How Could this Possibly Raise Competition for Jobs

The Washington Post ran a story Friday speculating that Obama's amnesty to illegal immigrants would lead to an increase in competition for jobs and college. Two things with regard to this, first of all this is an instance of linear thinking. Increasing the potential supply of workers and college entrants should impact a number of other economic and social variables, there is no good reason to believe this will increase pressure on existing job seekers or prospective students (it may, but without further evidence there is no reason that the intuitive response is correct, the impact is indeterminate).

I'll illustrate my second issue with a quote from the article:

But Steven Camarota, a researcher with the nonprofit Center for Immigration Studies in Washington, said that the Obama administration was not taking into account the new measure’s probable impact on competition for jobs at the low end of the economic scale, where chronic unemployment is highest. Among Americans with less than a high school education, he said, the jobless rate is 13 percent.
“It doesn’t seem the administration is considering the cascading consequences,” Camarota said. “What does this mean for unemployed Americans who will be competing for jobs with a million-plus people who can now apply for work authorization? Is this really a good idea?”

This strikes me as wrong-headed. Currently, illegal immigrants lack virtually all bargaining power with regards to jobs, wages, and working conditions. They are also severely limited in their ability to incorporate and to employ others. One of the primary sources of downward pressure on wages and opportunities is a large number of individuals who are available to be hired who are in no position to ask for benefits, who cannot legally pay taxes, and who cannot appeal poor working conditions and abuse for fear of deportation. This makes these individuals very appealing as hires to less scrupulous employers in the low wage sector.

This reform removes much of what distinguishes illegal immigrants from other potential employees. Far from making them more competitive, this reform makes them largely indistinguishable from other workers. What advantage does an employer get from hiring an illegal over a native? The former illegal now has the opportunity to report labor violations, can now work legally and pay taxes so has less incentive to take under the table employment, and can now demand work place benefits. It's plausible that they may even have an increased demand for employer benefits relative to native workers since they don't qualify for Federal benefits; private disability, pension, and health benefits are that much more important to workers who lack even our threadbare social safety net. I fail to see how greater similarities between immigrant and native workers increases competition relative to the status quo. What mechanism would cause more similar workers with more protections to distort the market more than disadvantaged workers with less protections?

This strikes me as one of those irrational, intuitive responses that I referred to in my last couple of posts. Once the argument is thought through the holes in it are rather obvious.

Why Americans Don't Work and Mexicans and Chinese Do

I'm going to try to keep this short.  I get annoyed with the meme that Americans have lost their work ethic and that other countries have developed or retained some kind of amazing cultural affinity for work.  The difference observed in these cases has basically nothing to do with culture, to the extent that culture has does influence this America has an amazingly pro-work culture and has higher than expected labor force participation, hours worked, and entrepreneurship, and a lot to do with economic opportunity.

The problem is the belief that people should work hard, just because well, people should work hard.  The corollary of this is often that people should damn well do what they're told for what I want to pay them or go to work for themselves (which ain't easy, even if you're sitting on your rear sending article after article to publishers).  I could present this view more sympathetically, but I find it elitist and classist with no real supporting evidence so won't bother (the most recent article to make me think about this was in the Economist, which discusses immigration and the difficulty of finding Americans willing to do the work immigrants did).

The real reason people work is that they aspire to something better.  People generally have a pretty good idea of what their opportunities are and will generally act on them.  If people aren't taking jobs like vegetable picking in Alabama it's probably because they have a good idea that they won't get anywhere by doing it.  Even poor people realize that spending a summer picking veggies in a scorching field won't do much to bolster their resume to get a better job later one, they're not stupid.*  There's no upward potential, so they won't do the work.

Now, of course, many of my educated fellows can share stories about how they did unpleasant or backbreaking work to get through college or in between jobs.  Hell, I can share a few of my own.

But there's usually a difference here, almost all of us with these stories were young, most often single, and had some kind of in kind supports that allowed us to save from these jobs.  In these circumstances, most people can and do work.  They do this because they know it's a stepping stone to somewhere better.  I used to spend 8 hours a day getting yelled at in a call center to save for graduate school, while perhaps not as bad as working in an Alabama field it's pretty depressing and I got through it by telling myself I'd never have to do that kind of work again.

But for your average down on their luck unemployed person, this work doesn't look so good.  That time in the fields means not applying to jobs that might get you out of your situation, people don't do this kind of work to simply tread water.  At one point in time there may have been a path up the ladder, do good, get recognized, become a foreman.  There's probably still some cases like this, but these days you're more likely to be passed over in favor of someone with a 2 year business or 4 year agriculture degree.  You don't suffer through a crummy job with no prospects for another year at a crummy job with no prospects.

