T Nation

Immigration in the Welfare Age

A very interesting look on why the open-border immigration policies of the 19th century cannot be considered in the same light as open-border immigration policies would be today, by Gary Becker, and Richard Posner on their blog – hopefull the conversation will be ongoing, but I’ll post what’s up so far.

I’m generally in favor of open borders as an economic matter and in theory – however, those are big caveats. I think we have big national-security issues with the border, and with current immigration policies. And, to add to that, we have to consider the cost of government services to illegal immigrants, which is this massive welfare state that we call home, are quite significant.


he New American Dilemma: Illegal Immigration-BECKER

President Bush proposed in 2004 that illegal immigrants with jobs be allowed to stay for up to six years. For good as well as bad reasons, his proposal has not gone anywhere in Congress. Mainly because of political obstacles I do not see any attractive policies toward the flow of illegal immigrants.

The US has six basic options toward illegal immigration:

  1. This country can continue its current policy of beefing up border security, and sending apprehended illegal immigrants back to Mexico, or wherever else they came from. Meanwhile undocumented workers who are not caught remain eligible for various kinds of health care, schooling for their children, and other benefits.
  2. Illegal immigration could be discouraged by giving apprehended aliens jail sentences before sending them back to where they came from.
  3. Employers could be punished for hiring illegal workers.
  4. Illegal immigrants could be allowed to come, but would be ineligible for government transfers, such as health benefits or schooling.
  5. Illegal immigrants could come and be eligible for all the public benefits available to other residents.
  6. Illegal immigrants could be allowed to remain for a certain number of years if they have jobs, but then they would have to go back after their time expires, whether or not they are still employed.

None are satisfactory, as we can determine by considering each of these options in turn.

  1. The present policy of sending back apprehended aliens is not effective in deterring illegal immigration since many of these simply turn around and cross the border again. Various studies show that it is easy with enough persistence to come across from Mexico, guided by “cayotes” who do not charge that much. I doubt whether the recent tightening up of border patrols will do much to raise the cost of crossing illegally.

  2. Most Americans do not wish to give significant jail sentences to illegal aliens whose only crime is that they want to come to this country, usually seeking higher wages and better working conditions than they have had. Yet in the absence of such punishment, immigrants will continue to flow across the border, pulled by earnings that are 5-10 times higher than what they could earn in Mexico and most other Latin American nations. So the only effective way to deter illegal immigration is not politically feasible, and is not attractive on moral grounds.

  3. The 1986 immigration law barred employers from hiring illegal immigrants, but it did not help employers determine when potential employees had forged documents. It is cheap to buy forged social security cards, green cards, and anything else that would certify an employee is in this country legally. Unless that defect is overcome, and it will not be easy, the courts will continue to be reluctant to punish employers for hiring workers who turn out to be here illegally.

  4. I am attracted by a policy that allows illegal immigrants to come, but denies them eligibility for any government assistance, or to apply for citizenship unless they return home and apply through normal channels. Some states have tried aspects of such a policy, but courts threw out their attempts to limit the education and medical care of children of undocumented immigrants, and emergency room medical care for adults.

  5. The government can concede defeat and allow immigrants to be eligible for all benefits available to other residents. This approach too runs into opposition from many groups that believe immigrants lower the earnings of Americans, and accuse immigrants of enjoying medical, schooling, and other benefits paid for by American taxpayers.

  6. Finally, we come to the President?s proposal for guest workers. He said in a speech in 2004:

"I propose a new temporary worker program that will match willing foreign workers with willing American employers, when no Americans can be found to fill the jobs. All who participate in the temporary worker program must have a job, or, if not living in the United States, a job offer. The legal status granted by this program will last three years and will be renewable – but it will have an end. Participants who do not remain employed, who do not follow the rules of the program, or who break the law will not be eligible for continued participation and will be required to return to their home.

Employers who extend job offers must first make every reasonable effort to find an American worker for the job at hand. Employers must not hire undocumented aliens or temporary workers whose legal status has expired. All participants will be issued a temporary worker card that will allow them to travel back and forth between their home and the United States without fear of being denied re-entry into our country.

