The Fence

Andrew Sullivan links to this IHT article about the border fence. To make it short, it’s pissing a whole lot of people off, but it also appears to be “working”:

The protests come as known efforts at illegal crossings - measured by the number of people detained at the border - have fallen 17 percent this year, after declining 20 percent in 2007, figures that Chief David Aguilar of the Border Patrol points to as proof that the overall approach to border enforcement is working.

Still, Aguilar and other officials acknowledge, the new fencing has mainly proved useful when it has been backed up with other enforcement methods, like electronic surveillance and aggressive prosecution of illegal immigrants caught by the Border Patrol.

Since last year, the steepest drops in illegal crossings along the 2,000-mile border were recorded here in eastern Arizona and in places in Texas where those combined tactics were applied, official figures show.

That’s certainly interesting, but could it be that there are other factors affecting how many people try to cross the border?

In addition to the border enforcement, immigrant traffic is influenced by a variety of social, political and economic factors; the recent drop in known crossings, for example, occurred as the economy began to sputter, drying up construction jobs and others that lure immigrants.

The more I think about it, the more I realize that our sporadic, politically motivated attempts at immigration enforcement are something close to a crime against humanity. The fence, for example, just motivates more, less safe migration. The reason there are so many migrants crossing in the area of Texas that they’re currently building in is because they had already locked down the urban border crossings in San Diego, Nogales, El Paso and other cities. So, people started crossing in the desert, where not only do they have to pay coyotes to smuggle them across, they also face the risk of dehydration and exposure. Also, the immigration crackdowns on the other side of the border by ICE don’t meaningfully deter immigration or generally enforce immigration law, they’re politically motivated to make the Bush administration look like its doing something because they couldn’t pass comprehensive immigration reform. But the people who pay the price for the administration’s attempt to save face are the most marginalized members of society, especially children.

Income Per Natural

Will Wilkinson wrote about this new metric developed by Lant Pritchett a while ago, and Tim Harford has the definitive run-down in Slate. The idea behind income-per-natural is one I’m deeply sympathetic with. Instead of calculating the average income of people who live within a country, you calculate the income of people born in that country, no matter where they live. Although in rich countries, the difference between income per natural and GDP per capita are trivial, in poor countries like Mexico or the Philippines, much of the wealth generated by Mexicans and Filipinos comes from immigration to richer countries. But because of the way Gross Domestic Product and other measures of national income iare calculated, a Mexican who immigrates to the US lowers average income of both countries, despite accruing great gains to himself. When we become obsessed with GDP and using the nation as our standard unit of economic and social analysis, you get all sorts of absurd commentary, like Robert Samuelson attributing poverty in the US to Mexican immigrants, despite the fact that those immigrants had gotten much, much richer.

The myopia of looking at nation-states as the fundamental economic unit is also exposed in discussions of Mexican immigration. We so often hear that the “solution” to the immigration “problem” is that we should try to develop the country of Mexico. John Judis, for example, proposed that the US adopt a policy along the same lines of the EU towards Greece or Portugal - preferential trade agreements and massive investments to jumpstart the economies so they could be eventually be on an equal playing field with their rich neighbors.

The problem with this approach - which accepts the normative assumptions behind GDP per capita - is that it ignores the needs and desires of Mexicans alive right now. Developing the Mexican economy will be a long, arduous task, and so it seems mighty imperious for America to, instead of opening the floodgates to immigration, insist on Mexicans staying in America. As James Suroweicki said in his review of Ha-Joon Chang’s Bad Samaritans, “What’s missing is a recognition of how mysterious the secret of economic growth remains, despite all the energy that economists have poured into solving it.” Although how to best promote growth of national level economies is indeed mysterious, how to promote the increase in personal well being is not. Immigration from poor to rich countries works. And so until we can think of something better, allowing unfettered labor mobility should be the primary tool to fight global poverty.

Reduce Inequality! Increase Competitiveness!

Here’s a good question for everyone who opposes expanding the cap on H-1B visas for high skilled (and especially high tech) workers…WHY? I mean has any countryever said “no, we don’t want skilled immigrants” and been better off for it? Shika Dalmia WSJ op-ed on the issue makes the good point that these workers are not just going to stay home when they can not get into the US, instead, they will go somewhere else that wants them more.  So all we got is a net loss (or not as large a gain) in skilled workers for nothing.