Looking at countries like Mexico or China, the situation is different.  The Chinese maintain, at considerable expense both in terms of state dollars and economic distortion, a range of state owned companies that give vastly inflated wages and benefits.  People swarm into their cities and take crummy jobs in hopes of eventually being able to qualify for one of these posts.  Without them, it's unlikely that people would work for the wages and conditions they are given in Chinese factories, but people have a rational expectation of being able to move up and out.  This won't come true for many, but it comes true for enough to keep the dream alive.  Mexicans immigrating here have similar ideas, they may eventually learn English and move up, or at least their children will.

This simply isn't the case in the US right now, most low wage jobs are insecure, often seasonal.  You don't move up the ranks if turnover is less than 3 years or so, which is the reality for most low wage employment.  Unions once made up for this by negotiating scheduled wages, this had its downside but people will put up with a lot if they know things are getting better every year.  But we've gutted unions, we demand degrees for most positions of responsibility, and wages are too low to save for school if you either have dependents or can't rely on family or a buddy to let you sleep on their couch and save for school.  In this situation, why bother with a crummy job?  It gets you nowhere, doesn't build a resume for a more responsible position, and barely covers a subsistence level of income.

Of course people don't do these jobs.  Society is never, and will never be, set up in a way that people will work hard without prospects.  When people did back-breaking farm work it was because they knew the economy was growing and more responsible, better paying positions were opening up.  People will work for that hope, even if it doesn't come true for everyone doing it.  But that isn't our modern economy, it's very rare that someone can take a labor or retail job and move up.  Who would spend their lives stuck in a low wage, insecure job?  No one would, surveys taken show that both the poor and middle class have remarkably identical opinions on what they consider the minimum wage they'd work, the same could likely be said of opportunities.  This is simply a reality that we'll have to deal with, people won't stand for the scraps thrown to them by the rich and the only solution is to create better expectations, not to lecture people to become resigned to having none.

* The exception to this is the recent graduate who has never held a full-time job.  Most managers have dealt with enough bozos that skipped shifts and called in "sick" (hungover) to be somewhat leery of taking a chance on a middle of the road student with 0 work experience.  In this case, an entry level crummy job is pretty much a prerequisite for something better later on.  It's always been thus, and recent graduates have always moaned about it.  This, however, doesn't seem to be the case with much of the unemployed, particularly in the low wage sector.

Obama Authorizes Dumping of Additional $600 Million Into Money Hole

Given the complete and total failure of increasing border control spending from $1 billion to $3.5 billion to make the flow of Mexican immigrants to the US dependent on anything but economic factors, Obama opts to build upon success and dump an additional $600 million into America's Giant Money Hole further confirming America's obsession with supporting failure at any cost rather than changing course.

If you can't tell, I'm completely fed up with policies that continue based solely on emotional factors without any particular grounding in actual reality.  We need to stop this madness.

Not Going to Comment Further Immigration Doesn't Need Constitutional Reform

People need to know about this.  I'm not going to comment further but things are going too far if Senators are talking about constitutional amendments as part of the immigration debate.  At least the leadership is trying to create distance from these claims.


"But Mr. Graham, speaking on Fox News last week, said it was “a mistake” to allow American-born children of illegal immigrants to become citizens automatically, a practice known as birthright citizenship. He said that along with a plan to grant legal status to millions of illegal immigrants, he would also amend the 14th Amendment as a way of discouraging future unauthorized immigration."


"But giving citizenship to everyone born in the United States has been the practice since the 1860s, and was upheld by the Supreme Court on the few occasions when it was tested there, immigration lawyers said."

"In fact, under immigration law American citizen children must wait until they are 21 years old to apply for legal residency for their parents. Also, most of the illegal immigrants who have children who are American citizens have not recently arrived."  

[Small edit: Apparently blogger didn't like my giant link so it was broken in places.  Should be fixed.]

Fantasy Immigration Policy

This is how I'd go about trying to fix the immigration policy.  By fix, I mean fulfilling as many expressed policy goals as fully as possible.  This is written with no consideration for existing law, while I'm unsure I believe that the tax provision at least would likely face difficulties with existing legislation, other portions likely would as well.  This is the advantage to being a blogger and not a legislator.  I'd list those interests as the following:

Provide America with a workforce it needs given demographic changes
Maintain our international obligations and reputation (asylum mostly)
Minimize regulatory burden and business uncertainty
Promote labor mobility
Reduce impact on the budget
Provide long term revenue
Assimilate new immigrants
Reduce smuggling
Protect against security threats (terrorism etc.)
Prevent crime (as in street level, thefts, assaults, etc.)
Distinguish between security threats and benign traffic
Create opportunities for the American workforce

