Even immigration is no free lunch – Washington Examiner

For every other issue on the planet, libertarians fervently believe Milton Friedmans old adage, There is no such thing as a free lunch. But for immigration, Friedmans wise words suddenly fly out the window.

Libertarian think tank scholars would have you believe that importing cheap foreign labor is a win-win for everybody. Employers get cheap labor, immigrants get higher pay, and consumers get cheaper goods and services. American workers arent hurt, the libertarians claim, because native workers wont do the jobs foreign workers will, and they actually benefit by using cheaper services to allow them to work longer hours in higher-paying professions (e.g., a lawyer who can work more billable hours since he can buy dinner instead of cooking it himself).

The libertarian case that adding to the supply of cheap labor never reduced native wages was always wrong. Harvard University economist George Borjas eloquently explained why years ago here.

But now, the Wall Street Journal is even reporting that cheap foreign labor has other drawbacks, too. In an article titled Rich Countries Are Becoming Addicted to Cheap Labor, Tom Fairless reports:

Many business owners say that bringing in low-skilled foreign workers has become essential, as local populations age and labor forces shrink. To some economists, however, dependence on imported workers is approaching unhealthy levels in some places, stifling productivity growth and helping businesses delay the search for more sustainable solutions to labor shortages.

Fairless continues, A 2022 study in Denmark found that firms with easy access to migrant workers invested less in robots. Research in Australia and Canada suggests that migrants could keep weak firms alive, weighing on overall productivity. Labor productivity growth has been sluggish across advanced economies in recent years. In the U.S. and U.K. farming sectors, productivity has flatlined for a decade or longer. In Japan and Korea, which have more restrictive immigration policies, it increased by around 1.5% a year, OECD data show.

Even Milton Friedman himself famously said in a 1999 interview, You cannot simultaneously have free immigration and a welfare state. And the United States spends over a trillion dollars every year on welfare.

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Lower wages for native workers, billions in debt from unfunded welfare programs, and now, lower overall economic growth.

Yes, mass immigration is great for employers and the immigrants who come here. But lets stop pretending it benefits everyone.

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Even immigration is no free lunch - Washington Examiner