Immigrants Aren’t Criminals

Mexican immigrants - legal and illegal - are less educated and have lower incomes than the rest of the population, so it makes sense that they would have a higher crime rate than average.  It turns out, in California at least, that they don’t.  And the difference between Mexican immigrants and the average isn’t just trivial, it’s rather significant.  It’s easy to explain why this is true for illegal immigrants — they have a huge incentive to avoid any contact with law enforcement and so the benefit gained from the commission of crime is easily outweighed by the possibility of deportation.

And, of course, software engineers in the US on H-1B visas don’t commit crimes at any high rates, and Mexicans don’t either.  From a study by the Public Policy Institute of California:

Noncitizen men from Mexico between the ages of 18 and 40, which the study indicated were more likely to be in the country illegally, were eight times less likely to be in a “correctional setting,” the study found.

So often, crime is associated with illegal immigrants, and especially Latino and Chicano men who live in urban areas.  And since so much of our fear of immigrants (despite little evidence that they drive down wages or increase crime) is driven by a classic fear of the unknown, the different and the foreign, it’s not surprising that people just assumed that immigrants would increase crime.

This is why I think that people who favor greater immigration, like immigrants, and think that restrictionism is stupid shouldn’t necessarily get bogged down in exactly what the effect on wages is or how much crime goes up or down.  Instead, we should recognize that a la Jonathan Haidt that our emotional connection to immigrants is borne out of our valuing of fairness and harm in our moral calculations as opposed to honor or purity.  And sure, evidence that immigration has little negative effects on the US economy are fine, but that’s not why we support immigration.  We support immigration and refuse to stigmatize illegal immigrants because the gains to the immigrants themselves are extremely high.  Basically because they’re people too.  And until the other side realizes this, most immigration debates are pretty silly.  You can’t fight atavistic prejudice with facts.

Immigrants and Wages

Ezra Klein points to this chart from the Times showing that while there’s probably some downward effect due to illegal immigrants on wages (it’s hard to imagine an economic model in which increasing the number of workers who a. don’t have much interest in bargaining for higher wages and b. are prevented by their legal status from effectively doing so) the actual data doesn’t really support that it’s solely or even mainly responsible for low wages among low-skilled workers. In fact, the states with the most illegal immigrants seem to have higher wages for low skill workers. Of course, correlation ain’t causation, and I think there’s probably some sort of common response happening.

Illegal immigrants are, almost by definition, the most elastic and mobile labor force in the nation. By even coming to the United States, they’ve shown a willingness to go long distances and incur quite large personal and financial costs and even danger to find jobs. Also, because of their status, they can’t really settle anywhere - ie, they aren’t exactly putting 10% down on a track home in the ‘burbs. So, it makes sense that once they’re within the United States, they would go, and quickly, to where the most jobs and the best pay is for low skilled workers.

The more important part of the research, done by Harvard economists, Lawrence Katz and immigration skeptic David Borjas, shows that the effect of immigrants on wages nationally is really only marginal, especially when you consider that immigrants’ low wages prevent some jobs from leaving the country at all and are really competing with low wage workers in other countries.  Also, illegal immigrants create new markets and because of their low wages, encourage companies to mechanize and invest rather than leave, meaning they can actually hire more people.

And while the article and the research are both really good because they debunk the myth that increased illegal immigration is the main driving force in declining wages for low skilled workers, there’s one thing that is not mentioned once: the gains to the Mexicans that immigrate.  Are they not people too, are their increased benefits not included in our utility calculations, should their gains be mentioned when we talk about immigration’s affect on wages?  Because even if American low wage workers have seen wages fall (without any mention of how immigrants keep prices for staples like food down or the other salutary effects of high immigration) by 4-8%, shouldn’t we at least throw out the fact that an average Mexican illegal immigrant sees his wages go up 450% (two dollars an hour to nine).  I feel like I’m taking crazy pills or something.  In the words of Steven Landsburg, how much is an immigrant’s life worth, exactly?

Chart is below the fold

Attrition Could Work, But Why Would We Want It To?

Standard economic theory tells us that when markets are open and the constituents of markets can move about freely (labor and capital) it generally produces socially optimal results.  This basic logic applies to immigration.  Immigrants, despite the dangers and expense of traveling to the United States, travel to the United States mainly because of the amazing economic opportunities.  And when the gains to the immigrants start to get smaller when the economy contracts, it’s no longer rational to immigrate, and so immigration slows.  And restrictive immigration reform, while not able to totally stop immigration, actually can slow it down, as it already is in Arizona:

While it is too early to know for certain, a consensus is developing among economists, business people and immigration groups that the weakening economy coupled with recent curbs on illegal immigration are steering Hispanic immigrants out of the state.

