581. What Both Parties Get Wrong About Immigration | Freakonomics Radio

The U. S. immigration system is a massively complicated machine, with a lot of worn-out parts. How to fix it? Step one: Get hold of some actual facts and evidence. (We did this step for you.) (Part two of a three-part series.) FOLLOW FREAKONOMICS RADIO: YouTube: https://freak.ws/3yIl6dl Apple Podcasts: https://freak.ws/3yAvQh0 Spotify: https://freak.ws/3TsdCmV ABOUT FREAKONOMICS RADIO: Discover the hidden side of everything with host Stephen J. Dubner, co-author of the Freakonomics books. Each week, Dubner speaks with Nobel laureates and provocateurs, intellectuals and entrepreneurs, and various other underachievers to uncover things you always thought you knew (but didn’t) and things you never thought you wanted to know (but do) — from the economics of sleep to the future of education, from markets for marriage to the surprising utility of wolves. ABOUT THE FREAKONOMICS RADIO NETWORK: Freakonomics began as a book, which led to a blog, a documentary film, more books, a pair of pants, and in 2010, a podcast called Freakonomics Radio. Hosted by Stephen J. Dubner, it’s one of the most popular podcasts in the world, with a reputation for storytelling that is both rigorous and entertaining. Its archive of more than 500 episodes is available, for free, on any podcast app, and the show airs weekly on NPR stations. Freakonomics Radio is now the flagship show of the Freakonomics Radio Network, which includes the podcasts No Stupid Questions, People I (Mostly) Admire, and The Economics of Everyday Things. FREAKONOMICS RADIO NETWORK PODCASTS: Freakonomics Radio: https://freakonomics.com/series/freakonomics-radio/ No Stupid Questions: https://freakonomics.com/series/nsq/ People I (Mostly) Admire: https://freakonomics.com/series/people-i-mostly-admire/ The Economics of Everyday Things: https://freakonomics.com/series/everyday-things/ Special series: https://freakonomics.com/topics/ CONNECT WITH US: [email protected] https://twitter.com/freakonomics https://www.instagram.com/freakonomics/ https://www.facebook.com/freakonomics/ https://www.tiktok.com/@freakonomicsradio https://www.linkedin.com/company/freakonomics-media Subscribe to our newsletter: http://eepurl.com/bKm0cf

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• 0:03Stephen J. Dubner?

  Hey there. It's Stephen Dubner. This is part two of a series we are calling "The True Story of America's Supremely Messed-Up Immigration System." If you haven't listened to part one yet, don't worry about it. You'll be fine. You can go back later if you want. For part two, I'd like to begin with a story. This story goes back to 2008, when we ran a contest on the Freakonomics blog. That was long before this podcast existed. Hey, maybe we should start having contests on the podcast. Anyway, the goal of this contest was to choose a new motto for the United States. There was the old motto, "E Pluribus Unum," from the "Many One," which I'd always liked, but no one seemed to use it anymore. Congress had replaced it in 1956

• 0:48Stephen J. Dubner?

  with "In God We Trust," but that didn't really catch on either, except on our currency, where it is required. There were some other unofficial mottos: "Land of the Free," "Home of the Brave," things like that, but I thought we could do better. At the time, I was captivated by this recent trend in six-word stories. This was a thing among writers especially. The most famous six-word story was attributed to Ernest Hemingway, although it's uncertain if he actually wrote it. It goes like this: "For sale, baby shoes, never worn." So, we asked Freakonomics readers to propose a new six-word motto for the United States, and then we would all vote on a winner. There were more than 1,000 submissions. We narrowed

• 1:33Stephen J. Dubner?

  them down to five finalists. Here are the four finalists that didn't win. Remember, six words: "Caution, experiment in progress since 1776," "The most gentle empire so far," "You should see the other guy," and "Just like Canada, with better bacon." And here's the motto that was voted winner by a mile: "Our worst critics prefer to stay."

• 2:05Stephen J. Dubner?

  That was more than 15 years ago, and I still think about this motto all the time. It's not quite uplifting, but it's a sharp and knowing observation, and I think it's aged well. To me, it describes a place that is well worth complaining about and which allows us to complain as loudly as we want. It also describes a place that hundreds of millions of people around the world say they would like to move to if they could. Today on Freakonomics Radio, what do our worst critics have to say about the state of immigration in the US today? A nation that doesn't control its borders really isn't much of a nation. Well, here's some surprising history behind the anti-immigration movement.

• 2:50Speaker 01

  If you were an environmentalist in the 1960s, your main concern wasn't climate change.

• 2:55Stephen J. Dubner?

  And is Canada trying to steal our bacon?

• 3:11Speaker 02

  This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.

• 3:28Stephen J. Dubner?

  In the first 15 years of the 20th century, roughly 1 million immigrants were admitted to the United States every year. This was way more immigrants than the US had received in earlier waves, and these immigrants were coming from different countries than the earlier waves. They were coming from Italy, and Poland, and Greece, from Russia, and Hungary, and Czechoslovakia. There were a lot of Catholics and a lot of Jews. E pluribus unum, baby.

• 3:56Stephen J. Dubner?

  But as we heard last week, some old school Americans got itchy about all these unfamiliar foreigners. And in 1924, Congress passed the National Origins Act. As they saw it, they were trying to make America great again. These new rules drastically cut the immigration of Catholics, Jews, anyone from Asia. It was a long list. By the 1930s, immigration had fallen from a million people a year to 50,000. But fast forward to today, and we are back to admitting a million permanent residents every year. There's also an estimated 11 million immigrants living in the US who entered the country illegally, mostly through our southern border with Mexico,

• 4:40Stephen J. Dubner?

  which has become increasingly chaotic and frustrating to just about everyone. How did that happen? How did the US go from nearly choking off immigration to reopening the floodgates? And then having the floodgates flooded? To answer these questions, let's go back to the basics.

