Confronting Immigration - some thoughts on what we should do

Over much of the last decade I have worked in Mexico on a variety of projects which have been centered in various parts of the country. I have listened to the debates about immigration and become increasingly dissatisfied with any political discussion about it because the myths of the debate – whether from the point of view of the left or the right - are filled with odd or inappropriate conclusions. But I have hesitated in writing about the issue because I wanted to see my own thoughts clarified before I went forward. This is the first attempt on this issue, there may be more.

The heated rhetoric on both sides is annoying and not productive. Whether the xenophobes wish to admit it or not, there are huge number of people here who did not come through the normal processes and we will not (nor should we) deport them all back. On the left, the accomodationists seem to want us to think that this infusion of people has not affected either social services, governmental expenses or our culture. Few people in this discussion want to think about the current situation to come away from it with a realistic set of responses.

I started with four fundamental assumptions, that do date have not been shaken. The US benefits from our immigrants although there are some associated costs and wrong headed policies can decrease the benefits and increase the costs. Wrong headed policies are not the province of one party or ideology. A second assumption about this debate is that both sides (or all sides) tend to throw around statistics which are either wrong or wrongly used. That is true of the xenophobes on the right as well as the accomodationists on the left. A third assumption is that while there are always risks with immigration (including the introduction of gangs and criminal activity) the vast majority of immigrants add something to the mix of society – if for nothing else than they lower the average age in states with high proportions of immigrants and in the long term partially defuse the ticking time bomb of a graying society. A final assumption is that we would benefit from some more clear headed thinking about these issues.

About a decade ago Julian Simon did a wonderful book on the economics of immigration. Simon did, what he often did, which was to look at an issue and confront the data. He found that the net cost, after social service costs were added in, of immigration had a payback of something less than three years. In other words, add all the costs of immigration between enforcement and services and the net gain to society from these people comes relatively quickly. Simon’s work predated some changes in public policy including increased reliance on health services, but I believe the general direction of his trend is still right.

Last year the USC Center on Demographics published a paper that suggested that despite what the public press seems to yammer that this generation of immigrants is being assimilated rapidly. Their language acquisition, intermarriage and other characteristics is faster than previous generations. The numbers in the report are stunning. After about one generation for Hispanics, it is hard to tell the native born from the immigrants.

So what facts do we know with relative certainty. Well we know that about a third of the “illegals” are actually only short term mistakes on visa stays who have no intention of staying. We know that the transmittals to Mexico may amount to $20 billion (the estimated GDP of the country is somewhere north of $1 trillion which makes it less than 1/12 of the US or about half the French economy or at a bit more than $10,000 per capita – about 25% higher than Brazil) and some suggest that the second largest contributor to the economy in many states comes from these sources. I know this because of discussions with two of the smartest governors in Mexican states – who recently told me about their dilemma in figuring out how to re-attract their citizens but worrying about the economic effects of an immediate cutoff of remittances. We also know that a lot of the remittances have been a back door and largely silent way of funding small ventures that the mercantilists in the Mexican economy would not have been able or willing to do. We know that in LA county alone 11 emergency rooms have been closed because of the inability to fund them, caused in part by utilization by immigrants. We know that the problems confronting the country are primarily in the governmental sector and likewise the remittances back to Mexico are an aid in building a more vibrant economy (more on that later). Café Hayek commented recently (and I think quite intelligently) “The goods and services that people complain immigrants cause to be overused are either government-supplied goods and services (for example, government schools) or goods and services that are heavily subsidized by government (for example, medical care). No one complains that immigrants are over-using supermarkets, movie theaters, auto dealerships, or clothing stores. That is, private enterprise seems quite able to 'absorb' immigrants and prevent overcrowding and free-riding. Problems arise almost exclusively with goods and services supplied or subsidized by government.”

While California has had a lot of types of immigrants, the primary discussion in the US has been about immigrants from Mexico. That immigration is different from earlier generations of immigrants in at least one way. In this generation of immigrants persons who come to this country have the opportunity to keep contact with their initial country. Thus, as you see on flights between the US and Mexico, a good number of people, even those who have made the decision for citizenship, have the opportunity to get back to Mexico frequently. That leads the xenophobes to the conclusion that this generation of immigrants is not being integrated but the data from USC suggests that the perception is simply wrong.

