Immigrants and 'Comparative Advantage'

WALL STREET JOURNAL (Opinion)

By Ben Wattenberg

August 8, 2012

http://online.wsj.com/article/SB10000872396390443477104577551250082215534.html?mod=googlenews_wsj

In 1817 the great English economist David Ricardo coined the phrase "comparative advantage" to identify activities that one nation can do better than most others. The concept here is that if the Swiss make the best watches, or the Israelis grow the best oranges, they should make use of their advantages to profit in the marketplace.

Today, America has advantages in the global marketplace that stem from its immigrant population. Let's consider some of these.

Modern nations that have expanding domestic markets are more likely to be economically healthy. For the most part, European nations do not have that advantage, and it hurts them.

When birth and fertility rates are low, over the decades population shrinks, sometimes rapidly in places such as in Italy, Germany, Spain and Greece. In Japan and South Korea, birth and fertility rates are also perilously low. The result: All of their socialized pension plans and programs to provide health care for the aged are dreadfully underfunded. The only serious remedies are higher deficits, reduced benefits or higher taxes—none of them pleasant.

In the U.S., on the other hand, total fertility rates are higher and population continues to grow. While the numbers are down somewhat due to the recession, immigration remains relatively high— -- an estimated 1.1 million, legal and illegal, in 2010, according to the Census Bureau. This immigration will lead the country on a path of healthy long-term population growth from (roughly) 300 million people in 2000, up to 400 million in 2050 and to half a billion in 2100. This is good news for the growth of the domestic market.

Moreover, America's immigrant population (median age of roughly 29) is younger than that of the native-born (about a decade older). That means they will have many more years of working life, paying into and helping support our old-age pension and health-care systems for years before they take out a dime.

Survey after survey shows that Americans are the most patriotic people on the planet, and that immigrants to the U.S. are among the most patriotic of all Americans. For example, immigrants serve with distinction in our armed forces.

Most immigrants, particularly young ones, assimilate rapidly into the larger American culture. One indicator: intermarriage. There is a lot of it, according to the Census. Latinos and Asians in particular marry outside their race or ethnicity, a pattern characteristic of larger immigrant groups. Their offspring and the offspring of their children lose much of their ancestral identification, even as the grandparents may sob a bit.

The new waves of immigrants since the 1960s, when restrictive legislation was abandoned, have assimilated rapidly and well. The intermarried couples and especially their children become "blended families" and likely call themselves just plain Americans. This follows the traditional pattern throughout American history.

Also traditional is the pattern of how native-born Americans feel about waves of immigration—which is to say, not well. The Irish were "micks" and met signs on stores that had hiring posters in the windows reading "no Irish need apply." The Jews were "kikes" and hotels had signs that read "no Jews and no dogs." The Poles were "Polacks," the Hungarians were "Hunkies," and the Italians were "dagos."

Americans have been afraid of each new group of immigrants as they arrived. As far back as the 18th century, Germans grew almost as numerous as people of English background; there was even some sentiment in favor of German as a second official language. All that didn't stop Benjamin Franklin from writing bitter screeds denouncing them.

Today only the identities of the immigrants have changed. Pat Buchanan, who celebrates hard work, religion and family values, regularly condemns Mexican immigrants who honor hard work, religion and family values.

Mr. Wattenberg, a senior fellow at the American Enterprise Institute and the Hudson Institute, is working on "The Death of the Population Explosion: Why Americans Gain and Others Lose," from which this op-ed is drawn.