THE PRESIDENT BLINKED ON IMMIGRATION
September 2nd, 2014
For months the President has been threatening to issue some type of mass amnesty for millions of illegal immigrants by decree. He has no authority to give people in the country illegally work permits or social security numbers, but he did just that for hundreds of thousands of young illegals two years ago to boost his standing with Hispanics during his re-election. It worked. Now with a midterm election looming, the pressure from his political base for a much broader program of legalization, perhaps for everyone in the country illegally, was expected.
But there was a backlash from conservatives and immigration restrictionists that grew loud enough that the President reversed course. Last week he announced he needed more time to think about immigration. It appears there will be no decree before the November mid-term election. He probably perceived any such action would do more harm than good to his political interests. If Republicans win control of the Senate in November he may decide not to proceed with any immigration decree. A provocative decree would likely lead to impeachment hearings in the House and possible retaliation against Obama nominees in the Senate. It just might be a bridge too far and cause too much harm to other things the President needs from Congress.
If the Senate stays Democratic, then we will probably see a more modest amnesty decree than what had been speculated about. The most intense pressure from immigration enthusiasts is for a halt to deportations. (And the administration has overstated the number of deportations by counting removals by the Border Control, which was never done historically.) This could occur, or perhaps a halt to all deportations except violent felons. Issuing work permits and social security numbers to millions of illegal immigrants will be very controversial. It seems Republicans have found their voice on immigration for the moment. They passed a bill in late July to modify the law allowing requiring hearings before deporting minors from Central America. They are also demanding stronger border enforcement and no longer talk of “immigration reform” or legal status for illegals. The summner border crisis, and reports of ISIS terrorists entering the country through Mexico have scared the public.
The more concerned the public is about the border the less likely the President is to act on his own (lawlessly). The tide of events seems to be moving in favor of common sense on immigration.
PRESIDENT OBAMA HAS CAUSED THE BORDER CRISIS
August 4th, 2014
The children trying to cross the U.S. -Mexico are not refugees. That is they are not fleeing oppression due to their race, religion, nationality or membership in a “social group,” the criteria for refugee status under the Immigration and Nationality Act (INA) and our refugee treaty obligations. They are being sent here by their parents who are already here and paid smugglers to bring them to the border and surrender them to Border Control agents. (Previously smugglers had to actually cross the border. Their task has been shortened.)
The parents are taking the the chance the children won’t be returned. But the risk of that grows smaller by the day. They are hoping and expecting the President will issue a decree which allows them and millions of other illegal aliens to remain here without fear of deportation and possibly also be authorized for employment. This loose talk of executive action on immigration has set off the current crisis.
The expectation of such a decree by the President is hardly wild speculation. Two years ago he did the same thing for the benefit of young illegals who had been brought over by their parents before they were 18. It was called “deferred action” and basically lets them live here for the rest of their lives without being deported and to be allowed to work without a social security number. The President had no legal authority to do that. He called it “prosecutorial discretion,” the right of the executive branch to choose the worst offenders among a group too big to deport immediately. But discretion is one thing; issuing official government documents conferring the right to live and work here is something else. He went beyond his legal authority to enforce the INA. He changed it.
No consequences for that lawless decree followed. Neither the President nor the Director of the Department of Homeland Security, in charge of deportations, was called to account by Congress much less impeached, and Congress did not act to undo what the President decreed. So more would-be illegal immigrants have rightly concluded that the next Presidential decree of amnesty might cover them or their children. The President has been hinting he will have to “act” on immigration because the House will not do as he wishes and enact “comprehensive immigration reform.” Most Americans probably paid no attention to those statements since May. But he was not speaking to most Americans. He was speaking to that part of his political base that is here illegally. And the message was received. They promptly enlisted smugglers to bring over their children. We have been invaded/inundated ever since.
President Obama cannot say we will let them all stay indefinitely. The public is not in favor of an open border. So he says we will be “compassionate,” give every child an asylum hearing (to which they are not entitled because nobody believes they fall into one the refugee categories identified above), and then release them to relatives here. Notice he did not say relatives who are here legally. So the upshot is the illegal children will be turned over to their illegal parents, fail to show up for their asylum hearings and live out their lives here. They don’t really need any presidential decree. The Obama DHS will generally not deport illegal immigrants unless they commit a felony after their arrival. But if a decree is issued, they might even be able to legally work in this country, something the INA does not allow. And if that is not forthcoming, they will end up working illegally.
