Most of what I learned in economics for a degree granted more than 30 years ago has long ago leached away, but I remembered enough to spot the economic nonsense coming from Attorney General Jeff Sessions as he justified ending the DACA program for undocumented immigrants who were brought here as kids.
The attorney general seemed to fall for a classic blunder in the field, the “Lump of Labor Fallacy.” That came when he claimed that DACA “also denied jobs to hundreds of thousands of Americans by allowing those same jobs to go to illegal aliens.”
That’s not even close to the way the economy works. There’s no good economic case for ending DACA, or Deferred Action for Childhood Arrivals, and the attorney general ought to know better than to say there is.
It matters, too. Talking up a nonsensical negative economic impact could make it harder for Congress to muster the votes to do the right thing and keep some version of DACA in place.
The DACA program has only been around since 2012 and it’s never really been settled policy, in part because it was created by executive order during the Obama administration and not by Congress. The people affected have sure responded to it, though, as it allows undocumented immigrants brought here as children to apply for temporary legal status and work permits. Now they can complete their education and move on with their lives.
By far most of the 800,000 or so people affected by DACA have jobs, according to an oft-cited survey from last year. The leap of logic in the attorney general’s statement is that if they are working they must be in a job that would have otherwise gone to a native-born person, who now must go without a job.
But that conclusion only makes sense if there are a fixed number of jobs in the economy, whether there are 800,000 more people here or not. That’s so obviously not the case that it’s a head scratcher how anyone could believe it.
It might sound right, if you didn’t know any better, but it’s a garden-variety fallacy right up there with concluding that a coin flip will now come up heads because you have just gotten tails seven times in a row.
In checking with an economics professor last week, he explained that teaching first-year students in economics about the lump of labor fallacy isn’t done quite the way it once was. Instead it likely gets taught as part of a broader set of economic lessons.
One foundational idea still taught in economics is that pretty much nothing is fixed. If your neighbor gets richer it does not mean that you get poorer. There isn’t a fixed amount of wealth, on the cul-de-sac or in the country. It’s entirely possible for both of you to get richer at the same time.
There isn’t a fixed amount of labor needed in the economy, either. That’s been understood for at least 125 years.
Just imagine what has happened in the economy over the course of my adult life. Since the date of my college graduation, the U.S. population has grown by more than 90 million people, according to the latest Census Bureau estimate.
If the total number of jobs in the country hadn’t changed one bit since 1983, what would all of those additional people be doing now? If they were working they would have taken the jobs of the people who already had them.
Of course, the number of nonfarm jobs has actually grown faster than the number of people in the country since then. The economy obviously has grown a lot, too. In fact, getting productive work out of more people, whether from abroad or born here, is one ingredient in a very simple recipe for growing the economy.
The economic consensus about immigrants’ role in economic growth was nicely summarized in a huge report released about a year ago by the National Academy of Sciences, which explained that “importantly, immigration is integral to the nation’s economic growth. Immigration supplies workers who have helped the United States avoid the problems facing stagnant economies created by unfavorable demographics — in particular, an aging (and, in the case of Japan, a shrinking) workforce.”
The effect on the wages of some groups isn’t nearly so black and white, however. That same report noted that when there does appear to be lower wages as new immigrants enter a segment of the labor market, the people most likely to be hurt were immigrants who arrived earlier as well as native-born workers without a high school diploma.
The DACA folks, on the other hand, aren’t really like the classic stereotype of a lower-skill immigrant worker. They were brought here as kids and grew up in the American educational system, and according to one survey from last year nearly half of the participants in DACA are going to school at least part-time.
They have also been starting businesses at about twice the rate of native-born people.
A young and highly motivated cohort of workers, going to school and improving their skills, is almost exactly who you would want to recruit to come live in your town or state. They are going to be working and paying taxes for decades.
Hopefully a majority in Congress comes to realize this economic reality, too, and there may yet be a change of heart on the part of the Trump administration. But the possibility clearly remains that steps could be taken to kick the DACA folks out of the country.
If it’s difficult to picture what would happen to a group of 800,000 people, bring it down to the size of a town or neighborhood. Imagine maybe 100 young neighbors, in college or technical school and likely already working, being asked to leave town. They are not just neighbors, of course, but employees, suppliers, customers, paying tenants and parishioners.
You wouldn’t need an economics degree to realize, watching the taillights disappear, that everybody left in town now seems at least a little worse off.