• 5:00Speaker 03

  For many families, there's a before and after. They were not in the United States, and then they came to the United States, whether it's across the Pacific or the Atlantic or the Rio Grande, or you name it.

• 5:11Stephen J. Dubner?

  That is David Leonhardt.

• 5:13Speaker 03

  My great grandfather, Robert Leonhardt, was the first Leonhardt to come to this country.

• 5:19Stephen J. Dubner?

  Robert Leonhardt was an opera singer.

• 5:21Speaker 03

  And a strangely talented opera singer, given how bad of a singer I am.

• 5:26Stephen J. Dubner?

  David Leonhardt has other talents.

• 5:29Speaker 03

  I'm a senior writer at The New York Times, and I'm the author of Ours Was the Shining Future: The Story of the American Dream.

• 5:36Stephen J. Dubner?

  Leonhardt has been writing about immigration for years. His own great grandfather, the singer, had come from Austria. His son, David's grandfather, had stayed in Europe and was working in Paris as a photojournalist at the start of World War II. In 1940, he fled to the US just ahead of the Nazis. I asked Leonhardt if his views on immigration are influenced by his roots.

• 6:01Speaker 03

  I think they inevitably are. I really embrace the heroic story of American immigration. The idea that we are a nation of immigrants, to use John F. Kennedy's phrase, the idea that we welcome refugees fleeing persecution from around the world, the idea that immigrants have come up with some of the most important inventions, not only in our country's history, but in the world's history. And so I very much embrace that story, and I find it moving to read stories of immigrants. I also, in writing this book, came to grapple with the question of, okay, immigration can be great. That doesn't necessarily mean that more immigration is always better.

• 6:44Stephen J. Dubner?

  Remember, the National Origins Act of 1924 had severely constrained immigration to the US, both in number as well as countries of origin. In his book, Leonhart describes how John F. Kennedy wanted to undo this in the early 1960s.

• 7:00Speaker 03

  I think he and the people around him genuinely believed that the immigration system of the time was grossly unfair. I mean, two-thirds of all immigration slots were given to just three countries: Britain, Germany, and Ireland.

• 7:16Stephen J. Dubner?

  And many of those were unclaimed, you write, yes?

• 7:19Speaker 03

  Yes, because by that point, many people in Britain, Germany, and Ireland didn't want to leave. They had a pretty good life in their country. They were happy there. So John F. Kennedy becomes president in 1961, and he is seen as an advocate for changes to the immigration law. Part of it is political, in order to appeal to the later generations of the earlier Eastern European and Italian immigrants. Part of it is moral. And much of John F. Kennedy's agenda just goes nowhere in Congress, somewhat famously.

• 7:52Stephen J. Dubner?

  We all know what happened next.

• 7:54Speaker 04

  President Kennedy and Governor John Conley of Texas have been cut down by assassins' bullets. They were shot as they toured downtown Dallas in an open car.

• 8:04Speaker 03

  And Lyndon Johnson becomes president and is extremely skillful at negotiating Congress and understands that Kennedy's death creates some momentum behind Kennedy's legislation and also understands that there are real political forces pushing for immigration reform because this is the civil rights era and the Congress passes and Johnson signs two big civil rights bills that basically bar discrimination based on race and on national origin.

• 8:36Stephen J. Dubner?

  Okay, so this is one of LBJ's major pushes, but he also got some help, not from John F. Kennedy, who's dead, but a couple other Kennedys in the Senate, yeah?

• 8:45Speaker 03

  Correct. Both Robert Kennedy and Edward Kennedy become big advocates for an immigration overhaul. They see it as a way to honor their brother's legacy. And we then come to this point where there's a very important distinction. The advocates for changing the immigration system, the Kennedy brothers, basically all progressive Democrats at the time, a lot of moderate Republicans as well, and President Johnson, all insist, "We are not changing the volume of immigration to this country in any meaningful way. We are only changing the rules around who can come." So we're not going to have much more immigration. We're not going to vastly expand the number of slots. We're simply going to end this old

• 9:29Speaker 03

  racist system that gives all the slots to Western Europe.

• 9:32Stephen J. Dubner?

  You write that Bobby Kennedy liked to give examples, real-world examples, of the kind of immigrants who were currently not allowed to come to the US but whom the US could really use.

• 9:44Speaker 03

  Yeah, there's this really testy and fascinating exchange in a Senate hearing between Bobby Kennedy and an immigration skeptic from North Carolina, Sam Irvin. And Irvin asked Kennedy, "Is this bill that you're pushing going to allow ditch diggers to immigrate?" It's the word they both use, basically for construction workers. And he said, "No, it will not." Kennedy says, "There are lots of ditch diggers in the United States, so we would not be bringing ditch diggers in here." That's our RFK's line, and his point is we have written this bill in such a way, we are going to treat every nation around the world equally, going to get rid of the old racist system, but we are going to continue to make decisions based on which workers we actually

• 10:28Speaker 03

  need, and we're not going to increase the overall level of immigration. And since we don't need ditch diggers in this country, we're not going to let them in.

• 10:36Stephen J. Dubner?

  And give me some of the mechanics of that. For instance, let's say that the economy needed a bunch of whatever, nurses and nuclear engineers and physicists, okay?

• 10:45Speaker 03

  Yep.

• 10:46Stephen J. Dubner?

  How does the US put out the call for that? What is the mechanism for all that to happen?

• 10:52Speaker 03

  The way it would happen is that the government says, we need nurses and we need physicists, and they look at all the people who are applying to get in. And unlike in the past, they do not take into account what country those people are coming from. They say, is this really a nurse? Is it really a physicist? They think about how many slots they have for nurses and physicists, and then it's first come, first served.

• 11:14Stephen J. Dubner?

  So that sounds on paper logical and probably a good thing for the US. What actually happened?

