Centerfield

Ah yes. IMMIGRATION. Immigration is one of those issues that doesn't fit well into either party. It is a strattled-party issue because it's not a matter of Left and Right. Both sides have a pro and anti faction in this debate.

A good analogy would be the French NO VOTE to the European constitution. The NO VOTERS came from both sides and extremes of the political spectrum. The YES VOTERS also came from both sides. The NO VOTERS were low to mid level laborers, extreme righties and lefties and those fearful of immigration and threatened status. The YES Voters were business owners, elitists, cosmopolitians, globalists (good and bad ones) and generally those who felt no threat from "Classical Liberal" economics.

Dems and Reps have these same factions in there base. Many lower to middle class workers fit into both parties and many "cosmolpolitans" and upper class people fit into both parties.

But, as is the case with most things, the upper class views tend to dominate. The Republicans in DC are more swayed by their big money interests than by their isolationist, proliterate base and classic conservatives like Pat Buchanan and Lou Dobbs.

Likewise, the Dems are more swayed DC by status quo, some big money and idealist liberal interests groups most of which are either ambivelent to immigration or for it.

Therefore, nothing happens! The saddest part is that when the "blame game" of politics start, I sense both sides picking on the "pro" or "who cares?" groups on the other side to further enrage their base. All this while sidestepping the reality that the leadership and upper levels of both sides, for their own reasons, are actually on the same side when it comes to immigration. The policy then becomes one of leniency and inaction. The lower levels on both sides suffer and blame the otherside.

There is a response to this argument that is popular among both employers and pro-immigrant liberals: that immigrants take jobs that no native-born workers would want. ... But this belief is utterly wrong

While that argument is true in a very strict sense, it is equally misleading. The issue isn't as simple as whether or not native-born workers would want the jobs or not.

There is a maxim which perfectly describes or sums up capitalism: An employer will pay an employee the least amount it takes to keep the employee on the job, working with an acceptable level of efficiency and reasonably happy.

The reality is that many immigrants are very content to do many of the dirty jobs for low wages.

Here in Oregon it rains a lot, especially in the winter and spring. The overwhelming majority of landscape maintainance crews I've seen are hispanic men. Undoubtedly many (most?) are immigrants earning far less than I earn.

When I was in highschool I worked for a massive wholesale nursery which grew landscaping plants. I worked part-time during the school year and full time during the summers. Something like 99% of the field hands were hispanics. Ditto for the woman who worked in the greenhouses. They never complained. They just worked. And I know for a fact that the large majority of them were illegal aliens. They earned slightly over minimum wage.

Any native-born person could have applied for a job at that nursery and got it. But few were willing to work under those conditions for those wages. By contrast the immigrants were quite content to work under those conditions for those wages. And having worked with them I can tell you that the large majority of them had a very strong work ethic. They worked hard for shit wages.

The reality with many of these kinds of jobs is that while many native-born prospective workers might want a job... many of them aren't willing to do some of the dirtiest and toughest for the wages being offered.

The Democratic Party should also be concerned about the views of black voters on this issue, where there is also growing rumbles re: employment and community demographic issues. Not enough yet to do a realignment, but enough where an enterprising Republican can shave off a few points here and there for an electoral victory.

I'd like to see some hard, non-union-provided numbers showing whether wages in hotel housekeeping or construction or migrant farmworker jobs have actually fallen as a result of illegal immigration. Personally, I doubt it, but I haven't seen any hard numbers.

Last time I looked at any kind of numbers on this issue, we had maybe 10 million illegal immigrants working in this country, and about that same number of Americans classified as unemployed, about 4% to 5% unemployment. My general understanding of the economics related to employment levels is that 100% employment is not possible or even desirable, as it raises wages to unsustainable levels. And remember that the higher the wages, the higher the price you must pay for your food, hotel rooms, and other immigrant-provided services.

We cannot enforce our way out of this problem; it is too big, and affects too many parts of our economy. Some conservatives and others who want to crack down on immigration propose massive government intrusion into the workplace, with ideas such as a massive database of ALL citizens, so that if you are not in the database, an employer is not allowed to hire you. I cannot stomach such massive government interference in the marketplace, and my mind boggles at the potential for nightmarish glitches in the system.

Every wave of immigration in this country's history has been met with hostility by the immigrants who were here before. Every new wave is considered dirty, willing to work for un-American wages and unfit to marry our daughters. Every new wave is "not like the last one, the last straw." Nevertheless, every previous wave of immigrants has eventually melted into the American pot quite handily.

PatHMV,

As an Italian American whose parents both came from Italy in the 60s, I can vouch for the negative labelling of and hostility toward them from the "establishment citizens" thru stories that they told me that seem crazy just 40-some-odd years later. To think that Irish went thru the same thing (see movies Far And Away/ Gangs of New York) seem crazy by today's standards. Irish and Italians?? But on it goes.

I think what sets the Hispanics apart is that they've been arriving in droves for a long time now so the hostility towards them spans generations while the Irish/Italian/Polish/Russian etc. wave is now a thing of the past.

I support the idea of that database. I think it's exactly what we need.

In terms of being a massive intrusion, I don't see it as being more intrusive that the IRS. Isn't every wage paid already reported by employers to the IRS? Some people don't file taxes, of course, because they are paid a very small amount (or are cheating). I see such a database as being only marginally more intrusive than the current system.

The I-9 form is already being filled out, and it represents an intrusion. All this does is automate the process, and eliminate fraud.

