Thread: Global economics spur illegal immigration

http://www.chieftain.com/editorial/1150007088/2

Global economics spur illegal immigration


Dr. Ida Whited is assistant professor of economics at the Colorado State University-Pueblo Hasan School of Business.

With the wide variety of economics-related arguments made by both sides of the current debate on illegal immigration, (much of it fairly incoherent), it has been disappointing to see little reference made to the important impact of globalization on this phenomenon.

Illegal immigration into the United States, to put it plainly, is a natural result of the movement of labor caused by globalization. Since its causes and problems are rooted deeply in the principles of economics, any serious attempt at a workable solution to the conflicts caused by illegal immigration has no choice but to follow and be guided by the economic logic that relates to globalization.

There are two fundamental reasons for the existence of illegal immigrants in the United States: (1) Price competition in domestic and global markets; (2) lack of law enforcement. The former has been greatly impacted by globalization. The latter has greatly increased that impact.

Recently, with the aid of technology and a surge of easy capital looking aggressively for investment opportunities around the world, the line dividing the traditional tradable and non-tradable sectors has become blurred, and the world economy has been integrated ever more quickly.

This globalization process has put intense pressure not only on the price of goods and services, but also on the cost competition of expenses, such as labor, faced by many U.S. firms in both domestic and world markets.

U.S. firms in such industries as manufacturing, textiles, and furniture-building have been forced to outsource to places like China and India for the purpose of capitalizing cheaper labor in order to stay competitive. In Korea and Japan, even traditionally geographic-specific agriculture has been outsourced. The movement to the U.S. of illegal immigrants willing to work for below-market wages, which are still significantly higher than those available in their homelands, is a variation on outsourcing in which cheap labor moves to the location of industry rather than vice versa.

Motivated by the powerful economic incentive of making a substantially higher wage and better living in the United States, and abetted by decades of ineffective border security and inland law enforcement, the flow of illegal immigrants here has become a de facto importation of otherwise unavailable cheap labor.

Faced by the great price competition found in both domestic and global markets, many firms have found illegal immigrants to be an attractive alternative source of labor. Right or wrong, our economy has steadily relied on this black market in labor for a noticeable part of its success.

In many industries - meat-packing, farming, construction, hotel, restaurant, daycare, landscaping, and so on - firms have been able to make profits due to this "in-sourcing" of cheap international labor. Their businesses grow and they can hire more workers. Consumers of their products and services also benefit from the lower prices offered by these sectors.

Thus, the currently illegal importation of cheap globalized labor contributes to the nation’s overall economic vitality. The question that looms over the passionate disagreements inspired by illegal immigration is this: At what cost? Some have argued that illegal immigrants have reduced the wage earned by low-skilled, low-educated legal workers. But will the elimination of illegal immigrants increase the wages of this group? It is true that their wages have hardly increased in recent years. Illegal immigration may have contributed to this trend to some degree, but the surplus of the world labor supply - notably in China and India, but also in many other developing nations - may weigh more in pressing down this group’s wages.

In the presence of globalization and outsourcing, the more relevant question should focus not on the magnitude of the wages of this threatened group, but rather on whether there will be any jobs available to them at all.

Without a flexible labor market in the domestic economy - that is, when firms are forced to hire labor at a cost that is more than what the market is bearing - the natural economic consequence is for those firms to move their businesses offshore to places where they can access production factors - in this case, labor - at what they consider fair values. When this occurs, low-skilled, legal laborers in the U.S. do not receive higher wages. They do not even receive lower wages. They receive no wages at all because they have no jobs.

Any meaningful attempt to fundamentally solve the problem of illegal immigration needs to deliver a result that brings the currently underground labor market into the daylight in an economically viable way.

President George Bush’s guest worker program is a step in the right direction. By legalizing this labor market, it satisfies the needs of our economy. Business firms can legally obtain and secure their needed labor. Consumers can continue to enjoy attractive prices resulting from this globalization of labor movement.

Without risking their lives to cross the border, workers can gain protection from the laws covering wage payments, working conditions, and so on. Governments gain additional tax revenues. Conforming this underground market to a legal setting will, contrary to a conventional belief, stabilize rather than destabilize our social order, as suggested by various episodes in our history.

To realize all of these benefits, such a program relies on three basic requirements - and complete compliance to the laws attached to them - in order to succeed: Total border control, effective tools to identify workers’ permits, enough working permits to reflect realistic demand.

Lacking these three key elements, any program is doomed to fail. If an immigrant can get into the country illegally (border control) and work without legitimate guest-worker status (effective permits), then what would be so special about this newly-granted right? Why should we even bother to deal with it in the first place?

The number of permits should be generous because easy access to them will discourage workers from finding jobs outside the law and encourage them to return to their home countries without fear of being unable to return legally.

