Wednesday, May 16, 2007

Another illegal immigration debate (paca)

Every once in a while I get caught up in a debate over on the only political blog I regularly participate in, (The Moderate Voice), and I find myself saying things that seem worth preserving to me. This time the issue was that of a Dallas suburb voting to fine apartment owners who rented to illegal immigrants. The fine is $500 and there are a few exceptions, such as to mixed legal and illegal renters and minors. Everyone here is welcome to tell me how stupid my thoughts are, and they are likely to be stupid since I've never studied immigration or economics and that's what I wrote about.

There was a long discussion in the comments before I got involved. I will add new comments in all caps here.

Pacatrue:
I just wonder where the people are going to live if they are not in apartments. I know the answer I will hear is that they should all “go back home.” I think the more likely reality is that there will be shanty towns.(THIS IS ONLY RELEVANT IF THE RESTRICTIONS ON HOUSING WERE BROADER THAN ONE SUBURB OF COURSE. THE POINT IS THAT IF ILLEGAL IMMIGRANTS ARE NOT LIVING IN APARTMENTS, THEY WILL BE LIVING SOMEWHERE.)

I think that 1) the market should control legal immigration to a large degree, and the current legal limits are far below market demand on both sides of the border, and 2) you control illegal immigration with border control and employment restrictions. You can’t address 2) effectively without fixing 1) however. Until there is a legal way to meet free market requirements, the illegal version will continue.

Commenter X then said:
pacatrue said:
“Until there is a legal way to meet free market requirements, the illegal version will continue.”

This assumes that companies want to employ legal workers, but are forced to employ illegal ones because of lack of legal ones. It goes back to “Mexicans do the jobs Americans refuse to do”. This phrase is correct, just incomplete; “Mexicans do the jobs Americans refuse to do for slave wages”. Believe it or not, fruit was picked, lawns were mowed and houses were built by Americans once, and would be again, if the possibility of employing an illegal for a fraction of the cost was not there. Once upon a time, oranges were picked by Americans and orange juice still didn’t cost it’s weight in gold. If you upped the number of legal immigrants, the companies would still try to employ illegals, they pay them less, take care of their safety less, don’t need to cover their healthcare, all profits that go back to them.

Commenter Y (who is typically 'left' on most issues) said:
The right wingers are about to love on me….

I fully agree with what the Dallas suburbs are doing, infact they should have gone further and targeted banks that loan to illegals (which is against federal law), and especially employers that hire them. When they don;t have lodging, employment, or ability to start up their own businesses/homes here they can go back and do it the legal way. If we really have so many jobs that americans won’t do I’m sure amendments to immigration numbers will happen.

Commenter X then came back in:
It’s funny, Commenter Y, on the immigration issue, there seems to be quite a few people who usually self-define as left who go over to the other side. Same thing in Spain; people who would recoil at the thought of being called conservative are VERY conservative on immigration. I can only guess that having to deal with the ugly realities of illegal immigration every day, and knowing that tolerance of illegal immigration is BAD for the countries poor and working families makes it an easier issue(I THINK SHE'S TALKING ABOUT THE VERSION OF THE LEFT WHO IS ANTI FREE TRADE, SOCIALIST-INCLINED, AND CONSERVATIVE ABOUT PRESERVING THE TRADITIONAL CUSTOMS FOR THEMSELVES). Illegal immigration only benefits the illegals themselves and the rich bastards who feed off their services.

And now me again:
Pacatrue:
I agree with Commenter X and some of what Commenter Y said (clearly not all). What I mean by market demand is simply that since 10 to 20 million illegal immigrants have come to the U.S. in the last 20 years, the U.S. has continued to grow its GDP at a moderate rate overall and kept unemployment at one of the lowest of non-socialist industrial nations. The main economic refinement I would put on Commenter Y’s point(AHH, REFINEMENT. TRANSLATION: I THINK YOU ARE COMPLETELY WRONG, BUT I'M GOING TO PRETEND WE ONLY DISAGREE SLIGHTLY SO AS TO GET YOU TO ACTUALLY CONSIDER MY POINT) is that it’s not as if a nation has a certain number of jobs and illegal or legal workers can take them. Instead, economies are highly dynamic. The number of jobs in the U.S. changes by the tens of thousands every month. And one of the greatest means of growing an economy is making production more efficient, i.e., cheaper. So producing all of the items that illegal immigrants produce with lower wages is partially driving the economy as a whole forward. I am not saying that lower wages are always good. In fact, I’m very interested in the idea of the living wage where you can lead a basic life financially if you work a 40 hour week.

