American policy for illegla immigration has gone too far

I understand. I was merely proposing a solution to the illegal immigrant workforce problem. It is true that it may hinder more on a larger scale.

 

SamFisher arguing for arguments sake.

You do realize that you just agreed with the main fundamentalist economic view of conservative's, don't you?

 

Droxford, if the Mark Krikorian and his fellow anti-immigration xenophobes at the CIS (who, by the way, came up with the $10 billion figure I noted above) can find some way to provide automated table bussing and roofing & toilet cleaning - I'm all ears. However most of these jobs can't be mechanized.

Oh, and if you're the type get upset about government waste - you probably shouldn't cite US agribusiness. Those tomato growers are of course the reciipients of billions and billions in annual government subsidies that make the costs of immigrants look like chump-change - (and conversely they have the side effect of hurting third world farmers - guess where those people come after they can't make a living at home?)

 

A landmark 1985 Urban Institute study on the impact of immigrants on California, which found that Los Angeles prospered in the 1970s in part because of large economic contributions by immigrants.(21) Even with a huge inflow of Mexican manufacturing workers, black employment in Los Angeles for teenagers and adults increased at faster rates than the national average for the decade of the 1970s and through the early 1980s. The study found that, despite the 220,000 new Mexican immigrant households that entered Los Angeles during the 1970s, unemployment rates in the city fell relative to the nationwide rate and per capita income rose faster over the decade. Manufacturing jobs in Los Angeles grew at an astounding four times the rate of the nation as a whole, with immigrants filling between one-third and one-half of the new positions. An estimated one-quarter of the jobs filled by Mexicans would have disappeared and the apparel industry would have migrated across the Mexican border, according to the Urban Institute analysis, if immigrants had not been available. Finally, for California consumers, Mexican immigration meant lower prices for many goods and services and less inflation than the nation as a whole. "The bottom line consensus on the impact of Mexican immigrants on Los Angeles is that, on balance, they are an economic benefit," says coauthor Thomas Espenshade.(22)


A separate analysis of Mexican immigrants in California cities, by Kevin McCarthy of the Rand Corporation in 1985, which reached similar conclusions,(23) compared 1970 and 1980 U.S. Census Bureau data on demographic, employment, and earnings changes for California. The study found that "widespread concerns about Mexican immigrants are generally unfounded. Overall, the immigrants provided strong economic benefits for the state, with only minor dislocation effects, mostly among native-born Latinos." It further concluded that immigrants' "use of public services in general is not a problem," although it found that Los Angeles and other heavily affected cities had to bear a "disproportionate cost burden while receiving a less-than-proportionate share of the tax revenues."

A 1986 study by the New York City Department of Immigration Services, which compared immigrants and U.S.-born New Yorkers on a whole range of social and economic statistics, found that the foreign born in New York have a higher labor force participation rate, a lower rate of using public assistance, a lower crime rate, and roughly an equal unemployment rate.(24) The report concluded that "New York City seems well able to absorb immigrants at the rate at which they are now entering the city. There seems to be room for them in the job market, in the institutional structure, and in the infrastructure. . . . Immigrants do pose some problems to this city, but the balance is unquestionably favorable."

Crime:

But cities with large percentages of foreign-born in their population are typically low-crime, not high-crime cities. For example, the seventeen cities with the most immigrants in 1990 had a 1991 crime rate of 8.7 per 1,000 population. The cities with the fewest immigrants had a crime rate 17 percent higher, or 10.5 per 1,000 persons. Of the high-immigration cities, only Miami, which has the second-highest crime rate in the nation, had a crime rate of at least 12.0 per 1,000 or more. But of the seventeen low-immigration cities, six had crime rates that high: Jackson, Birmingham, Mobile, Saint Louis, Kansas City, and Baton Rouge.

The cities with the most immigrants in 1980 also had lower crime rates on average (9.2 per 1,000) than the low-immigration cities (11.1 per 1,000). A similar negative relationship exists for the crime rates and the increase in immigration between 1980 and 1990. In sum, crime is more rampant in cities with few immigrants than in cities with many immigrants.