It certainly seems a whole lot more intrusive for the NSA to be listening in to all our overseas calls than for us to have to fill out a form once in a while.

Rick, I see such a database as FAR, FAR, FAR more intrusive of our privacy then the wiretaps that have so many people in a tizzy. My phones are not being listened to; nobody from Al Qaeda is calling me. If I had relatives or friends in the Middle East, I would be a bit more at risk of having my calls intercepted, but as a practical matter it still is extremely unlikely to affect my life at all. Only if the wiretaps led to information that led to me being put on the no-fly list or some such would it actually affect me, personally.

There are three problems with such a database, beyond it smacking of the Soviet's "may I see your papers please" (rendered in best Boris & Natasha accent). First is the philosophical principle that it is NOT my responsibility to prove my identity or citizenship in this country. If the government does not believe I am a citizen, or am who I say I am, then it can take me to court and prove it. The database of citizens allowed to work would shift that burden the other way.

Second, look at the no-fly list. It's bad enough when a government database keeps you from flying. What happens when it keeps you from working? What happens when you're a woman and you get married and change your name, and the company won't hire you because your name doesn't match your name in the computer list? Just yesterday, my car dealership couldn't quickly find my name in its database because I am a fifth (instead of jr. or sr., I have a "V" at the end of my name). Their system had my last name as "Martin V" rather than "Martin". What if I were a day laborer and the hiring boss was having similar trouble finding my authorization in the database? He'd move on to the next guy.

Third, it wouldn't actually solve the problem at all; it would make identity theft even worse. Given that we already have the I-9 (which I consider to be unconstitutional, but I have to live with it), the only immigrants this would stop from working would be those employers who do in fact check for green cards now (if they don't fill out I-9s now, they're not going to call up the computer database). So this system would ONLY catch illegal immigrants who have phony documentation now, with names that do not match the Social Security number on their ID. But if they have fake IDs with names matching the Socials, then that ID would clear the computer system. So this would create a HUGE incentive for increased identity theft. What happens when I get a letter from the IRS saying that it wants my taxes for that lettuce-picking job it says I had last year? Do I then flag my citizen's account as having been the victim of identity theft, making it even harder for me to get a job myself in the future?

These are far from all of the problems of the system (misuse by government bureaucrats, mission creep for law enforcement, child support enforcement, and other uses, etc.). But these 3 are inherent in the concept; no system could be tweaked to get around all 3 of them. I'm normally the last one to label anything as "unAmerican", but I truly believe such a massive database, requiring that I as an American citizen must prove my identity to every employer I may ever work for before I can legally be hired, is profoundly un-American.

PatHMV, what makes you so certain that your phones haven't been tapped? Because the guy who authorized it, and in so doing skirted the clear will of Congress, says so?

Ever hear the quip about the proverbial fox guarding the hen house? It is clear from the limited peeks behind the curtian (via news reports) that at least some in the know about it were deeply concerned about it, including former AG Ashcroft and his deputy AG who reportedly flat refused to authorize it while Ashcroft was undergoing surgery.

I agree with Rick that the proposed data base wouldn't be any more intrusive than the NSA domestic spying program. Although I don't support either idea.

4 reasons, Kevin:

1) I'm wearing my tinfoil hat today;
2) I'm not a member of the raving anti-ChimpyMcBushHitler legions;

3) Not a single one of the people willing to BREAK THE LAW to disclose classified information was able to point to a single instance of these wiretaps being used against even ordinary criminals, much less misuse against political opponents; and
4) There's way too many people in this country to actually listen to very many international phone calls; the odds that I was targeted, EVEN if they are completely lying about using these capabilities to listen to Al Qaeda calls coming into the U.S., are EXTREMELY low.

PatHMV, what makes you so certain that your phones haven't been tapped?

What makes you certain that the CIA isn't peeking through your sock drawer when you're out of the house, Kevin?

There's nothing like the combination of negative proofs and the paranoid style to really send a discussion off the deep end. Hofstadter was so very very correct, and all you have to do is switch the labels about a bit to fit the times.

I've never hear of anyone before claiming the I-9 to be unconstitutional. If it were, then the database I advocate would be too. What I'm advocating is simply automating the I-9.

You're right, it would no longer be possible to produce fake SSN's with fake ID's that match. It would be necessary for the fakers to get real SSN's with matching names. It would be irritating to find that someone is impersonating you, and there would have to be resources available to quickly expedite identity investigations. In order to avoid preventing legal workers from working, it could be that the system simply says okay, you can work if the SSN and name are legit, even if there seem to be 10 people using the same SSN. Then an investigator would need identify which is legit, and visit the others work sites to arrest those working fraudulently.

If the scheme was handled intelligently ( a big if) I think it could be done without inconvenience to legal workers and really cut down on illegal workers. It wouldn't prevent hiring day laborers, but legitimate businesses would no longer have an excuse to hire illegal workers.

And this doesn't mean we wouldn't have immigration from Mexico. If it cut down on illegal immigration so much that the lawns of American looked bad, we could raise the amount of legal immigrants from Mexico.

Oi. Anyway, to go back to immigration, a few plain facts.

That's taking just the presence of illegals as labor, without figuring in the extraneous societal costs (welfare, health care, etc.) into account. If the illegals are removed from the labor market, overall prices will readjust. Wages will go up--but so will prices. No fair whining about your lettuce being more expensive. If they're costing the economy more through gov't benefits than they're contributing, that'll show up as well.