• 11:21Speaker 03

  I think it's important to say it is logical and a good thing. What ended up happening was the bill's advocates were so committed to passing this change that they really dismissed almost all criticism of the bill as unfair. This is what Teddy Kennedy said, "The charges are highly emotional, irrational, and with little foundation in fact. They are out of line with the obligations of responsible citizenship. They breed hate of our heritage and fear of a vitality which helped to build America."

• 11:55Stephen J. Dubner?

  In other words, y'all are a bunch of old racists. Shut up. I know how this is going to work. It's going to work great. Just watch.

• 12:02Speaker 03

  Yes. And let's be really clear about what Kennedy was talking about. He was talking specifically there about accusations that the bill would lead to an increase in the level of immigration. It turns out he was entirely wrong about that. LBJ was wrong about it, and the bill's critics were correct. The bill led to an almost immediate and very large Increase in immigration and it did so because it included a whole bunch of loopholes that the bill's authors and advocates basically didn't pay much attention to.

• 12:33Stephen J. Dubner?

  So what happened? How was their prediction so wrong? Was it a failure of execution? A bureaucratic failure? Were there not enough resources put into the system?

• 12:44Speaker 03

  The reason the 1965 immigration law led to this huge surge in immigration, even though its authors insisted it wouldn't, is this technical difference between quota and non-quota immigration. The bill set an annual ceiling on immigration. Roughly 265,000 people could come into the US. But then it exempted several categories of immigrants from that ceiling. And they just didn't think through how many people would come into the system in the non-quota categories. The most important ended up being family members. And so if you were certain categories of family members of someone already living in this country, you could come to the United States and not count toward the quota.

• 13:29Speaker 03

  And over time, what happened is family members came and then family members of that family member came. So we really had vastly more immigration than the law's authors insisted they were allowing.

• 13:42Stephen J. Dubner?

  Did the advocates ignore those possibilities because they had motivated reasoning? They just wanted to see the upside? Were they really bad at math perhaps? Or did they just not understand how much demand there was out there?

• 13:55Speaker 03

  I've gone through the historical records on this. I found no evidence that they privately believed it would lead to an increase. I don't think they were lying. I think they were engaged in motivated reasoning and I think they weren't thinking very rigorously.

• 14:10Stephen J. Dubner?

  The Kennedys' opponents at the time had another reason for wanting to limit immigration. It's a reason we don't hear about much today.

• 14:18Speaker 03

  In some ways, it's a strange answer. The story goes back to the environmental movement. And when I first read it, I was like, really?

• 14:26Stephen J. Dubner?

  That's Zeke Hernandez. He's a professor of management at Wharton and the author of a forthcoming book called The Truth About Immigration. We met him in part one of this series.

• 14:36Speaker 01

  If you were an environmentalist in the 1960s, your main concern wasn't climate change. It was overpopulation. And listeners who are old enough might remember the book The Population Bomb, the fear that the world was going to starve to death because there were too many people, birth rates were too high, and agricultural production was too low. There was a man named John Tanton in Michigan, an ophthalmologist, who was a avid conservationist. He joined this zero-population-growth movement. A decade or so later, the predictions of the Population Bomb didn't prove correct. The environmental movement shifted into what we would recognize today. But John Tanton was in the radical wing of zero-population

• 15:19Speaker 01

  growth, and he wouldn't give up the cause. And he moved into this green nativism. So he started with funding from Cordelia Scaife May, who was an heiress to the Mellon Foundation, started a whole bunch of think tanks, like FAIR, Center for Immigration Studies, Numbers USA. These are the heart of today's anti-immigration movement. And he started these think tanks pushing policy papers, making arguments that we were all going to die, that the US couldn't handle that many people. The movement was fringe for a few decades, but eventually latched on to today's conservative movement. The Trump administration's immigration apparatus

• 16:01Speaker 01

  was staffed by people from these Tanton-founded think tanks. What they have found, and been fabulously successful, is that this plays very well with a certain base of voters, and it angers them, and it gets people to the polls.

• 16:15Speaker 03

  In any country in the world, people feel uncomfortable when their society changes really rapidly. And the far right is often able to take advantage. And what the left tends to do is they say, "Don't be like that to the voters of the country. Don't be so intolerant." And it just doesn't work. And I think the left and immigration advocates should ask themselves, why is it that this story is so similar all over the world?

• 16:46Stephen J. Dubner?

  But it took a long while for that anti-immigration sentiment to set in. Consider the national vibe in 1986. That was the 100th anniversary of the Statue of Liberty being erected in New York Harbor, a gift of friendship from the people of France to the United States. President Ronald Reagan, a Republican, spoke at the anniversary event. Here is what he said about the millions of immigrants whose very first view of America had been the Statue of Liberty.

• 17:20Speaker 05

  They were the men and women who labored all their lives so that their children would be well-fed, clothed, and educated. They worked in our factories, on ships and railroads, in stores, and on road construction crews. They were teachers, lumberjacks, seamstresses, and journalists. They came from every land.

• 17:39Stephen J. Dubner?

  There is a famous poem by Emma Lazarus inside the statue's pedestal. You're probably familiar with it. It begins, "Give me your tired, your poor..." (Singing) Give me your tired, your poor. Your huddled masses yearning to breathe free. "Your huddled masses yearning to breathe free. The wretched refuse of your teeming shore.

• 18:22Stephen J. Dubner?

  Send these, the homeless, tempest-tossed, to me. I lift my lamp beside the golden door." (Singing) I lift my lamp beside the door. When you hear these words today, they take on a different color. The huddled masses and wretched refuse sound more like epithets, but back then, at least for Ronald Reagan, this massive immigration had been a boon for the United States. Here is how he put it in 1989.

• 18:55Speaker 05

  Since this is the last speech that I will give as president, I think it's fitting to leave one final thought, an observation about a country which I love. We lead the world because, unique among nations, we draw our people, our strength, from every country and every corner of the world.

• 19:16Stephen J. Dubner?

  This is plainly not the kind of political rhetoric you hear today, especially from the Republican Party. Zeke Hernandez again.

