The “Papers, please” immigration bill

In today’s City AM I highlight some of the worst parts of the government’s Immigration Bill. The Bill forces private citizens like landlords, nurses, wedding registrars and others to become de facto state informants, reporting anyone they suspect of being an illegal immigrant to the authorities:

But “papers, please” could soon become government policy. Whatever your perspective on migration, the Immigration Bill currently being debated in Parliament would turn thousands of private citizens into state agents, forced to report anyone they suspect of being an illegal immigrant. Almost every provision in the Bill will deputise some group of British citizens in this way, and would subject others to invasions of privacy.

Private landlords will have to run immigration checks on tenants, and will be at risk of prosecution if they fail to comply properly. The crackdown on “sham marriages” will expose more Britons to investigation. Marriage registrars are already required to report “suspicious” marriages to the state, but this Bill will double the period during which couples are under threat of being reported. Any Briton hoping to marry a non-EU citizen is open to investigation, and there will inevitably be mistakes that remove protections from legitimate couples.

Though concerns about health tourism are legitimate, the actual cost is tiny:

This week, it was reported that the NHS spends £2bn on treatment for temporary migrants in the UK. But most of this is on those, like students and temporary workers, who are already paying tax here.

The cost of actual health tourism – people coming to the UK specifically to get health treatment – is estimated by the government to be £70m, or 0.06 per cent of the NHS’s annual budget. Enforcing tighter controls may seem attractive. But if the cost is greater than the amount of money it saves, it doesn’t make sense.

Read the whole thing. I’d be interested to hear people’s views in the comments.

Mean medians

The US Census Bureau has just released a major publication “Income, Poverty and Health Insurance Coverage in the United States: 2012″ that has set much of the US political and economic blogosphere alight. “The incomes of the middle class have stagnated!” they cry, pointing to a statistic that shows the median household income in 2012 down from a real terms peak of $56,080 in 1999 to its pre-recession peak of $55,628 in 2007, to a measly $51,017 last year. That means the median has grown just 3% since 1991, when the last major recession hit the bottom. On the headline measure, incomes are actually below 1989.

I do not doubt that the middle classes (and the poor!) have been hit hard by the recession (although in the UK the story might not work in exactly the same way). But to tell this as a general story of middle-class decline seems to be stretching it massively. I don’t just mean because we can now use excellent services like Facebook, Twitter, Google, and so on for free. Having said that, I think Tyler Cowen massively undercounts the importance of free internet services—we now have near-instant, cheap or free access to basically the entirety of human artistic output. A proper measure of consumption or income that included these would give a much more optimistic result.

Still, this isn’t my key point. We use median statistics because incomes are very unequally distributed—the US had a Gini coefficient of 0.463 in 2012, while the UK’s was 0.32 in 2011-12. A mean (like GDP/capita) does not tell us anything about how gains are distributed, it just tells us how big the gains have been, compared to the size of the population. A median, showing us the middle point, is less easily skewed. But a median can still be extremely misleading under certain circumstances.

One of those circumstances, and an empirically highly relevant one, is when there is mass immigration to a country. According to one official dataset and my simple calculations, legal inward migration to the US was 13m between the 1999 peak and 2011 (inclusive). Presumably illegal migrants aren’t counted in the figures, but for completeness we might note they seem to number more than 12m. If we assume that inward migration is typically lower skilled than the US population as a whole (which seems highly plausible), then it’s entirely possible that a median falls while every individual in the population becomes much richer. Indeed, this is particularly true if outward migration is largely made of particularly high-skilled people (which also seems plausible). The income per natural concept, developed for a different reason, but relevant, is the number we’d want to check to look at the real trends in incomes when the make-up of the population is changing significantly.

Immigrants to the USA have much higher incomes than they had before. US citizens’ incomes also rise, not just because migration boosts their wages but also because of the general effects of economic growth—GDP/capita is significantly up on 1989, 1991 or any of dates picked to generate shocking income statistics. Everyone is better off, but the statistics need not reflect that. Of course, since I haven’t picked the statistics apart absolutely conclusively, I can’t say for sure that this effect is actually driving the divergence between apparent prosperity for US middle classes and the statistics implying penury. But of course, without that level of digging, neither can the het up US wonks.

The real reason we like immigration so much

Martha Gill has a good piece on immigration on the Telegraph Blogs site today, pointing out the simple fact that people often forget: the main reason immigration is such a good thing is that it’s really, really good for immigrants.

Sure, immigrants make the rich countries they arrive at richer and subsidise those countries’ welfare states, but people in rich countries have a lot already. It’s people coming from places like Somalia and Sierra Leone that have the most to gain from being able to work in the UK.

Michael Clemens’s study, “Trillion dollar bills on the sidewalk“, looks at estimates of the global GDP gains that would come from open borders. The gains range between 67% and 122%, depending on how many people actually migrated. Those benefits would overwhelmingly accrue to the world’s poorest people, and that’s a good thing.

