Thread: Markets Solve The Immigration 'Problem'

Political Economy
Markets Solve The Immigration 'Problem'
John Tamny, 01.26.09, 12:00 AM EST
A decline in foreign migrants is a bad sign for any economy.

During the darkest days of the war in Iraq, former British Prime Minister Tony Blair was asked whether the United States' best days were behind it. Instead of piling on with the popular suggestion that the U.S. was a nation in decline, Blair calmly replied that failing countries usually repel rather than attract immigrants.

Far from indicating a country on the ropes, the foreigners seeking both legal and illegal entry into the U.S. in the last decade are a market signal pointing to a nation doing far better than elite thinking around the world has suggested. Simply put, countries that attract the washed and unwashed the world over are pictures of success; the countries that lose their limited human capital are failures. Cuba, North Korea and Zimbabwe do not have immigration "problems."

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Blair's past thinking takes on new meaning when we consider a recent front page story from USA Today titled, "Fewer immigrants caught sneaking into U.S." Thanks to a weakened economic outlook stateside, the number of people "caught trying to sneak into the USA from Mexico is at its lowest level since the mid-1970s."

No doubt tougher border enforcement explains some of the above, but the bigger story here reveals the market forces that factor into all human activity. With jobs in the U.S. presently harder to come by, the number of migrants here has declined. As University of Texas, El Paso professor Josiah Heyman described it to USA Today, when economic opportunities in the U.S. become less plentiful, "Word gets back to Mexico really fast."

All of this speaks to a broader truth about immigration itself. High immigration doesn't indicate a nation besieged, but rather the fact that jobs exist. When jobs do not exist, basic market forces cause migrants to seek economic opportunity elsewhere.

The U.S. does not have an "immigration problem." It would be more realistic to say that for much of the last 25 years the U.S. has been blessed with a booming economy; one made more vibrant thanks to the influx of workers seeking better opportunity in an economy that needed more workers than our existing population provided. In The Wealth of Nations, Adam Smith used a pin factory to show the wonders of the division of labor, and in our case, new human capital from across the border has freed us up to do even higher value work during a period mostly marked by labor shortages, as opposed to labor gluts.

So if it's established that the somewhat natural ups and downs of our economy serve as a natural, market-driven regulator of worker inflows into the states, this reality should cause us to rethink policies meant to keep immigrants from reaching the U.S. altogether. As the aforementioned downturn has revealed, worker demand, or lack thereof, does a good job in that regard.
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More broadly, the problem with making natural migration toward economic opportunity illegal is that it creates negative incentives. Thanks to tough border enforcement, the incentive exists for immigrants to hide their labor once they've made it across the border. And due to very real uncertainty with regard to returning if they leave, illegal immigrants are more likely to bring their families than they would if their passage were legal. According to a 2006 Wall Street Journal article by Joel Millman, those whose work is legal aren't as likely to become full-time residents. Instead, when labor shortages in the U.S. reveal themselves, these workers legally cross the border until the work that brought them here is done. They then return home until the next opportunity in the states arises.

As Millman wrote, not only are these situational workers "a boon to employers," they also "rarely put a burden on social services, because they leave their school-age children and elderly relatives at home." And unlike undocumented workers, who, according to Millman, "are less likely to pay taxes," these legal workers from Mexico generally "pay all state, local and federal taxes," not to mention that they're covered by workman's compensation as a result of "paying into a fund covering all workers on the job."

Some would argue that lax policing of our borders is a non-starter during a time when terrorists are devising all manner of ways to get into the country. It's a good point, but it merely speaks to the importance of making all work in the U.S. legal. Rather than sneaking across the border, potential laborers would have every incentive to report their arrival at the border. This alone would make those looking to cross undetected conspicuous in their attempt at stealth, and more readily detectable by border patrol agents freed up to deter activity that is actually criminal.

Another anti-immigration argument says that rather than accepting Mexican labor, U.S. authorities should demand that Mexico change the anti-growth policies there that make the U.S. a magnet for its citizens to begin with. A fair point for sure, but also an excellent endorsement of policies stateside meant to make worker inflows legal. Indeed, when Mexicans leave their country for the U.S., Mexico is not just losing a large percentage of its population, but more important, some of its most industrious citizens. If work here were made legal, Mexican politicians, faced with the loss of some of their best and brightest, would finally be forced to address the policies that regularly drive its citizens to better economic climes.

But until the day comes that Mexico liberalizes its economy, the U.S. would do best to embrace the words of 19th century political economist Jean-Baptiste Say. In writing about immigration, Say observed that, "A nation, receiving a stray child into its bosom again, acquires a real treasure." Looked at from our perspective, when people migrate to the United States, the ambition that brings them here is our treasure, one that enriches us given the simple truth that workers are capital, and their efforts add to our national wealth.

John Tamny is editor of RealClearMarkets, a senior economist with H.C. Wainwright Economics and a senior economic adviser to Toreador Research and Trading. He writes a weekly column for Forbes.
http://www.forbes.com/2009/01/25/immigr ... tamny.html

This writer is obviously "jacked up on Coke!"

Please put some chapstick on. Your lips must be sore from kissing up to the Cof C and foreign interests.

Originally Posted by WorriedAmerican

This writer is obviously "jacked up on Coke!"

But you know that articles have been written that stated that when recent immigrants take American jobs and throw people out of work that more jobs are created for the Americans who have lost their jobs.

George Orwell was right!

Originally Posted by millere

George Orwell was right!

Totally, if you could just insert PCs into '1984' as a tool as strong as TV he would have had it all covered.

Originally Posted by millere

Originally Posted by WorriedAmerican

This writer is obviously "jacked up on Coke!"

But you know that articles have been written that stated that when recent immigrants take American jobs and throw people out of work that more jobs are created for the Americans who have lost their jobs.

George Orwell was right!

We aren't talking recent immigrants. We are talking ILLEGAL IMMIGRANTS. We can't confuse the two like the left does!

Typical Globalist thinking, he sees workers as being an interchangeable commodity to be bought and sold, where Americans who have worked, fought, and died to create the richest country in human history are no better than third world peons.