Taxes:

The strongest relationship between city taxes and immigration emerges when we examine the change in immigration from 1980 to 1990. The fifteen cities gaining the most immigrants in the 1980s had an average tax burden of 2.7 percent in 1990 compared with 4.0 percent in the fifteen cities that lost immigrants from 1980 to 1990. In fact, not one of the fifteen cities with the large gains in immigration in the 1980s had a tax burden exceeding the eighty-five-city average. Four of the five cities with the largest losses in immigration in the 1990s had tax burdens well above the eighty-five- city average of 3.7 percent: Detroit, 5.4 percent; Pittsburgh, 4.8 percent; Rochester, 5.7 percent; and Cleveland, 5.7 percent.

These findings seem to contradict the popular notion that immigrants impose a large fiscal burden on taxpayers. The case for a federal transfer of tax dollars to cities highly affected by immigration is especially unpersuasive given that the cities with the largest share of new immigrant arrivals in the 1980s had low tax burdens in 1990. Federal aid would require residents of cities with higher-than-average local tax burdens to pay more taxes to subsidize high-immigration cities with lower-than-average local tax burdens.


http://www.mega.nu:8080/ampp/moore.html

 

I'm not talking about accounting costs. I could care less about those (and with respect to a people that are avoiding detection, accounting costs are difficult/impossible to estimate). I'm talking about the true economic costs, measured in total welfare.

You can't make the unqualified statement: "There is a net welfare gain." It's misleading, and in all likelihood incorrect.

The thrust of your argument is that illegal immigrants take the "cheap" jobs that no "legal Americans" would take, receive lower wages, and depress costs, offsetting the welfare loss from imposition of the minimum wage. In fact, there have been several studies that have shown that illegal aliens DO NOT earn less on average than American workers of the same skill level. So that argument is severely undermined. (Look at the work of Chiswick. Addressing this point in particular is a paper in the Journal of Economic Perspectives, Summer 1998)

I can give you a lot more scholarly work on this topic. No op-ed pieces or "It seems to me" 's or "I find it hard to believe" 's. I'm talking good empirical research.

If anything, evidence points to the costs of illegal immigration outweighing the benefits provided (tax revenues + downward price pressure).

 

Sam - I would also like to say that I agree taht immigration is just a drop in the bucket. Any losses in welfare due to illegal immigration pale in comparison to the welfare losses generated by agriculture subsidies, export subsidies and idiotic trade policy.

Frankly, I believe that any loss due to illegal immigration is so insignificant compared to much of the redistributive B.S. that our government does that it's not even worth bringing to the table.

As a child of immigrants, I think we could improve our immigration policy, but I really don't care too strongly one way or the other about or illegal immigration policy.

 

WHOA! Sam, Hayes....I think you guys have entered the clearing at the end of the path...on COMMON ground..hehehehe

 

I never said he was ALWAYS wrong.

 

Good or bad for the economy, its just wrong that these people are forced to abandon their country to come to this one to try to live.

None of this will ever change unless the Mexican government clamps down on corruption and fixes itself and its country. Right now, Mexico has no reason to fix itself economically or socially as its "problems" all escape over the border to the North.

If America were to put a stop to the overwhelming illegal influx, then Mexico would be forced to fix its problems that cause that influx. Social change would actually be a possibility if they had 3.5 million extra citizens a year that don't "disappear" over the border to deal with.

As it is now, there is no reason for social or economic change in that corrupt government. I'm not just talking about heads of state, but gov't officials all the way down to local police...there needs to be sweeping change.

De-nationalize its corporations so they can provide more jobs, ect.

I think North America as a whole would benefit with a more educated, more economically solvent Mexico, not just its citizens.

Alas...things will probably never change...but America COULD force social and economic reform on Mexico if they chose to.

 

So if these studies are correct why are illegals hired at all if it is not cheaper to do so? Obviously it exists and in a big way - and if you have to pay illegals the same as natives (and incur legal risks & other costs (having to learn spanish,etc) associated with it) it seems like firms would realize this and not do so (just like they realize its cheaper to manufacture goods in China).

