Wednesday, May 17, 2006
Very sensible piece from Robert Samuelson today about immigration. I should have acknowledged the interaction between aging and immigration as another good restrictionist argument - particularly because it is usually touted as an argument *for* high immigration levels.
The usual argument is that immigration is needed to redress the looming imbalance between the number of workers and retirees. But this is false for three reasons. First, low-skill immigrants don't add as much value as retiring workers take out; the number of additional low-skill workers you'd need to generate enough value to pay for the retiring baby boomers is staggering. Second, immigrants don't come alone. They bring families - not only children, but also parents. Yes, they may bring the total fertility rate up and thereby bring somewhat more demographic balance, but bringing parents partly offsets this. Third, and most important, low-wage immigrants will themselves retire. And because they will fall in the lower end of the income distribution, their retirement will be subsidized - and their healthcare will be massively subsidized. It's this factor that pushes low-skill immigrants into the net-loss category in terms of the solvency of our entitlement programs. Mass low-skill immigration not only doesn't fix our entitlement problem; it makes it worse.
The way to solve our entitlement problem is extremely simple: we have to extend our working lives to offset the extension of our actual lifespans. Everything else is either window-dressing or a non-sequitur. (Social Security "reform" of the sort advocated by President Bush was a back-door way of cutting benefits, and I favored it for precisely that reason.)