Immigration Economics and S.1348
It is undeniable that economics is the primary driving force in illegal immigration. The economic opportunities here and the lack of such opportunities in Latin America provide the incentive for people to brave the desert in the hope of a better life. Thus, it is necessary for us evaluate the proposed solution (S.1348) in light of the economics of immigration, both legal and illegal.
One of the oft-repeated problems with illegal immigration is that the illegal immigrants drive down wages. There are studies both supporting and countering this assertion, and we will not go into that here. However, Sen. Kennedy did use that assertion as a basis for both the legalization of the illegal immigrants currently in the country and for the Guest Worker program, so we will assume that the assertion is correct, and see whether the proposed solution will solve the problem.
Sen. Kennedy does make one good point. If the illegal immigrants are legalized, then they would have to be paid at least minimum wage, and their employers would be required to pay their payroll taxes and to pay them time-and-a-half over 40 hours. The immigrants would then be on a level playing field with citizens. As it is now, an employer can pay an illegal immigrant more than a citizen or legal immigrant, but, by avoiding payroll taxes and time-and-a-half rules, lowers his total cost of employment. S.1348 may correct this problem if the penalties for hiring illegal immigrants, and for being an illegal immigrant, are big enough. There must be a reason for the workers to "come out of the shadows." Lower take-home pay, the result of increased taxes and reduced overtime work, is not a good reason.
Furthermore, the legalization of the current crop of illegal immigrants will only encourage the influx of more illegal immigrants to undercut those who have become legal. Strict border enforcement is required, and this is why people want the borders closed first, and only when that is done do we move on the question of what to do with the illegal immigrants who are already here. Additionally, people want greater penalties on the employers who hire illegal immigrants, including substantial fines and the loss of one's business license. By shutting off the incentive to come here, jobs, fewer will come, and some may even leave voluntarily.
Even if these problems are overcome, another the problem still remains: that an increase in the numbers of unskilled laborers drives down the cost of unskilled labor. If we have, for instance, full employment of unskilled laborers at a rate of $10/hr., an influx of unemployed laborers will cause that rate to decline, as those unemployed workers offer their services at lower prices to get the jobs. This is good for the employers, because they can get more work for the same amount of money, but it is not good for the workers who used to earn $10/hr., but are now only making $9/hr. S.1348 does nothing to address this problem, but exacerbates it with the Guest Worker program.
This problem can be addressed by a program of deportation. Can we deport twelve to twenty million illegal immigrants? Probably not, but that does not mean we should not deport those we find. We cannot arrest all the pick-pockets, either; should we not arrest those we do catch? If an illegal immigrant is caught at a routine traffic stop, he should be deported. The INS should also go to his residence, check the status of those living with the illegal immigrant, and deport those who are here illegally.
Will such deportations have an economic impact? Certainly. The wages of our unskilled laborers will go up, but so will prices, as employers have to pay more for the same amount of work. If you want to argue that the workers will be no better off because the rising prices will offset their increased pay, then you must make the same argument against increasing the minimum wage.
Simply put, S.1348 does not address the economic realities of illegal immigration. Until the borders are more secure, and the penalties for hiring illegal immigrants, or for being an illegal immigrant, are sufficient deterrents, more illegal immigrants will come across the border to underbid the legal workers. Border control, deportation, and employment enforcement must come first.
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