If People Could Immigrate Anywhere, Would Poverty Be Eliminated? (The Atlantic)
Senior Fellows Michael Clemens and Lant Pritchett are quoted in The Atlantic on the economic benefits of open borders.
What if there was a program that would cost nothing, improve the lives of millions of people from poorer nations, and double world GDP? At least one economist says that increased mobility of people is by far the biggest missed opportunity in development. And an informally aligned group of advocates is doing its best to make the world aware of the "open borders" movement, which suggests that individuals should be able to move between countries at will.
To prove the economic power of open borders, supporters often turn to the work of Michael Clemens, a development economist and one of the strongest voices for loosening border restrictions. Clemens is not an open borders advocate, but his research and writings make it very clear that movement of people across international borders should be a much higher priority than it is now. He is, he told me, "in favor of a vastly more sensible way of regulating movement," if not "a utopia of completely free movement." Based out of the Center for Global Development, a think tank in D.C., he has spent much of the past half-decade compiling international labor mobility statistics that are, as he says, "gasp-inducing."
Barriers to emigration may--according to Clemens's paper--"place one of the fattest of all wedges between humankind's current welfare and its potential welfare." Though he affirms that the research on migration's effects is far from complete, what Clemens has found "suggests that the gains from reducing emigration restrictions are likely to be enormous, measured in tens of trillions of dollars." Remove all remaining barriers to trade, says Clemens, and all remaining barriers to capital flow, and it still wouldn't compensate for the inefficiencies created by current global labor mobility restrictions. His research indicates that allowing free movement of all people across international borders could double world GDP.
According to Clemens, we are all victims of an epic intuition fail. "Development is about people, not places," he has said many times over, and often the best way to make a person richer is by allowing them to move to another place. We don't really care about helping poverty-stricken Liberia, we care about helping poverty-stricken Liberians. It sounds almost too simple at first: A very large percentage of people who have gone from extreme poverty to relative financial stability have done so by moving across borders. So why don't we just let more people move?
In 2008, Clemens and his frequent co-writer, Harvard economist Lant Pritchett, came up with a new statistic called "income per natural." Their goal was to show "the mean annual income of persons born in a given country, regardless of where that person now resides." They found that large percentages of people from Haiti, Mexico, and India who live above international poverty lines don't actually reside in their home countries. "For example, among Haitians who live either in the United States or Haiti and live on more than $10 per day--about a third of the U.S. 'poverty' line--four out of five live in the United States," Clemens wrote. "Emigration from Haiti, as a force for Haitians' poverty reduction, may be at least as important as any economic change that has occurred within Haiti."
The trillions of dollars are lost by not maximizing human potential. Workers in the developing world can be much more productive when they are not locked in places with crumbled infrastructure, poor academic institutions, and mass corruption. "It's the biggest arbitrage opportunity in the world," Clemens told me. "It's hard to find a cell phone or pair of jeans that sells for a thousand percent price difference in two different countries, and yet the labor of a McDonald's worker, the labor of a child care worker, the labor of a construction worker, does sell for thousand percent differences between Haiti and the United States."
If wealthy nations open their borders, won't native workers lose their jobs or see their pay shrink? Not so, according to Clemens. He and his co-authors, through study of all the available economic literature, have found that decades of immigration of tens of millions of people to the United States has reduced real wages for the average American worker by fractions of a percent, if at all. Meanwhile, immigrants to the U.S. from developing countries can increase their income by 100 percent, or 1,000 percent. "Immigration is very, very far from being a zero-sum game of 'their poverty or ours,'" Clemens wrote in 2010. "Within ranges that even slightly resemble current migration levels, it is rather simply 'their poverty or their prosperity,' while we remain prosperous."
Clemens's research also challenges the notion that immigrants take away jobs from Americans. In agriculture, for example, he has estimated that for every three seasonal workers who are brought in, one American job is created across all sectors. Directly, workers need managers, and more often than not those managers are Americans. Indirectly, workers buy things, which means more Americans are needed to sell and produce those things. And yet, Clemens told me, "when a bus of 60 Mexicans is coming up from the border, nobody looks at it and says 'Ah, there's 20 American jobs.'"
