WHY DO WE HAVE IMMIGRATION?

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The current debate about “immigration reform” begs the question we need to answer in dealing with this topic.  Why do we have immigration?  One can’t “reform” a law without starting from a problem and then proposing a legislative solution to it.  If the problem with our immigration system is, as described by the proponents of “reform,”  that it has made life difficult for the 11-15 million people who entered the country illegally, and we want to alleviate their suffering, then legalizing their status would be an appropriate “reform.”  But since when do we write laws to accommodate those who break them?

Does the U.S. need immigrants?  If so, how many?  And what type of people should they be: skilled, unskilled, young, unmarried, educated?   Two justifications for immigration have been offered.  The first is to provide more skilled workers for the technology industry, which claims we have a “shortage” of mathematicians and computer programmers.  The word shortage is a misnomer.  The number of people graduating with such degrees is determined by labor economics.  If employers are demanding more programmers than are entering the labor market, then the price for their services will rise.  If programmers earn relatively high salaries, higher than other professions, then more students will switch over to tech careers and equalization will occur.  All employers would like to pay lower salaries for skilled employees; all employees would like to receive higher pay.  In a competitive labor market, the price is set by the forces of supply and demand.  Requesting foreign workers because of a “shortage” is like saying low-skilled workers want a higher minimum wage.  Every few years congress gives it to them, but everyone knows it’s just another form of redistribution of wealth.

It seems absurd for any employer to be complaining of difficulty in obtaining enough workers at a time of high unemployment. We have high unemployment because the supply of workers is growing faster than the demand for them.  Immigration, that is expanding the supply of skilled workers, will have the effect of lowering the price employers must pay for their labor.  It will also make it harder for Americans to get these technology jobs by introducing competing job applicants who are willing to take them at lower pay.  (After all, if the foreign workers were not willing to take jobs at lower pay, then they would already be filled by Americans at the current market price.)  In some cases the problem may be mobility costs rather than pay.  That is, an employer may not be able to find sufficient programmers where it is located who can fill its jobs.  The employer  may find that qualified applicants are ensconced in other firms and don’t want to give up seniority or move to a different city.  This will add to the cost of labor, but the government could respond to these mobility costs through tax breaks.  Importing foreign workers is not the only way to deal with it.

U.S. immigration law has not been enacted to lower the cost employment.  Since the 1920’s, employers have been required to pay the market price and hire American workers willing to take jobs before bringing in foreigners.  So making immigration law employer-friendly would be a reform of immigration.  But if we move in that direction, we need to strike the right balance.    Should employers be allowed to bring in immigrants when unemployment is high?  The higher it is, meaning that more and more citizens cannot find employment, the less moral is the case for immigration.  Politicians who claim to be acting in the national interest in promoting reforms that make it harder for Americans to find work need to explain why they are taking the side of employers at the expense of workers.  The corollary is also true.  A refusal to allow immigration when unemployment is low would skew the economics toward workers at the expense of employers.

Sen. John McCain expressed the usually unspoken motive of many Republicans in Congress this week.  He wants “reform” to remedy the poor performance of his party among Hispanic voters.  This is a purely political justification for immigration.  In his candor, McCain makes it fairly clear that the country does not need more immigration.  Republicans need to appease illegal immigrants to do better among Hispanic voters.  Logically, this would only follow if Hispanic voters favor high levels of immigration.  After all, Hispanic voters are already citizens and job seekers.  They are labor market participants, too. .  McCain cited no evidence for his view that Hispanic votes will be swayed by legalizing illegal immigrants.  He is entitled to his opinion based on considerable anecdotal experience as a Senator representing Arizona.  But we passed a major immigration reform law in 1986, which gave amnesty to 3 million illegal immigrants, and party preference of most Hispanics did not change.  I think McCain gives Hispanics too little credit.  For decades they have voted heavily Democratic.  It seems they do so for other reasons, and this was particularly so when he ran for president and won only 25% of their votes.

So, neither labor economics nor politics are persuasive reasons for immigration.  There are no other justifications for immigration expressed in this debate, and it seems when the topic comes up, we never get off the ground.