Latest / Trumponomics / 45: The Economics Behind the Boom in Anti-Immigration Sentiment

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45: The Economics Behind the Boom in Anti-Immigration Sentiment · Trumponomics

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  Speaker 1: and welcome back to Bloomberg Benchmark, a show about the
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  Speaker 1: always have? But well, we'll always have you back. What
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  Speaker 1: what kind of law do you want to practice? I
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  Speaker 1: So stay tuned. So if our listeners continue to follow
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  Speaker 1: you on Twitter at Tori still, well maybe in three
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  Speaker 1: weeks they'll find out. Yeah, probably in lots of like
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  Speaker 1: boring legal jargon tweets from the Yale Lobby Library. Yeah exactly,
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  Speaker 1: I love that. So for our final show together, we
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  Speaker 1: thought we'd tackle a topic that seems to be everywhere
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  Speaker 1: we look these days, and that is immigration, and specifically
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  Speaker 1: how immigration affects our economy. Immigration has been a hugely
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  Speaker 1: or should I say you ugly, I'm trying to do
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  Speaker 1: my impersonation, get a little breathier like this, but it's
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  Speaker 1: been a very important topic in the U S election,
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  Speaker 1: and obviously Donald Trump has garnered a lot of support
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  Speaker 1: from people who are concerned about the growing number of
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  Speaker 1: newcomers from other countries here in the US right. And
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  Speaker 1: in the meantime in the UK, of course, Brexit happened
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  Speaker 1: and a lot of people who voted to leave the
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  Speaker 1: EU did so because they wanted more control over the
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  Speaker 1: number of people coming into the country, so kind of
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  Speaker 1: this groundswell of anti immigration nativist sentiment and membership in
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  Speaker 1: the EU is founded on four freedoms guaranteed to citizens
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  Speaker 1: and companies, and one of those is a free movement
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  Speaker 1: of people. But for a lot of voters in the UK,
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  Speaker 1: that freedom became synonymous with uncontrolled immigration. So that's why
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  Speaker 1: you wanted to use today's show to discuss exactly how
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  Speaker 1: immigration effects an economy, because there does seem to be
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  Speaker 1: a lot of emotion and debate about this issue, but
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  Speaker 1: also a decent amount of misinformation. Right, And because immigration
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  Speaker 1: is just such a broad topic, and inigration in the
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  Speaker 1: US can mean something very different from in Japan or
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  Speaker 1: in Brazil, we're going to be limiting our discussion today
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  Speaker 1: to the US and to a lesser extent, the UK.
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  Speaker 1: And so before we bring on our guest, let's run
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  Speaker 1: through some quick facts about immigrants in the US to
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  Speaker 1: set this stage. So to start, the US has more
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  Speaker 1: immigrants than any other country in the world by far.
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  Speaker 1: Pew Research Center estimates that the foreign born population residing
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  Speaker 1: in the US reached a record forty two point four
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  Speaker 1: million in twenty fourteen. That's about fourteen percent of our population.
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  Speaker 1: And that does include documented as well as undocumented immigrants. Right,
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  Speaker 1: this includes me too, right, that's right, right, Well, I'm
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  Speaker 1: on a work visa here, so I guess that's a
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  Speaker 1: nonimmigrant visa, but I'm a Japanese citizen and Mexicans account
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  Speaker 1: for the largest share of this, followed by Asian immigrants
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  Speaker 1: like me. Other Latin Americans came in third, Europeans and
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  Speaker 1: Canadians came in fourth, and among the new arrivals, Asians
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  Speaker 1: outnumbered Hispanics. Looking at the unauthorized immigrant population, it actually
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  Speaker 1: grew very rapidly between nineteen and two thousand and seven,
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  Speaker 1: but has since sort of leveled off, even declined a
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  Speaker 1: little bit. It topped out around twelve point two million,
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  Speaker 1: and now it's closer to eleven point two million, So
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  Speaker 1: it's actually about a quarter of the U S's overall
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  Speaker 1: foreign born population, right and zeroing in on the labor force,
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  Speaker 1: which I think a lot of people care about. Last year,
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  Speaker 1: there were twenty six point three million foreign born persons
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  Speaker 1: in the US labor force, so that's about of the total.
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  Speaker 1: So now that we've got those basics covered, let's get
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  Speaker 1: our experts on here to really add some color to
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  Speaker 1: this and help us discuss the arguments in support and
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  Speaker 1: against immigration control or tighter immigration control. Giovanni Perry is
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  Speaker 1: an economics professor at the University of California in Davis
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  Speaker 1: who has done extensive research on immigration. Giovanni, welcome, well,
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  Speaker 1: thank you, it's a pleasure to be here. Giovanni, tell
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  Speaker 1: us a little bit about you and how you became
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  Speaker 1: interested in immigration in the first place. Yes, there is
• 6:15
  Speaker 1: a little bit of a personal and the professional story.