• 19:24Speaker 01

  A lot of our national conversation about immigrants is framed around two narratives that both are incorrect and they do a lot of damage to us.

• 19:32Stephen J. Dubner?

  Hernandez himself is an immigrant from Uruguay. He came here for college and stayed.

• 19:38Speaker 01

  I call one of them the villain narrative, which is the idea that immigrants hurt us because they steal our jobs, they threaten our national security, they threaten the rule of law. The evidence contradicts that. But then, interestingly, on the pro-immigrant side, the most common narrative is what I call the victim narrative, which is the idea that immigration is good for immigrants and we owe the poor huddled masses of Emma Lazarus's poem compassion, even if it costs us. And, you know, that's a very moral point of view, but it's kind of a weak argument because it doesn't tell everyone else what immigrants do for the rest of us. So the anti-immigrant message is focused on how immigrants affect us. The pro-immigrant message is focused on how immigration affects immigrants.

• 20:22Speaker 01

  And there isn't like this narrative of the truth about how immigrants affect us economically and socially. And I thought, boy, we're giving up so much because the evidence so overwhelmingly shows net positive benefits for us, not for immigrants. I mean, yes, for immigrants too, but like for us.

• 20:40Stephen J. Dubner?

  We heard a lot of that evidence in the first episode of this series. For instance, the children of immigrants climb the economic ladder at a higher rate than the children of parents who were born in the US. Nearly half of the companies in the Fortune 500 were founded by immigrants or their children.

• 20:57Speaker 01

  Immigrants today are responsible for 36% of all patents in the US. They tend to be mostly Asian immigrants, but not exclusively. And so had the US not allowed those immigrants in, we wouldn't have those patents.

• 21:12Stephen J. Dubner?

  And immigrants are 80% more likely than the native born to start their own business. What accounts for that difference?

• 21:19Speaker 01

  If you're an unskilled immigrant and your employment prospects are low, you have a lower threshold for entering self-employment. That's why you see everything from ethnic restaurants to nail salons, laundromats, corner stores that sell calling cards. You know, these kind of ethnic businesses that I think everyone in the US is familiar with.

• 21:42Stephen J. Dubner?

  What do you think the US would look like today economically and socially, politically, et cetera, et cetera? If the Immigration and Nationality Act of 1965 had never existed and the US had continued on its low immigration path?

• 21:56Speaker 01

  I think the US would still be a powerful economy just because it's very large and because it still produces a lot of smart people on its own. So I don't think the US would be like a poor country.

• 22:09Stephen J. Dubner?

  We don't become a bigger Greece, for instance?

• 22:12Speaker 01

  I don't think so, but I think it would be on its way to decline. In fact, I think a good historical parallel to the US, which even follows a lot of the same timeline, is Argentina. So in 1900, immigrants were equally likely to go to both places. So Italians would go as much to Buenos Aires as they would to New York. Because, you know, Argentina produced cars. Argentina had a thriving manufacturing industry. It was a country with a lot of very talented, educated people. Then the two countries diverged. A populist movement led by Juan Peron, this is Evita, you know, those of you who know the musical, Evita's husband, Juan Peron,

• 22:53Speaker 01

  started a bunch of policies that were deeply protectionist and exclusionary. And so Argentina stopped receiving as many immigrants. It turned inside economically. It started preventing foreign investment and ideas from coming in. I don't want to oversimplify. There's a lot of other differences between the US and Argentina since then, but Argentina has not fared well and kind of entered this consistent, little by little, economic decline to the point of being what it is today. And I think the US would have probably been similar, perhaps not as bad as what Argentina is because its politics were less dysfunctional, at least back then. But I think it's a good parallel.

• 23:36Stephen J. Dubner?

  So the US didn't become Argentina, but the huge spike in illegal immigration, especially over the past few years, does have a lot of Americans thinking we're losing our grip. We'll get into that after the break. I'm Stephen Dubner. This is Freakonomics Radio. Unless you have been paying no attention to the news, you know that illegal immigration to the US is a big problem that has generated all sorts of friction.

• 24:13Speaker 06

  Apprehensions of migrants crossing the southern US border are once again reaching record levels.

• 24:20Speaker 07

  Nearly 10,000 migrants a day. That is what federal officials say they are encountering at the US southern border on average.

• 24:28Stephen J. Dubner?

  Border chaos, refugee backlogs, political fighting, and that's only part of the immigration story, the inbound side of the equation. On the outbound side, here's how The Wall Street Journal put it recently. "In the past, most migrants were single adults from Mexico looking for work. If caught by the Border Patrol, they could easily and quickly be deported. Now, a fast-growing share are families with children who are difficult to deport to their home countries. The change started around 2014 and has exploded in the past two years."

• 25:01Speaker 03

  As Barbara Jordan, the former congresswoman from Texas, said, "A nation that doesn't control its borders really isn't much of a nation."

• 25:09Stephen J. Dubner?

  That, again, is David Leonhardt, author of "Ours Was the Shining Future: The Story of the American Dream."

• 25:16Speaker 03

  The US has gone back and forth about how strong its border security has been. In recent years, our border security has been weaker, and that message, thanks in part to social media and the rise of smartphones, has really spread. And so, yes, chaos and poverty in Latin America play a role in the recent surge of immigration. But another thing that plays a role is that many immigrants have come to believe, often with cause, that as long as they can get here, even if they don't have legal permission, they will be able to stay for months, if not years, if not forever. And that creates a feedback loop that causes more and more people to want to come and creates more chaos at the border.

• 26:00Stephen J. Dubner?

  But it isn't just chaotic. It's also expensive. Here again is Zeke Hernandez, author of The Truth About Immigration.

