Opinion

The Great Debate

An altruistic immigration policy

By Tim Fernholz
June 26, 2012

Monday morning, the U.S. Supreme Court struck down much of Arizona’s controversial immigration law. It’s now confirmed that it’s not a crime for immigrants in the United States, even undocumented ones, to apply for jobs here.

That ruling dovetails with President Barack Obama’s recent decision to effectively forbid the deportation of upstanding young people who are in the United States illegally.

Immigration advocates rejoiced at both decisions, but neither the Supreme Court ruling nor Obama’s move resolves the economic dynamics that drive illegal immigration. Instead, they create a gray area for undocumented immigrants to live and work more safely here in the United States. The next logical step, reforming our guest-worker system to allow more non-citizens to work here outside of legal purgatory, would offer more protections to these workers and boost the economy, too.

For years, some immigration advocates and contrarian economists have argued that a formal effort to give jobs to foreign workers – even without citizenship – can help everybody. A guest-worker program might just be the most powerful tool to fight global poverty, and a chance to help economic conditions here at home, too, if we can embrace the counterintuitive but true idea that more foreign workers can help even when domestic workers are caught in high unemployment.

David McKenzie, lead economist of the World Bank’s development group, has, along with his fellow researchers, been examining the way migration affects migrants – not just the people they leave behind or the new communities they end up living in. They’ve found that improved labor mobility is by far the greatest way to give a leg up to low-income people around the globe.

“High-skilled immigration is going to be useful for the high-skilled migrants, but allowing lower-skilled workers in is directly going to improve poverty in poor countries,” McKenzie says.

The reason is that geography matters. Developing nations may lack key institutions and norms, from police forces to property rights, that make economies work, not to mention the relative wealth of investment capital, infrastructure and labor specialization that prevails in developed countries. Even low-skilled workers see huge advances in their productivity, and their wages, in a better ecosystem.

In a study of guest workers in the United States, Michael Clemens, an economist at the Center for Global Development, found that workers coming to the United States from developing countries saw immediate gains in productivity and wages: A Peruvian worker’s income increases 2.6 times, about the average, but emigrants from other countries see higher gains – Filipinos see their income grow 3.5 times over; Haitians see their wages expand seven times.

Comparing those gains with other programs that aid impoverished people around the world is instructive. In 2005, the microcredit lenders at Grameen Bank generated $30 million in new income to Bangladeshis. According to Clemens’s calculations, that same income jump could be generated by allowing just 3,000 Bangladeshi guest workers come to the United States for a year.

With many developed countries struggling to maintain their working-age populations and tax bases, it could be a long-term fiscal benefit for them as well. There’s also the value of these workers as brand ambassadors for the United States and its economic system. If they have a good experience here, they’ll spread appreciation for the U.S., helping it flex its soft power muscles around the world.

Right now, the United States only allows about 100,000 low-skilled guest workers in the country each year, compared with an overall workforce of 150 million. Given the figures behind the Bangladeshi example, even doubling that number could have a major impact on poverty in the developing world while being a rounding error to the U.S. labor market.

But won’t these new immigrants steal jobs from American workers? Actually, no. Letting in more workers at a time of high unemployment may not be popular, but study after study demonstrates that immigrants in a fair system don’t reduce native wages. They do bolster the economy, expanding the workforce to support an aging population. More low-skilled workers help with economic specialization across the economy, increasing productivity, not just for themselves but for everyone.

Just look at how restrictions on immigration have hurt the economy. Dwindling illegal immigration and tough immigration laws passed recently in states like Arizona and Alabama, and has resulted in the inability of many farmers to find much-needed workers, forcing them to leave produce wasted in their fields. Americans aren’t taking these jobs, and that’s a problem: A University of Georgia study funded by the state’s agricultural trade association found that farmers there had 40 percent fewer workers than they needed during the spring harvest, costing the state $390 million in economic activity.

Still, there are risks for the migrant workers. The Southern Poverty Law Center found that today’s limited guest-worker programs have resulted in worker abuse. In particular, the practice of linking a worker’s visa to a specific employer has left workers vulnerable to mistreatment, since that employer controls their fate. They have been cheated of wages, denied medical care for on-the-job injuries and forced to live in squalid conditions. If they protest, they face deportation or blacklisting. Private attorneys have little incentive to help them.

Reforms like ending the linkage of visas to specific employers and providing meaningful legal rights to the workers would go a long way toward fixing these problems. Other developed nations, like Canada and New Zealand, have been able to develop guest-worker programs that have successfully dealt with challenges like these.

What it comes down to, though, for the migration economists, is the simple math. In 2005, the World Bank estimated that easing immigration restrictions in developed countries around the world would deliver $300 billion annually to citizens in developing countries; that same year, developed countries sent only $180 billion in foreign aid abroad. That kind of benefit makes a guest worker program an investment with a very high return.

ILLUSTRATION: Elsa Jenna/Reuters

Comments
9 comments so far | RSS Comments RSS

This article is fresh, moist caca…

Posted by sarkozyrocks | Report as abusive
 

I don’t think anyone would argue with the claim that immigration to the U.S. helps the immigrants. But it’s also displacing workers here. Most people rightly see it as unfair to allow large numbers of foreign workers in to compete with Americans for scarce jobs, or to look the other way, as Obama is doing, while illegals walk the streets in large numbers in Arizona, working as day laborers, taking jobs away from Americans, and causing social problems.