Part 1: End the Quota System
The quota system places an undue administrative burden on the state as well as making it difficult to distinguish between legitimate security threats and benign immigration.  Furthermore it is simply philosophically unsound to apply quotas to people when rationing is not enforced by physical constraints.  The most basic reason being that it is essentially arbitrary which engenders contempt for the law, even using the point system, because there will be equally well qualified individuals who are permitted in and who are not with no promises to those who were not permitted in.  Expanding on this idea would take too much space so I'll propose an intellectual exercise, imagine if government decided to control pollution not through regulation on vehicles or by imposing gas taxes but by restricting access to public roads by setting up quotas on the number of driver's licenses available each year, would you continue to feel the law was just if your neighbor gets one and you didn't?  The fact that this arbitrariness is applied solely to non-citizens does little to make it more philosophically defensible.

Part 2:  Require Registration
All immigrants would be required to register with the federal government, including immigrants currently illegally within our borders on payment of a small fine (the advantages of this system require registration, providing strong disincentives, while perhaps just, would prevent many of the positive developments of registration).  There would be a requirement of productive activity to remain in the country, this could be a job, marriage, school, voluntary work, and perhaps some other areas.  This would have to be renewed on a yearly basis showing that requirements were met for at least half the previous year, if the requirement isn't met at the time of renewal there would be an additional requirement to fulfill the productive activity requirement within 3 months and submit proof to ICE (Immigration and Customs Enforcement).

Part 3: Tax
All registered immigrants would be subject to an additional 3% tax on income while they remained under that status.  This tax would cease once an immigrant becomes a permanent resident.  A large portion of these funds would be earmarked for programs designed for new immigrants that will be described below.  This tax serves several purposes.  First, it funds specialized programs for new immigrants, existing citizens should not be responsible for services they will not use directly.  Second, it is a Pigovian tax and creates disincentives for businesses to hire immigrant workers when entirely equivalent workers are available in the US labor pool (indirectly through lowering effective wages, this is charged to the worker, not the business).  Third, it is flexible and can be responsive to changes in labor demand, though to maintain the legitimacy of treating these workers differently any increases should also lead to correspondingly greater budgets for services of interest to immigrants.  Fourth, it would create an incentive for a worker to either eventually return home or to make a priority of fulfilling the requirements to become permanent resident.

Part 4: Updated Permanent Residence Laws
Permanent residence requirements would be extended to include English language requirements (or alternately American Sign Language, other waivers may be necessary in some cases), a minimum of 1 year of residency as a registered immigrant, no criminal history (with a possible waiver for misdemeanor or less after the passage of several years), and passing a basic test on US history and culture to help promote integration within the broader community.  The effort required to achieve this minimum requirements will provide a disincentive for immigrants who simply wish to avoid a small tax from going through the effort while providing a strong incentive for an immigrant desiring longer term residence to work on skills needed for integration in the community.

Part 5: New Immigration Programs
Using money from the new tax programs would be developed to aid immigrants.  These would involve English language classes or subsidies for all registered immigrants and permanent residents, bi-lingual education for immigrant's families, a relocation program funding a move back to the country of origin for immigrants which so desire (this would be capped), and a job matching program for immigrants that would like to come over as temporary workers that would help them to have employment prior to arrival (ideally with offices in countries having high levels of immigration to the US).  Funds would also go towards enhanced law enforcement activities against groups which seek to exploit immigrants, such as prostitution and drug smuggling rings.  The victims would be provided with counseling and given the option of repatriation or going through the standard immigration process (the exploiters would obviously be punished to the full extent of the law).

Part 6: Access to Services
Registered immigrants would receive access to most basic services, exceptions would be made for unemployment insurance and other transfers until permanent residence status is attained.  This serves two purposes.  First, it provides an incentive to register to receive basic services such as a drivers licenses.  Second it provides incentives to work towards permanent residence to attain full access to services.  The restrictions should, along with the increased revenue provisions, assuage fears that immigration will be a net drain on the Treasury.

Part 7: Enforcement
Shifting to these mechanisms would do a great deal to make enforcement easier, even without additional considerations.  There would be little incentive for a law abiding immigrant to enter illegally, too many advantages would now be available to a legal immigrant.  To help insure this would be the case, immigrants who fail to register should be subject to severe penalties, including the potential for a permanent ban on them achieving legal status.  Immigrants entering illegally would be much more likely to be engaged in illegal activity allowing security forces to focus on those that pose the biggest threats.  Immigrant communities would also become much more likely to assist law enforcement since they would no longer have to fear legal action.  There would furthermore be an additional funding stream if additional resources prove necessary.  Businesses would also benefit from decreased regulatory costs since there would be less incentives for immigrants to commit fraud, removing a source of some uncertainty and of workforce turnover.