Law and order are the foundations of social stability and economic prosperity. A country cannot properly function while ignoring the enforcement of its existing laws. Neither can it function effectively while ignoring the laws of economics. Our nation will be best served if we recognize the need to change our statutory laws to reflect the reality of economic law, in this case, the flow of labor determined by the forces of globalization.

Now the spotlight is finally on illegal immigration. With all the benefits that can come with legalizing this source of abundant and cost-effective labor, we deserve the best efforts of the policymakers on Capitol Hill, as well as our own diligent attention, to push through legislation that will allow us to realize these benefits.

Unfortunately, in an election year, we also will need a lot of luck to get this done right.

economic law

vs our Nation's laws.

To realize all of these benefits, such a program relies on three basic requirements - and complete compliance to the laws attached to them - in order to succeed: Total border control, effective tools to identify workers’ permits, enough working permits to reflect realistic demand.

Thanks for posting Pat. This person is reality based. My issue with all of this is that a select group of people set all this in motion with neither permission nor input from the people who it affects most directly.

As per your request for information in Europe and elsewhere I have discovered that after what 11 years? now Europe still has problems with "illegal" aliens as they refer to them traveling all over the continent on EU passports. Europeans were sold the following bill of goods to get them to accept the necessity of the EU. They were told there were problems that simply could not be resolved by a group of smaller independent countries. Besides defense issues the primary sales pitch was (and this should sound familiar to all of us) that some ethnic groups (primarily Caucasion) were "dying out" i.e. Italians in the example I read. Itally and other nations in Europe were told they had an older population that was not reproducing enough children to cover the cost of the care of the older citizens who were living longer. The old 4 workers to each retiree formula.

Which brings me to this question... if the all knowing social engineers who created this fiasco were concerned with the care of a large group of people who would flood the social systems in the future (i.e. baby boomer generation) why did they push for reduced population in the 60s and 70s? The populations affected by the urgent demands not to overpopulate the planet were Caucasian.

The second question that comes to mind is ... surely the United States government and its all powerful information gathering agency was aware of the following: 1. That socialistic political parties were forming in Mexico with the intent to reoccupy areas of the United States. and 2. They were aware that third world populations were exploding with unchecked birth rates.

So why then did they set us up the Caucasian race to be over powered by other ethnic groups?

So why then did they set us up the Caucasian race to be over powered by other ethnic groups?

IMO, it's a Globalist agenda, because with a strong USA, the agenda cannot succeed.

Last night I watched a program on "the little ice age". They ended up with some man that was hired by the Pentagon to give a report on global warming (which I do not believe)....in his report of a fictional ice age, he states that Americans may move to the South: Mexico and the like, or the Latino's may move into the USA for food, water, etc.

He said the USA could have many "immigrants" from all over, as we would have to be the world leader in food, water, blah blah..........and felt our borders would have to be open to move freely.

Seems like everything lately, has to be open borders, even for a fictional ice age.

But, another program, showed the moon is moving away from Earth at 1 1/2 inch per year, once it moves too far away, it will throw the earth into an unbalanced tilt......hot areas would be cold, cold areas would be desert......so I don't believe the global warming theory...

But, it just seemed odd, that lately, everything ends up with open borders and the USA has to be the super power....

How can we be a super power if we are losing jobs, are only doing "service" type jobs,?

Besides, I don't want to be the world's police...

All theories seem to end up being wrong, like telling us about the population explosion.....only certain countries seemed to listen to that while other's popped out a kid everyother hour!

Law and order are the foundations of social stability and economic prosperity

And is sorely lacking in this illegal alien mess. I do not trust that ANY laws passed relating to immigration will actually be enforced.

GET US OUT OF THE UN! Don't forget that on July 4th (OUR INDEPENDENCE DAY) the United Nations is holding a global gun ban treaty in New York. Are our 2nd amendment rights the next to go?

July 4th (OUR INDEPENDENCE DAY) the United Nations is holding a global gun ban treaty in New York. Are our 2nd amendment rights the next to go?

ARE YOU SERIOUS?

WHERE IS THIS INFORMATION POSTED?

WHO is in authority to sign this ban? Bolton??????

YES I THINK THAT STRIKING DOWN OUR LAST AMMENDMENT IN TACT IS ON THEIR AGENDA!

Do our soldiers realize any of this is occuring?

Don't forget that on July 4th (OUR INDEPENDENCE DAY) the United Nations is holding a global gun ban treaty in New York. Are our 2nd amendment rights the next to go?

Are you serious? I don't have one but I was glad to have the right to own one if I wanted to. They can ban all they want and I can guarentee most of the people that shouldn't have one will. Criminals. As my husband said.....seems they want to make sure we won't have the power to fight back before they destroy us.

I don't think they can do that, surely our constitution protects our right to have guns, who knows though, the crazy things being done in New York and California, thank god, I live in oklahoma, like to see them even considering a gun ban here!
JUST TRY TAKING A RED NECKS GUNS AWAY FROM HIM, THE WAR WOULD BE ON!