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Last week, in a triumph of hope over experience, Sens. John McCain and Teddy Kennedy introduced an immigration bill. This will now be engulfed by all the usual rhetoric. "America is a Land of Immigrants" vs. "the English language is at risk." "Immigrants are criminals" vs. "forcing immigrants to remain illegal is the real source of crime." But consider the economic question. Will letting in those foreigners harm American workers?
Start by knocking down the dumb arguments on both sides. It's implausible to claim that poor immigrants generally do jobs that Americans won't do. Mexicans mow all the lawns in Southern California, but it doesn't follow that largely immigrant-free suburbs in Pennsylvania are choked with waist-high grass. According to the 2000 Census, 82 percent of New York taxi drivers are foreign-born. But there are still cabs to be hailed in Detroit and Cincinnati, where more than 90 percent of taxi drivers are U.S.-born.
Then there's the opposite dumb argument: that immigrants push unemployment up. Setting aside swings in the business cycle, the level of unemployment in an economy is determined by the flexibility of the labor force, not by how many people are in it and certainly not by what passports they hold. Every economy has something called the NAIRU -- the non-accelerating-inflation rate of unemployment -- and the central bank's job is to keep the monetary taps open until the jobless rate falls to that level. If the rate falls below the NAIRU, the shortage of workers will push wages up faster than output. The resulting inflation will force the central bank to jack up interest rates, slowing the economy and halting job growth.