Are you (or not you, but Chiswik et al) arguing that the labor market is hindered by the mistaken perception that illegals will work more cheaply? There's got to be some explanation for such a massively dysfunctional market, right?

Intuitively this theory causes lots of problems especially for a lay person as I'm sure you'll agree - I mean we reduce "S", and then something happens as we have been taught.....

Well we can educated guess that at its worst, the fiscal/accounting cost (portrayed in terms most highly favorable to the anti-immigration side) is 10b annually as far as revenues vs. services.

So you are telling me I only have to make up $10b in downward price pressure annually (less whatever costs I didn't account for on the opposite side.) That really doesn't sound like that much to me.

 

Well, first off, the Mexican economy benefits a lot more from the billions that are wired home each year than it would if workers sat around and did nothing in Mexico

Second, Mexico's economy has been privatizing since the early 80's; its recent economic woes are not due to failure to embrace the free market - instead it has been the ROW's embrace thereof - leading to asian manufacturing centers taking jobs away from Mexico.

(note: In a larger sense I am arguing both sides of the fence here literally & figuratively and am wide open for attack on the other side)

 

The Economic Benefits of Immigration
By Justin Heet
Monday, December 01, 2003

Imagine, in a sort of demographic “Let’s Make a Deal,” that you could choose among three possible Americas for the year 2050, each an official projection scenario of the U.S. Census Bureau.

America Number One is a country with roughly twice as many people as today, or approximately 553 million.

The population changes embodied by America Number Two are less dramatic, with the nation growing by about 120 million people to a total of 404 million.

America Number Three is similar to the one we see now, with approximately 328 million people, compared to 280 million today.

Many people would choose America Number Three. Slower growth seems instinctively more manageable. Rapid population growth creates social pressures that are commonly associated with economic decline. Sprawl is pushing our cities ever farther into the countryside. Many school districts can barely build new facilities fast enough to keep pace with population growth. Besides, who, in these troubled times, does not wish for a little less change? Now, explain to the demographic game show contestant that choice number three is the Census Bureau’s “zero migration” scenario (number one and number two are the “high” and “middle” scenarios, respectively), and that immigration will likely account for a large share of the population growth of between 124 and 273 million people in the United States over the next half century, and America Number Three becomes a very popular choice indeed.

But it is the wrong one.

America’s continued economic growth requires a steady flow of immigration. It almost always has and will in the future, perhaps more than at any time in the past. Rather than placing economic pressure on the United States, immigration relieves an acute pressure created by the aging of the native population and provides an enormous boost to economic growth. Even if the native U.S. population were growing healthily on its own, the nation’s ability to provide the breadth and level of talent required for an economy built on knowledge would be questionable.

America Number Three is far older than the population today, with almost twice the proportion of persons sixty-five and older. That fact might not be important enough to determine immigration policy, were it not for the exceedingly important matter of funding government retirement and health care entitlement programs for that older population.

Immigration alone certainly cannot cure all of the challenges posed by flatter birth rates and longer life expectancy. For instance, to keep the current ratio of 4.2 workers twenty-five-or-older for every sixty-five-or-older retiree through 2050, and thus lessen the pressure on governments to finance entitlement programs, the safest estimate is that we would have to add eighty million more workers (not including children or non-working spouses) in the next half-century. This would be a difficult feat, even for America’s amazingly absorbent and flexible economy.

Nonetheless, immigration can help a great deal. The Census Bureau’s projection of America Number Two—an extra immigrant worker for every four sixty-five-or-older retirees—would result in an enormous number of extra workers to pay taxes and obviate the pressures on entitlement programs. America Number One would add an extra immigrant worker for every two retirees.

New World Order

The benefits of immigration in offsetting the aging of a population are not limited to the United States. The same situation is shared by most developed nations, in many cases to a greater degree. The United Nations has projected that Canada, France, the United Kingdom, Germany, and Italy will all have a greater percentage of their population in the sixty-five-or-older category in fifty years than will the United States. The same goes for East Asia: Singapore, Taiwan, the Republic of Korea, China, and Thailand all currently have younger populations than the United States but are projected to have an older population by 2050. Japan, with a population already older than America’s, is one of the most rapidly aging nations in the world. China may have as many as 400 million people sixty-five-or-older by mid-century.

