America's advantage

April 05, 2006|By JOSM-I ENRIQUE IDLER

WASHINGTON -- The vast majority of immigrants to the United States don't arrive through seaports. But the Dubai ports debacle, now an emblem of economic nationalism, has a lot in common with the sorts of arguments used against immigration. Like those who opposed the Dubai deal, foes of foreign workers, whether low-skilled guest workers or high-skilled techies, miss a central point. The U.S. isn't an economic bubble. Snapping out of the protectionist mood and playing by the rules of open markets are both good and necessary.

In February, the failed attempt by Dubai Ports World, a firm owned by the United Arab Emirates, to purchase a British company with operations at six ports in the United States left some wondering whether Congress' protectionist fit had gone too far.

Nonetheless, in clearing the way March 27 for a guest-worker program and offering a citizenship path to some illegal immigrants, the Senate Judiciary Committee seems to be moving away from a protectionist mindset. Now it remains to be seen how far this approach will go, particularly if a comprehensive Senate bill hits the House.

Although the featured characters from the Dubai affair (Arabs) and the immigration debate (foreign workers) are unrelated, the two events display similarities since the underlying assumptions made by some lawmakers are the same. The reasoning goes like this: There's a foreign element that brings negative effects. Therefore, the proper response entails fending off the foreign element in order to protect the country.

Part of what motivates many lawmakers who support immigration-reform-by-restriction-alone is the protection of American workers. A recent letter from Rep. Tom Tancredo of Colorado and other lawmakers to Senate Judiciary Committee Chairman Arlen Specter of Pennsylvania explicitly mentions protecting American workers. And Mr. Tancredo has put the matter in terms of a "supply problem coming across the border."

According to this mindset, immigrants depress wages and take away jobs Americans would otherwise perform.

There are legitimate worries associated with massive flows of immigrants, not the least of which are national security, respect for the rule of law and the future civic, cultural and political integration of the newcomers. But those who decry the negative effects on the economy and the labor market seem to miss the larger point: Immigrants strengthen America's competitiveness.

There's some debate among economists about whether low-skilled immigrants compete directly with most low-skilled native-born workers. Beyond that, however, what's perfectly clear is that immigrant workers are absorbed by the U.S. economy in part because of a comparatively flexible labor market, which has prevented high unemployment rates found in more highly regulated markets. Additionally, this employment growth translates into higher productivity and an overall stronger economy.

A 2003 report from the Federal Reserve Bank of Dallas found that "it is clear the pace of U.S. employment growth is closely tied to the pace of immigration." And the point is echoed in the 2005 Economic Report of the President.

Although there are some costs associated with immigration, and people with low levels of education might be negatively affected by new immigrants, the general results are increased productivity and a nation that continues to become more prosperous every day. Problems do remain, but shunning immigrants won't solve them.

In fact, it turns out that the supply problem that Mr. Tancredo describes is part of what gives America its global competitive advantage. To have an idea of where the protectionist disposition can lead, just turn to France, where economic nationalism runs strong. Highly regulated markets and a protected work force have generated an unemployment rate of 23 percent among the young.

Addressing immigration reform with a protectionist mindset is the wrong approach. The foreign element that restrictionists fear has a positive impact, so a rational response entails making the best of immigrant flows by creating channels characterized by an efficient, orderly and legal framework.

Speaking with newly sworn-in U.S. citizens last week, President Bush said the United States is "stronger and more dynamic when we welcome immigrants." Approval ratings may not reflect the wisdom of this point, but it remains true. Immigrants are part of America's dynamic and competitive edge.

JosM-i Enrique Idler is an NRI fellow at the American Enterprise Institute. His e-mail is

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