This program expects temporary workers to return permanently to their home countries after their period of work in the United States has expired. Some temporary workers will make the decision to pursue American citizenship. They will not be given unfair advantage over people who have followed legal procedures from the start. I oppose amnesty, placing undocumented workers on the automatic path to citizenship. Granting amnesty encourages the violation of our laws, and perpetuates illegal immigration. America is a welcoming country, but citizenship must not be the automatic reward for violating the laws of America."

This proposal and similar ones sound good on paper, but they are unworkable, and in most respects undesirable. After six years of employment as documented guest workers, what is to prevent these workers from becoming undocumented after their total term as guests expires? In fact, after working that long, they will have become accustomed to living in this country, especially if their children are in school, and if they marry or have spouses when they came who also earn good money, or made the adjustment to living in this country. Then we are back to the present situation with formerly documented guest workers becoming undocumented.

The most desirable type of immigrant commits to this country, its values, language, and culture. Immigrants who came during the nineteenth and most of the 20th century made this commitment, and usually their children were fully integrated into American culture. But immigrants under the President?s guest worker program have little reason to become integrated if they plan to go back to their native countries after their six years as guest workers expires.

In addition, it is a bureaucratic nightmare to require that “employers who extend job offers must first make every reasonable effort to find an American worker for the job”. A lot of phony efforts are made, and who can determine if an effort was sincere? Moreover, such a stipulation displays ignorance of how competitive labor markets operate. The market for the unskilled or low skilled labor provided by Mexican illegal immigrants is usually highly competitive, with jobs available at the going wage to everyone who is willing to work at that wage.

Open immigration to America worked well during the 19th century because the government did very little for immigrants and their families. How immigrants voted after becoming citizens also mattered little because government decisions were not so important. With the growth of government during the past half century, neither of these conditions continues to hold, so the case for open immigration is fatally weakened.

Compounding this decline in the willingness to accept immigrants, during the past half century the incentive to immigrate from poor to rich countries has greatly increased with the growing gap between earnings in these countries, and much faster and cheaper modes of travel. Rough estimates put the number of illegal immigrants in this country at six to eight million- with about 500,000 entering every year. This clash between the flow of immigration and the resistance of rich countries creates the urgency of the challenge of designing better policies toward immigration.

If apprehended illegal aliens are not to be punished, if illegal entrants are not to be denied significant benefits, and if employers are not punished for hiring illegal immigrants, the only workable solution is to allow virtually unlimited illegal immigration. This can be combined with a face-saving gesture toward immigration control through beefed-up border patrols that return thousands of apprehended aliens to Mexico and elsewhere.

Can anything else be done? The US can try to help Mexico develop economically, for that would sharply cut back the number of Mexicans who want to work in the US. The NAFTA Free Trade agreement is an important step in the right direction, but Mexico has to take the lead in providing a good environment for faster economic growth. Unfortunately, while important policy changes have been implemented, progress has been slow in recent years, and a left wing candidate is the favorite in the upcoming presidential elections.

I favor among all the least good policies reducing the benefits available to illegal immigrants in recognition that it is impossible to stem the flow of illegal immigration. This would require denying illegal aliens access to most health, education, and other benefits. If that is not feasible politically, illegal immigration will constitute perhaps the major American Dilemma during the coming decade.


Illegal Immigration–Posner’s Response to Comments

Let me first try to clear up a few misunderstandings. I did not suggest that competition from illegal immigrants working in the United States was bad or inefficient. The more competition in labor markets, the better. Nor was I defending restrictions on immigration. I do not believe in unrestricted immigration, because the result would be such a flood of immigrants that the congestion and other external costs imposed, along with the inevitable political and social strains, that the costs would exceed the benefits. But I do think that we should encourage immigration, especially but not only of highly skilled workers. In our postings, Becker and I were assuming that there are laws restricting immigration, whether good or bad laws, and asking how they can best be enforced.