As a result, there will be strong pressure for relatively high levels of immigration in all of these countries. Watson Wyatt Worldwide, a global consulting firm, estimates that Japan will need an immigration rate fifty-four times its current pace to offset the drop in native fertility. France will require a rate twenty times greater; Italy seventeen times greater; and Germany twelve times greater.

Of course, it is extremely unlikely that any of these nations will be able to sustain immigration at such levels. The stress on institutions and social programs would be enormous. Europe is already witnessing a political backlash against certain cultural dimensions of immigration. (See Herbert London’s article in this section.) Consistently high levels of immigration in Japan would surely evoke similar resistance, and there may simply not be enough people outside of China to offset that nation’s aging, even if its political climate were somehow made sufficiently attractive to potential immigrants.

Nonetheless, the inability, here or abroad, to rely totally on non-native workers to overcome the challenges of an aging population does not mean that policymakers cannot or should not take advantage of immigration to ameliorate these problems. It simply requires a focus on other policy areas as well. For example, pay-as-you-go systems like Social Security will have to be completely or partially privatized. Retirement ages will have to be increased. Jobs will have to be made more attractive to all segments of the working-age population (even as declining wages for unskilled workers reduce their incentives to work), and both government and business will have to emphasize research and development and capital investment to boost the productivity of workforces. No single policy can adequately address the demography problem in the long-term, but immigration will remain an important tool in policymakers’ toolboxes.

Immigration has become an essential and unavoidable feature of the global economy. Increasingly, the world’s labor markets are beginning to function as a single labor market, albeit with significant institutional and legal sticking points. Workers seek out the highest returns on their labor, and employers seek the best talent available at a cost-effective wage. For example, nurses migrate from South Africa to the Netherlands seeking higher wages, so South Africa looks to Ghana to offset the resultant shortage. The Catholic Church has been moving nuns from India to teach in its private schools in America. In similar fashion, these movements are repeated throughout the world in nearly every industry imaginable, from the highest-wage jobs to the lowest. The international labor market is flowing across national borders at an increasing rate and depth.

A new report from Northeastern University’s Center for Labor Market Studies estimates that half of the net new workers in the United States in the 1990s were immigrants. The figure was fully 80 percent for men. This represents an acceleration of an already existing trend. In the 1970s, 10 percent of the nation’s new workers were immigrants, and in the 1980s, 25 percent were. These data alone hint at the terrible price America would have to pay if immigration were severely cut.

These aggregate figures mask the extent to which immigration has become an especially dominant element of workforce growth and development in specific regions. Most of us are familiar with the Hispanic share of the workforce in the American Southwest and California, but Northeastern University estimates, in a report on New England’s labor market, that New England has become “more dependent on foreign immigration for the growth of its resident workforce” than at any time in its history. Considering the waves of European immigrants into New England at the turn of the twentieth century, the report’s conclusion is stunning.

Low Wages and High Skills

Immigration usually conjures up visions of very low-skilled labor. This certainly described the European immigrants of a hundred years ago, and it still describes a fair number of today’s: approximately a third of the nation’s non-native workers hold blue-collar jobs—typically of a rather dark blue. There is much truth in the old saw that immigrants take the jobs nobody else wants.

Yet there is also another sizeable body of immigrants who hold jobs that everybody would like to have but cannot for lack of skills. One-fourth of all U.S. immigrants work in managerial, technical, and professional occupations. The most common form of legal immigrant status for these workers (and the overwhelming bulk of such immigrants are legal) is H-1B visa status. For Massachusetts alone, the U.S. Department of Labor reported receiving 17,356 applications since 2000. Well over a third of these jobs were reported to pay $70,000 or more, with some paying hundreds of thousands of dollars per year. As their wages suggest, these workers represent the backbone of the knowledge economy: computer programmers, scientists, and systems analysts. Eliminating this flow of immigrants would cripple America’s most competitive firms and its most vibrant metro regions such as Boston and Chicago.

