Thursday, November 30, 2006

immigration # 687

Thought I'd forgotten about immigration didn't you? Well I haven't!

Don Boudreaux has a nice quote from Milton Friedman; it's a little heavy going but the point is that high rates of immigration can mask the amount of good it does. People tend to move from poor countries to richer countries; most immigrants picking grapes in America are earning more than they used to so it's good for them. But, GDP per head in America goes down because the wage he earns is less than the average.

From 1870-1914 (a period that gets me all misty eyed) American GDP per head grew by 2% a year, not bad. But during that time there was enormous immigration and the vast majority of immigrants were starting out at the bottom and dragging the stats down with them. America was doing really, really well.

In the last 30 years America has had higher rates of immigration than most European countries, a straight comparison with Europe understates American prosperity. But it at first glance it makes them look bad because they have quite a lot of poor people.

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