Here are some random thoughts –

#1 – The changes in immigration laws have produced some unintended consequences. It is clear that the costs of using coyotes has increased since the last immigration reform. That has not seemed to have reduced the volume of immigration significantly (although the data for California suggests that beginning about five years ago, the influx of Mexican immigrants has been slowed significantly). Tim Cavanaugh of the Reason Foundation suggests that open borders might offer greater security than all of the silliness about fences and troops. The one clear thing about fences and troops is that they offer a significantly higher possibility for unfortunate incidents and they increase the cost of movement for those who want to come across the border. So in the end, as in many other areas of policy we should look out for unintended consequences. The proposed fence and the proposed criminalization of immigrants are two proposed policies that are likely to be both unsuccessful and produce huge unintended effects. The blather about deporting all of the illegal workers in the US is pure nonsense. (Think about deporting the state of Illinois.)
#2 – The best available research says the impact of Mexican immigrants on jobs in the US seems to be minor. The argument made by the President – i.e. that most of the jobs taken by immigrants are not ones that would be done by our domestic population is correct. Some have suggested that if we simply raised the wages for these jobs American workers would take them. That is probably not true. The people most affected by the influx of immigrants – both legal and illegal – has been predominantly to workers with the least education. Not to be callous but those workers (all around the world) have seen their average wage drop for the last 30 years. The tradeoff, if there is one, between lost wages for unskilled workers and increased productivity should not be underestimated. The President’s call for a guest worker program seems like a good idea. At the same time we should get out of the 19th century techniques of identification. In my home area false identities – be they green cards or social security cards seem to be pretty available. Technology could be a help here – but the INS has not had a good record in this area. The INS created a program using biometrics for re-entry of frequent travelers which would have been great but they could not get the computers to work. The guest worker program would regularize the relationships and at the same time it would allow the INS to begin to think about industries that hire a lot of illegal workers. Both of those seem like benefits.
#3 – However, I also believe that the demands of citizenship should be rigorous enough to assure that individuals have an understanding of the foundations of the country. There is a good reason why the US is as attractive as it is to immigrants and it is not entirely based on money. I am skeptical of all of the efforts to offer continuous bilingual services. In Mexico, where I work a lot, while many people speak English, the expectation is that people will communicate in Spanish. If it is good there, why should it not be here. But I would repeat that the best research on this issue suggests that this generation of immigrants is acquiring language at a pretty rapid clip – so the people on the right who argue that this generation of immigrants is not becoming a part of our society is simply wrong. But language is not enough – our unique political history including the rationales for why our system works in the way that it does – should not be missed on new Americans. There is an American tradition and citizens should understand it – the tradition is not immutable but even those who seek to change it should first understand why the founders created what they did. Each generation of immigrants has added something to the American experience –so it should not be surprising that we are adding words and foods we did not know before. Pete Wilson once quipped that the standard California lunch was becoming a fish taco with a side of Kim chi – in my mind that is not all bad.
#4 – The Mexican economy could benefit from some further economic liberalizations. There are still too many mercantilists in major sectors of the economy (phones and oil are only the most prominent). There is some hopeful movement there in that some areas seem to be moving rapidly into the next stage. But the tax system still has a lot of leaks. The GNP growth is officially listed at something well below what it is – that is partially because of the tax system. Micro business development and mid-business development could help change the economy – the next president (to be elected on July 2) needs to commit some real attention to these issues. Mexican securities laws(the development of the Mexican equivalent of Sarbanes-Oxley has been thoughtful and in many ways better than our own) and the introduction of international banking standards will also help. There are some very helpful signs in several states where governors have decided to try to implement federalism for real. All of these things will help over time.
5 - The issue of dealing with the influx of people from Mexico should not be limited to that border. Indeed the most visible border crossers are from Mexico but remember that at least one of the hijackers came across the Canadian border. The debates in this area should think more carefully about a comprehensive approach to immigration not a response to a perceived problem in Mexico. At the end of the discussion we should have a good idea about how many people we want to admit each year, what are the consequences for breaking the law and what rights or benefits should be offered to people who enter this country either legally or illegally. In my mind, if for no other reason than NAFTA, we should be significantly more accommodating to our neighbors to the north and south than the rest of the world.