While announcing President Donald Trump’s decision to end the Deferred Action for Child Arrivals program, which protects undocumented immigrants from deportation if they arrived as children, Attorney General Jeff Sessions made a startling and blatantly incorrect claim:
“(The DACA program) denied jobs to hundreds of thousands of Americans by allowing those same jobs to go to illegal aliens.”
Hundreds of thousands? How did Sessions arrive at this number? It appears that he simply counted the number of adult Dreamers, as the program’s beneficiaries are known, and assumed that each had denied a job to an American.
That’s terrible economics. It’s a classic application of a well-known fallacy called the Lump of Labor — the idea that there are a fixed number of jobs in the world, and those jobs get divvied up among people.
How do we know this is a fallacy? It’s obvious that the number of jobs in the world isn’t fixed. Imagine if the U.S. deported every single American except for Jeff Sessions. Would Sessions then have his pick of any job? No, he’d be in the forest trying to eat berries to survive. Kicking people out doesn’t just reallocate jobs from one person to another. It also destroys them.
Another way to see this is population growth. Suppose the number of jobs in the U.S. was fixed. In that case, unemployment would rise as more Americans reached adulthood. The U.S. population has almost doubled since 1960. But the percent of Americans with jobs has actually gone up since then.
This is because jobs don’t just appear out of the sky. People give each other jobs. When new people arrive, either by being born or by immigrating, businesses expand to take advantage of the new labor and to sell things to the newcomers. Also, new businesses get started. Often, newcomers start the businesses themselves — immigrants and young people are both over-represented among the ranks of entrepreneurs.
Now, it’s possible that immigration or population growth could temporarily put some people out of work. With some changes, like trade and automation, there are long-term gains but short-term pain as the economy rearranges. It takes time to start new businesses, and for existing businesses to expand, so it’s theoretically possible that a big surge of immigrants or a baby boom could temporarily raise unemployment.
But in practice, this doesn’t happen with immigration (or probably with baby booms either). Study after economic study has found little or no short-term impact of immigration on native-born employment levels. A small number of papers have found otherwise, but the methods they use are highly questionable. So even in the short term, jobs don’t look like a fixed pot to be divvied up.
Every good economics class teaches the Lump of Labor fallacy and warns students to avoid falling into its seductive clutches. But judging from the number of people who still make the mistake of thinking that 100,000 immigrants means 100,000 American jobs lost, the fallacy seems to be going strong. Why?
One reason is that in our daily lives, jobs look and feel like a fixed resource. Companies offer job openings, and we compete to get them. If a particular job doesn’t go to me, it goes to someone else — maybe a young person or an immigrant.
But this process isn’t the same as what’s going on in the economy. Overall, the presence of immigrants and young people raises the number of job openings that I can apply to in the first place. That process is invisible to most job applicants.
Another reason people keep believing in the Lump of Labor fallacy is that unscrupulous politicians and thought leaders keep telling them to believe it. By convincing Americans that they’re in a zero-sum competition for jobs, leaders can divide the populace. Appealing to the Lump of Labor fallacy probably helps Trump gin up anti-immigrant sentiment, ultimately helping him at the ballot box.
This is definitely one case where Americans should ignore Sessions and Trump, and pay attention to economists. Economists have lost a lot of respect and status since the financial crisis, and it’s certainly true that the discipline has not always made good recommendations. But in this case, they know what they’re talking about. Immigrants don’t take jobs away from native-born Americans.
Noah Smith is a Bloomberg View columnist.