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Why restrict immigration at all?

The Constitution and the laws of economics compel us to welcome all immigrants.

By Becky Akers, Donald J. Boudreaux / June 7, 2007

New York and Fairfax, Va.

Just in time for summer, the Senate is heating things up with immigration reform. The bill it's debating aims to shore up border security and start some 12 million illegal aliens on the path to citizenship. Despite passionate disagreement, voices across the political spectrum concur on two points: They insist the federal government should do something about immigration, and they're sure immigrants threaten American jobs.

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People assert these claims as though they're self-evident. But they aren't, as even a basic understanding of the US Constitution and the principles of economics shows. And that means most of the premises about immigration are confused.

Real reform must build on the secure foundation of constitutional and economic truth – not on political talking points.

The US government has been tinkering with immigration law for decades now. Surveying the wreckage – heartbroken families, an underclass of exploited workers, and ruined lives – makes it clear why the Founding Fathers refused to trust the national government with power over immigrants.

That's right: The Constitution does not authorize the federal government to control immigration. Nor does it say anything about illegal aliens. We looked for a clause with directions for ranking immigrants on a points system – another feature of the Senate's reform bill – but we couldn't find one.

Sadly, lawmakers have repeatedly interpreted this silence as license for ill-conceived legislation. Congress began barring entry to the nation in 1875 with prostitutes and convicts. Soon, all sorts of people fell short of congressional glory: ex-convicts in 1882, along with Chinese citizens, lunatics, and idiots. Paupers, polygamists, and people suffering from infectious diseases or insanity made the list in 1891, while the illiterate were banned in 1917.

The biggest spur to antiforeigner fervor is always the same: natives fear that newcomers will swipe their jobs. Take, for example, the 1889 Supreme Court case challenging the Chinese Exclusion Act. The Court upheld the exclusion because the Chinese had competed "with our artisans and mechanics, as well as our laborers in the field.... [Californians wanted] prompt action ... to restrict their immigration."

Why immigrants increase wages

It seems neither Californians nor the Court understood a fundamental principle of economics: the division of labor. Too bad they hadn't read Adam Smith's "Inquiry Into the Nature and Causes of the Wealth of Nations." Published in 1776, it explains how prosperity results from more workers and better specialization.

Suppose that 10 workers produce 20 chairs per week with each worker building a complete chair. Those same workers can produce many more chairs every week if they specialize.

When one worker saws the wood, another carves it into shape, and a third fastens the pieces, the total output rises dramatically. Greater specialization leads to greater production and greater prosperity. Adding another five workers to the original 10 multiplies the benefits.

It's true that immigrants can temporarily reduce wages for Americans whose skills closely match theirs. But falling wages raise profits. And higher profits are the soil from which better wages grow.

Seeking those superior returns, investors bring more capital – more machines, expertise, stores, and new firms – while entrepreneurs learn to enhance employee output.

Specialization deepens. Workers' productivity soars, forcing employers to compete for their time by offering higher pay. Immigrants actually increase wages in the long run.

For proof, look around. The US work-force has more than doubled since World War II, yet workers' real total compensation (wages plus benefits) is higher now than ever. Notice that Manhattan's employees make more money than Mississippi's. If hordes of workers depressed wages, New York City's crowds would earn far less than Mississippi's few. But paychecks in Manhattan – even for unskilled workers – trump those of workers in sparsely populated Mississippi.

Given the talk about point systems, guest-worker programs, and fenced borders, you'd think immigration endangers America's cultural and economic wealth. But just as the unhampered flow of goods and services – free trade – blesses participants, the easy flow of workers – free labor markets – also brings unprecedented prosperity.