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  Speaker 1: So personally, I was a college student in Europe in
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  Speaker 1: Italy in the early nineties, and there was the period
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  Speaker 1: in which Western Europe had the first wave of Eastern
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  Speaker 1: European immigrants. In Italy, they were mainly Albanian and then
• 6:30
  Speaker 1: immigrants from North Africa. And when I finished college, I
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  Speaker 1: worked actually in a center that helped them to find
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  Speaker 1: a job, to learn the language and put them on
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  Speaker 1: their way, and I actually saw the huge amount of talent, abilities,
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  Speaker 1: skills that there was there. And then as soon as
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  Speaker 1: I finished with this, I came to the US as
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  Speaker 1: a graduate student, and I was on the other side,
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  Speaker 1: and I experienced how many graduate students were from all
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  Speaker 1: over the world coming to the US with their talent,
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  Speaker 1: abilities and motivation, and uh in Berkeley, I would say
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  Speaker 1: that good half of the students that interacted with were
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  Speaker 1: from the rest of the world. And so I really
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  Speaker 1: started thinking how incredibly valuable this potential could have been
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  Speaker 1: from an economic point of view. Professionally, I started my
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  Speaker 1: career working on the impact of education, skills and abilities
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  Speaker 1: on economic growth of American cities. I focused on the
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  Speaker 1: US metropolitan areas in the last twenty years, and obviously
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  Speaker 1: by researching this, the topic of immigration come very soon
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  Speaker 1: because a lot of these cities have prospered and growth
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  Speaker 1: thanks to the skill and ability of many immigrants, and
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  Speaker 1: that's how I grew particularly interested. Now I really think
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  Speaker 1: that immigration is one of the big forces that is
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  Speaker 1: shaping our economic world and social world, and I think
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  Speaker 1: we need to understand it much better than we do now.
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  Speaker 1: Well gif any, it seems like the basic debate around immigration,
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  Speaker 1: and correct me if I'm wrong, is that either helps
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  Speaker 1: or hurts the economy. And it seems like there's also
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  Speaker 1: some gray area in there, but there seems to be
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  Speaker 1: that's the major fault line. So let's walk through the
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  Speaker 1: claims on both side, and I think both sides, excuse me,
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  Speaker 1: and I think on on the help side, the obvious
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  Speaker 1: one in my head is that it makes the economy bigger.
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  Speaker 1: We have more people working. Yes, so immigration increases the
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  Speaker 1: size of the labor force, but more interestingly increases the
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  Speaker 1: variety and the different number of skills and abilities that
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  Speaker 1: there are in the labor force. For a modern economy,
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  Speaker 1: it's very important to have available a large thick, as
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  Speaker 1: economists to say, labor force that can do different tasks
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  Speaker 1: and productive function, So you gave some number at the beginning.
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  Speaker 1: I want to emphasize that immigration in the US has
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  Speaker 1: been a very balanced and very highly represented throughout the
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  Speaker 1: range of skills. So there are a lot of less
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  Speaker 1: educated manual type of worker which are immigrants, but there
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  Speaker 1: are also a lot of very highly and highly educated scientists, engineers,
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  Speaker 1: and technology workers who are immigrants. So this very large
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  Speaker 1: and broad spectrum of skills, combined with the fact that
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  Speaker 1: when immigrants came into an economy, they not only supply labor,
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  Speaker 1: but they also consume. They start companies, they invest, create
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  Speaker 1: an increasing the size of the economy, and that's where
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  Speaker 1: the positive impact of them come from, right right, So
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  Speaker 1: on the low inside they might be people from more
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  Speaker 1: developing economies who do jobs that other Americans don't want
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  Speaker 1: to do. And then on the higher, higher income side,
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  Speaker 1: the higher inside, it's kind of the high scaled immigration
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  Speaker 1: that you hear a lot in Silicon Valley about the
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  Speaker 1: need from more computer programmers and other technical talent. Yes,
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  Speaker 1: so let me go a little bit more in depth
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  Speaker 1: into this partition that you did, which I think is
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  Speaker 1: very important. You use this word at the low end
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  Speaker 1: of the education, so relatively unskilled manual workers do jobs
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  Speaker 1: that Americans don't want to do. So the way economists
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  Speaker 1: explain this is that Americans, because they have are becoming
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  Speaker 1: more educated, they're also becoming older as a society, are
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  Speaker 1: quickly moving out of some manually intensive, relatively unskilled type
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  Speaker 1: of jobs. But the demand for this is relatively high.