• 26:09Speaker 01

  It's a complicated issue, but there is a legitimate complaint by states and localities that become the gateways for a disproportionate number of immigrants. The best estimate, and this is from a study by the National Academies of Science in 2017, it costs states money to welcome a first-generation immigrant. And the average estimate is $1,600 per immigrant. And this is accounting for all the future expenses and turned into net present value terms. And so, in the short run, it costs states to welcome immigrants. The main reason for that is because immigrants have more children than natives, and so states

• 26:53Speaker 01

  spend more educating the children of immigrants than the children of natives because they have more of them. It is true that some places bear a disproportionate share of those costs, and they're not guaranteed to recover them. Because imagine if the children of those immigrants that the state of Iowa paid for, they move to Illinois, and then Illinois collects the taxes that those children pay as adults, Iowa doesn't get its sort of, quote, "return on its investment on those children." If you look in the long run, however, at the state level, those children that were expensive to immigrate, so that's now the second generation, contribute positively

• 27:33Speaker 01

  to the tune of $1,700 per immigrant, and the grandchildren, the third generation, to the tune of $1,300 per immigrant. So if you add it up over three generations, the gain for the second and third generation is $254 billion across all states versus a cost of $57 billion. So it's a positive return on investment, but it just takes a long time. And so I think the legitimate conversation is, why is the federal government not reimbursing states for the costs that they bear to welcome new immigrants? The estimates show that the net benefit at the federal level, the net tax benefit of each immigrant is like $260,000.

• 28:16Speaker 01

  That adds up to over $10 trillion in taxes collected over many decades because of immigrants. But it's just that the federal government gets the benefits, states bear those costs unevenly, and there's no reimbursement scheme.

• 28:31Stephen J. Dubner?

  So that return on investment goes into the plus column when you're thinking about the economic benefits of immigration. But it does lead to a separate question. Does the economic success of immigrant families hurt the economic prospects of native-born families? Here is David Lee in heart again.

• 28:49Speaker 03

  A lot of people, particularly on both the political left and the pro-business libertarian right, imagine immigration as a kind of free lunch with no downsides.

• 29:01Stephen J. Dubner?

  So those who call for, let's say, open borders, and there are economists who call for that. What's the most obvious critique of an open border argument to you?

• 29:09Speaker 03

  There are not only economists who call for open borders. There are many political progressives in this country who say, no, I'm not for open borders, but in fact are extremely uncomfortable talking about any border security or any deportation. And I think effectively, even if they don't want to admit it, do favor something like open borders. So I would say that the first downside to large levels of immigration is there are wage costs for workers who are already in this country, both native-born workers, citizens, as well as recent immigrants. And there is just abundant evidence of this.

• 29:45Stephen J. Dubner?

  The evidence Lee and Hart is citing here comes from that same 2017 report from the National Academy of Sciences.

• 29:52Speaker 03

  They created a table that reviewed all of the relevant studies to look at what the effect of immigration was on the wages of people already here. And it is dominated by negative numbers. The economic logic here is Fairly straightforward. When the supply of a good increases, all else equal, the price of that good tends to fall. And so when you look at individual studies, the aftermath of the 1994 Mexican peso crisis, which led to this burst of immigration here. It found that wages fared worse in regions of the US that had more people who were coming here because of the peso crisis. Another study has looked at teenagers and found that those who live in places with less immigration tend to work more and earn more.

• 30:37Speaker 03

  A particularly elegant, if narrow, study looked at mathematicians and found that American-born mathematicians fared really poorly after the collapse of the Soviet Union, and all these Eastern European and Soviet mathematicians came into the country. It's a very basic concept, but a lot of advocates for immigration tend to dismiss it and say, no, no, there are all these other complex factors that erase that effect. And they can diminish that effect, but they don't erase it.

• 31:06Stephen J. Dubner?

  Although I do see one line in the summary of the study, which is, "The impact of immigration on the overall native wage may be small and close to zero, and the bulk of the effect is among the lowest education bracket in the US."

• 31:21Speaker 03

  Yep.

• 31:21Stephen J. Dubner?

  So tell me why you think that statement, that the impact is small, close to zero, doesn't line up with your assessment?

• 31:30Speaker 03

  There's a whole fascinating debate about the summary written about that report. One member of that expert panel, George Borjas, who tends to be more skeptical of immigration, released a separate summary, arguing that the summary did not fully accurately describe the report's own evidence, and that it put a thumb on the scale. Now, I actually don't dispute the idea that it may be small, and as you said, it may be focused on lower-income workers. But that means for many of those lower-income workers, it's not that small. This is one of these things in which it's worth not only looking at the evidence, which I think is supportive of what I'm saying, but also letting people think this through for themselves. Just a

• 32:15Speaker 03

  Imagine you work in an industry where there's suddenly a big burst of workers who are competing for your job. Do you think your wage is going to fall? Or ask yourself, why is it that certain professions that have a lot of political capital in our country manage to restrict competition from immigrants? My favorite example is doctors. It is extremely difficult to practice medicine in this country unless you do your training in this country. And that is effectively a way of doctors saying, hey, we know that if doctors immigrate to this country and can immediately compete with us, it might hurt us. So we want to keep some of them out.

• 32:55Speaker 03

  I went back to Zeke Hernandez from Wharton to see what he thinks of this argument, that immigration hurts the wages or employment prospects of current citizens.

• 33:05Speaker 01

  I understand it, and so I don't want to be uncompassionate for that kind of concern. There are some exceptional cases where you do see negative wage effects, but the headline is, it just doesn't happen.

• 33:18Speaker 03

  When Hernandez says, "it just doesn't happen," he means that he doesn't buy David Leonhart's interpretation of the data.

