Why Immigration Economics Can Take Us To Milk and Sugar

“The priestly leaders of the Parsis were brought before the local ruler, Jadhav Rana, who presented them with a vessel full of milk to signify that the surrounding lands could not possibly accommodate any more people. The Parsi head priest responded by slipping some sugar into the milk to signify how the strangers would enrich the local community without displacing them. They would dissolve into life like sugar dissolves in the milk, sweetening the society but not unsettling it. The ruler responded to the eloquent image and granted the exiles land and permission to practice their religion unhindered if they would respect local customs, and learn the local language, Gujarati.”

—Parsi Legend (quoted from the World Bank Group, “Migrants, Refugees, and Society”)

Parsi legend reminds us of the positive side of immigration economics.

Immigration Economics

Starting with the basics, you can see that the relative size of the U.S. immigrant population has been constant:

Jobs

As for jobs, The Border Within tells us that, “Most immigrants come to the United States to work.” Knowing that economists debate immigrants’ impact on job markets, we can focus on where the data is less controversial.

We know that in a U.S. labor force that is close to 170 million, 29.4 million are foreign born and employed:

More debatable, the impact of immigration on low skilled jobs is unsettled. Hypotheses range from negligible to somewhat. Asking who is affected by new waves of immigrants, we can focus on low wage workers without a high school degree and recent immigrants displaced by a new wave. EIG (Economic Innovation Group) believes though that because of more spending from those that are highly skilled, a lower income cohort benefits.

Economic Growth

On the other hand, as innovators, highly skilled immigrants bring economic growth:

According to EIG, highly skilled immigrants fuel economic growth and funnel extra tax revenue to federal and local governments. We can support the growth hypothesis by noting that 55% of U.S. billion dollar startups came from immigrants. EIG used Fairchild Semiconductor as their example. Half of Fairchild’s founders were immigrants or the children of immigrants. Inventing the semiconductor, the firm initiated a ripple of people and ideas that spread far beyond one firm. Meanwhile, as high earners, skilled immigrants earn an average of $130,000. Whereas governments receive close to $32,000 in tax dollars from highly skilled immigrants, they spend far less on them.

Below, you can see where immigration might take us:

Our Bottom Line: Immigrants’ Impact

Moving from the future to the past, we can be sure that, as a minimum, immigrants have added to the labor force:

However, much of our data returns us to the Parsi’s milk and sugar,

My sources and more: For a comprehensive look at immigration economics, and our Parsi quotation, we can start with the World Development Report from 2023 . Then, this paper and podcast from the Economic Innovation Group are perfect complements. In addition, the Migration Policy Institute had dependable detail.