Is Anti-Immigration the New Mercantilism?

I have to wonder if the anti-immigrant people are not some sort of new version of Mercantilism. Mercantilism was a view that a country could achieve economic prosperity via economic regulation, primarily of trade. Right there a red flag should go up. How can every country have a favorable balance of trade at the same time? The idea is that by putting tariffs in place for our markets we protect them from foreign competition and at the same time our industries will be able to sell in foreign markets. A great theory is you assume the politicians/policy makers in other countries are complete dolts.1

Much of the anti-immigration rhetoric strikes me as being very similar. I’ll often hear claims about protecting the middle class. The implicit idea here is that the middle class is entitled to a given lifestyle/income level. The difference between this view and that of a living wage is pretty minimal, IMO. Yet the anti-immigrant crowd will loudly decry the notion of a living wage, but will go on at length about how a guy who hangs dry wall used to make $18/hour and wouldn’t it be grand if the wage for dry-wall-hangers would go back up to that level.

And it applies to legal immigration as well, IMO. When President Bush first floated the idea of a guest worker program several of the conservative talk radio shows hosts I listen too sprang into action. “This is a dagger aimed at the heart of the middle class!”2 What the rhetoric really means is the following: There will be more competition in some job markets and as such the wage will probably go down. Funny….I thought conservatives liked competition. I guess they only like some competition. Also, don’t we often hear the conservatives saying, “So what if a company relocates to Bangladesh and hire people for $0.25/hour? It is captialism and a big component of capitalism is competiton and making profits!” Apparently this only holds for some firms.

Frankly, these anti-immigrant supporters should be supporting legislation against off-shoring/out-sourcing. In fact, these people should oppose out-sourcing here inside the U.S. If a company finds that it could save money by out-sourcing say its human resources department, what about all the people currently working in that firm’s human resources department? Don’t they deserve protection from the nefarious agencies that will get the out-sourcing business? Shouldn’t the HR employee have some degree of certainty that he or she will continue to get that $18/hour just like the dry-wall-hanger? The logical inconsistencies on the part of the anti-immigrationists make my head hurt when it comes to their tortured economic logic drivel.
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1It shouldn’t take a brianiac to figure out that the politicians/policy makers in the other countries will strongly consider placing tariffs on their markets. Hence there is either ongoing trade wars that actually reduce exports and imports which is generally not a good thing, or there is not net gain from the tariffs.
2In actuality it means more competition for those who work in low-skill/low-education jobs. A guy hanging dry wall is more likely to face more competition than a computer programmer or a nuerosurgeon.

FILED UNDER: Economics and Business
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. DaveD says:

    Steve, I am unclear here. Since a distinction between legal and illegal immigration has been a major focus of discussion in the recent past, do you take issue with folks who are against illegal immigration practices alone?

  2. David C says:

    The underlying *economic* point is the same for either legal or illegal immigration.

    And BTW, one of the problems with mercantilism or any other form of protectionist theory is that even *if* the politicians/policy makers in other countries are complete dolts, the tariffs *still* hurt you.

  3. Steve Verdon says:

    DaveD,

    David C has it. If legal immigration were of the same magnitude as illegal immigration we’d observe pretty much the same economic outcomes in terms of wages. Hence, the economic arguments apply to both legal and illegal immigration.

    David C,

    Good point. For one thing, the protectionist policies tend to almost never increase employment in the protect industries, but instead simply result in a price increase. This of course is bad for all those consumers who consume goods from the protected industries.

  4. LarryA says:

    I’m a software engineer for an automotive supplier and I already have to compete with out-sourced labor (30-50 percent of the programming work is outsourced) AND immigration labor (H1B immigrants working on-site).

    My wages have been frozen for the last five years while the benefits (health care, etc) have been reduced.

    They are even starting to manage some of the projects off-shore.

    I’m 57 so the thought of starting over in another field is troubling (to say the least).

    I’m either between a rock and a hard place or the light I see at the end of the tunnel is really a rapidly approaching train…

  5. Inattention to illegal immigration could threaten continued political support for legal immigration.

  6. bryan says:

    Steve,

    Here’s a softball question for you. Is there any country in the world that *doesn’t* practice protectionism?

  7. Steve Verdon says:

    Bryan,

    Hmmm…I don’t know. I think all of them have sorts of laws and regulations controlling what comes in. These don’t have to be fore economic reasons, but they can still have an economic effect.

  8. Jerry says:

    Well lets face it, we NEED the immigrants to do our low paying jobs. Do you think you or I will be staing in the middle of the field picking cherries, in 90 degrees weather and getting paid $8.50/hr ? The answer is NO, so we should be happy that someone else is doing those jobs or we would be importing all the foods from China.

  9. Shiloh Sharps says:

    Legal immigration through channels. Immigrants must want to BE American, not just seek riches. Illegal aliens – don’t get me started.

    I know I know – the guy who hides in the engine compartment of a diesel electric locomotive for four days to get back to the $5 an hour stable mucking job in a Boston suburb he was deported from is exactly the kind of employee you want. Such dedication! Which is rationalizing on steroids. America is an ideal, not a cash register. America is a Dream, not a teat to suckle. America is a culture, not an all you can eat buffet. America is a shining hope, not a Salvation Army second hand store. America is a nation of Laws, NOT a nation of expediency. A nation built upon blood and sacrifice, dedicated to God’s Will and Revealed Ways, NOT a merchant’s wet dream of whatever puts the most money in the bank. America is Character writ large, not a nation created for hit and run opportunism.