Anyway, my main worry about simply forbidding housing to illegals without anything more comprehensive is that it is just not enough to dissuade immigrants from coming illegally. The incentives will remain high and now we will have immigrants living apart from everyone else, meaning they won’t be learning English and American customs, living in shacks and drinking diseased water. Instead you need to comprehensively make coming to the U.S. legally easier while also adding employment, housing, and financial restrictions to illegal workers. To make the prohibitions against illegality strong enough in themselves to be effective would require billions and billions (and billions) of dollars in enforcement machinery - which seems an odd way to spend money since our economy can clearly handle the workers. One thing to keep in mind is that the legal wait currently can be 10, 15, 20 years to get a visa. By that time, the children parents are trying to find opportunities for are no longer children. If we can reduce the burdens on getting here legally, then less strict controls on illegal arrival will be more effective.(THE POINT HERE IS THAT PEOPLE OFTEN PRETEND LIKE IMMIGRANTS ARE SITTING AT HOME, MAYBE A NICE HOME WITH FANS OR AIR CONDITIONING, AND THEY JUST GOT BACK FROM SAFEWAY, AND THEY THINK 'I'D REALLY LIKE TO GO TO AMERICA. HMMM... I WONDER IF I SHOULD GO LEGALLY OR ILLEGALLY? AH, SCREW IT, I'LL JUST GO ILLEGALLY AND NOT BOTHER WITH THE LEGAL HASSLE.' IN REALITY, FOR MOST PEOPLE, IT'S GO ILLEGALLY OR DO NOT GO. YOU WILL ALSO HAVE TO USE YOUR OWN KNOWLEDGE OF THE ECONOMIES OF THE POTENTIAL IMMIGRANT TO ASSESS WHAT THE STAY AT HOME ALTERNATIVE IS LIKE. MOST OF US FORGIVE JEAN VALJEAN FOR STEALING A LOAF OF BREAD WHEN HIS FAMILY WAS STARVING. HOW SIMILAR ARE THE ECONOMIC CASES?).

And then a bit later I followed up on one of Commenter X' sentences:
Pacatrue said:
Quote from Commenter X: "Illegal immigration only benefits the illegals themselves and the rich bastards who feed off their services."
Does anyone know the actual stats on the economics of the people and companies hiring illegal workers? Some portion of them are large companies, such as people running industrial chicken processing plants. But my impression has always been that a lot of these workers are working for local family farms to help with a grape harvest, mowing the lawns and raising the children of the middle class, or working for a two person contracting company who need some extra help for a job. If so, that’s precisely the group of people you typically want to save money. Cutting expenses by 10% on the very wealthy indeed often has a low rate of return, because they don’t change their habits due to a 10% growth in their income. However, a middle class person might be affected enough by the savings to go spend some money they wouldn’t have otherwise, which then does indeed benefit the economy generally.

I'm done quoting now. No one ever responded to either of my two long comments which isn't unusual. The main point I'm trying to make is simply that unlike Spain and much of Europe, the American economy for the last 20 years of illegal immigration has been able to grow to support most of the new people coming to the country. Moreover, cheap labor may have been an actual driving force in the growth of the economy. Of course, of course, this has hurt many American workers whose wages are driven down by the cheaper labor option for employers. At the same time, because the illegal immigrants are often directly assisting the middle class in particular, the economy as a whole has grown as a result of the cheap labor. I am in favor of enforcing border controls if you accept the idea of immigration controls at all. You can't just pretend to have laws, which is the current situation. We pretend to have immigration control, but largely do not. However, I am arguing that if the laws do not reflect economic pressures at all, as is currently the case, they are going to be almost impossible to enforce. This is basically Richardson's take on illegal immigration, I confess. He supports increasing the number of legal immigrants immensely - up to 400,000 a year - which is a closer take on the economics in question, while at the same time increasing the border patrol enormously. Of course these sort of solutions will be of not interest to Americans who just do not want so many immigrants period. However, if the problem is illegal immigration in particular, and not all immigration, then it makes more sense.

Final thing. The reason I keep mentioning the middle class is due to my baseless belief that increasing disposable income on the middle class has the greatest effect on growing the economy. If a wealthy person makes $200,000 a year and they get a 10% boost to $220,000, would they change their spending habits much? They were likely already doing as they wished, and it would take a really large increase, say to $300,000, to get them to change habits significantly. For the poor making $25,000 a year, an extra 10%, or $2500, will be spent and will help, but a) it's a pretty small amount still and b) most of that money is already spoken for. However, if a $60,000 a year person is now making $66,000 maybe they would now go on that vacation they were putting off. Or they would now feel comfortable enough to risk starting that small business. Or they would just buy stuff they don't really need but like. It seems like the problem with trickle-down economics then is that most of the tax cuts are targeted at that $200,000 group, when they should really be targeted to the $60,000 one.

But then I've never taken an economics class in my life, so feel free to correct.

1 comment:

Llama said...

Paca,

I'm no economist, but I did study it somewhat during my time at Tulane. What you are describing regarding giving money to the middle class is not unfounded. In fact, it is the basic economic theory of the left... the counter to "supply side economics."

The idea of supply side is that you give money to the capitalists... the entrepreneurs, the rich. Those people who are likely to then invest that money in business, which will then create new jobs for the working class. In this way extra income given to the rich will "trickle down" to the workers.

What you propose, with one small correction, is exactly opposite. The theory holds that,rather than give extra money to the rich, we should give it to the poor. The rich, who already have more than enough money to meet their needs, will save it, or even worse, spend it on imported luxury goods. In either case the money is removed from the economy. The poor, on the other hand, will spend it on food, health care, education, etc., generating increased economic activity. Heck, from an economic point of view, even if they spend it on cigarettes and liquor it is still better than removing the money entirely from the system. In this way money given to the poor will generate increased demand, which will cause more goods to be sold, which leads to increased profits for the capitalists. This is "demand side" stimulation.

And though the right typically promotes supply side, Bush's 300 dollar tax rebate was unambiguously demand side.

As with many things, a truly effective policy would undoubtedly make use of both supply and demand side forces to keep the economy moving.

Llama