Gill’s piece is directed at the left, which is fair enough given that most defenders of immigration are on the left. But no side owns cosmopolitanism. Almost everyone has heard the slogan “trade, not aid” from people on the political right. They (correctly) see international trade as a much better way to improve the lives of people in poor countries than development aid. They want free trade because it works for poor people around the world, not just because it would also happen to make us a little bit richer.

It doesn’t seem out of the question that the same kind of altruism might eventually spread to the right’s view of immigration. That might seem unlikely, but the political right was once a bastion of protectionism, and that changed.

Fundamentally, immigration restrictions are laws that ban firms from employing certain people and landlords from renting or selling their property to certain people. What’s right-wing about that?

Milton Friedman’s objection to immigration

Free market supporters of immigration controls often quote Milton Friedman in support of their position:

There is no doubt that free and open immigration is the right policy in a libertarian state, but in a welfare state it is a different story: the supply of immigrants will become infinite.

On the face of it, this is a powerful argument for restriction. As I’ve noted in the past, whether we like it or not people are dependent on state institutions like the NHS and it would be a bad thing for those things to crumble without the reforms that make market-based alternatives viable.

But are things as clear as they seem? Elsewhere, Friedman also said:

Look, for example, at the obvious, immediate, practical example of illegal Mexican immigration. Now, that Mexican immigration, over the border, is a good thing. It’s a good thing for the illegal immigrants. It’s a good thing for the United States. It’s a good thing for the citizens of the country. But, it’s only good so long as it’s illegal.

I think Friedman vastly overstates his case in his final line (it’s only good if it’s illegal?), and empirically he seems to be mistaken (the fiscal contribution of immigrants is usually positive in general, and has been positive in the UK in particular) but still, let’s take his point as given. Does that make immigration controls the best option?

No. There are ‘keyhole solutions’ we can implement instead – that is, solutions that are specifically designed to address the supposed problems that go with open borders.

We could require that immigrants post bonds priced according to the average cost to the state of someone of their age. We could require immigrants to provide for their own health insurance, unemployment insurance, education, etc. We could restrict the use of the NHS and other state services to immigrants who are working. And so on. The point is that most of the problems associated with immigration are not best solved by restrictions on immigration. Don’t use a sledgehammer to crack a nut.

Well, OK, but we are where we are. Those solutions are nice in a think tank fantasy-land, but they’re never going to happen, you might say. (Well, not with that attitude, they’re not!) For the sake of argument, what if these keyhole solutions were irrelevant and Friedman was empirically correct?

In that case, his point about illegal immigration being the best kind of immigration – and indeed, a net positive overall – might really be worth thinking about. As Will Wilkinson has argued, people who follow Friedman on immigration should then argue not for restrictive immigration controls, but restrictive immigration laws paired with a toothless Border Agency, or one simply told in practice to ignore these laws. (Much as most decent police officers ignored anti-sodomy laws for some time before those laws were repealed.)

So maybe that’s a Friedmanite ‘keyhole solution’ for people concerned about immigrants sucking the welfare state dry: keep immigration laws the way they are, but shut down the UK Border Agency and treat the laws as the silly anachronisms they are.

Globalization drives cultural diversity

Donald Boudreaux recently reposted this 2010 essay on the impact of globalization on culture. Globalization is not about ‘just stuff’, he says, it’s about increasing diversity by allowing different parts of different cultures to mix:

A century ago, there were no internationally franchised restaurants in Paris, France or, for that matter, in Paris, Texas. A century ago, residents of neither Omaha, Nebraska nor Birmingham, England could find sushi restaurants near their homes; today, sushi restaurants are all over the Western world. A century ago, blue jeans were not the international fashion that they are today. A century ago, the typical man’s business suit worn by New York lawyers and London bankers was not widely worn in Africa and Asia, as it is today. In many ways, global commerce has indeed made the world more homogeneous.

But look more closely. While the differences between Paris, France and Paris, Texas are fewer than they were in the past, the cultural richness of each of these places today is far greater than it was just a few years ago. For a resident of Paris, Texas, circa 2010, the richness of the cultural smorgasbord available to him or her right at home is vast. A Texan can stay in town and dine on Vietnamese, Italian, or Greek food—or on barbeque. A Texan can listen to German symphonic music or medieval chants or Irish dance music or Edith Piaf—or country and western. A Texan can buy French neckties, English raincoats, and Italian scarves—and cowboy boots. Likewise a Parisian can choose croissants or New-York-style bagels. A mere century ago—even thirty years ago—the cultural diversity of both places was much less than it is today.

It’s easy to be annoyed at the ‘touristification’ of a place like Thailand, but what that really means is more people get to experience somewhere they would only be able to imagine visiting fifty years ago. Perhaps it’s no coincidence that this complaint usually comes from the people who can most easily afford foreign holidays and expensive exotic meals in their home cities. I’m tempted to say that they should check their privilege.

Boudreaux’s piece is worth reading in full.