The Optimist

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The case for sending America's unemployed abroad.

Although North America and Europe have finally emerged from the darkness of the global financial crisis, and although the stratospheric growth rates of Brazil, China, and India have come down to Earth, the economies of the West still lag behind those in the rest of the world. That's particularly the case when it comes to jobs. The unemployment rate in the United States, for example, remains stubbornly around 7 percent. In Chile, Hong Kong, Indonesia, Mexico, and South Korea, however, the official unemployment rate is way lower. Faster growth is key to high employment just as recessions produce dole queues.

So here's a novel solution to America's problem: Move the people to where the jobs are.

Exporting the unemployed may sound radical, even cruel, but the quest for jobs has been a driving force behind global migration -- and population growth in the New World -- for centuries. More than 55 million Europeans, many desperate and poor, migrated to the Americas between 1846 and 1940, for example -- often with a "good riddance" from their home governments. And in the past few years, those movements have started up again. When crippling unemployment throttled Spain, some 30,000 Spaniards upped and moved to Argentina between June 2009 and November 2010. The Portuguese, meanwhile, beset by debt and slow growth at home, are heading to Brazil and oil-rich Angola. Between 2008 and 2011 alone, more than 1 percent of the Portuguese population moved to just that one African country. (In terms of relative population, that would be the same as 3 million Americans packing up and shipping off to their country's ex-colony, the Philippines, in search of a better life.)

But Americans haven't been searching for a better life somewhere else on nearly the same scale. According to the State Department, only about 6.3 million U.S. citizens live abroad, or around 2 percent of the domestic population. In relative terms, that's pathetic. About 5.5 million British people live permanently abroad, almost five times the U.S. level in per capita terms. Maybe they're trying to escape the lousy weather, but it isn't like Brits have natural advantages over Americans as travelers. British people are almost as bad at speaking other languages as Americans are, and in terms of haughty isolationism and disdain for foreigners, surely Brits are worse. (I'm allowed say this -- I'm British.)

So why shouldn't America send out some huddled masses for once? Of course Americans want a young, employed workforce to help support their aging society as it pays for rising Medicare and Social Security bills, but it would be far better for everyone if they were employed abroad rather than sitting idly at home. And many of the country's unemployed are demographically well placed for a change of scene precisely because they're disproportionately young and footloose. The Bureau of Labor Statistics reports that, as of October 2013, the unemployment rate among those ages 16 to 19 was 22 percent; among those 20 to 24, it was 12.5 percent. And the rate among men never married in all age ranges is around 12 percent. Nothing's tying them down. Go East, young men! (I'm allowed to say this -- I'm married.)

Some might wonder, though: Would other countries really want America's wastrel youth, with their lack of language skills and poor education? It is true that Gallup polls suggest only 14 percent of U.S. citizens claim they can speak Spanish well enough to hold a conversation. Look at any other language and the numbers become truly dire. Around 4 percent can parler in French, and a little less than 3 percent sprechen Deutsch. And though teaching Mandarin to toddlers is now de rigueur in suburban nursery schools from Scarsdale to Santa Monica, fewer than one in 100 Americans can converse in China's lingua franca. The good news is that English has official or special status in countries that are home to 2 billion people, and one in four of the world's people speak English to some level of competence.

And though it's true that jobs are hardest to come by for the least educated Americans, it's still not a pretty picture for recent grads. The unemployment rate for those ages 20 to 29 who had graduated from college in 2011 was 12.6 percent as of October 2011. But even young Americans who haven't made it to university have received a quality of education considerably higher than that of most people in emerging economies. The Organization for Economic Cooperation and Development runs internationally comparable tests of student achievement at the high school level. The U.S. average score on the reading tests was 500. That's behind South Korea (539), but it compares favorably with Brazil (412) and Panama (371). It's even better than Portugal (489). So buck up, C students: You might still be an attractive addition to Brazilian firms looking for some English-speaking talent. And trust me, Rio de Janeiro isn't a hardship post.

Why should we be encouraging the young and unemployed to look worldwide for better opportunities? Because the benefits of U.S. emigration extend way beyond ready jobs and a more interesting life for those in search of adventures abroad. Research by economists Gabriel Felbermayr and Benjamin Jung suggest that as little as a 1 percent increase in migration between two countries raises bilateral trade. There's also evidence from development economists Maurice Kugler and Hillel Rapoport that migrating to another country brings greater foreign investment back home. Their research suggests that if you double the number of Americans living in another country, you'll see foreign direct investment from that country to the United States increase by about a fifth. Simply put, there's a profound benefit to the economy in sending your kids overseas, not to mention the benefit of getting them out of the house for a while. (I'm allowed to say this -- I have children.)

As Congress debates immigration reform, it's worth remembering that the United States benefits from both sides of the migration equation. Immigrants coming to the United States do wonders for the local economy: They're associated with higher wages and employment for Americans, according to research by economists Gianmarco Ottaviano, Giovanni Peri, and Greg Wright. And they're responsible for a huge amount of innovation and entrepreneurship in places like Silicon Valley: Research by Duke University's Vivek Wadhwa suggests that more than half of new start-ups out there are founded by immigrants. Perhaps Washington could boost this employment exchange by offering a few more places for immigrants from countries that open the doors to U.S. emigrants.

