What’s the economic impact of refugees in America?
Editor’s Note: Utica, New York, is known as “the town that loves refugees.” Why? Welcoming in refugees turned around Utica’s economic decline.
For Making Sen$e’s latest segment, economics correspondent Paul Solman spoke to economist Jeffrey Sachs, director of the Earth Institute at Columbia University and a senior UN advisor, about the economic impact of refugees in America as well as in Utica specifically.
You can read that conversation below. For more on the topic, tune in to tonight’s Making Sen$e segment, which airs every Thursday on the PBS NewsHour. The following text has been edited for clarity and length.
— Kristen Doerer, Making Sen$e Editor
Paul Solman: What’s the economic impact of refugees in America? Positive? Negative?
Jeffrey Sachs: For the world, it’s positive, because people are leaving desperate situations and getting to economically better situations. For the U.S., on net, it’s positive, because there are gains when people come, add to the labor market, add skills and generally, earn less than what they can contribute to the society as a whole. So there are benefits, but there are distributional consequences that can be quite complicated.
Paul Solman: And what are they?
Jeffrey Sachs: The distributional consequences come in two kinds. First, some workers face increased job competition, and their wages can be driven down. If lower skilled immigrants come, then lower skilled American workers may see a decline in their wages, whereas business owners may see more workers at lower cost for them.
The second kind of distributional consequence is that migrants get social services. And if they pay less in taxes and receive social services, that’s kind of a tax on the rest of the society. So economists point to both the labor market impacts and to the fiscal impacts.
Paul Solman: If refugees come and go to work, aren’t they paying in more than they’re getting out?
Jeffrey Sachs: What happens depends a lot on who the refugees are, their family structure, if they are lower skilled and in a place where there are lots of social services. If they are coming with large dependent families, maybe they are net recipients. If they are highly skilled workers and relatively young, they are almost surely net contributors. The more one studies this, the more one sees all different kinds of effects.
Paul Solman: From what I’ve read and seen, the refugees that are coming now are more well-educated and better off than the typical person in the countries they are leaving. And they are young, so when they come to America, they don’t receive as many social services as they would if they were older. For a while, this must be a real net plus.
When one looks in depth at this issue, almost all strong claims — certainly the hysterical anti-immigrant claims, but all plus claims too — have to be taken with more care.
Now, one more thing to add: We often speak as if the only thing we think about is: What does it means for us? But refugees are escaping with their lives, and we have a duty, a human right and an international legal duty to help them survive. We have to have a holistic view of what it means for the people involved. What does it mean for the so-called destination country? What does it mean for the so-called source country?
Paul Solman: In Utica, educated refugees have become active members of the labor force. The city loves refugees, because they are halting the city’s economic decline.
Jeffrey Sachs: I think it’s wonderful that a city loves refugees, because there’s also decency in that, in the acceptance of people fleeing from extreme danger and being welcomed. This is extremely important. Second, this city clearly sees that there are general gains for that community and for the local society, and that’s also quite realistic. I’m sure there are some tensions even within Utica, and we shouldn’t think Utica’s experience means that a complete open door would be easily accepted, but I do think that it’s a positive harbinger.
If the borders were simply opened and anybody could go where they want, I don’t think this would work very well actually, because hundreds of millions of people would be on the move and would overwhelm budgets and social services and even the community. So the issue of how to pace and time migration is one of the big open questions. Nobody has a formula for it. At the international level, there is no agreement on any of these issues. The only agreement internationally is that when people are fleeing persecution, fleeing for their lives, there is a human right for them to escape, and there is a responsibility for countries not to send them back to danger.
Paul Solman: And yet that responsibility is being ignored consistently all around the world.
Jeffrey Sachs: Right now everyone is saying “We don’t want these refugees. We’re not returning them to the war zones perhaps, but stay out of our country.” But it can add up to very much the same thing. So the international system is almost without a system right now. It’s everybody on their own. It’s very dangerous. We do have international agreements and commitments. We have the Geneva Convention, and we have responsibilities, and the United States, which has been a party to Middle Eastern wars and politics and is part of this Syrian reality and this Syrian story, has a legal as well as a moral obligation to take in more refugees.
Paul Solman: We’re very loath to do.
Jeffrey Sachs: Right now, there’s more hysteria and anti-migrant, anti-refugee feeling. There’s a sense among many responsible people, “What does this have to do with us?” And they don’t understand how much the United States has been involved in these wars and has been part of stoking up this disaster and then saying, “Nah. We have no responsibility.”
Paul Solman: For years, you’ve argued that what happens abroad matters to people here in the United States; the disease festers there will come here. If unrest festers there, we will have to do something about it that might threaten us in some way. Is there an analogous concern on your part with respect to the current refugee crisis?
Jeffrey Sachs: Absolutely. We are so interconnected, whether it’s Ebola, whether it’s climate change or whether it’s refugees. This is one interconnected society. But in the case of refugees, it’s even more than that, because it’s not just something that’s happening and then the United States feels the impact. The United States is one of the main protagonists of the wars in the Middle East. And so our responsibility, our role in all of this violence is much more direct. The more one understands the details of that, the more one should say, “Of course, the United States will play its role and its responsibility in helping people flee for their lives.”