For the most part the children who have made it here will never be sent back. The President has accomplished what his well-chosen words about “action” were calculated to accomplish.
IMMIGRATION “REFORM” IS DEAD, BUT WE HAVE AN OPEN BORDER WITH MEXICO
July 2nd, 2014
Yesterday the new House Majority Leader, Kevin McCarthy, informed the President the House would not take up immigration this year. This means the Senate immigration bill passed last year will not become law, and no other immigration bill will pass in this Congress. The threat that the House would pass some sort of immigration bill and go to conference with the Senate is over. The nation will not have more liberalized immigration laws for now. And with the economy cooling off again, case for more immigration looks weaker all the time. The last House Majority leader, Eric Cantor, was defeated in his primary by a Republican who criticized his apparent support for “immigration reform,” a euphemism for legalizing every illegal immigrant in the country and doubling the number of legal immigrants over time. It would seem the voters in Cantor’s district just did not note like that type of “reform” and didn’t accept his denials that he was secretly for mass legalization.
The flood of illegal alien children, something like a children’s crusade, now going on all across the Southwest border is not a coincidence. It was timed to persuade Republicans to “do something” about immigration this year. The people orchestrating the crusade were hoping the House would be shamed into some type of mass legalization bill. But the defeat of Cantor ended the discussion and the images of children coming over without their children gives the impression that Central America knows we cannot and will not enforce our immigration laws.
It seems to be impossible to summarily deport any one who enters the country illegally. Everyone gets an asylum hearing. But there are no genuine asylees from Central America. The people flooding our country now are economic refugees seeking better lives and drug dealers plying their trade. Nobody comes from Mexico as a genuine refugee, one being persecuted because of race, religion, nationality or membership in a social group. So the administration should declare this the emergency that it is and return all the children to the Mexicans without hearings. Any genuine asylees can reapply once they get back at the U.S. Embassy in Mexico City.
The President does not look or sound particularly distressed about the situation. He says they should stop coming over, but then sends buses to take them to shelters rather than to the border. He sees them not as lawbreakers and future welfare cases but as future Democratic voters sponsors of their parents when the influx fades from the news. If these children were the offspring of evangelical Christians crossing the Canadian border illegally, the administration would militarize the border and local school officials would be furious. Immigration changes the country, and the message we have been sending for at least twenty years to Central America is welcome.
WILL OBAMA GRANT AMNESTY BY FIAT?
June 5th, 2014
The time to pass immigration legislation this year is running out. In a few weeks the House will go on summer recess. When it returns after Labor Day it will be in re-election mode and unwilling to pass anything controversial. So any chance for enactment of a big immigration bill is now slim and fades more with each passing legislative day. So far the opponents of the Senate bill, which liberalizes immigration more than any reform since 1965, have kept it off the House floor. Every time Speaker Boehner makes a statement about immigration he betrays his orientation to do what the Chamber of Commerce wants, that is to pass the Senate bill, and gets slapped down by Republicans opposed to the bill.
Sen. Charles Schumer has ominously said that if the House does not pass his type of immigration bill soon, again meaning the Senate bill, “the President will have to act on his own.” President Obama is being heavily criticized for executive actions which exceed his statutory authority in several areas including granting dozens of waivers to the health care law, the Guantanamo Bay prisoner exchange, the E.P.A. rule on greenhouse gas emissions, and of course, immigration. Recall the President unilaterally granted work permits to “DREAMers” (young illegal immigrants) two years ago as a political ploy to boost Hispanic turnout for his re-election. It worked, but Congress had rejected that change in the Immigration and Nationality Act in 2008. So arguably, Congress could have started the impeachment process if it believed such an action was a “high crime or misdemeanor.” That phrase is not defined in the Constitution but basically means any offense deemed serious enough to consider removal from office. Arrogating the power to the change the law to the President from Congress should be an impeachable offense if it’s a very big power grab and occurs over and over again.
