Friday, March 31, 2006

What is Missing in the US's Immigration Debate

The debate on a controversial immigration bill is brewing on the Capitol Hill, read the report here in the Washington Post.

The story said, "A growing body of economic research contends that the recent surge of foreign workers has depressed wages for low-skilled workers, especially for high school dropouts, and has even begun displacing native-born workers. That benefits employers, higher-income consumers and the economy at large, but it may exacerbate the problems of the working class."

The whole issue is framed as a distributional one, employers gain (because of low wages as the supply of unskilled labor surges) at the expense of low-skilled workers.

But let's look at it from another perspective, let's think about the new immigrants would enlarge the size of the US market, and an enlarged market means there are more opportunities for further specialization and division of labor and hence more opportunities for beneficial exchanges are opened up as result.

Jim Buchanan had a nice little book, though not directly addressing the issue of immigration, that touched on the topic of how the enlargement of the market extends the opportunities of specialization and how this will bring fruits to everybody involved.

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