Sunday, January 20, 2013

Immigration and median income

Reading The Progress Paradox: How Life Gets Better While People Feel Worse. I'm only two chapters in but I already like it a lot. Gregg Easterbrook is very insightful and rather pithy ("if you torture numbers long enough, they will confess to anything.") He also has an interesting perspective on the debate over "stagnating median income" in America.

He writes:
for each of the last twenty years, the United States has accepted more legal immigrants than all other nations of the world combined, along with a huge influx of illegals... The result of wide-open borders is that today 11 percent of the United States population is foreign-born, the highest proportion since the 1930s. Immigrants start at the bottom of the income bell curve, and in statistical terms their main impact is to pull down the numbers for the median household...
Among the 89 percent of the American population that is native-born, inequality is declining, not increasing - a trend driven in no small part by the rising incomes of African Americans, most of whom are native born and whose family median incomes are currently rising twice as fast as family median income for the United States as a whole.
...if the existence of an inequality gap is an indictment of the American economy, then the solution is to forbid immigration. Such a policy would impose grave hardships on poor immigrants. If inequality statistics are bad and the solution is a policy that would impose grave hardships on the poor, the point of absurdity has been reached - which shows how weak the whole inequality-gap objection is in the first place. (pp. 10-12)
Lamenting the death of the middle-class is an easy way to make political hay, but unsurprisingly, its relation to reality is tenuous at best. Easterbrook does an excellent job of exposing why this argument is so fallacious.

The general message: life in the developed world is getting better for almost everybody, at varying degrees of speed. The overall goal of Easterbrook's book is to explain why people continue to feel their situation is bad when it is measurably improving by all objective measures. I may return with another post more directly regarding that topic soon.

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