    If people want to sup of the richness that is the wine of Americanism, let them pay the price Legally Established. Or else, what laws are we to respect? Are we to choose which laws we’ll respect? To wink and nod and slide ‘guest workers’ behind the umpire so no one will notice is to diminish my respect for law and order. Diminishing respect for Law is a certain path to doom, or else ya’ll missed the Great Lesson that was both Israel and Rome. Look what one oral sex incident from a President did to diminish the respect of proper sexual conduct among our children. I can tell you first hand that having gotten away with hundreds of illegal aliens in their ranks, contractors, shippers, warehousers, all sorts of men I know have become more calloused about America. More calloused about whether or not this nation stands for something bigger than just the almighty dollar. Are more calloused about friends and family and certainly more calloused about the legitimacy of government. They’re making great money but their spirits are being corrupted.

    I ask you – which is easier to repair?

    The glaring neon lesson of illegal aliens is that (a) anything that pays is more desirable than obeying the Law. (b) you can get away with most anything if you prosper the Right People. (c) we’re not a nation of blind justice and equal stature before the Law and (d) Character means dick in America when money is on the table.

    I truly despair, a deep angry knot in the guts that playing by the rules means absolutely nothing anymore to Pundits, Politicians, and apparently more than half of my fellow citizens. This is no longer the Nation I was raised to inherit, cherish and protect.

    Money has truly surmounted Character as the god who will be worshipped. It’s cloying decay is killing us, individually and nationally. Like Shaddrach, Meshach and Abednego, with this kind of shadow upon the land it will soon be the worship of gold, or the furnace for us as a nation.

    Most people have already signaled their preference.

    Show Me the Money wins in a landslide over Doing The Right Thing.

    Not chasing the Money is just laughable to the people I know. Bend any rule, push aside any Law, trash whatever is in the way to line their pockets. Why not?? Everyone else is doing it and no one’s being held to account.

    And our nation will die because of it.

    Shiloh Sharps

  10. toni says:

    I am somewhat disturbed you have equated illegal to legal immigration. The first being a law breaker and the second following the law. So, I am to be considered anti-immigrant if I oppose illegal immigration by your logic. Hmmm.

  11. Steve Verdon says:

    I am somewhat disturbed you have equated illegal to legal immigration. The first being a law breaker and the second following the law. So, I am to be considered anti-immigrant if I oppose illegal immigration by your logic. Hmmm.

    If you would oppose letting in the same number of immigrants via a legal immigration/guest worker program yes. In that case I contend your opposition to illegal immigration is just a handy bit of misdirection and that your preferred stance is protectionism.

  12. toni says:

    Well Steve – until the law changes protectionism has nothing to do with it. Illegal today means not in the country by legal immigration methods. I’m still befuddled by your logic and how that transforms into protectionism.

  13. Steve Verdon says:

    I get the feeling you are hiding behind the law here toni. Suppose a guest worker program was put in place and illegal immigration plummeted to very, very low numbers and guest workers jumped up so it is comparable to current illegal immigrant levels. Now the question is would you be okay with this? If you answer hinges on some economic notions (e.g. protecting American wage earners) then it strikes me as protectionism and that really you want little or no immigration of any kind.

    Many anti-illegal immigration proponents argue the economic arguments as well as the national security arguments. I find the national security issues compelling, but the economic arguments very much in the same vein as protectionism, living wage arguments, and anti-competition arguments. National security does not mean we have to set immigration very low or at zero, but it would require a major shift in our current policies.

  14. toni says:

    Steve – last comment for me on this. But I’m not totally against a guest worker program. I do have significant doubts in the Federal govt antying up to the task of managing the process without encouraging another wave of illegal immigration. I do believe though that under the table workers depress wages. I don’t buy the arguments that illegals pay their way currently. If this was happening then hospitals wouldn’t be going bankrupt. Citizens are just paying the difference in their wages through social services and entitlement programs which in essence then is a corporate welfare of sorts. I also think there should be significant fines for business which circumvent the law. But, currently I don’t think the govt does a good job regarding employer ability to verify legal status of potential employees. There are a few things I think should happen with a guest worker program and that is separate designation for drivers licenses plus all guest workers must take a drivers test in English to receive the license, no free medical, Social security shouldn’t be deducted but then guest workers don’t qualify for Social security either, Fed and state income taxes have to be paid, also a medical screening requirement for transmittable diseases and I’m sure there are other things if I thought about this a bit. The system of illegal immigration is just plain unfair to those who jump through the hoops to be legal.

  15. We do need to protect against the increase in aggression on the net taxpayer which occurs through mass immigration into a wastrel welfare society. The police are protectionist against the competition in violence. The military is protectionist against the competition in invasions of rival governments. Drug gangs compete in terms of ruthless violence; this is not competition that anyone but an anarcholibertarian, perhaps would want. Foreigners are different in status; to divert public funds to them is traitorous. How can there be a moral justification for increasing the aggression on the net taxpayer, by importing illiterates by the millions, on to net public subsidy? What explains the need to use ad hominem items like ‘anti-immigrant’, when one could say patriotic instead? No one is here just to work, unless it were a robot arriving in a crate; imigrants use public services and vote themselves socialist aggression on the net taxpayer, whose existence is ever so conveniently left out of account.