That's pretty much it.  I'll add a subsequent post if I think of anything more I'd like to add.  If by some miracle a politician reads this and proposes it I believe this could solve most of our problems.  It would make border enforcement a doable, rather than impossible task.  It would end what reality there is to the contention that immigrants are a net drain on revenue.  Incentives would be provided to assimilation, countering those critiques.  Otherwise law abiding immigrants that are currently illegal would no longer have to fear the law and could become full members of their communities. Strong incentives would be provided to foreign students that have already completed their education here to stay, most of the bureaucracy would have been reduced to a straightforward registration process that would be well funded through a dedicated revenue stream.  Business would have a more secure workforce with less turnover as well as less regulatory burden since verification is shifted to the individual not the workplace.  It would be easier for immigrants in unstable circumstances to leave, reducing the possibility that workers would stay here despite unemployment.  I could probably add some more positives if I wished.  I also have trouble seeing much downside, though there may be something of a net increase in immigration this would be partially offset by an easier outflow.

Border Control Data Dump

This provides the background data for a post I plan to write tomorrow.  That post will be my fantasy policy making post on what immigration platform I'd have if I had a massive stroke that caused sufficient brain damage to make me want to run for Congress and suffer through all that nonsense.  It's what I think we'd have to do to have a working border policy, not anything that I see coming up for debate any time soon.

Some very limited discussion.  First, as you can see there is likely some deterrent effect.  It's also mostly swamped by the economic effects.  I'd add that based on some historical points I've heard made that a massive increase in draconian enforcement would likely lead to a sharp drop in border crossings.  I'd also say based on historical data this drop would be temporary since those crossing can adapt faster than government can respond to adaptations.  The cost figures I have are for border patrol only, there is also substantial expenditure on inland enforcement, such as workplace raids.  From these reports it seems that interior enforcement is much more expensive than point enforcement at the border.  There is no hard data given on this so you can choose whether or not to believe this.  I do think it's unavoidable to conclude that an enforcement first approach is futile, the additional resources are having an impact but it isn't that large and is likely to suffer from diminishing marginal returns.

Feel free to dig into the data yourself.


People Crossing Borders: An Analysis of U.S. Border Protection Policies

Border Security: The Role of the U.S. Border Patrol

Remember, these are reports for Congress.  Whatever it is they're saying they do know this stuff, or at least have a staffer who does.
[In case it wasn't clear, all data from the above two linked reports]

Immigration Generation Gap, and Some Free Association on the Subject

The NY Times today had an interesting article on the generational divide on attitudes towards immigration. I don't think many would find it surprising to learn that younger people are more accepting of it.

What interested me however was this:

...baby boomers and older Americans — even those who fought for integration — came of age in one of the most homogenous moments in the country’s history.

Immigration, which census figures show declined sharply from the Depression through the 1960s, reached a historic low point the year after Woodstock. From 1860 through 1920, 13 percent to 15 percent of the country was foreign born — a rate similar to today’s, when immigrants make up about 12.5 percent of the country.

But in 1970, only 4.7 percent of the country was foreign born, and most of those immigrants were older Europeans, often unnoticed by the boomer generation born from 1946 to 1964.

Here's the free association bit. While American history isn't my strongest subject a basic impression I have of it is that between the 50s and the 80s we pursued a number of highly wasteful policies. It isn't that we didn't have achievements, civil rights and the space race come to mind, but we performed rather poorly in long range investments in many sectors of the economy and public policies did little to maintain infrastructure and growth. Particularly I'm thinking of the gutting of our rail system and suburbanization both encouraged, admittedly indirectly, by government policy. On the whole, we seemed to be coasting during these decades squandering our resources on adventures abroad (Vietnam, Korea was expensive but necessary) and poorly thought out domestic initiatives while failing to think long term and invest our resources in long range projects.

Perhaps the lack of immigration had something to do with this. When we've been at our best, we've been capable of borrowing successful policies from all over the world as well as using our own inventiveness to improve upon these ideas or think of new ones. During this earlier time period however, we seemed to turn inward and focus less on what we could get from the rest of the world. Perhaps this was simply because our relative power was at its peak, the Soviet Union was a somewhat exaggerated threat from the 50s on, so we felt we had less to learn from everyone else. In any case though, these are decades that I'm not sad I missed, we failed to use our assets to provide well for our future. I'm more hopeful about the future but to seize it we have to reject what we were during these years and embrace what we were when our country was more diverse and more open to change.

Which is just another example of the generation gap. I reject the notion that these earlier decades marked a great time for our country, our greatness was too much the result of others' decline than our own powers. Those who would like to go back to how we were are ignoring the actual context of why we were at our peak. To get back to the primacy we held during those decades will be achieved not by seeking to return to what our country was then but by displaying the ability to change through openness and flexibility that we had in the years previous to the 50s that lay the groundwork for those years. We should embrace returning to earlier levels of immigration as a benefit, not as a threat.