If the President does what Sen. Schumer wants and declares that D.H.S. will issue work permits for all illegal immigrants in the country, that would be an arrogation of Executive power on a scale not seen since the Civil War. It would make the 2012 act seem trivial by comparison, as it affected under a million people. The House would be justifiably enraged and there would be many calls for impeachment. It would also be seen as a brazenly political ploy to boost Hispanic turnout for the November midterm elections, which don’t appear to be going the President’s way.
There never was a a broad national demand for the Senate immigration bill. Immigration comes in fourth or fifth in surveys of national priorities. So the House’s refusal to pass an immigration law this year reflects the national mood and is not a purely partisan rebuke to the President. But granting amnesty by fiat, i.e., changing the law in a major way, would be.
RICO CAN APPLY TO MAIL AND WIRE FRAUD SCHEMES HARMING FOREIGNERS
May 1st, 2014
The “extraterritorial” application of federal statutes has been a big issue since the Supreme Court’s Morrison decision four years ago. Morrison rejected the attempt to apply U.S. Securities law to the purchase by a American citizen of securities on the Australian stock exchange. The Court reaffirmed the long-standing presumption against the application of American law to conduct occurring abroad. But this has been difficult to apply to RICO cases with foreign elements- as many illegal schemes sprawl through foreign holding companies, banks and co-conspirators.
At what point does a RICO case become “extraterritorial?” Some district judges have looked at the RICO enterprise and decided it was the key element. Others have drawn the line at the locus of the racketeering activity, believing that was the point of the law. The Second Circuit muddied the inquiry with its Norex decsion three years ago holding that complicated case involving control of the Russian oil industry was extraterritorial because it had “slim contacts” with the U.S. The slimness of the contacts were not ascribed to either the enterprise or the racketeering activity, and the opinion was too short to lend much guidance in future cases.
Last week the Second Circuit decided European Community v. RJR Nabisco, which clarifies what makes a RICO case extraterritorial. It’s the location of the racketeering acts, not the enterprise. There the European Community is alleging RJR Nabisco “orchestrated a global money laundering scheme from the U.S. by sending employees and communications abroad.” Since these schemes were committed in the U.S., they are not considered extraterritorial even though they are alleged to have been directed at foreign entities. This has significant implications for future RICO cases involving foreign plaintiffs. Many frauds are committed by Americans using mails and wires for the purpose of defrauding foreign businesses or people. Under this decision, those cases are not extraterritorial and can be heard in U.S. courts. (RICO cases can also be brought in state courts.) The extraterritoriality problem only arises when a plaintiff wants to use RICO to sue for damages committed abroad. So the European Community can proceed with its massive RICO suit in New York.
The decision also clarified that certain RICO predicate acts can be the basis of RICO claims if those laws provide for extraterritorial application. The federal money laundering statute is one such law, which by its own terms applies abroad. So that part of the European Community’s case can proceed even though the illegal conduct occurred abroad. This is consistent with Morrison because it recognized some laws are written to expressly apply to extraterritorial conduct.
The decision basically supersedes the confusing Norex opinion, which raised more questions than it answered. But European Community only applies in the Second Circuit. Federal judges elsewhere are not bound by it. Yet in the absence of other competing appellate decisions applying a different take on extraterritoriality, this should be persuasive to federal district judges, more so than the slew of contradictory district court opinions out there. So for now, this is the leading case on extraterritoriality, and it favors many RICO plaintiffs.
THE SUPREME COURT REQUIRES CAUSATION BE SHOWN IN COMPLAINTS
April 3rd, 2014
Pleading causation in a Complaint used to be an afterthought. A lawyer would say that the defendant committed acts which violated some statutory or common law and the plaintiff was injured by them. No elaboration of causation was needed. Defendants could not move to dismiss a complaint because the allegation of causation was too vague or unsupported. There were some exceptions to this in RICO cases, such as where the complaint describes a party that was more “directly” injured by the violation than the plaintiff. In Holmes v. S.I.P.C. (1992) the plaintiff, the Securities Investor Protection Corp. (SIPC) , the federal agency that reimburses brokerage account holders when a broker goes bankrupt and accounts are lost, sued Robert Holmes for securities fraud (then a RICO violation). SIPC’s theory of causation was that the fraud was exposed, Holmes’ company’s stock plunged in value and several brokerage firms heavily invested in the stock went bankrupt. Then SIPC had to make good on its insurance policies to the account holders. It did so, and then sued Mr. Holmes for reimbursement.