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  Speaker 1: I think of manual job in personal service, childcare, elderly care, construction,
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  Speaker 1: agricultural services. These are typically job that are filled then
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  Speaker 1: with immigrants, and immigrants by taking this job allow companies
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  Speaker 1: and economies that leave off this type of activity to
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  Speaker 1: expand and to grow and to create related job connected
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  Speaker 1: job that actually Americans will do. So a construction company
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  Speaker 1: will certainly need construction worker, but we'll also need engineers,
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  Speaker 1: sales representative, accountants, And with the company staying in business
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  Speaker 1: because it can hire immigrants, it will grow and higher
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  Speaker 1: in other type of job where most Americans actually will work.
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  Speaker 1: So that's it's the complimentarity measure rather than the competition
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  Speaker 1: only of immigrants that opens up this possibility that actually
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  Speaker 1: more immigrants not only grow the economy but can actually
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  Speaker 1: create job opportunities for American workers. And that's one of
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  Speaker 1: the channels through which this positive effect works. Of course,
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  Speaker 1: at the high end of the spectrum, the scientists an
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  Speaker 1: engineer are even more if anything, needed for company to
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  Speaker 1: grow and to increase in size. And so, as you say,
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  Speaker 1: certainly Silicon Valley is an example in where a very
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  Speaker 1: large number of immigrants has allowed the sector to grow
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  Speaker 1: to hav an world leadership and to give job to
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  Speaker 1: a lot of others American too. So the fallacy that
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  Speaker 1: there is one job and if it's taken by immigrant,
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  Speaker 1: is not taken by native is a fallacy because the
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  Speaker 1: number of jobs not fixed in an economy, and economy
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  Speaker 1: that can grow thanks also to the contribution of immigrants
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  Speaker 1: can create job And so why more immigrants is more
• 12:01
  Speaker 1: than one more job? Is one more job for him
• 12:04
  Speaker 1: or her and then more jobs for the rest of
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  Speaker 1: the economy. And I think another argument that I've read
• 12:10
  Speaker 1: in various researches that um, when immigrants do take lower wages,
• 12:14
  Speaker 1: either because you know, they really want this job or
• 12:17
  Speaker 1: that matches with their skill set, whatever it is, that
• 12:20
  Speaker 1: can help keep costs low for businesses, which means higher
• 12:23
  Speaker 1: profits for them. It could also mean lower costs for
• 12:25
  Speaker 1: American consumers. So that's something to think about as well.
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  Speaker 1: But I do want to turn to sort of the
• 12:30
  Speaker 1: argument for tighter immigration controls or I don't. I don't
• 12:34
  Speaker 1: know if we want to call it against immigrants. I
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  Speaker 1: don't think that fits necessarily. But you touched on it
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  Speaker 1: just now. Immigrants take jobs at Americans need. So this
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  Speaker 1: idea that instead of it being complimentary, as you mentioned,
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  Speaker 1: there is just one job and the immigrant takes it,
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  Speaker 1: and then you know that leaves a native born worker
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  Speaker 1: without a job that might fit his or her skill set.
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  Speaker 1: And if we look at that argument, Giovanni, who would
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  Speaker 1: be the types of workers, the types of American workers
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  Speaker 1: who would be most impacted by that. Given that at
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  Speaker 1: the low end of the skill spectrum, immigrants are tendentially
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  Speaker 1: taking these manual intensive jobs in agriculture, construction, and services,
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  Speaker 1: American worker who do the more directly jobs which are
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  Speaker 1: more directly in competition with them, will be more at risk. Now,
• 13:26
  Speaker 1: the data show that a lot of Americans have actually
• 13:28
  Speaker 1: moved out of this job at a relatively quick uh speed,