• 33:25Speaker 01

  And there's two explanations for that. One is, when you get this increase in the supply of workers because there's more immigrants, it's not just the supply of workers that increases, but demand goes up, the economy grows, because there's now more people who need to be fed, who need entertainment, who need housing. A bigger economy needs more jobs, and so you get this outcome where it's not zero sum. And then the other misconception behind the worry, it's what I call the "a worker is a worker is a worker" assumption, which is that a worker is the same regardless of where they were born. But actually, it's not the case. We know that immigrants, for example, go for jobs that natives won't do, whether it's farm jobs, construction jobs, dishwashing

• 34:09Speaker 01

  jobs. Companies simply can't find natives to do those jobs. The other is that even for jobs in which both immigrants and natives want to work, they bring different skill sets and play different roles or have different occupations. Let's say you have an immigrant. In the construction field, that immigrant might not speak English very well. So that immigrant will end up doing the drywall work or the work that doesn't require language skills. And that will create a push for the native construction worker perhaps to become the foreman where he or she needs to speak English. And so you also get this reallocation into occupations that don't compete directly with each other.

• 34:50Stephen J. Dubner?

  By now, you may be starting to feel about immigration the way I do. The more you dig in, the more you can appreciate just how complicated it is. How many inputs there are and how many outputs. How many conflicts between a humanitarian impulse and an economic one. How many arguments we have with family and friends and political rivals that aren't based on evidence, in part because the evidence itself is complicated and in part because we humans like to cherry pick the facts in order to win our arguments.

• 35:26Speaker 01

  I'll say something provocative, and I don't know if this is true, but I wonder if this is one case where the wisdom of the crowd doesn't work because the crowd is so misinformed and drowning in false narratives and false facts.

• 35:41Stephen J. Dubner?

  One example, Hernandez says, has to do with public safety.

• 35:45Speaker 01

  The misperception is that immigrants increase crime, that especially undocumented immigrants increase crime. And of all the hot button issues, that's the one that has the most unambiguous answer, which is exactly the opposite. It's not only that immigrants don't increase crime, it's that immigrants, and especially undocumented immigrants, commit fewer crimes than natives.

• 36:05Stephen J. Dubner?

  Now, you may be unfamiliar with this data because US media coverage of immigration tends to be, how shall we say this kindly, a tad hyperbolic. Whenever a recent immigrant, especially an undocumented one, does something terrible, that crime is held up as an example of an overwhelming trend, even though, as Zecran Hernandez told us, the data tells a different story.

• 36:29Speaker 01

  If you take a national security angle... The real threat to national security is not enough immigration. Let's take one example from Oppenheimer. That movie gets into the threat of the Nazis developing the atomic bomb before America. And the reason the US was able to out-innovate the Nazi regime is because it got all these talented scientists, many of which were German Jews.

• 36:53Stephen J. Dubner?

  Today, of course, immigrants are coming from many different places.

• 36:57Speaker 01

  Modern migration is not from Europe, it's from Asia, China, India, other Asian countries, and also Latin America, Mexico, Central America. What are the benefits? Well, immigration creates this conveyor belt of investment. One of the fastest-growing fast-food chains in the US in the last couple decades is a company called Pollo Campero. It's a company from Guatemala. It's kind of like a KFC, Popeyes kind of company, but they have recipes that are unique to Central America. This is a company that is super-popular. It's Central America's favorite fast food. They're one of the fastest-growing chains in the US because they follow this strategy

• 37:41Speaker 01

  of starting restaurants in places that have high populations of Central Americans. They discovered the opportunity because their highest-selling stores were in the airports of Guatemala City and El Salvador. And if you were on a flight from Central America to the US in the early 2000s, the plane would stink like fried chicken. And that's because if you were a Central American who was going to go visit friends and family, they didn't let you stay with them unless you brought a bag of Pollo Campero. Like, there's a story of a woman that carried 1,600 pieces in duffel bags, 1,600, and sold them at a profit. This is stale chicken that you sell at a profit, right? So that's the extent to which there was a market for this.

• 38:25Stephen J. Dubner?

  But that's a short-term market. You're saying the actual expansion of stores here made sense?

• 38:30Speaker 01

  It made sense. Their strategy is what they called "from Sanchez to Sanchez to Smith." The first Sanchez is the Central American market. Then you kind of grow into the Hispanic market more broadly, not just Central American. And then the ultimate target is the Smiths, meaning the general US market. And so immigrants... They act as a gateway for firms to tackle markets. There's a lot of information that immigrant communities can give you that is very nuanced and you can't just buy in a consulting report. It's also a matter of trust. Who is going to refer you to suppliers, to investors? The point is that investment across borders, and investment in general, is much more deeply human and social than we imagine.

• 39:14Speaker 01

  It's not just a matter of price differentials, wage differentials, market size. Of course, those variables matter, but social ties are the grease that makes those wheels spin.

• 39:26Stephen J. Dubner?

  As Hernandez sees it, economists have given us bad mental models of how the economy actually works.

• 39:33Speaker 01

  We also have really bad mental models of society. The melting pot model is very much a one-dimensional model. There's the origin culture, there's the receiving culture, and they're kind of competing. And then, of course, if you're very worried about immigrants and you look around and you see that Peruvian immigrants in New Jersey have this very tight-knit community and they maintain their foods and a lot of them still like to speak Spanish, and you're like, wait a minute, they're not melting. And so you have this unidimensional model of assimilation, right? But psychological research by John Barry tells us that model's totally wrong. The original culture and the receiving culture aren't along one dimension that competes,

• 40:16Speaker 01

  they're sort of perpendicular dimensions and they can coexist. Barry calls assimilation when someone is strongly attached to the receiving culture but loses attachment to their original culture. That's very hard. For first-generation immigrants, that is not going to happen because you're asking them to give up something that's precious and visceral to them, right? You can't tell me to give up everything that makes me Uruguayan. What Barry has found instead is that immigrants can have strong attachment to both. And that's what he calls integration. Integration means that you develop a healthy attachment to the mother culture and the adopted culture, and that has the best psychological outcomes for immigrants.

• 41:00Speaker 01

  Here's the counterintuitive part. Immigrants adapt better to the receiving country when they maintain that healthy attachment to the original culture rather than when they lose it.

• 41:14Stephen J. Dubner?