The other obvious point is that regardless of how many laws you pass, if you don't enforce them they're meaningless. More laws won't help if they're not enforced.

Rick, if you're going to just let everybody work as long as they have a name/number that match, then there is no difference at all between the proposed new program and the current system. Just check the tax rolls for payroll taxes submitted under bogus SSNs. As for doing it "intelligently", could you please point me to a single government program involving over 100 million people which is run "intelligently" and without hassles to those people using the system.

Tully is of course correct about the basic facts of life. There are some key unknowns, the answers to which should drive our policy decisions. At what wage level will sufficient "native" Americans be willing to pluck chickens or pick lettuce or clean toilets in hotel rooms for a living? How much would your taxes increase if road construction costs rise because of a labor shortage? How many sewing jobs would be shipped overseas if wages at the textile factory with illegal immigrant seamstresses increase by 50% or more?

If we increase the amount of allowable legal immigration to match the levels of apparent economic demand for same today, then we can more intelligently deal with other issues, such as healthcare costs and labor standards, because the workers will be (1) paying taxes like everybody else and (2) not so afraid of the INS that they will put up with all sorts of abuse or not cooperate with the police in investigations, etc.

Increased enforcement of immigration laws is no match for the economic forces which are driving this wave of immigration. We must deal with the problem by tweaking the market forces, not just issuing stern edicts against verbotten hiring.

never underestimate the power of money over principles in the GOP.

Marcus, boy, that comment really advanced our discussion of thorny immigration issues which are brining out some of the worst aspects of both parties. Thank you so much.

If you would just change your constant derogatory references to the GOP to "politics," "politicians," or "parties", you'd find a lot more agreement and be a lot more accurate.

If wages rise, overall prices will rise as well. Goods and services will become more expensive.

There's the rub. The other side of this coin is the effect on the rest of the economy.

We already have a problem with American companies outsourcing jobs to foreign countries or even to American controlled islands in the Pacific (ala Abrahmof & DeLay) which has a very real effect on our domestic economy.

If my lettuce costs more than that makes it that much attractive of a market for South American lettuce producers to exploit. And if they don't then my purchasing power gets diluted because I'm paying more for things than I was before and therefore have less available to spend on other higher ticket items... which would have an effect on the rest of the economy.

Don't get me wrong. I'm not advocating that we just ignore illegal immigration. I firmly agree with you that we ought to be enforcing the laws we already have. But this is really two different issues. 1. enforcing our immigration laws, and 2. the net effects on our economy of 11 million extra mouths to feed.

So lets assume that we somehow find a way to send every single illegal alien home and prevent any more from getting inside our country. How long before our population increases by 11 million and we end up with the same exact problem except with no illegal aliens to blame it on?

The Republican base has mostly been anti-immigration, but elite business interests have been powerful enough to control the issue.

I don't think that's really a fair statement. First of all, it is absolutely essential that we differentiate between legal and illegal immigration--there's a big difference. Once we establish that point, I feel comfortable saying that I don't think you would find that the Republican base would be any more opposed to legal immigration than the Democratic base. It just feeds to the myth that the South is anti-immigration. The South is Republican. Therefore, Republicans are anti-legal immigration. (I don't think either is true.)

I would argue that most politicians who claim to be anti-illegal immigration are appealing to the generally anti-immigrant (legal or illegal) sentiments among some voters.

Being anti-immigration, legal or illegal, for economic reasons is a sentiment of utter futility. Tully's assertions are absolutely correct, so being economically anti-immigration is not completely irrational. It's just not going to matter. You might as well advocate a lower birth rate and the destruction of the machines.

The government should focus on stopping human exploitation and getting people into the legitimate system.

As long as employers have access to sources of cheap labor that holds down their cost of production, they will continue to employ cheap labor, legal or not.

If employers were to be penalized for hiring illegal labor, they would switch to legal labor, but their costs and therefore the price of their products would rise as well.

So, which is it?

Do we want to enjoy low prices thanks to illegal labor, or do we want legal labor but higher prices?

A more interesting discussion is what should we do about illegal immigration? It seems that many of the proposals put forth by GOP conservatives are just pie-in-the-sky programs that won't do much in the long run. A fence? Unless that fence is also guarded and armed, illegal smuggling networks will just build tunnels. And there still are the legal entry points where people can sneak through. Oh, and how much will this fence cost? As for the massive database, who says employers will actually follow the database? It's hard enough to get small businesses to pay their propert taxes. Do you think the INS is going to get every small businessman to stop hiring somebody because they're on some computer? Employers already know when they're hiring an illegal immigrant. The problem is that they don't care.

A real, long-term solution is to improve the economies on the other side of the fence. Anything that improved the economies of Mexico and Central America would do more to stem the tide of illegal immigration than anything else.

Pat:

Your phonecalls may be listened to. That's were a lot of the spat comes from. Experts are concerned that NSA is using the same tools it uses overseas which means messages are scanned for certain words and if combinations are found are monitored.

And the administratyion has admitted that some of this is wholly domestic.

As for your desire to see real figures it is bogus. Information that the minimum wage has fallen to 70% of it's mid seventies value is common and this is weighing health care at 6% and using national averages ignoring the massive increases in rents in certain regions.

Do we want to enjoy low prices thanks to illegal labor, or do we want legal labor but higher prices?

Put me down for the latter. Paying a few more workers at minimum wage won't break us.

A real, long-term solution is to improve the economies on the other side of the fence. Anything that improved the economies of Mexico and Central America would do more to stem the tide of illegal immigration than anything else.