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  Speaker 1: And in places where immigrants are, Americans move out and
• 13:36
  Speaker 1: do jobs which are more um more interactive, So they
• 13:41
  Speaker 1: go from being construction worker to supervisor. They go from
• 13:44
  Speaker 1: being agricultural worker to farm manager at a faster speed
• 13:48
  Speaker 1: when immigrants arrived, because they have to find other niches
• 13:51
  Speaker 1: where they can compliment and take advantage of the richer
• 13:55
  Speaker 1: structure of skill in the economy. But certainly low educate
• 14:00
  Speaker 1: the older worker who will have a hard time transitioning
• 14:03
  Speaker 1: are the one who could be more at risk. Inaggregate,
• 14:06
  Speaker 1: I would say that most of the data and most
• 14:08
  Speaker 1: of the research in the United States, both looking at
• 14:11
  Speaker 1: the cities, at states that counties, does not seem to
• 14:15
  Speaker 1: find a net negative effect on the jobs even of
• 14:19
  Speaker 1: relatively low skilled Americans, but certainly some specific categories and
• 14:23
  Speaker 1: some specific group of workers who are displaced at least
• 14:27
  Speaker 1: in the short run by this, immigrants could be for
• 14:31
  Speaker 1: a while at least suffering out of this, right, And
• 14:34
  Speaker 1: do you have funny what about on the wages side,
• 14:37
  Speaker 1: because supply and demand just tells us that if you
• 14:40
  Speaker 1: increase the number of workers, that would lead to a
• 14:43
  Speaker 1: suppression and wages. What are your thoughts on that? Yeah,
• 14:47
  Speaker 1: the supply and demand will tell you what you just said,
• 14:50
  Speaker 1: that if you are comparing oranges with oranges the same
• 14:53
  Speaker 1: type of workers. So if you have one type of worker,
• 14:55
  Speaker 1: and you increase the supply, then the wage of those
• 14:58
  Speaker 1: will go down, but if nothing else changes obviously, but
• 15:02
  Speaker 1: there are a couple of things which actually happen when
• 15:04
  Speaker 1: immigrants come first. As I said, they have somewhat different skills,
• 15:07
  Speaker 1: so they take type of niches which are not the
• 15:09
  Speaker 1: same as the one where Americans are. Second, when American
• 15:13
  Speaker 1: immigrant workers come in, firms respond to this so invest more,
• 15:18
  Speaker 1: look for more highers, and this increases capital and so
• 15:21
  Speaker 1: it may in turn increase demand. So certainly there is
• 15:24
  Speaker 1: a little bit of this competition effect, because as we said,
• 15:28
  Speaker 1: there are some worker in direct competition, but there is
• 15:30
  Speaker 1: also some effect in complimentarity. So you have to look
• 15:34
  Speaker 1: again in aggregate. But that very simple model in which
• 15:37
  Speaker 1: when you increase supply the wages go down is only
• 15:41
  Speaker 1: true if I have identical workers and if everything else
• 15:44
  Speaker 1: is completely constant. Immigrant and me emphasize this other point,
• 15:48
  Speaker 1: do not come in all at a certain point. They
• 15:50
  Speaker 1: have been coming in relatively slowly, so the economy that
• 15:53
  Speaker 1: has received them has had time to invest to adjust,
• 15:58
  Speaker 1: and worker American worker had time to recalibrate their specialization,
• 16:02
  Speaker 1: their education. Also, as a consequence of immigration, so I
• 16:06
  Speaker 1: would say that the long run effects are the more important,
• 16:09
  Speaker 1: the one in which you not only look at the
• 16:11
  Speaker 1: increasing supply of immigrant worker, but also you see how
• 16:15
  Speaker 1: American firm respond to that and how American workers specialization
• 16:19
  Speaker 1: changes as a consequence of that. In that type of framework,
• 16:23
  Speaker 1: which happens over five ten years, American worker tend to
• 16:27
  Speaker 1: be more differentiated from immigrants and so tend to suffer
• 16:30
  Speaker 1: less and benefit more in their wages, in their productivity
• 16:34
  Speaker 1: from the influence of immigrants on wages. I wanted to
• 16:37
  Speaker 1: say one more thing, which has to do with the
• 16:39
  Speaker 1: highly skilled. The highly skilled scientists an engineer are a
• 16:43
  Speaker 1: clear input to American technological growth, maybe one of the
• 16:47
  Speaker 1: most important inputs. And American technological growth in the last
• 16:51
  Speaker 1: fourty years has been the main reason why productivity in
• 16:54
  Speaker 1: the US have grown and with it wages. So in
• 16:58
  Speaker 1: the long run, having more of the group can actually
• 17:01
  Speaker 1: result in higher wages because of higher productivity of everybody.
• 17:05
  Speaker 1: Think of how information technology is transformed the way we
• 17:08
  Speaker 1: do a lot of things in healthcare, in the services,
• 17:12
  Speaker 1: in education, and how the productivity of worker has gone
• 17:14
  Speaker 1: up because of that. If you think that part of
• 17:17
  Speaker 1: that innovation and that changes is brought by that segment
• 17:20
  Speaker 1: of immigrants, then you have a very big, long run
• 17:23
  Speaker 1: effect on wages that could be actually very positive. So
• 17:26
  Speaker 1: we're gonna take a quick break to digest all of this,
• 17:29
  Speaker 1: and when we come back, we're going to talk a
• 17:31
  Speaker 1: little bit more about the history of immigration and also
• 17:35
  Speaker 1: why this topic has become so big now in both
• 17:38
  Speaker 1: the US and the UK, and how this tension could
• 17:40
  Speaker 1: be resolved after we come back. Bloomberg Benchmark is brought
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• 18:01
  Speaker 1: For just well, so you have anny um. I mean,
• 18:12
  Speaker 1: one more thing that we didn't talk about just now
• 18:15
  Speaker 1: was the whole idea of use of public services and
• 18:19
  Speaker 1: the tax base. And that's sort of just a whole
• 18:22
  Speaker 1: other can of worms that we could talk about at length.