Way To Go After the People We Most Want In This Country

This NY Times article describes how a student in Georgia is facing deportation because she got pulled over for a traffic stop. Apparently she came over here illegally when she was 11 and since then has excelled academically and is in college.

Couple of things here. First, this is exactly the kind of person we want in this country. What a waste of talent to go after her. Second, this law is going after someone that didn't have a choice in violating it. Half her life has already been spent here, what possible purpose does it serve to deport her now.

And it just gets worse. Apparently, Georgia doesn't like the idea of illegal immigrants not conforming to the stereotype of low wage agricultural worker and is seeking to keep them from going to college. From the article:

One Republican candidate for governor, Eric Johnson, has said that if elected he will mandate that all college applicants demonstrate their citizenship. The chancellor of the state university system says that would be prohibitively expensive, costing $1.5 million, for roughly 300,000 students.

What a waste, I'll never understand these people. It's just a single case, but it is symbolic of a lot of the mindset.

What Happened to Those Legalized in the Last Amnesty?

This is a question I've been wanting to find an answer to, until now completely unsuccessfully. This story examines studies that tracked results of illegal immigrants legalized under the Immigration Reform and Control Act of 1986 and examined them again in 1992. The main result is it found significant upward mobility once immigrants were made legal. This varied among groups, notably lower for Mexican immigrants but does show that you cannot simply expect immigrants to stay where they are on the income scale once legalized. I'd like to track down more recent data, how do they look 10 and 20 years out? How do their children look? Still, this is a good piece of data.

Though I still think that any immigration reform needs to acknowledge this is an economic problem and needs to be dealt with in that fashion instead of through policies not adapted to regulating labor markets.

A Mistake I Hope To Never Make

Came across this in a rather drawn out discussion about immigration at the Economist's DIA blog. This page contains an assumption that is obviously wrong from the information contained within the post. This isn't new but hadn't seen it before and was a bit floored by it. Below are the relevant sections:

The Net Retirement Costs of Amnesty

Giving amnesty to illegal immigrants will greatly increase long-term costs to the taxpayer. Granting amnesty to illegal immigrants would, over time, increase their use of means-tested welfare, Social Security, and Medicare. Fiscal costs would rise in the intermediate term and increase dramatically when amnesty recipients reach retirement. Although it is difficult to provide a precise estimate, it seems likely that if 10 million adult illegal immigrants currently in the U.S. were granted amnesty, the net retirement cost to government (benefits minus taxes) could be over $2.6 trillion.

The calculation of this figure is as follows. As noted above, in 2007 there were, by the most commonly used estimates, roughly 10 million adult illegal immigrants in the U.S. Most illegal immigrants are low-skilled. On average, each elderly low-skill immigrant imposes a net cost (benefits minus taxes) on the taxpayers of about $17,000 per year. The major elements of this cost are Social Security, Medicare, and Medicaid benefits. (The figure includes federal state and local government costs.) If the government gave amnesty to 10 million adult illegal immigrants, most of them would eventually become eligible for Social Security and Medicare benefits or Supplemental Security Income and Medicaid benefits.

However, not all of the 10 million adults given amnesty would survive until retirement at age 67. Normal mortality rates would reduce the population by roughly 15 percent before age 67. That would mean 8.5 million individuals would reach age 67 and enter retirement.

Of those reaching 67, their average remaining life expectancy would be around 18 years.[17] The net cost to taxpayers of these elderly individuals would be around $17,000 per year.[18] Over 18 years, the cost would equal $306,000 per elderly amnesty recipient. A cost of $306,000 per amnesty recipient multiplied by 8.5 million amnesty recipients results in a total net cost of $2.6 trillion.

The report also contains this:

Education of Illegal Immigrants.Illegal immigrants generally have very low education levels. As Chart 3 shows, 61 percent of illegal immigrant adults lack a high school diploma, 25 percent have only a high school diploma, 5 percent have attended some college, and 9 percent are college graduates, according to the Center for Immigration Studies' estimates.[4] The Pew Hispanic Center estimates slightly higher education levels: 49 percent without a high school diploma, 25 percent with a high school diploma only, 10 percent with some college, and 15 percent with college degrees.[5] Overall, 49 to 61 percent of adult illegal immigrants lack a high school diploma, compared to 9 percent of native-born adults.

Thus, using solely the information from the report itself, at a minimum between 14% and 25% of illegal immigrants are not low skilled (assuming anyone with a college education is not low skilled, which I believe conforms with most definitions of the term). Yet, this page did the calculation as if all illegal immigrants were low skilled.

