Evans On The Economy -- More Immigrants

May 25, 2006
The economic arguments are compelling for the United States to welcome immigrants, provided they become citizens.

Which U.S. state currently has the biggest cash surplus?

Answer: Florida.

And which state has led in job creation for each of the past 41 months?

Again, Florida.

And which is the only large state with an unemployment rate more than 1% below the national average?

You guessed it. Florida.

And which state has the largest percentage of recent immigrants in its population?

Actually, it's California. But Florida is second.

I realize there are arguments on both sides of the immigration issue, and I'm not going to take a stand pro or con on the social aspects. But on the economic aspects, the anti-immigration people are dead wrong. Immigrants do not take jobs away from American citizens. Immigrants do not reduce the overall wage rate. And in a state that is sensibly run, immigrants do not increase the budget deficit. The figures are undeniable.

It's true that Florida has a few other things going for it, such as no income tax and a generally sunny climate, except during hurricane season, that attract rich, older folks with lots of disposable income. Nonetheless, the unemployment rate in the southeast part of the state, where most of the new immigrants land, recently touched 3%, compared with a national average rate of 4.7%. With the single exception of Hawaii, no state has a lower unemployment rate. Conversely, the states with the highest unemployment rates -- Mississippi, Kentucky, and South Carolina -- are among the states that are least friendly to recent immigrants.

Some will argue that immigrants take away jobs. In fact, the opposite is more likely to be true. By filling jobs that are generally considered undesirable, they permit upward mobility for those who would otherwise have to fill these positions. Of course, if the unemployment rate is high, that doesn't work. But at least in Florida, employers claim there are three times as many jobs as there are qualified applicants. And were talking medium-level management jobs, not washing dishes and cutting lawns.

More From Mike Evans

See Economic Outlook and Financial Market Outlook: Mike Evans' new blogs on the economy and stock market.

Others will argue that immigrants are a drain on budgets because they dont pay taxes. That's because the government doesnt allow them to register. If they could sign up legally, the vast majority of them would gladly pay taxes, including Social Security taxes. As I have pointed out previously, when all taxes are considered, almost half of everyone's paycheck goes to taxes. So if the average immigrant earned $20,000 per year, about $8,000 of that would go to federal, state, and local taxes, if the immigrants were properly registered. The only drain on the budget is people who, for one reason or another, aren't working. There are very few immigrants in that category.

One of the silliest arguments around, which many other economists have already shown to be fallacious, is that immigrants depress wage levels. The work of Harvard economist George Borjas, which is responsible for many of these canards, has already been widely discredited. In fact, by creating demand, immigrants boost wage rates by increasing the overall demand for labor as they use their paychecks to buy goods and services.

Next to providing the appropriate level of national defense to keep our country safe, the most important job the government has is implementing policies to ensure that everyone who wants to work can find a job. When that happens, there are plenty of jobs for immigrants as well as those of us who have already been here a while. Let immigrants in -- and, assuming they take steps to become proper citizens -- let them stay.

Michael K. Evans is chief economist for American Economics Group, Washington, D.C., and president of the Evans Group, an economics consulting firm in Boca Raton, Fla. Also see: Economic Outlook and Financial Market Outlook: Mike Evans' new blogs on the economy and stock market.

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