Immigration and Economics
by Tom Donelson on May 9, 2010 at 12:44 PM
Where to go from here on Immigration? Of the present economic versus security debate, the late Richard Nadler wrote, “The days of the “open border” are grinding to a close. But the nature of the border control that replaces it will vary with the public’s assessment of its intent. If the purpose is to establish identification, no fundamental economic freedom is at risk. If the purpose is to prevent the access of productive labor to willing employers, then all are.” There is a difference in border security that reduced infiltration and border security that reduces needed work force from migrating.
Nadler observed, “Contemporary immigration is often compared to a hostile invasion. A wave of foreign labor captures U.S. jobs in America itself, leaving burgeoning rates of unemployment, poverty and crime in its wake. The ensuing debate focuses on how to remedy these catastrophes. Absent from this conversation is the threshold question: 'Does immigration actually cause the ills attributed to it?'" For Nadler, the answer was no and certainly data will support that immigration enhances overall economic growth. The only real economic debate is whether immigration affects the earnings of lower income workers. Some studies have stated that immigration does in fact offer direct competition to lower income workers and reducing their earnings. Nadler’s own study Wealth of State disputed those notions by showing that states with high immigration had higher overall greater income regardless of demographics or ethnicity.
Of the debate about economics and security, “The concept of laissez-passer – freedom of movement – is a bedrock corollary of market economics. It teaches that the free movement of labor in response to supply and demand produces social effects that are, on balance, benign. The concept has all-but-vanished from the contemporary immigration debate. In the post-9/11 world, it is widely assumed that nations must staunch the flow of cross-border labor to fight crime and terror. But to national security concerns, new objections to laissez passer have been advanced – caveats suggesting that a free market in labor is socially malign.” Nadler's biggest fear was that concern of free market economics would be shunted aside in favor of security as he wrote, “The concept of laissez-passer – freedom of movement – is a bedrock corollary of market economics. It teaches that the free movement of labor in response to supply and demand produces social effects that are, on balance, benign. The concept has all-but-vanished from the contemporary immigration debate. In the post-9/11 world, it is widely assumed that nations must staunch the flow of cross-border labor to fight crime and terror.”
Nadler feared by demonizing immigrants, conservatives risk losing Hispanic voters for a generation and jeopardize their business coalition from the rest of the conservative coalition. Some conservative pundits have essentially accused businesses of employing immigrants, in particular illegal as indentured slaves, but as Nadler countered, “Low income immigrants are slaves? Does this mean that Mexicans came here involuntarily in slave ships? Or that their employers whip them and deny them wages?” Immigrants, illegal and legal, pursue job opportunities and many immigrants coming across the border will earn 2 to 6 times the income than back home. So for many immigrants, working in America is hardly slavery.
On legitimate economic argument is the attraction of the welfare state ensnarling immigrants. Denver Post writer David Harsanyni warned, “When the Nobel Prize-winning libertarian economist Milton Friedman was asked about unlimited immigration in 1999, he stated that "it is one thing to have free immigration to jobs. It is another thing to have free immigration to welfare. And you cannot have both. Dependency programs incentivize not only those who want to work, but those who don't want to work. That's why we need to allow a generous number of immigrants and visitors to take a shot at the American Dream and become part of our economy. I'd just like them to do it on their own and check in first.”
The Welfare reform in the mid 90’s was based on the premise that welfare disincentivizes many of the poor and when the reforms were enacted, many of the poor escaped permanent poverty. Competitive Enterprise Institute Alex Nowrasteh proposed, “A responsible middle ground on amnesty also needs to be proposed. 10.8 million illegal immigrants are not all going to be deported or convinced to leave. Fees, fines, language requirements, prohibiting access to government benefits and more in exchange for a path to legal status are smart and realistic conservative compromises.”
While the economy is still struggling and emotions high, this is not the election cycle where sane immigration reform will be settled. The key will be not to demonize immigrants including illegal immigrants and accept that illegal immigrants are responding to a logical economic incentive by moving where the jobs and incomes are. There is a difference between a drug dealer and a construction worker. Border security to keep Mexican drug violence from spilling over into America is a priority goal, and border security is a primary responsibility of the Federal Government.
No one should declare Arizona voters racist for passing SB 1070, for they are responding to a violent world revolving around them. In an economy suffering from recession and Drug war at its border, Arizona voters reacted. Arizona voters no longer trust the federal government to do its basic duty and in this particular argument, the voters are right. The governing class has failed as they run up debts beyond what voters will be able to pay down and expanding government in all aspect of daily life, while failing to protect voters’ lives and property. As long as the governing class is no longer trusted, sound immigration reform may be a bridge too far.