So let's help show young Americans the door by allowing the Peace Corps to offer short-term voluntary assignments and by expanding programs like the Fulbright that support academic study overseas. And let's keep them abroad by abandoning the system that makes them pay taxes to the United States on top of the taxes they pay to their host countries. And why not encourage the portability of benefits from Medicare to Social Security? Or, thinking bigger, why not use the U.S.-EU trade talks to set up a transatlantic visa-free zone? The free movement of labor has done wonders for Europe. It's time Americans get on board. A more globalized U.S. workforce would be good for the unemployed, good for the country -- and good for the world.

Photo: Reuters/Lucas Jackson

The Optimist

Barriers to Entry

How opening borders gives economies a lift.

Americans spent much of this summer arguing over immigration reform, and South Africans spent much of it contemplating Nelson Mandela's legacy. But the link between the two went unnoticed: One of Mandela's biggest legacies was to show that immigration reform -- on a scale hugely more ambitious than anything proposed in the halls of the U.S. Congress -- can benefit everyone, in real economic terms.

One of the earliest acts of South Africa's first post-apartheid government was to break down borders within the country that had prevented members of the black African majority from choosing where they worked and lived. In economic terms, this reform created a true single market, equivalent to what would happen if the United States pulled down the border fence with Mexico and gave all comers citizenship. To many Americans, that's a terrifying thought -- as it was to white Afrikaners, who predicted economic collapse. But, instead, virtually everyone got richer after borders were opened within South Africa -- and in relatively short order. Mandela's government demonstrated that large-scale border dismantling can be good for people on both sides of the fence.

Among its litany of evils, the white South African government had declared that blacks were nationals of particular "homeland" states, or Bantustans, based on their ethnicity. The apartheid regime drew up the borders of these supposed states with little regard to economic rationality or practicality, let alone the views and concerns of the proposed residents. In 1970, black South Africans were issued papers for one of the 10 Bantustans, and many were stripped of their South African citizenship. Millions of blacks were forcibly resettled to their new homelands, desperately poor places like Transkei and Bophuthatswana that relied on cash transfers from the South African government to function at all. Those who remained outside the Bantustans clustered in slums around the edges of the country's major cities or its mines -- employed, if at all, as "guest workers" ineligible for the legal and financial protections accorded South African citizens. (The process was not dissimilar to the U.S. government drawing up reservations and forcibly relocating Native American tribes in the 19th century.) Given the gross inequalities fostered by the apartheid system, it is no surprise that, in 1993, white South African households enjoyed an average income almost five times higher than that of black households.

Days before Mandela became South Africa's president in 1994, the homeland system was rapidly dismantled. According to South African government statistics, about 12 percent of the country's population moved between 1996 and 2001, the considerable majority to large cities like Cape Town and Johannesburg. Beyond ending one of apartheid's most toxic institutions, the shift was a huge experiment in what happens when barriers to labor mobility fall, as economist and immigration expert Michael Clemens has argued. What were essentially different "countries," with race-based quotas and employment rules, all became a single (officially colorblind) labor market. A black population that today is about nine times the size of the white population was at last free to compete for the same jobs -- and even benefit from some positive discrimination in the labor market.

Consider this parallel for scale: Brazil, China, and India have a combined population nearly nine times that of the United States -- the same ratio of blacks to whites in South Africa. Now imagine if the citizens of those three countries were not only right next door to the United States, but suddenly had the legal right to move in and compete for American jobs on an equal basis with U.S. citizens. (It's probably fair to say that support in Washington for this kind of immigration reform would be low.)

As it turned out, what happened was that South Africans as a whole got richer over the next 15 years. Economists Murray Leibbrandt of the University of Cape Town and James Levinsohn of Yale University report that average household income in South Africa more than doubled between 1993 and 2008. For black South Africans, incomes rose an average of 61 percent, but far more dramatic was the 275 percent average increase in white South African incomes. Even poor white households, those potentially most at risk from the influx of cheap labor, got richer. In the end, everyone benefited from an economy made stronger by the free movement of people and labor.

It's a lesson that also emerges from other experiments in dismantling barriers to migration. In 1993, citizens of European Union countries were given the right to work in any other member state. Once again, the doomsday predictions proved false. Overall migration increased, but it didn't cause Denmark's economy (with a per capita GDP of $20,410 at the time) to collapse under the weight of Portuguese immigration, despite the fact that the Iberian pipsqueak had a per capita GDP of only $12,327. In fact, both countries had a long run of reasonably good growth until the eurocrisis and austerity ended the party. Denmark's annual GDP growth in the 15 years after 1993 averaged 2.2 percent; Portugal's averaged 2.3 percent. And subsequent expansion of the European Union to countries like Poland gave a boost to Western economies, particularly Britain, where tens of thousands of Poles flocked in search of work.

These real-world experiments in opening borders suggest that poor, less-skilled workers in a privileged region shouldn't fear an influx of even poorer workers from outside. That holds true for the United States and Mexico, too. South Africa demonstrates that the practical benefits of open borders -- when compared with the selfish interests of those on the "right" side of the line -- outweigh the concerns. When the levee breaks, the rising tide lifts all boats. So perhaps it's time to think big and loosen that most peculiar and outdated institution: the right to work only where you're born.

Photo: Susan Winters Cook/Getty Images