  After the break, how can the receiving country do better? Also, if you want to learn more about how labor supply and wages fit together, we made an episode a while back called "The True Story of the Minimum Wage Fight." I don't remember it that well, but I think it was pretty good. It's episode 460, and you can get it and all our episodes on any podcast app. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back.

• 41:51Stephen J. Dubner?

  Zeke Hernandez's forthcoming book is called "The Truth About Immigration." In it, he spends a lot of time untangling and simplifying the many components of this particularly complex issue.

• 42:03Speaker 01

  We've only really had illegal immigration or undocumented immigration since 1965 because the system never quite matched economic reality.

• 42:11Stephen J. Dubner?

  Another argument you make is that in the US, the anti-immigration movement has coalesced around primarily the issue of border security. So how do you think about that issue?

• 42:23Speaker 01

  Well, I agree that it's a big problem. It is important, though, to separate immigration, which is overwhelmingly good, from the immigration system, from the border. Those are three separate issues. And yeah, I think people are justified in being upset at the mess that's happening. I get a lot of emails and letters. And the common argument for those who are anti-immigration and very angry about the border is they make the bad apples argument, right? We have all these bad apples, all these bad actors who are violating our laws, and that's why the solution to that is we have to ratchet up enforcement and secure the border. You know, sure, there are some bad apples that get through, but the US has a stable,

• 43:05Speaker 01

  permanent population of over 11 million undocumented immigrants. When you have 11 million people in that status, it's too simplistic to say that it's 11 million bad apples, right? It's that our system of bringing apples into the US is totally messed up. When you haven't updated the number of visas since 1990, and in some cases, since 1965...

• 43:30Speaker 01

  You just have a huge mismatch between the economic needs of businesses and the supply of talent that those businesses need. A lot of people think, oh, it's big greedy corporations that are hiring these undocumented immigrants. The truth is they're not. It's the small and medium businesses that dot your community who have a very hard time finding talent, who don't have the resources to pay for expensive immigration lawyers or navigate the complicated US immigration system. There's just a huge mismatch between America's demand for people and the supply that the system allows. What does it take to start Zoom or Google or OpenAI?

• 44:12Speaker 01

  It takes really deep STEM skills and immigrants are just overrepresented in STEM fields. They're nearly half of the STEM workforce with graduate degrees.

• 44:22Stephen J. Dubner?

  Is that more reflection on excellent STEM education in those places or crappy STEM education in this country?

• 44:29Speaker 01

  I don't know that we know the answer to that. I think some of it is that we have programs that select for immigrants with those skills.

• 44:37Stephen J. Dubner?

  Immigration programs?

• 44:38Speaker 01

  Immigration programs, like the H1B program or even our employment-based green card program really selects for people with graduate skills, especially in STEM.

• 44:47Stephen J. Dubner?

  The fact that knowledge-based immigration and employment-based immigration produces that many, let's say, founders is, if nothing else, an indication that one component of US immigration policy is really good, yes?

• 45:00Speaker 01

  I would take the word "policy" out there. One component of US immigration that's really good is that we attract a hugely disproportionate share of skilled immigrants. We have something like half of foreign-born Nobel Prize winners in the world. Of all the immigrants in the world with bachelor's degrees or higher, the US gets over 40%. And so the US has been a magnet for the world's best and brightest for a long time.

• 45:27Stephen J. Dubner?

  But you're suggesting that's not connected to policy per se. How?

• 45:30Speaker 01

  I think the US does well with immigration despite policy, not because of it.

• 45:35Stephen J. Dubner?

  What do you mean?

• 45:36Speaker 01

  Well, our policies are pretty bad. Our immigration system is not designed for a modern economy. I mean, it was a system designed in 65 with some updates in 1990. But you know, even if we take 1990 as a reference point, the economy was $9 trillion then and it's over $20 trillion now. In 1990, we didn't have the tech boom or the need for the kinds of talent that we need now. And so we have a patchwork of programs and visa types that is really outdated. And so we don't accept enough talented people. Only 14% of green cards annually are given for employment-based purposes and two-thirds are given for family-based purposes.

• 46:18Speaker 01

  So we have a system that actually isn't designed to benefit from the world's best and brightest. Mostly, the US gets so much talent because the US is still the preferred destination for talented people. I would also say the other thing that the US is still outstanding at is higher education. The US has the highest quantity and on average, the highest quality of education institutions. And they are the preferred institutions for most international students. Even though the US only keeps less than a quarter of them in the labor force, the US is still getting a lot of that supply of really talented people through education. We just do a really bad job of keeping them.

• 46:59Stephen J. Dubner?

  Just how bad a job does the US do in keeping talented immigrants? Consider the H1B visa program that Hernandez mentioned. It is a three-year work visa for a variety of specialized occupations.

• 47:12Speaker 08

  There are 85,000 slots every year. That number is fixed. This time, I believe it was somewhere around 700,000 applicants.

• 47:23Stephen J. Dubner?

  That is Sindhu Mahadiven.

• 47:25Speaker 08

  I work in quality assurance in the medical device industry.

• 47:29Stephen J. Dubner?

  Sindhu grew up in Gujarat, India. In 2012, she moved to the US to get a master's degree in molecular and cell biology from the University of Texas at Dallas.

• 47:40Speaker 08

  After that, I worked at major medical device manufacturers in this line of work.

• 47:45Stephen J. Dubner?

  Her husband, who is also an immigrant, was getting his PhD in computer science.

• 47:51Speaker 08

  What's happened with immigration in the US is that the whole identity of the immigration issue has become border security. That's the face of immigration in the US. What I'm talking about is what's called EB immigration, employment-based immigration. And that's just not talked about. It's a source of great frustration in the immigrant community that this is not an issue that sees any daylight at all.

• 48:17Stephen J. Dubner?

  Through her employer, Sindhu applied for an H1B visa, twice.

