Marketplace, March 30, 2006

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KAI RYSSDAL, host: The president took some time out for a little sightseeing today. He's in Cancun for meetings with Mexican President Vincente Fox and Canadian Prime Minister Stephen Harper. Even though he is away from Washington, President Bush could not quite escape domestic politics. In a meeting after a visit to some Mayan ruins, President Fox called for some kind of US immigration reform. Considering all the emotion that is involved with the subject, we thought it might be helpful to talk about the economics of it. Paul Krugman is an economist. He's also a columnist for the New York Times. Welcome to the program.

Mr. PAUL KRUGMAN: Hi there.

RYSSDAL: One of the reasons we wanted to talk to you was that you're an economist, an academic economist. You're also somebody who has expressed a general support for immigration in your writings. And we thought we would check with you to see what they current state of the economic science is on net benefit to America of immigration.

Mr. KRUGMAN: The first thing to say is that the big dividing line is between low-skill and high-skill immigration. It's not between legal and illegal, it's between people coming in with large amounts of education, very high-skill software engineers and people coming from--typically from Mexico who are basically manual laborers. And I would love to say that the economic case was immigration is great. It's not. It's--it's a mixed picture with some shadows in it, particularly for the low-skill immigration. That's not saying it is a terrible thing. It is not going to destroy the country, but it's--it's not a wonderful, overwhelmingly positive picture.

RYSSDAL: What about some of the more intangibles? Getting away from the wage pressures that you have written about, what about things like general contributions to consumption in the economy? Donations to Social Security that perhaps immigrants aren't getting back?

Mr. KRUGMAN: Well, people try to take all of that into account. If you are talking about a high-skill, high wage immigrant, there's--they are going to be contributing more in taxes than they are going to be taking in benefits on average. If you are talking about low wage, low-skill immigrant, no matter how you push the numbers, they're probably on average going to be--they are costing more in terms of public services, which we have to provide to everybody here, than they are going to be paying in taxes. So it is--those are not all that intangible. They are reasonably well estimated and it's a small negative thing. We are actually a little bit worse off fiscally because of low-skill immigration.

RYSSDAL: Most of the proposals on Capitol Hill that have been passing so far seem to have some path toward citizenship---not an amnesty, but a waiting period, a fine, what have you. Do you think that if we give illegals eventually some route to citizenship that will change their economic behavior at all?

Mr. KRUGMAN: I'm not sure it will change their economic behavior, but look, I--I'm all in favor of that. My sense is that we have--we are not going to kick out the 11-12 million illegal immigrants we have in this country. It's--we couldn't do that without turning ourselves into a police state that we don't want to be. So we are not going to kick them out, and so what we want to do is we want to regularize. We want to assimilate them into our society. And I think that's--this is water under the bridge. We've got a bunch of people in this country. They are here because we did not actually seriously try to enforce immigration restrictions. Now we have to deal with them as human beings, which they are.

RYSSDAL: The column that you wrote on Monday in the New York Times caught our eye, and I wanted to ask you about they end where, in essence, you said--very un-Krugman like, actually--you threw up your hands and said, `I don't really know what they answer is.'

Mr. KRUGMAN: Well, I don't think there are any good answers. If I could do it, I would like to slow the inflow of low-skilled immigrants because I think it is a problem. I'd like to assimilate all of the people we have here. And I feel guilty even about that solution because the one thing that is clearly part of the overall picture is that for the immigrants themselves this is a huge improvement. And I want everybody to have the chance that my grandparents had to come to America and make a better life, but I don't think we can sustain that.

RYSSDAL: Paul Krugman is an economics professor at Princeton University. He writes a column for The New York Times. Mr. Krugman, thanks a lot.

Mr. KRUGMAN: Thank you.

Originally broadcast, 3.30.06