The bias here is so thick it is unreal. It gives the automatic assumption all illegal immigrants are low skilled. Furthermore, to give the appearance of balance, the article presents some of the weaker arguments made by pro-immigration groups to easily dismiss them. To stick with the original example, a notable sign of bias is trying to give the appearance of a balanced assessment by taking out the normal mortality rate. This accounts for a single, obvious objection giving the appearance of trying to do some real math, while leaving out much more significant issues with real skill levels and long term economic mobility, it simply assumes these immigrants will stay poor and that they have no skills.

There are plenty of other issues with additional information that I think would be necessary. What I can't get past though, is that this would be put up with such an obvious error in assumptions, proven wrong by information within the report itself, by a think tank. A politician's website I could understand but this is the kind of error you'd expect a freshman poli sci student to notice. It's unbelievable they'd let something that is such an obvious hack job go up. This sort of obvious mistake should be an embarrassment to anyone that is trying to be professional. A personal blog, sure, we say crazy stuff all the time. But this is paid work that an unpaid undergraduate intern should have been able to call the error on. Or, in this case, a guy sitting at home in front of his computer in pyjamas.

If Arizona Can Go Crazy Over Immigration So Can New York

This being New York though, I define crazy as doing something that makes sense, which is certainly against trend here. Not a big shift, but there is now a "special pardon panel" (their words, not mine) that will review cases of legal immigrants facing deportation. A baby step in the right direction.

[Update: More Complete Article]

Good Thoughts on Immigration from Cato@Liberty

I got the link for this from Douthat's blog, but I found I quite like the argument Griswold is making. He links through to some interesting data as well from immigration in the 1950s. What I don't like is the comparisons with prohibition, which appears in plenty of other places as well, which I think is distorting the point somewhat. While a semantic issue, the problem with the term prohibition is it continues the meme that this is a special case largely separate from other market issues. You wouldn't call it prohibition if the US government banned the import of cars. Why use a separate word for a few products? The self-regulating market imposes the same rules on us whatever it is that is being banned. This is of course assuming that a self-regulating market exists for the product being discussed, I think in the cases of alcohol and labor the evidence leans heavily towards this being the case.

Dynamic Markets and Immigration

I have stated before in a few places that I believe the balance between institutions (such as the state), the economy, and society shift in exactly how they fit together and what aspects of life they cover. Immigration gives a good example of this. Immigration is currently seen as being clearly within the role of the state. The state sets quotas and regulations regarding anyone that comes in and anyone that defies this is breaking the law. Simple. This works quite well with asylum seekers or people who simply want to move into the country for non-economic reasons, such as people moving because of politics or a Canadian snow bird sick of freezing their butt off. The state also retains power to control the access that immigrants have to other state resources, including citizenship.

However, the economic migration that is at the center of the immigration debate is something different. It is driven primarily by demand on the labor market. Few would dispute that if there is demand for something independent producers will produce more to fill demand. This is what's happening with immigration. It has been moved into the market and thus out of the non-market activities that are clearly under the control of the state.

Of course, the state does retain powers to regulate the market but the state does not possess powers to control it. There are innumerable examples of this, whether black markets in North Korea, those in the Soviet Union, my example of the illegal fashionable, or the smuggling in early US history. If the state tries to impose non-market controls on a market, you simply get black market activities as the state is circumvented. There are a distinctly different set of tools available to the state to regulate markets than the state uses to regulate non-market activities. Failure to make this distinction and to apply the wrong tools results in policy failure whenever it is tried.

What we're seeing right now with immigration is this sort of policy failure. Since the state cannot control the market directly it resorts to indirect measures in the vain hope of imposing the same control on a market that it can impose on non-market activities. What is going on now at the border is no different from increased naval controls that earlier societies used to prevent contraband from reaching their shores. These measures may limit it slightly, but not anywhere near the extent desired by the authorities and at the cost of creating very powerful criminal groups as well as contempt of the law and the loss of all the potential revenue if legal channels had been allowed to function. No amount of state power can completely destroy a market once created, the choice is between a legal, regulated market and an unregulated black market outside of state control. Turning immigration into a non-market activity that is within the state's power to control absolutely is outside of the state's power. Any successful immigration policy will have to accept this or be subject to inevitable failure as all earlier policies have been.

A Slightly More Serious Take on the Democrat's Immigration Proposal

Last night's post was somewhat frivolous so here is a short post summing up my impressions more seriously. First of all we have the standard enforcement stuff, more money for the patrols, walls, equipment, etc. I think this is a huge waste of money on an enterprise bound for failure in pursuit of a type of policy that never works but I guess I can lie to myself and pretend it's stimulus spending so no big deal.