• 18:26
  Speaker 1: But is there anything that the research shows there, because there,
• 18:30
  Speaker 1: you know, there is this notion out there that immigrants
• 18:33
  Speaker 1: come in and they use all these government services and
• 18:35
  Speaker 1: they don't pay their fair share into the system. Well,
• 18:38
  Speaker 1: so again, let me separate the effect of high and
• 18:41
  Speaker 1: less educated UH and argue that each one of them
• 18:45
  Speaker 1: probably does not impact too much, does not have a
• 18:48
  Speaker 1: big fiscal impact on the US. So they highly educated,
• 18:51
  Speaker 1: typically they will have an average wage which is higher
• 18:54
  Speaker 1: than the average Americans, so they will contribute more in
• 18:57
  Speaker 1: the system that they take moreover, many of them come
• 18:59
  Speaker 1: when they are young, and so they have a long
• 19:01
  Speaker 1: contributing life ahead of them before start taking anything out
• 19:04
  Speaker 1: of this UH in social security. So, in fact, having
• 19:08
  Speaker 1: more highly skilled immigrant is a general consensus is a
• 19:11
  Speaker 1: way of improving significantly the fiscal balance of the US
• 19:14
  Speaker 1: less educated. Well, there is this interesting fact a low
• 19:18
  Speaker 1: educated immigrants in the US are working in a very
• 19:22
  Speaker 1: large part um. They are as you were saying before,
• 19:25
  Speaker 1: in large part Mexican or Latino who are employed. UM.
• 19:30
  Speaker 1: And they given that a very big share of them
• 19:34
  Speaker 1: is actually undocumented, that they don't have access currently to
• 19:37
  Speaker 1: any of the welfare and the welfare benefits that the
• 19:42
  Speaker 1: US guaranteed. They don't have access to food stamps, to
• 19:45
  Speaker 1: welfare transfer, to unemployment transfer. But on the other hand,
• 19:49
  Speaker 1: they pay a large chunk of taxes. They pay certainly
• 19:52
  Speaker 1: consumption taxes, certainly the real estate through the rent that
• 19:55
  Speaker 1: they pay. Some of them even pay income taxes through
• 19:58
  Speaker 1: the fake Social Security in number that they have they
• 20:01
  Speaker 1: pay social Security tax. So the net accounting even therefore
• 20:04
  Speaker 1: less educated, is that currently they probably contribute more than
• 20:08
  Speaker 1: they take out in the system. And of course this
• 20:11
  Speaker 1: will change if there is a regularization which allow them
• 20:14
  Speaker 1: to access some of the benefit of the US. But
• 20:18
  Speaker 1: you have to keep in mind the debt. The welfare
• 20:20
  Speaker 1: state in the US is not too generous and it's
• 20:22
  Speaker 1: only really very restricted to citizen. Even temporary worker, temporary
• 20:28
  Speaker 1: immigrant on temporary visa do not have access to these benefits.
• 20:31
  Speaker 1: So chances are that they will stay as an active
• 20:34
  Speaker 1: contributor to the US public sector even if they are legalized,
• 20:39
  Speaker 1: as long as or before getting their citizenship. So overall,
• 20:43
  Speaker 1: I don't think there are bad news on that side either.