Notice that making most or all domestic workers legal and thus raising prices also has the long-term benefit of helping the economies of other nations. We'll import cheaper goods from lower-cost nations. So stemming the tide of illegal immigration by making it harder for domestic businesses to hire illegal immigrants is actually related to your prescription, not an unrelated "anything else" approach.

A fence? Unless that fence is also guarded and armed, illegal smuggling networks will just build tunnels. And there still are the legal entry points where people can sneak through. Oh, and how much will this fence cost?

I have no problem with guarding and patrolling a border fence after we build it. I have no expectation that such an approach will completely stop illiegal immigration, but I expect that it could substantially decrease the flow, and should be a part of strategy to funnel immigrants looking for oppportunity into legally decumented channels.

As far as putting a dent in the taste of businesses for hiring/exploiting illegal undocumented immigrants goes, I'm in favor of serious penalties instead of rigorous massive enforcement, a database, bureaucracies, lots more gov't workers. Make the price of getting caught too high to risk.

Brian, from the figures I've seen, many, many illegal aliens are making WELL ABOVE minimum wage already. I don't know about in the migrant farm worker community, but most of what I've read says that in construction and similar fields, they are making pretty good money already.

The problem with Mexico's economy is not that we won't buy anything from them, but that its government is so corrupt at so many levels and its legal system is inadequate to protect property and contract rights on the scale needed to encourage investment either from abroad or by its own entrepreneurs. Mexico is not India, for example. India benefits from outsourcing because it already had a good legal and governmental structure in place; the only expense in moving a factory to India is shipping costs. Mexico doesn't have that, so investments are much, much riskier and less likely to happen. Clamping the border shut may help somewhat, but I doubt it will help much; it could just as easily lead to sufficient unrest to cause a revolution in the country.

The stiffness of penalties is just one component of their deterrence value. The other component is the likelihood that lawbreakers are to suffer those penalties. Mobsters continued to murder opponents for years, even in the face of the possible death penalty, because it was rarely imposed. Mob hit men knew they either wouldn't get caught or, if they did, they could cut a deal and not get executed or serve a long jail term. You can't have deterrence without enough prosecutions to make the masses of lawbreakers believe that they could be next. With 10 million illegal workers here already, that could take a LOT of prosecutions.

And prosecutions are no easy matter. You must PROVE (beyond a reasonable doubt if you want criminal enforcement) that the employer knew that the worker's green card or other documentation was forged.

Pat nailed the problem with Mexico. A resource-rich land, yet they can't get off the corruption train long enough to build a sustainable modern economy. Of course, if you clamp the border shut there are those both at home and abroad who would loudly excoriate us for heartlessly making Mexico suffer....

Kevin, I made sure to mention the "other" effects because I haven't ever seen any good quantification that would allow a realistic judgement. By "other" I mean the net cost to taxpayers of government services provided to illegal aliens, a cost which is considerable. It wouldn't ALL be cost-raising econ effects. There are those who claim we'd have a net overall economic benefit from removing the illegals, though I personally doubt it. (That's figuring on domestic effects before balance-of-trade issues, which gets even more ethereal.)

But the cost/wage push would be fairly rapid and readily apparent.

As for your desire to see real figures it is bogus. Information that the minimum wage has fallen to 70% of it's mid seventies value is common and this is weighing health care at 6% and using national averages ignoring the massive increases in rents in certain regions.

?

That was meaningless. Also see above links about negative proofs and paranoia.

Got here from TMV. Nice site and good discussion.

I second AR's comment on the assumption that the GOP base is anti-immigration. The rank-and-file of both parties are essentially pro-legal immigration, which is a not-too fine point that escapes most of what passes for debate on the issue. Likewise the South.

Also, there is conflicting evidence as to whether or not stemming illegal immigration would impact the economy to any great degree. PatHMV notes one reason, but effected states may find that they save money that otherwise would be spent on subsidized services to illegals.

It is not yet proven that prices would be that greatly impacted by immigration reform, or that the economy could not sustain whatever hit that would cause.

The party that takes hold of this issue and addresses it without descending into demagoguery could ingite the interest of a great swath of voters. My party (Dem) makes a grave mistake when the leadership characterizes any call for immigration reform as racism. They are in danger of once again alienating their own people.

Daniel, welcome to the discussion! I agree with you that the rank-and-file would generally label themselves as pro-legal immigration, but that masks the deep divisions within each party on what level of legal immigration to allow and what to do with those who are currently in the country illegally. The trend among conservative bloggers at Redstate, Polipundit, Michelle Malkin seems to be rabidly anti-amnesty; they strongly oppose President Bush's immigration proposals, which would grant amnesty to current illegal aliens without quite calling it amnesty.

Me, I don't think it's feasible to deport 10 million people from this country. I'd rather focus our limited resources on deporting those who have broken non-immigration-related laws, and on stopping terrorists from crossing the border rather than families who are just seeking a better life.

On the issue of government services, if we simply made the current crop of immigrants legal, it would be much easier to collect taxes from them and their employers. Those increased collections must be considered when evaluating those overall costs. Right now, we wind up paying for schooling, emergency medical care, and some other services without collecting much in the way of income tax from them. I think it's better to bring them into the tax-payer fold.

Another point that has not yet been raised is that many migrant workers don't really want to stay here all year round. They want to work the season, then go home. But it's expensive for them to cross the border, so they stay here year-round. If we had a sensible policy allowing them to come and go with the work season, then maybe they wouldn't be such a drain on society during the off-season.

