Happy Immigrant Inflows Prove the U.S. Long Ago Won the 'War on Poverty'

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Talking to a good friend several years ago who is rich by most any measure, this individual surprised me with his recall of having once been very poor. In blunt, matter-of-fact fashion he went on to tell me that once he stopped "doing stupid things," he started earning good money on the way to becoming rich.

What's about to be said will no doubt be twisted by some as evidence of my lack of sensitivity, or better yet, elitism, but long-term individual poverty in what is the world's richest nation is more about bad choices than most would like to admit. Hard as it may be to accept at first glance, the simple truth is that in the U.S. any "War on Poverty" amounts to a lot of wasted energy. So is the study of poverty.  

To see why we need only consider what is easily the purest market signal in existence: the migratory patterns of humans. To simplify what is already blindingly simple, where people want to live tells us volumes about where opportunity is. It's the economy stupid, and people generally move to where they can most maximize their earnings. That's one reason why, among many, that all this talk about erecting a border to keep out striving Mexicans is so silly. That Mexicans can triple their work income upon arrival in the U.S. is a reminder that no matter the walls erected, or laws passed, the U.S. will always be the lucky beneficiary of the world's ambitious, including many resourceful people south of us.

What needs to be stressed here is what is already well known, that the U.S. has always attracted the world's strivers. It's why we're so rich, and it's also evidence that the study of poverty that so transfixes elite thinkers on the left and right is such a waste of time when applied to the United States.

We're a rich nation precisely because the personal and economic freedom that remains on offer has always been very attractive to the "unwashed masses" from all corners of the earth's land mass. These enormously energetic people were and are willing to leave the familiarity of home often at risk of life, and they do so knowing full well that intense near-term poverty will be their initial reward if they're lucky enough to get here in the first place.

Is it any wonder then, with the above in mind, that the U.S. is the most entrepreneurial nation on earth? Entrepreneurs are by the very word risk takers for attempting to do that which hasn't been done before, and they pursue their vision knowing very well that the odds of success are very slim. This very definitely describes immigrants willing to risk it all not for security, but merely for the chance to succeed.

Warren Brookes wrote in his 1982 classic The Economy In Mind that "this nation's greatest economic growth took place from 1880 to 1930, when we took in 37 million immigrants who, with their offspring, accounted for fully 60% of our huge population growth in that period." Immigrants are economic treasures, Brookes knew this well, and so did one Thomas Edison who witnessed the arrival of these millions. According to Brookes's account, Edison "had noticed that most of our invention and innovation had been the work of immigrants who, for some reason, found in the American system the right environment for their creativity to flourish."

That immigrants authored a massive surge of economic growth beginning in 1880 is exciting on its face, but it's also very telling about the nature of poverty in the U.S. That 37 million immigrants reached these shores from 1880-1930 is a certain market signal that permanent poverty hasn't been a problem in the United States since at least the late 19th century. Were the latter not true, as in if poverty had been insurmountable, then it would have also been true that the U.S. would not have been the lucky recipient of so many determined new arrivals.

Fast forward to the present, groups like the Young Guns Network write e-books titled "Room to Grow" that promote the falsehood of stagnant wages these last four decades, while think tanks on the left and right seemingly fall all over themselves trying to devise "solutions" to American poverty. They're arguably wasting their time, and their donors' resources.

Considering the notion of stagnant wages, if remotely true then it would also be true that the world's ambitious would no longer have any interest in risking it all in order to come to the U.S. That the United States remains so attractive to the energetic is a certain sign that the potential for outsize wage gains is very much alive.

As for poverty, if it were a permanent thing in America then it would also be true that the poor wouldn't be trying to sneak in to America. Markets are wise, and the arrival of the world's poor signals that the U.S. is where poverty is cured, not where it achieves permanency or grows.  


John Tamny is editor of RealClearMarkets, Director of the Center for Economic Freedom at FreedomWorks, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). He's the author of Who Needs the Fed? (Encounter Books, 2016), along with Popular Economics (Regnery, 2015).  His next book, set for release in May of 2018, is titled The End of Work (Regnery).  It chronicles the exciting explosion of remunerative jobs that don't feel at all like work.  

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