• 20:45
  Speaker 1: Overall it looks like they could be a net fiscal
• 20:48
  Speaker 1: positive for the US, and I mean welfare. Are welfare
• 20:51
  Speaker 1: systems generosity in comparison to to Europe, for example, Yes, yes,
• 20:56
  Speaker 1: in comparison to Europe, in particularly northern Europe is certainly
• 20:59
  Speaker 1: my too much more limited than the U S. Generals,
• 21:02
  Speaker 1: Do you have funny before we went to break you
• 21:05
  Speaker 1: talked about how lower educated older workers are probably going
• 21:09
  Speaker 1: to be the ones who lose out the most with
• 21:11
  Speaker 1: an influx of immigration. Although it's it is also difficult
• 21:15
  Speaker 1: to kind of compare you know, you said it wasn't
• 21:17
  Speaker 1: an orange is oranges comparison um. And of course in
• 21:22
  Speaker 1: the UK it seems like a lot of people who
• 21:24
  Speaker 1: voted to leave the European Union were lower educated, lower income,
• 21:29
  Speaker 1: older voters. So why do you think immigration has become
• 21:34
  Speaker 1: such a hot topic these days, both in the US
• 21:37
  Speaker 1: and the UK. And I wonder how you see the
• 21:40
  Speaker 1: tension being resolved somehow. So I have a couple of
• 21:45
  Speaker 1: potential explanation or reason why immigration is at such a
• 21:49
  Speaker 1: hot bottom. So one is that it is true that
• 21:52
  Speaker 1: a relatively older middle class worker in western countries have
• 21:57
  Speaker 1: not done very well in general in terms of wages
• 22:00
  Speaker 1: and income. In the last ten twenty years. The wages
• 22:03
  Speaker 1: of the median, particularly older worker in the US and
• 22:08
  Speaker 1: in the UK and Europe has not grown very much.
• 22:10
  Speaker 1: Now economists tend to agree that immigration probably has nothing
• 22:14
  Speaker 1: to do with this. In large parties technology technology is
• 22:18
  Speaker 1: mechanized and informatized. A lot of the jobs that used
• 22:21
  Speaker 1: to be relatively well paid in parties globalization. There of
• 22:24
  Speaker 1: course there is trade and some of these jobs have
• 22:26
  Speaker 1: been assured. But even if immigration is not the cause
• 22:29
  Speaker 1: of this, or at least economists can pinpoint that it
• 22:32
  Speaker 1: is not the cause of this, in the imagery that
• 22:35
  Speaker 1: is proposed, it's very easy to say, oh, look, you
• 22:38
  Speaker 1: have not been doing very well, and there is a
• 22:40
  Speaker 1: simple explanation. Are the immigrants that come in? Because there
• 22:43
  Speaker 1: is a simple solution. Close the border and the problem
• 22:45
  Speaker 1: goes away. So simple and very characterization of the problem,
• 22:50
  Speaker 1: I would say incorrect. And then simple solution maybe is
• 22:53
  Speaker 1: appealing from a political point of view. I was doing
• 22:56
  Speaker 1: a piece of research and um, it's said that wages
• 22:59
  Speaker 1: have been and stagnant in in the UK for a while.
• 23:02
  Speaker 1: Housing is hard to find and and expensive, and at
• 23:06
  Speaker 1: the same time of government austerity. Um, that's making public
• 23:10
  Speaker 1: services causing kind of a crunch there. And so it's
• 23:13
  Speaker 1: very easy to look at that scenario and say, wow,
• 23:15
  Speaker 1: if we had less people, maybe this would be easier
• 23:19
  Speaker 1: to deal with. Yes, correctly, So it's easy to make
• 23:23
  Speaker 1: the connection. And I think even this this little model
• 23:26
  Speaker 1: that you were mentioning before, increase the supply and wages
• 23:29
  Speaker 1: go down. I think people think that they understand it,
• 23:32
  Speaker 1: and I think that the economy is just as simple
• 23:34
  Speaker 1: as that, and so that's also part of the easy
• 23:36
  Speaker 1: communication of that part. So that's one. The other reason
• 23:40
  Speaker 1: is that I think immigration involves many other sentiments besides economics.
• 23:44
  Speaker 1: And obviously there are a sequence of cultural security type
• 23:48
  Speaker 1: of issues, and so it's easy to just bundle up
• 23:50
  Speaker 1: everything and propose one solution to all of the poes
• 23:54
  Speaker 1: of the modern society in pushing away immigrants. I really think, though,
• 23:59
  Speaker 1: that is neither unique to this country nor unique to
• 24:03
  Speaker 1: our time. The US has gone through several periods of
• 24:07
  Speaker 1: a very strong anti immigration sentiment. In the nineteen tents
• 24:11
  Speaker 1: nineteen twenties, when immigrants were at a level which was
• 24:14
  Speaker 1: as high as today, incredibly staugh draconian law against immigration
• 24:18
  Speaker 1: were passed because the Italian, the Irish, the Polish were
• 24:22
  Speaker 1: seen as these new immigrants stealing jobs and also bringing
• 24:26
  Speaker 1: culture and risks that were not known before. So we
• 24:30
  Speaker 1: need to have also patients because history has been going
• 24:33
  Speaker 1: through this before, and I think informing people about the
• 24:37
  Speaker 1: facts and emphasizing the importance of I think correct economic
• 24:43
  Speaker 1: understanding in order to do good policy is very important
• 24:47
  Speaker 1: today as it was in the past. So tor Funny,
• 24:50
  Speaker 1: is it safe to say that you think immigration is
• 24:53
  Speaker 1: generally good for an economy. Yes, I would say that
• 24:57
  Speaker 1: in general it is. Let me add this general classification
• 25:01
  Speaker 1: of immigration that are also different from the perception. Immigration
• 25:05
  Speaker 1: in general, certainly to the U S and the u
• 25:07
  Speaker 1: k S has been more high skilled and low skilled.