A tour of Boston’s many research universities would confirm this point. Roughly 26 percent of U.S. science and engineering graduate students in 2000 were foreign-born, and in some disciplines, the figure is much higher. For the nation’s research universities, a keystone of the knowledge economy, this pool of highly qualified candidates is vital.

The presence of highly skilled labor and students (who often provide very cost-effective labor themselves, in the form of teaching assistants) in the Boston region has a recognizable impact on the look of the city. The same is true for the Bay Area in California, and for Austin, Texas. Influxes of low-skilled labor have similarly altered cities across America. This cultural transformation of cityscapes into ethnic enclaves often fuels opposition to immigration, just as conditions in New York’s Little Italy did during the high point of European immigration near the end of the nineteenth century. However, these enclaves are tremendous assets to this country in the Global War for Talent. Ethnic enclaves promote internal networks that help ease immigrants’ acculturation and provide contacts that expedite their search for employment. For instance, Hispanic immigrants, legal and illegal, often come to the United States for a specific job, as a result of a tip from a friend or relative. This is a tremendous competitive advantage for the United States.

In fact, the United States currently maintains an overall advantage in the search for the world’s best and brightest workers. Germany, for instance, recently instituted a program to recruit the kind of highly educated workers targeted by the H-1B visa program, but the quota went unfulfilled while the demand for spots in the America’s workforce always exceeds the supply of visas. The sources of America’s competitive strength in the international labor market are numerous: our values, the size of our country and economy, our peerless university system, the world’s most high-tech and advanced firms, and our social fluidity, which allows for the rapid development of cultural touchstones (such as immigrant communities, churches, and volunteer organizations) that can help socialize immigrants.

Eventually, the competition for the most educated workers will intensify. Demographics dictate that Europe and Asia will become keener about keeping their best workers and luring the best from elsewhere. The flood of low-skilled immigrants into the United States is likely to become larger before it becomes smaller, however, because incomes and access to communication and travel must grow in developed countries before immigrants sense a sufficient level of opportunity in their home nations.

Mend It, Don’t End It

Roughly put, there are two ways to approach immigration: rely on the market, or rely on public goal-setting, which is more removed from the market and frequently places more primacy on social and cultural considerations. American policymakers should not discount the power of market-based stimuli, such as H-1B requests from software firms or human capital networks in dim sum restaurants, in determining migration patterns and ensuring that those who come here add to America’s productive might. Of course, no country relies completely on either the market approach or the public one, but rather on some combination of the two. The H-1B visa program, for example, still requires the consent of the federal government for each visa, which is given only after background checks and security clearances. Canada takes a more general approach, setting overall, numerical targets and scoring applicants according to how well they fit the country’s economic needs. Both approaches can be effective. H-1B’s success is evident, and Canada’s program has fostered the development of some of the more cosmopolitan cities in the world.

However, American policymakers should pause before listing too far from market stimuli as the primary criterion for determining immigration levels and deciding which applicants to admit, due to the country’s remarkable degree of mobility, both geographically and occupationally. All evidence suggests that the American labor market faces a shortage of both highly skilled, well-educated workers and low-skilled workers. American policymakers should be hesitant to ignore this evidence in pursuit of other considerations.

The most common such considerations are three-fold: national security, social services consumption, and illegal immigration. (There is a fourth having to do with cultural questions; for a discussion of these concerns and a proposal to alleviate them, see John Fonte’s article in this section.) None of these three objections to present immigration policy currently rises to the level of concern at which the United States should entertain thoughts of curtailing immigration. Homeland security is undergoing major changes in both form and operation, and it behooves the United States to wait and determine whether better communication and record sharing among federal agencies will stanch the flow of potentially dangerous entrants. As for consumption of social services, most evidence suggests that immigrants provide far more in economic growth and resulting taxes than they consume in government aid, though there is an unfair imbalance through which the federal government absorbs the tax receipts while the states absorb the social service costs.