Pat, you're of course right that there has to be some enforcement. But I thinki the difference in volume between gangster murders and illegal immigrants makes your analogy a little bit inapt.

My point is only that I'd prefer serious penalties to trivial ones that are widely enforced. The latter means that businesses can factor small fines into the risk of doing business. And the government ends up with thousands of extra employees at taxpayer expense, and all these people do is occasionally slap businesses on the wrist, play politics, and wait for retirement. No thanks.

Green cards could be scannable photo ID items like credit cards/licenses, and with mandatory checking and serious escalating penalties, businesses COULD be made to think twice about going along to get along. They could even be allowed or encouraged to take the option of sponsoring employees for legal status during the transition period.

I don't think we could ever enforce the laws strictly enough to stop significant illegal immigration short of taking draconian measures that simply are not likely to ever happen. This is not a country where we want to take brutal measures to keep people out, at least not publicly. I'm certainly not against enforcing the immigration laws, but any discussion has to factor in the fact that getting to the US means everything to these people and unless we are really willing to be tough (eg, making illegal crossing a felony and giving long prison sentences), they aren't going to stop, wall or no wall. Punishing employers probably makes more sense, but that's not likely to happen.

I think Pat is right--we need laws that take account of the reality that the migrants want to help their families in Mexico.

Two questions if I may? Please someone correct me if I'm wrong?

I thought I read somewhere that illegals using false SSN's actually contribute more to our welfare state than they use, since they can never collect on that social security. Is that correct? Does anyone know?

Secondly, does anyone else believe its all inter related? It's not just a matter of Mexico's corruption, although that's a big part of it, its also NAFTA and farm subsidies. Mexico could grow, I think, corn cheaper than we can and sell it to us at a price comparable to what we buy it for now, or cheaper, but this doesn't happen because we subsidize our farmers to keep the prices low, and the business stateside? Am I right?

And if I am, how can we complain that employees are coming to the business here when we are proactively keeping it here? If US farmers weren't subsidized, and had to sell their product at fair market price, a lot of them would be out of business here.

Of course, then the product would be grown in Mexico, meaning we wouldn't have as many illegals in the US, but would have more unemployed Americans.

Would that be a fair assessment?

This is a good discussion with good points from all sides (more than 2).

Immigration is a real issue and, as with most real issues, they don't fit well on bumper stickers once you get into the details.

Though the hypotheticals and causals all make sense, in the end it's going to take an approach that does 4 things:

1) We must make it easier to integrate and legalize immigrants. Stopping them won't work no matter what measures are proposed. Market forces simply won't let it happen. We have to come to terms with that.

2) We must raise minimum wage to something around $6.50.

3) we must lighten the burden of payroll taxes on small businesses. They are very regressive and have the greatest affect on businesses that deal with cheap labor immigrants. This will be a very doable once steps 1 and 2 are in place.

4) this is th hardest one. We must take a better approach in helping Mexico and its neighbors to the south to have a better economy through good globalization policies. It's in our best interests. European immigration from countries like Ireland and Italy only slowed down once they have little incentive to leave.

I thought I read somewhere that illegals using false SSN's actually contribute more to our welfare state than they use, since they can never collect on that social security. Is that correct? Does anyone know?

They're a clean plus for the SS/Medicare system, as they're unable to easily claim benefits without legal status. Some politicians have made proposals to allow illegals to collect on paid-in benefits, but if they were using false documentation, good luck sorting it out, and REAL good luck getting that bill through Congress. If they use false documentation AND their employer actually withholds and forwards those taxes to the feds, it's pretty much "free money" for the SS/Medicare system. But they beat the hell out of other social services, and not just at the federal level. Medicaid. Schools. Etc. Not easy to quantify in either direction, so be wary of claims either way.

The second is somewhat of a fair assessment, but begs the question to current circumstance. Mexican illegals have been coming here a helluva lot longer than NAFTA's been around. You can blame our successes or Mexico's failures, but when you tag it to current circumstances you're blaming the current symptoms and complicating factors, not the disease itself.

We didn't make Mexico poor. They didn't make us rich. Stick a rich nation next to a poor nation and you get immigration from the latter into the former, legal or no.

I too would second AR's comment on the assumption that the GOP base is anti-immigration. Just look at AZ and the activity before Prop 200. It was sponsored by some Republicans but had active opposition from many other prominent Republicans including both US Senators and several of its Republican House Reps.

...But they beat the hell out of other social services, and not just at the federal level. Medicaid. Schools. Etc.

That's certainly valid, Tully. The one thing that caught my attention there is the schools. I've seen this mentioned many times with respect to illegal aliens using a resource that they don't pay towards. That's simply not true in most states.

Here in Oregon, and I believe many other states do it the same, the bulk of public school funding comes from property taxes. Rent payments by alien residents are part of that fiscal dynamic.

Any landlord who doesn't pass on the cost of taxes is incompetent.

And don't forget sales taxes, Kevin. Louisiana has a relatively low personal income tax and a very low property tax, but pretty steep sales taxes. We rely on sales taxes (not that I think it's such a great idea) precisely to make sure that everybody pays at least a little bit in taxes. I suspect most illegal immigrants here consume very little and send much of their earnings back home, but that's not true for all. And whatever they consume, we tax (except food, medicine, and home electricity... we got rid of that sales tax a few years ago).