As for the supreme court ruling, Roy Beck from NumbersUSA described it as a definite win for immigration enforcement. The part of the law that was upheld was the most important part, and other parts of the law went unchallenged, too. He pointed out that the supreme court also upheld mandatory E-verify for employers, last year. These are important tools that will help make life less comfortable for illegals and make them want to leave; and make it a little easier for Americans to find work at decent wages.

Posted by Calfri | Report as abusive
 

The advocates of immigration conveniently ignore the economic principle of supply and demand, which nature imposes.

Introducing more workers into any market increases the supply and thus drives down the wage rates.

It applies to any resource. If more medical doctors are introduced into a city, the existing medical doctors will find they have fewer patients, and their incomes will go down.

The same applies to agricultural workers. If a county imports foreign laborers, the existing local laborers will find their wages going down quickly.

How benefits from immigration? The employers benefit and the immigrants benefit.

Who is hurt by immigration? The American laborer is directly harmed, and his family, home and occupation are, more often than not, destroyed forever.

Who can blame the American worker, whose career is destroyed, for speaking out against immigration? Or even for hating the American government, and immigration advocates, for such a brutal betrayal?

Posted by AdamSmith | Report as abusive
 

how about this scenario?
deport all illegal immigrants who work for low wages..
agricultural , farms, dairy industries all find labor shortage, they hire Americans for those jobs for better wages, product cost goes up, cost of living goes up..how much does salary go up by? people can’t afford day to day expenses, more foreclosures, more bankruptcies, more credit loans..more business closings ..more unemployment rate …consider this scenario ..and draw picture of the future of America and its economy..

Now take a break and think next scenario, keep illegal immigrants already here in a resource pool or guest worker programs to support agriculture and other industries dependent on illegals… or even educated skilled legal immigrants in STEM jobs.. while they are busy with basic jobs we need more higher paid managers that americans easily fit into , creates more jobs, creates more business, creates need for more housing, improves auto industry, created employments, improves economy..puts America back on track!!!

Think what you want? Be fooled by politicians and politics or live and let others live?

Posted by twinklekay | Report as abusive
 

When guest workers are allowed, abuses occur.

For example, some employers post job ads that are so narrow, nobody local can fill the position. This gives the employer an excuse to hire a foreign guest worker at cheap wages.

If guest workers are hired, their wages should be equal to the going rate for local labor, skilled or not. The wages plus 10% for administration should be paid to the government, who would then pay the workers themselves – to ensure they actually get paid. The government would keep the 10% to cover administration expenses.

Guest workers should be provided all the benefits normally provided to American workers, to avoid undercutting American workers.

Guest workers should be allowed only from countries that allow their currency to float freely. This is because currency manipulation makes foreign wages very cheap. Thus it makes employment in the USA all the more desirable, even at a fraction of minimum wage. Currency manipulation by foreign countries makes USA employers feel that American wages are too high.

Posted by DifferentOne | Report as abusive
 

Illegal is the keyword. Most of us do not have a problem with legal immigration. But as a nation, we should not encourage illegal activity. There is not a cookie cutter solution. Let’s work on ways to bring in migrant workers (legally). Let’s crack down on those who transport individually here illegally (human trafficers). Let’s crack down on businesses who hire illegal workers (to avoid paying a living wage). Let’s work on identifying those who mean us harm from those who just need to make a living. Innocent children should not be deported to a country they do not know, but their parents need to held accountable, and their needs to be a way for them to move from an illegal to legal status. I’m sure we can find ways to import the labor force needed in a legal manner that will save lives and money.

Posted by GLVG | Report as abusive
 

What part of the word illegal does no one in the United States understand? I am all for freedoms, the common good and the American way… but these terms are not equal terms in any sense. Or are we so used to the term illegal immigrants – that illegal no longer means against the law. Bottom line is they will take jobs, they will get paid under the table without being taxed, they will send the money home to their families and most will live off the system if they can. Those that work hard in this country are supporting the rest. What happens to America when those that support the country lose their jobs or all together break their backs? Same old story in my honest opinion – as it is the human condition and left to choice. Those that choose to do right and those that choose to do wrong will be judged not on this Earth but by our Creator.

Posted by soldier777 | Report as abusive
 

“But won’t these new immigrants steal jobs from American workers? Actually, no. Letting in more workers at a time of high unemployment may not be popular, but study after study demonstrates that immigrants in a fair system don’t reduce native wages. They do bolster the economy, expanding the workforce to support an aging population. More low-skilled workers help with economic specialization across the economy, increasing productivity, not just for themselves but for everyone.”

Utter RUBBISH. I remember a time when white and black American teenagers did the job illegal Latin American adult immigrants do now. I put myself partly through college washing dishes. Shock horror perhaps for some to read. I saved my pennies and was on the way to financial emancipation from my family. And the dishonest argument quoted above completely ignores the social costs of illegals in emergency room visits, education, and law enforcement. I was recently in Canada and intrigued to see white Canadians doing menial service jobs. But then they seem to enforce their borders and have a better immigration policy where they try to cherry pick the best candidates rather than just open the floodgates to low-skilled labor.

Posted by bluepanther | Report as abusive
 

These are all nice comments about trying to help our fellow man and I’m all for that. However, it seems as though the American citizen has to take a back-seat in all of this.

As my parents would say, a person becomes a guest by invitation. I’m not sure the people you are referring to as ‘guest workers’ were invited which makes them illegals and lawbreakers.

Posted by Knowing | Report as abusive
 

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