Economic facts are absent from immigration debate

  • James McCusker / Herald columnist
  • Saturday, April 1, 2006 9:00pm
  • Business

Demonstrations are tough to figure. Size is not always helpful; it can reflect the breadth of support, but not the depth or the passion. Some demonstrations with few participants seem to catch fire and change everything. Others, with thousands in the streets, come to naught.

It is difficult to judge the impact of the demonstrations launched recently to protest a proposed set of actions against illegal immigration. They were organized in cities across the country, but the Los Angeles protest attracted the most people – an estimated 500,000 – and the most attention. As it turns out, though, estimating the crowd is a lot easier than estimating its effect on either the Congress or public opinion.

Part of the difficulty in judging the effect of the demonstrations arises from the general fuzziness of the goals animating the protesters.

Some of the Los Angeles demonstrators, for example, were carrying puzzling banners, one of which read, “We didn’t cross the borders. The borders crossed us.” As slogans go, it has an appealing symmetry, like the tag on a rap lyric, but ultimately it is a statement without meaning – unless, of course, you buy into the Mexico-retakes-its-stolen-land conspiracy theory.

The demonstrations, especially in Los Angeles, also reflected the dismaying, and sometimes purposeful, erasure of any distinction between legal and illegal immigration. One demonstrator, for example, proudly said, “Immigrants built this country.” That is true, certainly, and it conjures up all sorts of good images. It takes a very different interpretation of history, though, to morph that imagery into, “Illegal immigrants built this country.”

After seeing the demonstrations and listening to the jabber in Washington, D.C., it is hard to avoid the sense that the immigration issue is not yet in clear focus. The imprecise grammar and rhetoric surrounding this issue are probably an accurate reflection of the fuzzy and imprecise thinking about it on all sides.

As we might expect, economics has been at the center of the immigration controversy. Unfortunately, it has not been good economics. In fact, it has mostly been as fuzzy and imprecise as everything else in this issue.

As a prime example, neither the guest-worker provision in the recent Senate proposal nor the felony treatment in the House bill really addresses the supply side of the illegal immigration equation. Current estimates put the number of illegal residents in the U.S. at 11 million to 12 million, and there is little evidence that any of them who wish to find work have difficulty doing so. And while some are laboring in the underground “cash economy,” it is fair to say that most of those who are working have acquired documents allowing them to do so “legally” – that is, they appear on payrolls, pay taxes and contribute to Social Security.

We don’t know why the number of illegal residents is at its current level, instead of, say, 1 million or 25 million. What is clear is that the supply of illegal immigrants is driven by economics and is not significantly constrained by border security or the legal system.

To re-title some of the existing illegal residents as guest workers would not, then, be expected to have any substantial effect on supply. What it would have an effect on is Social Security, since it would legitimize claims to contributions by illegal workers who now probably view their payroll deductions as an employment tax.

Increasing the penalty for illegal immigration to felony level does not address the supply issue directly, either. The penalties under existing law are both substantial and ignored, just as they are in other areas. It is almost always a felony to steal an automobile, for example, yet this has had little effect on the supply of car thieves or stolen cars. There seems to be a substantial element of wishful thinking in the idea that raising the legal ante would, by itself, have a significant effect on the supply of illegal immigrants.

Whether illegal immigrants take the jobs that “Americans won’t do” is, or should be, a matter of debate. What is true is that immigrants take jobs that home-grown Americans won’t do for the wages offered. But because the wages are low because of the near-limitless supply of illegal workers, circular reasoning takes over the argument.

The supply of illegal workers thwarts the effectiveness of minimum wage laws and exerts a powerful downward pressure on wages in our economy. It is, among other things, a kind of internalized outsourcing, an economic process by which labor costs move downward toward a global equilibrium level.

To make wise decisions about immigration, we will have to focus and think more clearly about this issue than we have in the past. Addressing the economic side would be a good start.

James McCusker is a Bothell economist, educator and consultant. He also writes “Business 101” monthly for the Snohomish County Business Journal.

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