You bet they pay property and sales taxes, Kevin. And I wish I had a dime for every time someone told me that they rented so they didn't pay property taxes! They may not write the check directly to the taxman if they rent, but they pay 'em. And most illegals pay income and SS taxes through their withholding. Those who don't are usually getting paid in cash, and that's the employer's bad.

I'd never argue that kids should not be educated, regardless of immigration status. But the public schools are gateways to social services, and ESOL programs are expensive. Illegal immigrants are much heavier users of the public schools than their proportional representation in the tax base, heavier users of special programs within the schools, and heavier users proportionally of embedded social services via the schools than the average user. That's gotten worse under welfare reform, as the feds/states are much more serious about checking status before providing services than the schools are.

As usual, when you dig down into the specifics it gets a lot harder to justify sweeping statements about costs and benefits. Illegals strain our health care system as well, but we don't throw people out to die in the streets. They strain our schools, but if a kid is in the community they need to be getting education. That's why for all the outcry about the costs, the "solution space" keeps going right back to border enforcement, and not denial of crucial services. The situation has to be pretty bad (meaning expensive) locally before you can get people to forget their humanitarianism.

Note that the illegals who are most visible, the ones on the roofing crews and picking crews and day-labor lines, are also the ones most likely to be here without their families, busting their butts working hard and sending much of their pay back to Mexico while using a minimum of public services. And that better-educated and well off Mexicans are less likely to be crossing the border--or need to.

In the last decade we're also seeing a lot of non-Mexican Central Americans who pass through our southern borders. Our dear friends in Mexico City have much tougher immigration enforcement than we do. They pontificate and posture whenever we threaten to tighten, but a Guatamalan in Mexico illegally can't get ANY services without cash to pay for them, and will be promptly jailed or deported if caught. Unless they're just passing through on their way to El Norte--then they're cash cows to be milked on the passage. Hypocrites.

Tully, I would only expand that providing education to illegal immigrants is not merely a humanitarian matter, but is essential to our long-term stability. Without education (and English language education at that), the children of the immigrants will not melt into our society, but will remain isolated, not fully a part of our communities. We've recently seen the dangers of that, in France.

Absolutely. Immigrants don't scare me. Immigrants that don't get assimilated into the common culture scare me. The difference between influx and invasion.

I disagree with Marc and others. I do think that we could substantially stem the flow of illegal undocumented immigrants if we had the will to do so.

But let me 2nd Tully. Immigrants don't scare me either. My beef is with our immigration policy and its lack of coherence. I don't think we should exploit the desparation and eagerness of those less fortunate than us by profiting off them and casting them into a purgatory of uncertainty with an indefinite term. Especially when such policies have substantial downsides for both low-income Americans and for border states. The current system just doiesn'rt seem to be doing right by people we should be doing right by.

"As long as employers have access to sources of cheap labor that holds down their cost of production, they will continue to employ cheap labor, legal or not.

If employers were to be penalized for hiring illegal labor, they would switch to legal labor, but their costs and therefore the price of their products would rise as well.

So, which is it?

Do we want to enjoy low prices thanks to illegal labor, or do we want legal labor but higher prices? "
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It's not that simple or that linear. That would be true if every company that employed illegals were running at a $0 profit margin. However, we know that's not the case. Ever wonder why top executive pay scales have skyrocketed out of all proportion to those of everyday workers or where all the money for those multi-million dollar golden parachutes you read about comes from?

Bottom line, a company will charge exactly as much for a given product as it believes the majority of that products target audience is willing to pay.....and it will pay the minumum amount it can get away with and still deliver a product that people are satisified with. The difference is called profit.

The price a company sets for a product is only very loosely tied to the cost to produce that product (i.e. it can't be less then the cost to produce it). It's based more on the percieved value of the product. For example, how much do you really think it costs Nike to produce those $200 sneakers that your teenager just HAS to have?

It does not follow that if you raise the costs to produce a product (by making the labor market more competitive) that a company will be ABLE to raise the cost of the product correspondingly. In some instances that will be the case (i.e. those products which are produced at close to operating costs) but in many instances it will simply mean reduced profits or force the company to reduce operating costs in other areas (i.e. executive salaries, marketing/sales budgets, martini-lunch expense accounts, business trips flying economy class rather then the corprate jet).

It's going to vary a great deal depending upon the industry and the organization.

Cengel is of course right in the abstract. But what's the profit margin in chicken processing? Or lettuce production? High-end hotels may be able to absorb higher wage costs without raising prices, but what about Motel 6?

Plus, a lot of employers I've talked with believe that poor immigrants have much better work ethics than poor Americans, so there could be an increase in cost along with a decrease in quality.

It's not that simple or that linear.

In particular cases, perhaps not--but you have to cite the specific cases, and the only way to know is by doing. But across the economy as a whole, the effect is completely unambiguous. Raise labor cost, either by decreasing the labor pool or raising minimum wages, and prices go up. Not only is the production cost base pushed up, but the demand side of the equation as well. Higher wage levels mean higher consumer demand, which also drives prices.

The primary effect is seen with the goods and services produced using that no-longer-cheap labor. Almost by definition, those are low-margin labor-intensive products and commodities, so any increase in labor cost drives up prices directly. The idea that management will tighten their personal belts to a large enough extent to cover the pinch is amusing. The more labor-intensive the industry, the less belt theree is to tighten.

Tully,

I respect your economic knowledge a great deal. I'm certainly a complete neo-phyte in that field compared to you.....but I simply don't believe the scenerio you lay out is as unambigious as you maintain.