The Supreme Court held that SIPC’s RICO complaint did not describe a “direct” injury caused by Holmes. Holmes may have committed securities fraud, but that only directly injured the the purchasers of the manipulated securities and the account holders who were wiped out, both of whom had already filed suits against him. SIPC’s injury was “derivative” of the injury to those people and therefore not compensable under RICO. This would have been true in ordinary tort law under long-established principles. So the Court did nothing dramatic. It simply applied those principles, which had already been applied in antitrust law, to RICO.
But what followed was years of confusion. Many defendants cite Holmes in motions to dismiss in cases where the complaint does not describe an injury where there is a more “directly” injured party. They have tried to apply the directness requirement to all sorts of cases, like ordinary fraud, where the supposedly directly injured party is the U.S. government or a state. The government has only been injured in the theoretical sense that its laws against fraud have been violated. But if that is really a direct injury that defeats the plaintiff’s right to sue, then what fraud case could ever be brought?
In Anza v. Ideal Steel Co. (2006) the Court held New York State was directly injured when a taxpayer made false tax filings. New York had a monetary claim against the tax cheat. So the tax cheat’s business competitor, another steel retailer, did not. That sounds like Holmes, and one can see why the Court did’t wan to open the courthouse doors so that businesses can sue rivals for unfair competition based on tax cheating.
Now the Supreme Court has given us more guidance on how much a plaintiff needs to say to allege causation. In Lexmark Int’l., Inc. v. Static Control Components (March 25, 2014) , a rare unanimous decision, it said this in footnote 6: “But like any other element of a cause of action, it [causation] must be adequately alleged at the pleading stage in order for the case to proceed. Ashcroft v. Iqbal.” Ashcroft v. Iqbal, as all litigators know, is a famous case that requires the allegations of a complaint to be facially plausible. But in that case it was the allegations of illegal conduct that were the problem, not causation. Now the Court has told us the causation allegations must be “plausible” too.
That may not sound terribly significant, but it is. If, for example, you are a plaintiff trying to bring a claim involving illegal pricing, the bare allegation that the price you paid was fixed, might not be plausible. Can a firm with a tiny market share plausibly “fix” the price for anything at a supracompetetiive level? Economics tells us no. A firm that does so will lose all of its sales. At least in a normally functioning market such as is described in economic textbooks.
I predict Lexmark’s footnote 6 will soon become famous. RICO plaintiffs must take note.
CHEVRON WINS IMPORTANT RICO CASE AGAINST LAWYER STEVEN DONZIGER
March 5th, 2014
After years of pre-trial decisions and appeals from a preliminary injunction Judge Lewis Kaplan of the Southern District of New York entered a final judgment in favor of Chevron Corp. and against Steven Donziger, a Harvard law school graduate yesterday in the nation’s most high-profile RICO case. The 500 page opinion goes into painstaking detail about the evidence Chevron produced in its long-running effort to stop Donziger from enforcing the $9 billion judgment he obtained from an Ecuadoran court against Chevron for polluting the environment in a region of that Central American nation known as Lago Agrio during many years of oil drilling. Mr. Donziger began representing Ecuadorans with grievances against Chevron and its subsidiary Texaco shortly after he graduated from law school in 1991 with incredible tenacity.
The case began as a class action in New York, was transferred to Ecuador at Chevron’s request, attracted hundreds of millions of dollars in investor financing and resulted in one of the largest judgments against an American corporation in history- $14 billion. The Ecuadoran Supreme Court later reduced it to $9 billion, and conceivably it could have been enforced against Chevron’s assets all over the world. Now it cannot be. Judge Kaplan has found that Donziger procured the judgment from various illegal schemes including bribing the Ecuadoran judge, ghostwriting an expert report and extortionate tactics tactics designed to coerce Chevron to pay a vast amount of money, far in excess of any actual damages suffered by his Ecuadoran clients.
