Monday, July 22, 2013

Does immigration REALLY cause unemployment?

As I argued in an earlier post, our language tells much about our attitudes, beliefs and value judgments. I used the statement "Immigrants take our jobs" to explain how this statement reveals the belief that the newcomers into a country are worthless and parasitic. This time, let us look at another case where the nature of immigration is obscured by our language. We can often hear the following statement: Immigration causes unemployment. This statement is common in academic circles as well, but then it gets a more nuanced form. For example, one might say: "I test the hypothesis that immigration causes unemployment." In this case, if one finds a statistically significant correlation between unemployment and immigration, one would conclude that there may be cases in which unemployment is caused by immigration.

However, the set-up of this statement or hypothesis already implies certain judgments and beliefs that cannot be supported by logic. The first judgment is that a certain feature of individuals--their place of origin--is a valid theoretical construct in economics. It is assumed that the sole fact that someone is an immigrant is an important explanatory feature.

Second, there is a belief that the principle of causality is a valid explanatory device when it comes to linking immigration and unemployment. Causality may be very useful in linking the force of gravity and falling objects, but not necessarily in linking immigration and unemployment. Why? Let us use the concept of causality as it used to explain how the force of gravity causes objects to fall in the context of the above statement that immigration causes unemployment.

If it is true that immigration causes unemployment, then the following scenario is a valid scientific description of the link between immigration and unemployment. Once immigrants arrive into a new country, the fact that these people are immigrants causes employers to lay off their current workers and to employ immigrants. In other words, once immigrants enter the country, there emerges an attraction force between immigrants and employers and a repulsion force between employers and the domestic employees. This force causes immigrants to replace the native population at their jobs, and the native population to become unemployed. What matters for the creation of these forces and effects is the "immigrant-ness" of the newcomers. This feature of some people--that they are immigrants--is the essence for explaining the unemployment of some other people.

This, of course, is nonsense. We know that employers don't care about your "immigrant-ness" but how well you can meet their objectives; how your service can improve their business. Any time an immigrant is employed instead of a native worker, the "cause" has nothing to do with the fact that one of the workers is an immigrant and the other is not. The real cause is that the employer has certain goals and objectives and that he is convinced that one of the two individuals is able to meet those goals and objectives better than the other.

At the same time, the native individual that does not fit the employer's objectives as well, is not forced to be unemployed by some external repulsion caused by the presence of an immigrant. His skills, willingness to work for a certain wage or under certain conditions have become less desirable compared to some other individual's skills and desire to work at a lower wage or under different conditions.

Notice how, by framing the question of whether immigration causes unemployment, we shift our attention from the real causal relationship (of employer-employee compatibility) to a false relationship (between the presence of immigrants and unemployment). From the explanatory perspective, it is completely irrelevant whether someone who is better than I at doing my job has Canadian citizenship or not. It is not his citizenship status that makes him better able to meet my boss's needs. So, if I end up "losing my job" to someone who is an immigrant, the cause of this "loss" would not be the immigrant-ness of the new employee. No, the cause would be my inability or unwillingness to meet my employer's needs as well as someone else can meet those needs.

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