Take my Nike example for a moment. Why would NIKE charge $200 per sneaker if they could get away with charging $400? The answer is they wouldn't.....NIKE reaches the largest portion of the target audience for that product by setting the price at $200.... put it any lower and they'd be making less money per unit sold then they could.... put it any higher then they'd start selling so many fewer sneakers that they'd make less profit overall. Now does it cost anywhere near $200 to produce that sneaker? No way.

Now if Nike's cost of producing a pair of sneakers increased by $10 would NIKE WANT to raise the price of sneakers to $210? Sure.... but NIKE would WANT to do that anyway (with no increase in the cost of production).... the problem is they CAN'T.... beacuse not enough people think sneakers are worth $210 a pair for NIKE to get away with it. Is there any reason to expect that peoples expectations about what a pair of sneakers should cost will change if it costs $10 more to produce them? Now your dealing with human psychology not mathematics, and human psychology is a much more complex animal. People aren't going to care that it costs NIKE $10 more to produce thier product....people aren't going to even see it. Any effects on peoples perception of what a pair of sneakers should cost will be indirect at best. In other words, NIKE won't neccesarly be ABLE to pass the increased cost off to consumers. Will NIKE stop producing sneakers if it costs them $10 to do so? Not as long as the price they can sell them at exceedes the cost to make them. So where is that extra $10 gonna come from if the costs of labor and materials aren't flexible? It's gotta come from somewhere.... and much as they might dislike it, guess what costs ARE alot more flexible?

cengel, your Nike example is a good one, though simplified (Nike winds up selling the shoes for much less later on in the product cycle, as fashions change and in clearance sales and the like). But Tully is right that in the economy as a whole, rising wages will ALWAYS be met with rising prices, for two reasons. One, the margins for most goods and services are much, much tighter than your Nike example. Two, as wages in the economy rise, so will prices, because people who could before only afford $100 shoes can now afford $200 shoes. So Nike ups the prices because its customers can now afford to pay more and the optimum price (the price which gives you the best comibnation of per unit profit and quantity of sales) goes up. Wages and prices don't necessarily rise in lockstep, but they trend upwards together.

Nike won't necessarily be able to, Cengel, but Nike isn't the entire market or anything like, nor the only company using (hypothetically, I don't know who Nike employs or at what wages) cheap labor. IOW, they don't exist in a vacuum. The market-wide effects are unambiguous, and when all other prices rise, it's easier for Nike to raise their prices as well. (They may not. But if their profit margins drop, the stockholders might start dropping Nike stock.) And overall prices will still rise.

Oddly enough, such a production-cost hit could actually result in equal or increased profitability at lower production levels for other reasons. Still involves a loss of employment, though. I've gone over this one before, but it bears mentioning. Corporations tend to produce not at the highest marginal (most efficient) profit-for-capital level, but at the highest marginal profit level that still meets stockholder's required rate of return, which is on the outlying downside of the production efficiency curve*. Boosting costs is roughly equivalent to lowering the overall production curve, and could thus force the company to produce less, farther back along that return curve but in a higher-efficiency production range. (That would generally be accompanied by a leveraged buyback of company stock to hide the obvious loss of gross revenue. And the managers would pat themselves on the back in public for their heroic cost-cutting mesures...)

There's also the point that Nike's are a "luxury good," commanding a high retail margin, and somewhat different demand elasticities apply. But I don't want to dive off into a full lecture on demand elasticites.

[*--This is clearly demonstrable, and has been shown empirically. It happens because management maximizes not shareholder profits, but its own perks, so they grow as large as they can while not being fired. The bigger the company, the greater the perks.]

Sorry Tully, I don't see how the market-wide effects are "unambiguous" even though you've repeated it multiple times without providing any supporting evidence as to why. We're talking human behavior here, not the law of thermodynamics.

I can see it as unambigous prices rising on "neccesities" where labor is a significant portion of the cost of production and where alternative supply sources don't exist and where profit margins are very low per unit sold. Really how significant a portion of our entire economy does the above represent?

For other items, the question becomes alot more open. Will people be willing to pay more for non-neccesity items or will they simply start reducing consumption if they percieve the price is getting "too high" which will FORCE the providers to look for savings in other areas in order to maintain sales (i.e. management may balk at reducing thier own perks but if the stockholders start rebeling because profits fall they won't have a choice). Same thing for items where a price increase will start making alternative vendors/products attractive. They'll have to hold the line on prices in order to stay competitive. For items where labor is not a significant portion of the production cost, prices may increase but the increase may be so negligible that the consumer doesn't notice it.

What IS unambigious to me are 2 things.

1) If the labor market is more competitive this places more bargaining power in the hands of laborers. Which changes power balance (and hence earnings ratio) between laborers and employers.... which (IMO) is a good thing because the balance being out of whack (due to the influx of cheap labor) is WHY upper level management have been able to keep such a large percentage of the profits when compared to workers.

2) It allows employers that actualy WANT to play the rules and treat thier employees fairly (by paying a living wage) to be competitive..... because thier competition no longer has an alternative to do any differently.

Lets look at a different example to illustrate my above points. We have 2 roofing contractors. In order to remain competitive they both have to charge thier customers roughly the same rate... lets say $200/hr. Let's say the job they are doing requires a crew of 5 men to do. Contractor #1 plays fair and hires legal workers and wants to pay better then sweatshop wages. He ends up paying each of his workers $10/hr. That means his cost is $50/hour in a labor, leaving $150/hr for other expenses and profit. Contractor #2 doesn't care about playing by the rules and doesn't care about treating his workers fairly. Every day he hires 5 mexicans off the street corner for $4/hr. His labor costs total $20/hr, leaving him $180/hr for other expenses and profit.