From a RICO perspective, the case was a stretch. It seemed like most of the illegal conduct occurred in Ecuador making the claim extraterritorial. But Judge Kaplan thinks otherwise, and his analysis of this important issue focuses on the place where the illegal schemes were “hatched” (the U.S.) rather than where they were carried out. This is an important development in the extraterritoriality issue, which is confusing judges across the country. Another problem was that the major RICO violations, trying to extort money from Chevron, were not accomplished. Chevron did not settle the case or actually lose any money from efforts to enforce the judgment (all unsuccessful to date). Rather, the damages it suffered were in the tremendous attorneys’ fees it had to expend in defending the suit. This was attempted extortion, and it was upheld as a pattern of racketeering activity (along with the false mailings and wires that were also used to execute it) to support a RICO claim. The implications for this judgment are significant in RICO. Many corporations are subjected to long-running schemes to coerce settlements or the recognition of a labor union. They have to pay millions in attorneys’ fees to fend off these efforts. Now, there is a RICO precedent for turning the tables on the plaintiffs’ lawyers. (Another such case is now progressing in the District of Columbia against the lawyers who filed and then lost a massive high-profile suit against the corporation that runs the Barnum and Bailey Circus which I have blogged about).
Another significant aspect of this RICO case is the remedy sought, an injunction against Donziger from taking any steps to enforce the $9 billion judgment against Chevron in this country. There has always been doubt as to whether RICO’s civil remedies include the power to enter an injunction against the loser. Judge Kaplan decided it does, and that was the primary relief Chevron was seeking. It did not seek or get a money judgment against Donziger. Presumably it realized Donziger does not have anywhere near the amount of money it was seeking in damages, and so it dropped any money damages claims. But the relief it obtained, a permanent injunction against him from taking steps to enforce the judgment means Chevron will never have to pay the $9 billion. Technically, the injunction cannot stop Donziger’s affiliates from taking steps to enforce it in other countries where Chevron does business, but Chevron is fighting it in those nations too. This decision will likely help Chevron persuade judges everywhere that the judgment was ilegally procured and should not be enforced.
Donziger will certainly appeal to the Second Circuit. He will probably lose on all issues. Although the RICO claim was a stretch, a respected district judge has used RICO liberally, which is his prerogative. Congress specifically intended the law to be “liberally construed.” Most district judges construe it strictly and grudgingly. But the appellate courts have been more generous, and I find nothing here that is so out of line as to be reversible. Donziger’s conduct was so appalling that he invited the Judge to push RICO to its limits. It is decisions like this that create new paths for future RICO cases.
THE SILENT RICO ENTERPRISE
February 3rd, 2014
There is a common misconception that all RICO cases involve “organized crime.” The very name of the law, “racketeer influenced and corrupt organizations” implies something like Tony Soprano and the members of his crime family hanging out in a New Jersey bar or strip club planning their next caper. That is often what federal prosecutors allege in criminal RICO cases. The defendants/racketeers are street criminals, and the RICO “enterprise” is nothing more than their gang, almost the same thing. The only difference is that Justice Department prosecutors will not charge every member of the gang with RICO violations. The leaders get charged; their underlings typically get charged with lesser crimes not involving RICO in exchange for lesser sentences or sometimes not at all. A drug courier who does not commit murder or extortion may not be the target of the prosecutors. The leaders of the gangs always are.
The concept of the “association enterprise” has always been a problem in civil RICO cases. If the association is a group of legitimate businesses, and the RICO person is a corporation committing a long-term fraud through its agents or subsidiaries, the federal courts have held there is no valid enterprise. This is so even though the same provision of RICO applies to both types of cases. There is no statutory reason why a group of corporations cannot be a single enterprise when a group of street criminals can. Federal courts say the former grouping is too far removed from the evil Congress was trying to combat in enacting the law. But the Supreme Court has held three times that RICO should be interpreted “broadly” and so is not limited to organized crime. Originalists and textualists will side with the Supreme Court. The Chamber of Commerce and judicial realists will side with the lower courts.