• 48:22Speaker 08

  The thing with the H1B visa, if you are in the for-profit sector, is that it's a lottery. And when they say lottery, they really do mean lottery. You know, a lot of us are very surprised by that when we first come to the US.

• 48:38Stephen J. Dubner?

  So what was that like?

• 48:40Speaker 08

  It's a very cryptic, strange process. The way it works is that the employer sends the USCIS a package, an application package on your behalf.

• 48:50Stephen J. Dubner?

  The USCIS is the United States Citizenship and Immigration Services. It was founded in 2003 as part of the Department of Homeland Security, and it now oversees all immigration to the US. The agency it replaced was the US Immigration and Naturalization Service.

• 49:08Speaker 08

  And with that, they enclose a check for the processing fees. And they keep checking their accounts to see if the check has been cashed. And if the check has not been cashed, you were not picked. And that's it. That's the kind of uncertainty that you are put into. So it's a very strange sort of idiosyncratic process. And you're kind of left hanging. Unfortunately, I went many times around the merry-go-round, and I never did get an H1B. So I had to stop working. And since my husband had just graduated, we figured we would continue on in the US and explore our options.

• 49:50Stephen J. Dubner?

  So what happens then when you realize that you haven't been picked and your work authorization has run out? What does that actually mean? And how is that made clear to you that your time has run out?

• 50:03Speaker 08

  What that means is that when your current visa ends, your time in the US is going to end unless you can switch over to a different visa. For me, that meant I could go on to a dependent visa status. I could become a dependent to my husband. But what that also meant is that I needed to stop working. Because by default, dependents in the US are not allowed to work. It's one of the things the US immigration system does badly.

• 50:33Stephen J. Dubner?

  Did the notification that you needed to stop working come from the US government? Did it come from your employer? What happened there?

• 50:40Speaker 08

  No, the funny thing is, if you live in the US, you become very familiar with immigration. You just get to know this stuff. Because you have to know the rules of your visa status. You have to know what happens when it ends. You kind of have to figure out how to swim.

• 50:59Stephen J. Dubner?

  So I understand that you became a sort of immigration nerd, yes?

• 51:06Speaker 08

  Yes.

• 51:06Stephen J. Dubner?

  That you got to know the policies and regulations inside and out. Was that on purpose? Or was that just the process of you learning a lot about the system because of your personal involvement?

• 51:20Speaker 08

  I think it was a combination of things. Number one, I work in a regulated industry. So reading a lot of dense material comes kind of naturally to me, I guess. The second thing is, I had to stop working. And that led me down a path where I was wondering, who does this benefit? And why is this the case? And is having work visas allotted by lottery really the best way of allocating these scarce resources? I remember when I first heard that the H1B was a lottery, I reacted with, obviously, skepticism first.

• 52:05Speaker 08

  But then I thought, you know, really, that does make sense. Because how is the government supposed to decide whether a business administration person is better suited for this than a social science person or a therapist or a scientist, right? But then I got to thinking about it, and I wondered if this was the best way of doing it. So I started going down that rabbit hole, and turns out I'm still in it.

• 52:31Stephen J. Dubner?

  Do you feel there's discrimination against Indian immigrants in the US on any dimension, including perhaps the way that H1Bs are awarded?

• 52:40Speaker 08

  H1Bs are not country of birth specific, but green cards are. So can I lay out sort of a pathway for how a typical Indian person would find themselves in what's come to be known as the green card backlog?

• 52:57Stephen J. Dubner?

  Yeah.

• 52:57Speaker 08

  So this is specific to employment-based immigration. A person comes to the US either through a work visa or as a student like I did. If you have a STEM degree, you get to work extra and then you join the workforce using an H1B typically. That is typically granted for a maximum of six years. In that six-year period, you have to get your employer to sponsor a green card. But the trouble is there's very limited number of green cards. That is also something that has not been reassessed in 30-plus years. But the issue is that for Indian-born applicants, that backlog is very, very long.

• 53:41Speaker 08

  I believe the last finding was that to clear the backlog right now, it would take 54 years, taking into account attrition by way of death and abandonment.

• 53:50Stephen J. Dubner?

  Wow. That's for the Indian backlog?

• 53:53Speaker 08

  It's for the Indian EB2 and EB3 backlog, which is the typical master's, bachelor's skill level.

• 54:00Stephen J. Dubner?

  So how do you interpret that massive backlog? What does it mean? What does it say?

• 54:04Speaker 08

  I'm in Canada, aren't I?

• 54:10Stephen J. Dubner?

  That's right. Sindhu Mahadiwane and her husband have brought their talents to Canada. Coming up next time in the third and final episode of our series on immigration, many people feel the American dream has faded significantly. Canada, meanwhile, has increased their immigration levels big time. I believe the Canadian dream is alive and well. Has Canada stolen the American playbook? And are they siphoning off the talent we need here? That's next time on the show. Until then, take care of yourself and, if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire

• 54:53Stephen J. Dubner?

  archive on any podcast app, also at Freakonomics.com, where we publish transcripts and show notes. This episode was produced by Alina Coleman and Zach Lipinski. Our staff also includes Augusta Chapman, Eleanor Osborne, Elsa Hernandez, Gabriel Roth, Greg Rippon, Jasmine Klinger, Jeremy Johnston, Julie Canfor, Lyric Bowditch, Morgan Levy, Neil Carruth, Rebecca Lee Douglas, and Sarah Lilly. Our theme song is "Mr. Fortune" by The Hitchhikers. All the other music is composed by Luis Guerra. As always, thank you for listening.

• 55:27Stephen J. Dubner?

  Is your great great or your great?

• 55:29Speaker 03

  Did I say great great?

• 55:30Stephen J. Dubner?

  You did say great great.

• 55:31Speaker 03

  Oh, that's wrong.

• 55:37Speaker 02

  The Freakonomics Radio Network, the hidden side of everything.

• 55:44Speaker 08

  Stitcher.