In order for Contracter #1 to be as profitable as Contractor #2 he'd have raise the price he charges his customers to $230/hr which no longer makes him competitive in the marketplace.... either that or he'd have to lower the wages he pays his guys to $4/hr - a rate which "no American would take to do that job", and one which he couldn't legaly do even if he wanted (since it's below minimum wage).

Now if Contracter #2 wasn't able to hire Mexicans off the street corner for $4/hr whenever he wanted, he would HAVE to offer $10/hr in order to get people to work for him. In that scenerio, if he wanted to keep the same profit ($180/hr) then he'd have to raise his prices to $230/hr which would make HIM no longer market competitive. Under that scenerio, in order to stay in business, he'd have to cut his own share of the profits (to $150/hr) and he'd have to offer his workers a half-way decent wage ($10/hr). He'd have no choice in the matter.

In my mind, those benefits more then offset any increase in prices engendered by removing the supply of illegal labor.

Note, I'm not anti-immigrant - my parents are immigrants..... immigration is one of the huge strengths of this country. We benefit from a certain level of immigration..... but UNRESTRICTED immigration (essentialy what we have now) is unsustainable by any country and in the long run will proove disasterous for us. Lets place some checks on the number of people immigrating to this country by enforcing our current immigration (and labor) laws properly. After that, if it makes sense economicly for us to have a greater pool of labor available we can adjust legal immigration levels to meet those needs. Not only does this give us some measure of control over our own destiny....but it also empowers those immigrants that do come into our country.... they will be able to operate openly and without fear which drasticly reduces the degree to which they can be exploited.

I might be wrong, but I'm going to guess that what Tully means when he keeps repeating "unambiguous" is that while when one theorizes (as you do Cengel) about it, it seems like there will be a lot of variance and a lot of exceptions, but when you look at real world data across a wide variety of domains , the empirics contradict this theory of wide variance.

In other words, while it seems attractive and sensible to think that there's going to be a lot of variance due the varying specifics of different markets, when you look actually look at data from diffferent sorts of markets, there really isn't that much ambiguity...you pull on the string at one end, and no matter how many wheels, eyescrews, spools, and pulleys the string goes through, it still moves at the other end.

Pretty much, Brian.

Cengel, please note that at no point have I ever argued for unrestricted immigation, and have frequently argued against.

You keep pulling out high-margin hypotheticals (like the Nike "luxury good" example) but in the real-world marketplace the margins just aren't that high. And those contractors you mention are also working, so their "margin" would include the cost of their own labor. Not to mention materials and other expenses. And (supremely important to the self-employed, of which I am one) RISK. Risk is always part of the cost of business.

Now, what you're saying (and I do get it, believe me) is that an increase in wages will not necessarily result in an overall increase in prices. You try to illustrate that with micro-economic examples. But we're not talking about just one boost to one producer in one high-margin business. We're talking about a cost boost to ALL low-wage-paying producers in the nation. All of 'em. Most of whom are not in high-margin businesses. They can't be--any business with that large a profit margin would attract swarms of competition in short order, and cost competition would immediately ensue.

Pretty much by nature, jobs held by illegals are generally hard labor for lower pay than natives will accept, and with little or no job security. That's why they're hired, despite the risk of legal problems--cost cutting at the margins. Take away the illegals, and the employer will have to pay more to hire folks to do the jobs. Now, what you're saying is that they'll soak that cost up through their profit margins. But there are very damn few areas where there is enough profit margin available to soak up added costs. The main reason most of those illegals get hired is because of cost/price competition. Unskilled illegals immigrants are by definition in labor-intensive jobs. Labor-intensive jobs are damn near by definition NOT in high-margin businesses. If Nike's supplier in Brooklyn or wherever has a cost increase, Nike will bid out the work--and we're back to cost competition. If that roofer can undercut his competition and stay in business, he WILL--and then his competitor has to cut costs or suffer.

Likewise, in your roofer example, if the low-cost roofer suddenly has to pay more for labor, he can't compete as well. He too has a required rate of return, below which it isn't worth putting in his own labor.

It's not (hypothetical) Labor + Other + Margin = Price, followed by [(Labor+4) + Other + (Margin-4)] = Price. It's [(Labor+4) + Other + (Margin-2)] = Price + 2 . If you're lucky.

Sooner or later, producer prices have to rise to compensate for increased costs. Period. Or the producers go out of business, their investors flee to greener pastures, etc. The markets enforce the investor's overall required rates of return through captial distribution. Make too much, draw comeptition which will squeeze you down. Make too little, and you'll starve.

So yeah, it's pretty darn unambiguous. All else being equal, an increase in overall labor costs leads to a direct increase in production costs leads to an increase in retail prices for goods. There's only so much "margin squeeze" to work with, and a system-wide increase on one end results in a system-wide increase on the other.

And just a reminder, since Nike makes an actual product rather than a service, it can simply reduce labor costs by shipping the whole factory to Bangladesh, or Mexico. Roofers and other construction businesses provide a service, and so cannot move their businesses elsewhere in the same way... but they can switch to more expensive, less-labor intensive products or more automation (like those giant asphalt-laying machines). My own city is in the process of converting to automated garbage trucks to keep costs down. The American economy is EXTREMELY competitive and is ruthlessly efficient at maximizing productivity and minimizing costs.