Many judges are now dismissing civil RICO cases for the reason that the RICO enterprise plays no role in the racketeering activity. Under this view, the RICO defendant must commit the violations, and the enterprise must be sort of an accomplice. But nothing in RICO requires the enterprise actively do anything. It’s just exploited by the racketeer in one of three basic ways. Under 18 U.S.C. 1962(a) the enterprise launders the racketeer’s illicit gains, under 1962(b) it is taken over by a racketeer (thus is a victim), and under 1962(c) it gives an aura of legitimacy to the racketeer. So in civil cases the enterprise is likely a legitimate business, a corporation or partnership, which the racketeer(s) has established to limit his legal liability and tell potential customers they are dealing with a legitimate business entity. Perhaps the racketeer cheats here and there, like using the mail or wires to mislead customers or hires illegal immigrants to cut costs. Strictly speaking, the enterprise does nothing illegal. The racketeer decides to cheat his customers by saying something is of a certain quality on the internet when it is actually not or has an HR director hire the alien workers. Corporations do not commit illegal acts; people do. Corporation law can attribute the acts of its owners and employees to the corporation, but that is a fiction designed to deter corporations from violating legal norms. It makes no realistic difference as to who the perpetrator was. The enterprise has no role in the illegal acts.
In the high-profile RICO case against lawyer Steven Donziger now pending in New York, Judge Lewis Kaplan was correct in allowing the plaintiff, Chevron corp., to allege that Donziger’s enterprise need not have committed the many crimes at issue. He held: “One must bear in mind that the RICO enterprise in a 1962(c) case, like this one, is not and may not be a defendant and need not be charged with any wrongdoing.” Chevron v. Donziger, 871 F. Supp. 2d 229, 243 (S.D.N.Y. 2012). The Supreme Court has decided four RICO enterprise cases and has never required the enterprise to commit a RICO violation. Rather, the enterprise must be a distinct entity in which the racketeer basically controls from its “operation or management” when it is a legitimate business.
RICO plaintiffs need to point this out in response to motions to dismiss. The precise argument about the “role” of the enteprise might not be made, but district court judges on the look out to short circuit cases will find this a useful escape hatch.
FOUR IMMIGRATION “REFORMS” WE ACTUALLY NEED
January 2nd, 2014
Immigration reform is the story that will not die. It might be on life support, as I recently wrote, but today the New York Times reports Speaker John Boehner is letting it be known he favors some “reforms” and will bring them to a vote in 2014. They are the usual amnesty-inducing garbage we are accustomed to hearing about: more uneducated/unskilled workers to alleviate the non-existent “labor shortage” in agriculture, and of course, clemency for Dreamers, the children of illegal immigrants. It does not appear Speaker Boehner will support the Senate bill in toto, but these reforms, if passed, will end up in a caucus with the Senate where the Senate’s leaders may prevail. It’s a very pessimistic scenario. Let’s pray for gridlock.
Sensible House members may want to consider four reforms of our immigration laws that are desperately needed.
1. End birthright citizenship. The Fourteenth Amendment to the Constitution was enacted just after the Civil War to enfranchise the freed slaves and make them “citizens” of their states and the U.S. over the objections of the Southern states. Nobody at the time thought they were enfranchising the children of illegal immigrants, a non-existent phenomenon. Congress should try to end birthright citizenship for children born of illegal immigrants, few of whom would be here if we had a sensible policy. It will be challenged and likely end up in the Supreme Court. If the Court holds the Fourteenth Amendment is a suicide pact, then we’ll need to amend it Such an amendment will be very popular.
2. Tie Immigration to Unemployment. There is no justification for admitting new people into the labor market to compete for scarce jobs against American citizens. We still have persistently high unemployment, well above 5%. Immigration should only be allowed If unemployment is low and the immigrants have the requisite skills to help our economy. The need for more unskilled and uneducated immigrants is long over. Our economy has been evolving from from that kind of labor for decades. Let’s bring the immigration system in line with economics. We’ve already made life very hard for Americans with low (high school) education. The most compassionate thing we can do for them is to cut off more immigration into their labor markets.
3. Immigrants Must Have Sponsors. All immigrants should have U.S. citizen financial sponsors who sign surety bonds. If an immigrant becomes unemployed or otherwise becomes a public charge, then the government can sue the sponsor for reimbursement. This was required until the giant wave of immigration in the 1880′s. We should demand it now more than ever when immigrants are net burden on public finance. The effect of such a law would be to dramatically reduce the supply of low- skilled immigrants, exactly what we need. Those with substantial skills and good job prospects will be able to obtain sponsors because the likelihood of them needing entitlements is so low.