I strongly disagree with the comment that complained about the “flotsom [sic] and jetsam” of the world’s population being washed up on our shores. Most illegal immigrants are Mexican, and they are hard workers with strong family and other values compatible with U.S. culture. Most immigrants from other nations either have special skills that are in short supply in our nation or are refugees seeking asylum from regimes that have persecuted. I believe both classes of immigrants are positive additions to American society.

That comment also accused Mexican illegal immigrants of being disproportionately involved in crime. An article last week in the New York Times reported the opposite–that they are less likely to commit crimes than members of other groups. That makes sense, since an illegal immigrant who commits a crime obviously greatly increases the likelihood of being deported.

What is a true observation in the comment and what I should have mentioned in my original post is that the costs imposed by illegal immigration are distributed quite differently from the benefits, which may explain the strong anti-immigrant sentiment in some parts of the nation. The federal fisc is enriched by illegal immigration, because most of the immigrants pay social security taxes but are not eligible for social security benefits (or Medicare), and consumers as a whole benefit from the lower labor costs that result from a larger labor supply due in part to illegal immigration. But because the Supreme Court has held that it is unconstitutional to deny a free public school education to children of illegal immigrants, local school systems (and other local government service providers) incur additional costs as a result of illegal immigration that they do not recover in taxes. This is an imbalance that could be corrected by the federal government’s providing financial aid to those schools, in recognition of the “profit” that the federal government earns from illegal immigrants because of their disentitlement to federal benefits.

My guess, though, is that much or all of the added costs of local government that illegal immigrants impose are offset by the benefits that the immigrants confer on the local community in filling jobs in hotels, restaurants, and agriculture that American citizens do not want.

One comment questions my suggestion that the Constitution might not require that children born in this country of illegal-immigrant parents automatically receive U.S. citizenship. It is true that section 1 of the Fourteenth Amendment provides that ?all persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.? But the purpose of this provision, adopted in 1868, was merely to grant citizenship to the recently freed slaves, and the accepted exception for children of foreign diplomats and heads of state (such children, though born in the United States, do not receive U.S. citizenship), shows that the citizenship clause need not be read literally.


Response on Illegal Immigration-BECKER

I will have to be selective in my response to a good discussion, with quite different viewpoints.

How immigrants voted in nineteenth century mattered much less because the government did so little. Governments spent a very small proportion of income, so taxes were very low-no income tax in particular- and few government benefits were given to anyone. The situation in all these respects is radically different now. That is why I do not believe unlimited immigration is any longer the right solution for the US.

One of you would like to extend the benefits received by the American poor to poor peoples in other countries. Unfortunately for such sentiments, someone has to pay for these benefits, and American taxpayers, rich, middle class, and poor, all agree in not wanting to do this. Shouldn’t they be the ones to decide how their money is spent?

I have argued in earlier entries in this blog that I favor much expanded legal immigration. I was amiss in not repeating this position in my discussion of illegal immigration. However, I neglected to discuss this mainly because I do not feel it would solve the illegal immigration issue, particularly if preference is given to more skilled migrants. To be sure, the acceptance of a sufficiently large number of legal immigrants of all types would largely eliminate illegal entrants, but this is another solution that is certainly not politically feasible, and questionable on some of the grounds discussed in my posting.

I based my claim about the price of coyotes on a study by Christina Gathmann when she was a student in the economics department at Chicago. She had an admittedly limited sample of data on coyote prices and other matters concerning illegal crossings. The price did not seem high even for poor immigrants, since they could have repaid the cost with less than a weeks earnings in the US.

Basic economics does imply that the price of coyotes would rise if greater barriers to crossing raised their costs. This would include the greater likelihood of being punished when apprehended.

We already have a law that stipulates that employers of undocumented workers can be punished. This has not been enforced, partly because of the prevalence of forged documents. Perhaps we now have the technology of making forgeries more difficult. If so, then employer punishment is certainly one way to cut down on illegal entrants.