Too much illegal immigration? Idaho agricultural industry say they need more immigrant workers

Idaho (Photo by Vidar Nordli-Mathisen | Unsplash

The Biden administration may be ready to lower trade barriers. Tariffs on products from China could be lowered as part of an effort to mitigate inflation.

What’s missing from the discussion are the barriers to trade in labor. Lowering the barriers foreign workers face may be just what our economy needs. The Bureau of Labor Statistics reports that labor market participation in the United States at 62% remains below pre-pandemic levels. Employers continue to have trouble filling many positions.

Meanwhile, members of Congress and the public remain concerned that there is too much illegal immigration into the U.S. But the data suggest otherwise. According to the Pew Hispanic Center, the number of undocumented immigrants in the U.S. grew from 2000 to 2011. But the trend reversed in 2012, and as a percent of the workforce, the change is even greater.

It is also important to note the characteristics of undocumented residents. The Pew data show that nearly two-thirds of all unauthorized immigrants have been in the United States for at least a decade, and illegal entry from Mexico is declining. Contrary to the belief of many, fewer than two-thirds of unauthorized immigrants are from our neighbor to the south.

Idaho officials have previously argued that undocumented immigrants take jobs from the state’s unemployed workers. But the labor market conditions today take the wind out of that argument. According to the Idaho Department of Labor, total state employment has risen and the unemployment rate is below the national average.

If we are going to reduce trade barriers to control the price of goods and services, it is a good time to also consider how we treat immigrants.

Economic theory and empirical evidence show that immigration is a net positive.

First the theory: For markets to be competitive, and thereby produce the best results for society, there needs to be free entry and exit. When we stop people from entering markets, including the labor market, competition is reduced, raising prices and reducing choices for consumers.

When the Idaho agricultural industry wants to hire workers to pick produce, the residency of those workers shouldn’t matter. Anytime we prevent mutually beneficial transactions, we reduce competition and all its benefits to society.

Next the evidence: Research by Giovanni Peri at the University of California — Davis shows that immigrants expand the economy’s productive capacity, stimulate new investment, and boost productivity. In one study, Peri found that states with higher immigrant-worker populations have higher rates of output per worker.

Research published by the Independent Institute shows that higher immigration doesn’t affect government spending and helps the world’s poor more than assistance programs.

Labor is a service, and if we want other countries to buy the services for which we have a comparative advantage, such as new technologies, we must be willing to buy goods and services for which other countries have a comparative advantage, such as labor.

If we want competitive markets and lower prices for the things we buy, and if we are going to advocate for free trade throughout the world, we must also support free trade in the labor market.

By Peter Crabb

Peter Crabb is a professor of finance and economics at Northwest Nazarene University in Nampa, Idaho.

Source: Northwest Nazarene University

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