Illegal immigration is admittedly a much thornier problem, but the solution is not in limiting legal immigration. The evidence as to whether border tightening has significant effects on curbing illegal immigration is unclear, and some evidence even indicates that tight borders can work in the opposite direction—keeping illegals in. The rational fear is that if an immigrant has made it through a tight border once, he will be more likely not to leave, given the low probability of making it through twice.

The other alternative, more aggressive attempts to find illegals who are already here, is similarly unlikely to be effective. Employers who hire illegal immigrants now have few incentives to report their activity, of course, and a government inspection program extensive enough to concern employers would likely be costly indeed. Given the scant evidence of significant displacement of native workers by low-skilled immigrants, it seems highly unlikely that there is a great mass of unemployed native workers who desire the jobs occupied by low-skilled immigrants, which makes bearing the cost of such a program a dubious proposition. A national identification card for workers would be redundant, as we already have one, otherwise known as a Social Security card. Employers that currently don’t ask for a Social Security card or INS documentation—or willingly accept a document they suspect is fraudulent—will simply not ask for the new and improved version.

The reality, of course, is that America will never be able to stop illegal immigration completely. The long-term danger of such immigration is the very real possibility that it will create a permanent, undocumented underclass without access to career ladders, education, and development of marketable skills. Some have argued for guest-worker status for current Mexican illegals in order to avert the potentially long-term problem of concentrated and permanent immigrant poverty. Such a policy, in addition to improving security along the Mexican border, would maintain America’s status as a place of opportunity for a better life.

The only way to become America Number Three—growing slowly, changing at a pace that is comfortable for all—is by purposefully or unwittingly becoming an America unattractive to non-Americans—with economic stagnation, brutal tax structures, acute labor shortages, and accelerating emigration of the best firms and the best jobs. In other words, a place that is pretty unattractive to Americans, too.

Justin Heet is an Associate Fellow with Sagamore Institute

 

There's no gap between illegal alien wages and citizen wages, but there's a HUGE gap between illegal alien skills and citizen skills. With the increasing extent of labor market mobility that illegal aliens now have and the incredibly low costs of being an illegal immigrant (poor detection and enforcement regime), it's quite intuitive to see that the ability of workers to exploit illegal immigrants is slim to none. Basically, you get a remarkably efficient labor market at the low end of the earnings distribution.

Illegals are hired because it's really not more expensive to hire them, given the enforcement regime. The fruit picking boss is thinking, "Hey, these guys are here, why don't I just use them?" The reason "these guys" are even there is because they're making MUCH more than they would in their home country. But it's still not statistically significantly different from what Joe American would make doing that job.

I'm not sure what the solution to immigration is, but again, I'm not sure that there's even that big a problem to start with. With our massive and numerous of horribly inefficient subsidies, worrying about the costs of illegal immigration would be like Monty Python's black knight worrying about a pimple on his cheek.

 

This still doesn't really make sense to me.

1. The skill gap - can you clarify is this between illlegal & natives as a whole? or between illegal & natives in low wage jobs. And how does it matter

2. "it's quite intuitive to see that the ability of workers to exploit illegal immigrants is slim to none."

Not sure to which you are saying that fellow low wage native workers don't benefit from immigration? I agree as it appears that the wealthy benefit far more from a cheaper force than do the folks at the bottom. But if we are just talking in terms of total welfare benefit (tabling the negative social costs of having an overly stratified uber-class for a second) then I'm not sure why that matters in this discussion.

3. But if it is ceteris paribus, then why does the fruit boss hire those guys?

Now I agree that in certain industries (like fruit picking) it is probably due to an entrenched perception among all involved that it is job for "those guys", so tht deserves some consideration, but...

I just still don't get it Vik. Our unemployment rate is what, 5%? Those unemployed people are not displaced toilet cleaners or fruit pickers - they are at the lowest end - factory workers or service industry refugees (non-toilet cleaning services). I seriously doubt that, even if they were willing to do those jobs hypothetically vacated by immigrants (I have not read Chiswik's thing - is it based on this assumption?) there would even be enough bodies to fill out demand - let alone fill it out at the same wage.