Week 1: The Economics of Immigration and Catholic Social Teaching

Previous Questions

Immigration is a subject near and dear to my heart.

I have just published a book which advances a brand new economic theory.("Five Short Blasts: A New Economic Theory Exposes the Fatal Flaw in Globalization and Its Consequences for America." Now available at Amazon.com.) The heart of this theory is that, beyond an optimum population density, continued growth in population density drives a reduction in per capita consumption through the need to conserve space.

This decline in per capita consumption collides with rising productivity, inevitably yielding rising unemployment and poverty. One of the major implications of this theory (the other is the pitfall associated with attempting to engage in free trade with nations far more densely populated than our own) is the immediate need to stabilize the population of the United States (not to mention the global population).

However, stabilizing our population is impossible without dramatic reductions - as much as 95% - in legal immigration, not to mention completely halting illegal immigration. This isn't the 18th, 19th or even 20th century any longer.

There's simply no more room in an already-crowded country that continues to add enough people every year to fill another city the size of Chicago. Regarding the teachings of the Catholic Church, I agree that people SHOULD be free to migrate, but it can't be a one-way street.

We can't continue to pack in more people every year when none are choosing to migrate on to other lands. It's a matter of simple math. I would be interested in hearing your thoughts and those of the other participants in this forum regarding this new concept.

Pete Murphy

Dear Pete,

Congratulations on your book. I will have to think through your argument; it seems Mathusian, no?

I think that the Yuengert treats the dilemma you pose thoughtfully, you state: "people SHOULD be free to migrate, but it can't be a one-way street. We can't continue to pack in more people every year when none are choosing to migrate on to other lands."

I have to respectfully disagree with you though, the math isn't THAT simple. Most of the research I have seen confirms what we all know, MOST people benefit from having skilled underpaid labor circulating in the environment. Most of what we buy is cheaper. When they have no rights they get paid less for their labor. Except for the workers competing against them, consumer are made "better off" measured in an orthodox economic way.

Teresa Ghilarducci

What are the negative and positive economic impacts of Hispanic illegal immigration on the U.S economy and on the income and job opportunity of poorly educated American citizens?

Joseph B. Farrell

Dear Mr. Farrell,

This is a great question and I can easily punt it to another section of the course. Richard Freemans' excellent article pointedly addresses your very questions.

However, since you asked me this is the way I summarize the research.

The research shows what you would intuit. MOST American consumers benefit from having skilled underpaid labor circulating in the economy. Most of what we buy is cheaper. When workers have fewer protections, they get paid less for their labor. Except for the workers competing against them -- the American workforce who would otherwise do farm labor and service work (latinos and African American) -- consumers are made "better off" measured in an orthodox economic way.

Skilled American workers are protected by the H-2 program.

Sincerely,

Teresa Ghilarducci

Hi, As you must be aware, our relationship, both legal and illegal with Mexico goes way back and will most likely continue. As a result, our economy is highly dependent on the cheap labor that these less fortunate people provide. What do you think we must do with 12 million illegal residents? These people are in the US and will probably continue to exist.

Bernie Cantu

Dear Bernie Cantu,

Thanks for writing. I am from California and know viscerally and academically the relationship you speak of. I am of the mind that our economy would be better off, and our values as a nation confirmed, if we can put these 12 million immigrants on the path of citizenship as soon as possible. I am not in favor of guest worker programs, they are abysmal in Europe, generating many social problems (see paris, France).

Teresa Ghilarducci

I enjoyed the podcast, but I find the term "Catholic social teaching" grating. Couldn't we be more global and refer to this as "ethical teaching"? Competition among organized religious groups is at the root of a lot of today's human conflict in the world, and I think it might be better to try to converge on a common set of ethical principles, rather than holding up "Catholic social teaching, as opposed to "Islamic social teaching," "Bhuddist social teaching," "Hindu social teaching," etc.

Your thoughts?

Bill Sugent

Dear Bill Sugent,

POINT WELL TAKEN!! I used to think the same thing, that CST just made ethical sense. Then I learned more. That CST is quite particular though it does share many tenants with other religious traditions but not all.

The principle of solidarity and preferential option for the poor as it relates to public policy is quite different from other traditions. This is a great question for Todd Whitmore, I am even shy about asserting an opinion here. I think he is up next week, so please ask him.

Teresa Ghilarducci

Forgive me for not having a background in economics, but I have a lot of basic questions.

1. Could you briefly describe what factor price equalization is and what you mean when you call unskilled labor a "scarce factor"? (p.92)
2. Why does disruption in an economy necessarily mean net gains to natives? (p. 93)
3. This might be answered in your answer to number (2), but why is it true that "[i]f immigration doesn't account for the fall in unskilled labor, it does little to increase aggregate income of natives?" (p. 93)
4. When you say on p. 95 that "a shift toward more highly educated immigrants (the abundant factor in the United States) would decrease the (already small) gains to immigration," what gains are you referring to, and what do you mean when you say that highly educated immigrants are an "abundant factor" in the United States?

Thanks so much. I am really glad to have this opportunity to learn about the complicated economic and moral issues tangled up in this country's immigration policies, especially in light of important national elections coming up in the next year.

Margaret Newell

Dear Margaret Newell,

Thanks you for your thoughtful email. I didn't write the article but I think I can answer your questions.

"Factor price equalization" is just simply the conclusion that if there is a lot of trading between two nations, the prices for two very similar "factors" -- factors are anything used to produce something -- will eventually equal each other because of competition. The most common example is wages -- labor is the factor. When two countries trade without regulation wages for similar jobs in both countries tend to converge. Unskilled labor in the US competes with unskilled labor in Mexico EVEN IF NO ONE MIGRATES under free trade agreements!

Unskilled labor a "scarce factor" only because it is not unlimited in its supply?

The natives "gain" when people work for less than they are worth -- meaning less than what natives can and are willing to pay. If immigration doesn't cause prices to fall then the natives don't gain from cheapened labor.

Last you asked, "When you say on p. 95 that "a shift toward more highly educated immigrants (the abundant factor in the United States) would decrease the (already small) gains to immigration,"

I think that Yuengert meant to say: that highly educated people are more "abundant" in the US than they are in Mexico )for example) and if we let doctors and nurses (for example) come here under the same kind of unregulated conditions we let in unskilled labor, then the wages of professionals will fall.

Sincerely, Teresa Ghilarducci

I work with CCIR - Catholic Campaign for Immigration Reform in the Archdiocese of Chicago ... I love your presentation, it has been long overdue to hear from an expert in economy and connecting the best kept secret in our Catholic faith social teaching. Thank you so much this helps those that do not believe in the issue of the undocumented!

Marilu Gonzalez

Thank you! The rest of the class should be even better.

Teresa Ghilarducci