• 25:10
  Speaker 1: If you look at the spectrum, there is a little
• 25:12
  Speaker 1: higher percentage of college educated in immigrants than in the population.
• 25:16
  Speaker 1: So immigration has been good also because it has increased
• 25:19
  Speaker 1: the level of education of the receiving country. And second,
• 25:23
  Speaker 1: immigration happens relatively slowly, so that country have been able
• 25:27
  Speaker 1: to adjust. Immigration is a force that changes the economy,
• 25:31
  Speaker 1: and if countries take this opportunity in the long run,
• 25:35
  Speaker 1: can really improve productivity, can improve the skills available. It's
• 25:39
  Speaker 1: a little bit like technologies are. To see the world
• 25:42
  Speaker 1: changing from today to tomorrow, but over a decade the
• 25:45
  Speaker 1: world changes a lot because of that, and I think immigration,
• 25:48
  Speaker 1: certainly to the UK and to the US, has been
• 25:51
  Speaker 1: this force bringing skills, changes innovation, but also more worker
• 25:57
  Speaker 1: and absorbed in the right way, it can be death
• 26:00
  Speaker 1: a force for growth and the long run effect, I
• 26:03
  Speaker 1: would say are certainly more positive than negative. As a
• 26:08
  Speaker 1: Japanese citizen living and working in San Francisco right now,
• 26:11
  Speaker 1: I like to think that I bring quite a lot
• 26:13
  Speaker 1: of innovation to the American I would agree that is hockey.
• 26:20
  Speaker 1: Not only you bring a lot of innovation, but your
• 26:23
  Speaker 1: own country is losing and missing a lot of innovation
• 26:26
  Speaker 1: by not admitting more immigrants. That Japan has been one
• 26:29
  Speaker 1: of the toughest countries in terms of admitting immigrants, just
• 26:32
  Speaker 1: to make a digression, and it's economy in the last
• 26:35
  Speaker 1: twenty years being quite slow and quite stagnating, So that
• 26:38
  Speaker 1: could be almost a counter example of the what immigration
• 26:42
  Speaker 1: and new ideas and creativity brings. And you make a
• 26:45
  Speaker 1: fantastic point that you know, immigration is an issue that
• 26:49
  Speaker 1: countries have been dealing with for decades and decades own centuries. Now,
• 26:54
  Speaker 1: this isn't the first time the US has gone through.
• 26:57
  Speaker 1: I don't want to call it a crisis, but there
• 27:00
  Speaker 1: definitely fears and concerns out there about immigration and how
• 27:03
  Speaker 1: many people we let in. So it seems like history
• 27:06
  Speaker 1: is just sort of repeating itself here. Yes, absolutely, the
• 27:10
  Speaker 1: interesting thing at the interesting difference I would say with
• 27:13
  Speaker 1: the previous historical period of large immigration, which was the
• 27:16
  Speaker 1: early was that in that period I would say that
• 27:19
  Speaker 1: immigration to the YES was almost genuinely free. Everybody who
• 27:23
  Speaker 1: showed up in Ellis Island or in San Francisco was
• 27:26
  Speaker 1: admitted unless they had some sort of diseases. And then
• 27:30
  Speaker 1: progressively there were tougher and tougher immigration restriction. Now immigration
• 27:35
  Speaker 1: is very regulated already. I guess people sometimes hearing this
• 27:38
  Speaker 1: thing that immigration is relatively free to the US, immigration
• 27:42
  Speaker 1: is the most regulated and restricted flow in on Earth.
• 27:47
  Speaker 1: So goods and investment and ideas flow much much more freely.
• 27:52
  Speaker 1: People in terms of mobility of labor is much more,
• 27:56
  Speaker 1: much much more constraint. On average in the US, UM
• 27:59
  Speaker 1: maybe seven hundred thousand people come in every year as immigrants.
• 28:03
  Speaker 1: This is zero point five percent of the labor force
• 28:07
  Speaker 1: of the United States. These are small and slow numbers,
• 28:11
  Speaker 1: but still I agree with you. The worries of the
• 28:15
  Speaker 1: border the immigrants, which are different in maybe ethnicity, in culture,
• 28:20
  Speaker 1: brings this incredible level of anxiety, both in Europe and
• 28:23
  Speaker 1: in the US, and good policymakers and good politicians have
• 28:27
  Speaker 1: to address it, explain it, and turn it for the best.