The second part is the biometric social security cards. These sound to me like a national ID card coming in through the back door. It involves a lot of inter-agency work and sounds very, very complex to get existing citizens to use it. While I think we have to move in this direction, and I'm not terribly fond of the flimsy cards we get now, I think this will have pretty much no impact on immigration. People always find ways to get around these measures, Europe has national ID cards and they still have a lot of illegal immigration, so as far as immigration controls go, this is also simply burning money but is more excusable since it is generally a step towards modernization of our record keeping.

There's a lot in there about cracking down on employers and increasing penalties on them to force them into compliance. I believe this will work as well as trying to control the economy in this fashion ever works, it will garner some big media circuses as raids happen to make people feel it is working while having a completely negligible effect on actual numbers. More money down the money hole.

The last part is new immigration rules for both high and low skilled workers and a pathway to citizenship for existing immigrants. Not a whole lot to say here that isn't well covered elsewhere. It is an improvement but still inside a broken system.

So since I'm doing all this complaining what would I actually like? Basically, market based mechanisms. Keep enough punishment and enforcement to keep people in legal channels and let the market pretty much take care of itself. Set no quotas but have a system for registration and require some degree of checking in so we know what people are up to, probably just an online database and your standard government documents, such as tax or DMV records, would be enough. To restrict the supply somewhat slap on an immigrant tax. Not sure what the proper level would be, high enough to make some difference but not so high to push people into the gray economy. Maybe a 5% payroll tax on top of other taxes. Perhaps require that immigrants stay legally employed or face deportation to prevent the bogeyman of using up government services. Then let the market take care of the rest.

My Impressions of the REPAIR Proposal

Just finished reading the Democrat's first proposal on immigration reform. The first thing that strikes me is that the whole enforcement approach is fundamentally flawed because it is centralized planning of the type decried by Hayek and that was shown to be a miserable failure by the Soviets. Why this isn't obvious to everyone screaming Socialism is completely beyond me, probably because of the insistence on separating economic freedoms from other freedoms in such an arbitrary way (I've also been reading the Contract from America, which I'll eventually post on).

While centralized planning for immigration will certainly fail utterly, these things always do, I'll highlight some of the parts of the bill I found most interesting, though not necessarily most important. First of all, out of 26 pages the first 18 are devoted solely to enforcement, and that's not absent from the rest. As I've said before, we are way past the point of diminishing returns on this and we're not getting much for our money, I don't think marginal increases that fall short of the Berlin Wall or the Korean DMZ will have a significant effect. The Onion accurately sums up what I believe the effect of increased enforcement measures will be. I'm not so much morally opposed, I actually think there are argument on both sides, I just think it is futile and throwing good money after bad.

Part of the proposal regards biometric social security cards, which are pretty cool but underutilized. I want one that will function as cash and update to all government databases so I don't have to mail information the same information in to different offices and keep filling out the same stupid forms all the time. Unfortunately, while quite snazzy it doesn't actually do anything useful (kinda like how I feel about the iPad). This is the proposal that baffles me however:

(4) offline verification capability (eliminating the need for 24-hour, 7-days-per-week online databases);

Erm, are our Senators really so ignorant about computers? That you want to verify things without computers makes sense. However, ff you have an electronic database with all the data and functionality online making it 24 hour, 7 days a week isn't so impressive. At all. What kind of online database is only available, say 9-5 M-F? Outsource this to Google if you have to, not a problem that needs a separate provision to deal with. Eliminating the need for a 24 hour per day database is about the least useful thing I could possibly think of.

There's lots in there about SSA needing to verify people's status to issue the cards, which sounds disastrous since SSA always has a huge backlog for everyone else and I doubt the logistics of this have been thought through. That is a lot of new Federal Employees you're throwing money into the money hole for. Not to even mention that people will find ways around this, they always do.

Then there's the name, BELIEVE. They are just asking for this to be a joke. The whole enforcement is a faith based policy boondoggle anyway. You can believe it will work all you want, see my earlier post for my thoughts on that.

Unsurprisingly, there is also a clause for ratcheting up punishments:

To make the system air tight, the proposal substantially increases civil monetary penalties by 300 percent for violations... (16)

Throw em in the galleys and it still won't work, give it a rest.

Other details, new national birth and death database, read above. I want it to fill out my DMV paperwork too, then I'm for it.

Then we get into the parts I like. There are new provisions for immigration, and temporary work programs, for low and high skilled immigrants. These are big improvements on the status quo, but still a command economy approach to immigration. It's a market damn it. Stop pretending it isn't and employ market mechanisms. May as well set targets for steel production while we're at it. While I'm complaining, this is better, just still in a fundamentally flawed framework.

