MSM Reporters, Innumeracy, And The Alleged Economic Benefits Of Illegal Immigration

Innumerate people are those uncomfortable and/or incompetent with numbers and quantitative concepts—a parallel to illiterate people who are unable to handle the written word.

Innumeracy, especially about financial quantities, seems to be a de facto job requirement among journalists [Peter Brimelow says: hey!], judging by how often I read, for example, “$30 million” when only “$30 billion” makes sense—or vice versa—in news articles or, especially, editorials.

(To make everything clear—a million is a thousand thousand: 1,000,000. In the U.S., a billion is a thousand million:1,000,000,000. A trillion is a thousand billion: 1,000,000,000,000. In Britain, by contrast, a billion is a million million, the same as our trillion. I`ll stick with the U.S. terms. OK?)

Besides such primitive confusions, I have the impression that reporters` (and many other peoples`) brains just lock up when they`re dealing with quantities such as “a trillion dollars” or “$1 trillion”.

(Nachman side note to journalist: Please DO NOT write “$1 trillion dollars”—a practice that seems to have supplanted using “it`s” for the possessive of “it” as the most common typographical stupidity.)

Of course, $1 trillion as a free-standing quantity is probably not very meaningful to anyone, even Warren Buffett or Bill Gates, each with net worth in the vicinity of $50 billion.

So here`s one way to think about it: If the U.S. federal budget were $1 trillion, and each of us approximately 308 million American residents were on the hook for an equal share of it, it would amount to about $3,250 in taxes per person.

That`s a quantity most adults can relate to.

(In fact, of course, the current [fiscal year 2010] federal budget is about $3.5 trillion. That would be about $11,375 per U.S. resident. Of course, about $1.2 trillion of that is borrowed i.e. punted to the next generation.)

Here`s my point in action: Recently, two articles in the Los Angeles Times credulously quoted from a recent UCLA study about illegal aliens and the American economy.

LA Times staffer Anna Gorman [email her] wrote

“The report said that legalization, along with a program that allows for future immigration based on the labor market, would create jobs, increase wages and generate more tax revenue. Comprehensive immigration reform would add an estimated $1.5 trillion to the U.S. gross domestic product [GDP] over 10 years, according to the report….

“And the economy would suffer if the U.S. deported all illegal immigrants, which Raul Hinojosa-Ojeda [the report`s lead author] acknowledged was an unlikely option. Mass deportation, he concluded, would reduce the GDP by $2.6 trillion over 10 years.” [UCLA study says legalizing undocumented immigrants would help the economy, January 7, 2010].

And columnist Tim Rutten [email him] published an op-ed that, near its close, also cited the UCLA study:

[T]he researchers concluded that if the currently undocumented population was allowed to regularize its status, it would add $1.5 trillion to our gross domestic product over the next decade.”

[Immigration reform and the healthcare debate on January 9, 2010]

(Of note, the study leader, Raul Hinojosa-Ojeda, [Email him] is an associate professor in UCLA`s Department of Chicana and Chicano Studies, and the César E. Chávez Center for Interdisciplinary Instruction And while I`ve no reason to doubt the numbers quoted from his report, Hinojosa-Ojeda certainly snookered the two journalists as to those numbers` significance. In fairness, maybe he snookered himself, too—one doesn`t necessarily expect faculty in the academic barrio to be number-savvy.)

Consider, for example, the claim that

  • Mass deportation of 12 million illegal aliens (the number used in the Gorman article) would reduce GDP by $2.6 trillion over a decade.

Sounds like a huge amount, no?

No! The U.S. GDP for 2008 was $14.4 trillion. So over a decade, we`d expect cumulative GDP (in 2008 dollars and assuming neither growth nor shrinkage in economic output) to be $144 trillion. Thus the fractional decrease in GDP, if all the illegal aliens were deported would be 2.6/144 or 1.8%—which isn`t nothing, but which also isn`t much.

There`s more to be said.

Most of that “bonus” $2.6 trillion in GDP over 10 years, if the illegals remain here, would go to the 12 million illegal aliens themselves.  

Following the analysis of Harvard economist George Borjas [Heaven`s Door: Immigration Policy and the American Economy, p. 93], we can estimate that no more than $200 billion of the GDP bonus would benefit the other 296 million of us (i.e. citizens and legal residents). That gives an average boost of about $70 a year to each of us during the decade—paltry compared to U.S. per-capita GDP of about $48,000/year.

And that`s before adjusting for transfer payments—e.g. the amount it costs American taxpayers to educate the children of legal and illegal immigrants etc.

Of course, if we`re talking about material well-being, it`s primarily per-capita GDP that matters. Compare, for example, India and Switzerland:

Country

 GDP

Per-capita-GDP

India

$510 billion

$500

Switzerland

$286 billion

$39,000

Now crass economics isn`t everything. There are probably reasons some people would prefer to live in India over Switzerland. But relative standards of living wouldn`t be among those reasons.

And note that Hinojosa-Ojeda`s claim was precisely about aggregate GDP, not the per-capita output.

Another important point, apparently lost on journalists and others, whose minds boggle over such items as Hinojosa-Ojeda`s “$2.6 trillion extra GDP per decade!!” was made by Borjas in his 1999(!) book:

The estimated $200 billion per decade “immigrant surplus” (Borjas` term) in benefits that native-born Americans receive as a result of the immigrant influx is very far from equally divided among us.

It accrues basically to capital owners and to the managerial classes—stiffing Americans at the bottom of the economic pyramid, because their wages are bid down by competition from immigrants.

Further, judging from Anna Gorman`s article, the UCLA report apparently contains nothing about the increased cost of the public benefits for which amnestied illegal aliens would be eligible. Legal status gives access to many welfare sources that—at least in theory—aren`t available to illegal aliens, a fact documented by Steve Camarota of the Center for Immigration Studies in his 2004 backgrounder, The High Cost of Cheap Labor: Illegal Immigration and the Federal Budget [PDF]. He found that a mass amnesty would boost net federal costs by $19 billion/year. And this doesn`t count similar amnesty-induced increased expenses to the states.

Of course none of the numbers above are precise. But precision would be overkill: The point is that simple arithmetic suffices to disprove, or put into perspective, grandiose claims such as those so endlessly made about society`s economic benefits from illegal immigration.

And the ignominious fact is that you can`t count on MSM journalists to do such arithmetic.

So I contacted both Gorman (phone, then email follow-up) and Rutten (email; no acknowledgment from him) to give them the perspective on Hinojosa-Ojeda`s numbers that they`d missed.

The phone conversation with Gorman was cordial, lasted perhaps five minutes, and seemed worthwhile. I think she grasped my main point about those allegedly enhance GDP $trillions` relative (in)significance.

We can expect the UCLA report, and others like it, to be bamboozling reporters and their innumerate readers for the next several months if the rumored concerted amnesty push indeed materializes in Congress.

So if you`re comfortable with numbers, and you see articles like the two that attracted my attention, consider contacting the reporters and politely helping them understand what those $ trillions really mean.

Often their email addresses and/or phone numbers are given with their articles.

Please don`t be snarky—don`t actually mention their innumeracy!

Paul Nachman [email him] is a retired physicist and immigration sanity activist in Bozeman, MT. Read his VDARE.COM blogs here.