4. Immigrants Cannot Go Home. Immigration is supposed to benefit the U.S. as well as the immigrant. This happens when immigrants assimilate culturally and become Americans. We do not really benefit from a multilingual and multicultural society. The best way to change the nature of immigration is to prevent lawful permanent resident aliens, those that are one step from citizenship, from returning to their home countries more than once a year for a short period. Immigrants are required by law to abjure their loyalties to their native lands. They can’t do this if they return for long periods to reconnect with families and run businesses there. That foot in both countries mentality is incompatible with the notion of being a naturalized American citizen. If people have a habit of spending substantial time abroad while being LPR’s, they should be disqualified from obtaining citizenship. Once they become citizens, we have no control over their travel or language. But we can do a lot more while they’re in line.
I haven’t heard any member of Congress propose these immigration “reforms.” If I do I’ll write about them.
EVERY EMPLOYER SHOULD FIND AMPLE WORKERS IN THIS ECONOMY
December 3rd, 2013
Fruit is rotting on the trees. Tech workers are “unavailable.” Such stories proliferate in coverage of immigration, as if the laws of supply and demand simply don’t work. Nobody doubts that unemployment persists at historically high levels, at least 7%. And the lower down you go in education and skills, the higher the rate is. Unemployment for high school graduates is more like 12%. And in the more sluggishly growing states in the Northeast and Midwest the rates are 3-5 points higher than that. So why do farmers say they can’t find workers to pick their fruit? Economics tells us the wage they offer must be below the market price. In my experience prosecuting RICO cases against employers of illegal workers I have run up against this attitude of entitlement to quasi-slave labor many times. Farmers interpret the non-enforcement of our immigration laws as an implicit acknowledgement that they should go right ahead and hire illegal workers at the minimum wage to do these jobs. Why do I say quasi-slave labor? Because illegal workers are second class members of society. They don’t ”live in the shadows,” like fugitives, as is often reported, because the federal government has announced they will not be deported. But their wages are too low to be even working class. They are effectively modern day serfs, indentured workers tethered to their employer and unable to move.
Any employer paying the minimum wage for hard and demanding labor is violating the laws of economics. Hard and demanding jobs are harder to fill than pleasant ones such as working in a retail store. Any argument to the contrary, as is made by farmers, is economic nonsense. Those tough jobs should be paying a significant premium above minimum. If they did, there would be no labor shortage. The unemployed would line up to take them. Americans are not adverse to working nasty jobs. Sewers are operated by American citizens at market wages. We won’t tolerate anything less than functioning sewer systems staffed by English-speaking high school graduates. But we will tolerate foreigners picking our fruit trees.
If the price of labor is high, it will force employers to automate. Many sewer jobs have been replaced by machines. In the Midwest combines, giant machines, pick corn and soybeans. Yet the fruit farmers still prefer Mexicans, quasi-slaves, because they are cheaper than the research and development of machines to pick the trees. So immigration stifles innovation.
Many technology companies, from the ubiquitous Microsoft and Google to small programmers located in every major city also want more immigrants. Yet there are upwards of a million unemployed tech workers in the country. Why won’t they hire them? Their excuse is that they want the best and the brightest, as if to say the unemployed are not. This is a hard argument to sustain if you are offering a sub market wage. Why would a tech worker interview for a job paying below what other firms are paying for the same work? The federal government has extended unemployment and health benefits indefinitely, and we are told the picture is brightening. Yet the unemployment rate just lingers month after month.
The recent visa fraud scandals involving Indian consulting giant Infosys show why it is so easy to bring in foreign tech workers on H-1B visas. An employer goes to Infosys or one of its competitors, claims it cannot find “qualified” workers at the prevailing wage, and hires the Indian technology consulting company to “solve” its labor problem. As long as the U.S. increases the number of such visas, the “problem” of paying the market wage for labor can be addressed. It’s no surprise that the Senate-passed immigration bill nearly doubles the number of such visas. Doing so during a time of high unemployment is a choice to side with employers and not the unemployed. If the Senate cared about reducing unemployment it would cut the visas to zero.
If I’m wrong, I’d like to be shown a firm which claims it cannot find workers to fill its labor needs. Does anyone know of an agricultural or tech employer that can’t find workers? Would someone please send me the details. What is the name of the employer, which jobs are going unfilled and what wages are offered for the jobs? Let’s see how those numbers stack up against the market data.