Long time friend and all around smart guy Steen Simonsen recently pointed out to me an excellent article published by the Cato Institute: "Restriction or Legalization? Measuring the Economic
Benefits of Immigration Reform" (summary available on-line, and full PDF available for download). The conclusions drawn by the authors are similar to most macro-economic analyses of immigrant labor that I have read: Immigrant laborers have a net positive impact on both the national US economy as well as the local economies in which they are employed.
While reading through the paper, I found myself once again nodding in agreement with the analysis and recommendations. According to their modeling, a program of legalized immigrant labor combined with a moderate visa tax (paid for by employers) would have a net impact on the US GNP of +1.25% over the next decade. Policies that instead stressed border protection or employer punishment resulted in -0.55% decreases in the GNP.
This led me to ask "If the macro-economic models are so strongly in support of increased legalization of immigrant labor in the US, why did Arizonans just pass such a draconian anti-immigration law?"
My answer is that macro-economic effects are too abstract to factor into the micro-economic decision making process of the average US voter. In other words, it is impossibly hard for an individual US citizen to directly observe a 1.27% increase in the GNP. It cannot be seen or heard, making it all but impossible for most people to wrap their heads around it. Myself included.
As the recent list of Nobel Prizes in Economics emphasizing the importance of human psychology indicates, the behavior of economic participants (real people like you and me) is often far from purely rational. Rarely does anyone think to themselves "Well, this political decision will have a net positive economic impact on my life in the next ten years, therefore I will support this policy despite the undesirable economic conditions I find myself in today."
Instead, people make their political decisions based on the micro-economic environment they find themselves in on a daily basis. Unlike an increase in the GNP, they can 'see' the Mexican day laborers waiting outside their local Home Depot. They can 'see' the number of Mexican children in the classrooms at their local elementary school. They can 'hear' the Spanish conversation from the people in front of them at the grocery checkout line. These are all very observable effects, and because of that they exert a much stronger political influence on the voting preferences of the people in these situations.
Rightly or wrongly, many people will correlate these visible signs of Mexican immigration to their current undesirable economic situation. They do not need proof of causation, just what their senses tell them is a preponderance of correlation. "My life sucks, I see more and more Mexican immigrants in my community, therefore illegal immigration must be the cause of my crappy economic situation."
I wish there were a more visceral appeal that could be made to voters - a way to more directly demonstrate the positive impacts of increasing legal immigration. But until someone comes up with a solution to that problem, the inherent human xenophobic tendency will continue to win the political debate.