This is my favorite section, just for the heading:
V. MANDATORY REGISTRATION, ACCEPTANCE OF RESPONSIBILITY, AND ADMINISTRATION OF PUNISHMENT FOR UNAUTHORIZED ALIENS PRESENTLY IN THE UNITED STATES

This is the amnesty clause giving a pathway to citizenship. They did a particularly good job on making it sound as much like Orwellian double-speak as they could, well done. It is unnecessarily harsh, but honestly, I think providing any doable pathway to citizenship is good enough so I'm fine with it.

On the whole, it's better than things are now. I think the central planning approach to immigration is madness and ignores everything we've learned about what kind of policies work and which don't as well as how policies interact with human behavior. Given that we're stuck with this mentality though it's a step forward within a bad frame. We'll just have to wait and see if it gets even worse in negotiations.

If People Will Put Up With This You Think a Wall Will Stop Them? Really?

Another good NY Times article today on how difficult illegal immigrants already find it. I'm really left baffled as to how anyone can think that we can make the border hard enough to cross to have any big effect. Sure, the Soviet Union did it in Berlin but couldn't entirely along the rest of the Eastern Bloc's borders and even the North Korean border is a little leaky. Unless we want to pull all the US troops back full time to police the border, as if we were the Roman Empire or Ming China, we're not going to succeed in making the border hard enough to cross to make a huge difference.

I doubt we could even make it as hard as it is for illegal immigrants to get to Europe, which still has several hundred thousand illegals entering a year, exact statistics were harder to find on Europe than the US so I couldn't get better numbers.

Even for the US however, Mexico is only the origin for 50 some percent. While I'm sure some will take the view that numbers from China or India are bearable and its this 50 some percent we have to cut back on, does anyone really think we can make it as hard to get here from Mexico as it is from China? That's a really tall order. The exact statistics, a bit date admittedly are below. These figures are from this report from DHS. For most of the countries outside North America these immigrants still have other options meaning that many more would likely be coming here if America were as obvious a choice for them. If people are willing to go through this much effort to cross much more significant barriers than we can erect why does anyone continue to believe enforcement is a real option?

What We Can Learn About Illegal Immigration from the Illegal Fashionable

The recent debate over the Arizona immigration laws and immigration law in general has left me reflecting on why governments insist on passing laws, and people continue to demand them, that will be impossible to enforce. There is a lot of data showing that it is so prohibitively expensive to reduce supply of just about anything by enforcement measures alone that I am left at a loss to give a rational reason (I am not however at a loss to give plenty of irrational reasons) why we continue to pretend that we can. We know we can force supply into controlled channels and we can create incentives for supply to favor these channels over breaking the law but while these methods are sufficient to have marginal effects on both supply and demand there is no mechanism by which we can force either to conform to an arbitrary standard of what we'd like immigration or anything else to be at. If you restrict something like immigration too much, illegal means will be found of meeting demand. It has always been so, whether you're talking about tea smuggling in the American colonies, drug supply or illegal immigration today, or any other of an near infinite number of policies imposed that were meant to restrict economic or social life into some sort of preconceived pattern rather than trying to control the pattern that already existed.

Yet, whenever laws fail to make people behave how we'd like them to the response is to call for greater use of force to make them conform to our standards. However, unless expenditure is on a truly massive scale, this never works. One of the more absurd examples I've read about recently is in Braudel. To choose a frivolous non-immigration example (the inability for lords to prevent peasants from running to cities and the large population migrations show it was far from possible to control this then and you can go back to Rome for other examples of uncontrolled immigration) that shows the futility of using punishment to control supply and demand I will tell the tale of France and Indian cotton.

Against this invasion of light fabrics nothing worked. Not "supervision, inspections, confiscation, imprisonment, fines..." or advisers who suggested "to strip... in the street, any woman wearing Indian fabrics." (179) Prosecution failed to stop this, even with confiscation of goods and fines of over 1000 ecus (don't know the conversion) on anyone who would buy and sell the fabric. So devastating was this scourge that in 1717 punishments were increased to deter these illegal fashionable by making punishments harsher, including among others a sentence of life in the galleys, "and even worse if the case called for it." (180) This invasion of light fabrics and the illegal fashionable would not cease until France lifted the ban in 1759 and gained a cotton industry able to compete with others.

The point of this? If life in a galley wouldn't deter people from wearing cotton, the Arizona law, and any immigration enforcement we try, isn't going to deter people from seeking a better life here. Supply and demand simply doesn't allow these kinds of laws to function, you can't set supply or demand by fiat without some really heavy guns to force it to work. Best accept reality as it is and develop policies to control immigration and prevent the illegal and socially corrosive activities that come with illegal immigration by creating legal channels for it.