• 28:31
  Speaker 1: I think yeah, And I think it's I think it's
• 28:32
  Speaker 1: mostly undocumented immigrants that that wrinkle people the most though,
• 28:37
  Speaker 1: And that's sort of understandable if if people aren't going
• 28:40
  Speaker 1: through the process, maybe America is a country full of
• 28:43
  Speaker 1: rule followers. I don't know, I don't believe. So there's
• 28:47
  Speaker 1: this idea about people getting around the rules though, that
• 28:50
  Speaker 1: that really sorts of gets under people's scan. I agree.
• 28:53
  Speaker 1: I agree. It's interesting though about undocumented immigrants, And let
• 28:57
  Speaker 1: me say why. I think there is a little bit
• 29:00
  Speaker 1: just in the perception there too. In the last so
• 29:03
  Speaker 1: as you have said, the net inflow of undocumented is zero.
• 29:07
  Speaker 1: In fact has been negative in the last ten years.
• 29:09
  Speaker 1: So the inflow of undocumented it was really an issue
• 29:13
  Speaker 1: of the nineties and the early two thousand's. Now we
• 29:16
  Speaker 1: have the undocumented in and now the issue is how
• 29:18
  Speaker 1: to find a path for these people. But back then,
• 29:22
  Speaker 1: the American economy was growing, especially in the nineties, and
• 29:26
  Speaker 1: one was creating a lot of these jobs which were manual,
• 29:30
  Speaker 1: low skilled, and American companies were very willing to hire
• 29:33
  Speaker 1: people who were foreign born because there were very few
• 29:36
  Speaker 1: Americans available. However, there was no way whatsoever to accept
• 29:42
  Speaker 1: legally person to do the job unless a personal relative.
• 29:45
  Speaker 1: In the United States, everybody else who was a Mexican
• 29:48
  Speaker 1: worker of an unskilled type, not a professional, could not
• 29:52
  Speaker 1: find the visa to come. And this was a big
• 29:54
  Speaker 1: difference relatively to the high skill for which the H
• 29:56
  Speaker 1: one B visa program since nineties as allowed people like
• 30:01
  Speaker 1: a key like me to come into the country if
• 30:04
  Speaker 1: we had a job offered. So yes, it's true that
• 30:06
  Speaker 1: people are against the bypassing the line and not following
• 30:10
  Speaker 1: the rule, but literally there was this incredible creation of
• 30:14
  Speaker 1: jobs and firm willing to hire, and there was no
• 30:16
  Speaker 1: legal way to come in and the US for a
• 30:19
  Speaker 1: while as closed than eye. And now all in a
• 30:21
  Speaker 1: sudden that this is not a need anymore because that
• 30:24
  Speaker 1: influence level people think, oh wow, now these people have
• 30:28
  Speaker 1: broken the rules. Well, these people have, just as the
• 30:31
  Speaker 1: company who hired them has broken the rules. And so
• 30:34
  Speaker 1: we need to find a way out of this because
• 30:36
  Speaker 1: I think as of now, the fact is that eleven
• 30:40
  Speaker 1: million people have been in the US, many of them
• 30:42
  Speaker 1: for five and fifteen years, and the disruption of sending
• 30:46
  Speaker 1: them back back on the American economy will be so
• 30:49
  Speaker 1: massive that I would say, no reasonable person can see
• 30:53
  Speaker 1: such a huge even just economic cost, to forget about
• 30:56
  Speaker 1: the human and moral cost, just such huge economic acosta.
• 31:00
  Speaker 1: So it's through the American followed the rule. But there
• 31:03
  Speaker 1: is a little bit of hypocrisy in this attitude. Now, well,
• 31:06
  Speaker 1: gm Anny, this is This has been a fascinating conversation
• 31:09
  Speaker 1: and I think a great one for Aki and I
• 31:11
  Speaker 1: to in her time on Benchmark with So thank you
• 31:13
  Speaker 1: so much for joining us. Thank you, thank you for
• 31:16
  Speaker 1: having me. It's been a real pleasure, and thanks to
• 31:19
  Speaker 1: all of you for joining Tori and I one last
• 31:21
  Speaker 1: time on Bloomberg Benchmark. The show is going to be
• 31:23
  Speaker 1: back again next week, this time with Dan at the Helm,
• 31:27
  Speaker 1: So make sure you tune in and maybe even right
• 31:30
  Speaker 1: to Dan to tell him how much you miss us.
• 31:33
  Speaker 1: And as always, you can find us on the Bloomberg
• 31:36
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• 31:46
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