The Arizona economy, heavily dependent on growth and a Latino work force, has been slowing for months. Meanwhile, the state has enacted one of the country’s toughest laws to punish employers who hire illegal immigrants, and the county sheriff here in Phoenix has been enforcing federal immigration laws by rounding up people living here illegally.

It’s hard to disentangle the correlation.  Is the economy slowing because there are fewer immigrants to make up a large labor pool, or is the slowing economy (in combination with the restrictions) causing the immigrants to leave or not come over the in the first place?   Another thing this article shows is that, contrary to claims that immigrants because of their low education and itinerant nature are a negative influence on their communities, any type of mass migration out due to economic slowdown is then exasperated:

out, but they are not all illegal,” said Terry Feinberg, president of the Arizona Multihousing Alliance, a trade group for the apartment and rental housing industry. “A lot of people moving are citizens, or legal, but because someone in their family or social network is not, and they are having a hard time keeping or finding a job, they all move.”

Elizabeth Leon, a legal immigrant and day care worker, said the families of two of her charges abruptly left, forcing the state to take custody of the children. Ms. Leon’s brother, a construction worker who is not authorized to be in the country, plans to leave, unable to find steady work; families at the neighborhood school have pulled children out, Ms. Leon said, fearful of sheriff’s deputies.

“It is like a panic here,” she said. “This is all having an effect on the community, mostly emotional.”

Juan Jose Araujo, 44, is here legally. His wife, however, is not and is pressing for the family to return to Mexico because of the difficulty in finding a job and what the family considers a growing anti-immigrant climate.

So here’s the world of attrition.  Empty houses, families abandoned to the state, increased itinerancy, communities ripped apart and splintered.  And for what, so we don’t let Mexicans increase their incomes by eight times so that we can attempt to alleviate people’s cultural and social anxieties?  Doesn’t sound worth it to me.

Faux On Immigration

Jeff Faux’s American Prospect piece advocating an immigration strategy focusing on improving Mexico’s economy so to make the incentives for illegal immigration less extreme is now available to the public.  My criticism of the piece, which has always been available to the public, is here.

Faux Concern for Mexicans

Jeff Faux suggests in his American Prospect article titled “What To Really Do About Immigration” that the US make some moves towards improving the Mexican economy so to reduce the need for out migration. What’s unfortunate is that Faux frames the large presence of Mexican immigrants as a problem that needs to be dealt with in the first place. Why, exactly, is out migration from a corrupt country with poor institutions a bad thing? Sure, out-migration may be a “safety-valve” for Mexican elites to forestall reforms, but shouldn’t we want poor Mexicans to get out through that safety valve?

He says gloomily, “A November 2007 Mexican government report concluded that even if the overall economy grows steadily, low wages and social inequality will continue to generate heavy out-migration to the U.S. at the current annual rate of roughly 500,000 — for the next 15 years!” Well, isn’t that how markets are supposed to work? Mexico’s economy can’t generate enough jobs for their growing population, so a large number of people get jobs in the United States. If out-migration is actually going to be so high for so many years, the demand for labor within Mexico should go up to incentivizes some workers to stay, but that will only happen if we encourage as much out-migration as the market is currently demanding. In short, the best immigration policy is to Let Their People Come.

What? Did I just mention Lant Pritchett? Oh yes I did. Did you really think we were going to have a discussion of migration without him? Silly you. The main focus of Pritchett’s research has been looking at ghost and zombie countries. What he means is that when a country faces a large shock to their economy, it can become a “ghost.” For example, mining towns in the Wild West, after running out of gold, quickly became empty. The ghosting phenomenon is a desired one, or at least preferable to the alternative — zombies. A zombie is a country that suffers a negative shock which dictates that it’s optimal population should fall, but because of restrictions on labor mobility, the population stays high and wages fall. So, if a country like Mexico has poor institutions and thus can not provide for its citizens, then by all means, we should be encouraging that as many exit as can find work in other countries.

Faux’s alternative is that the US try to somehow coddle Mexican elites into turning their country into a south south-of-the-border Sweden, with perfect institutions for generating job growth and economic security. But I don’t really want to wait for the US to cajole Mexico into ” guaranteeing free trade unions, enforceable minimum wages, and an increase in education, and other social spending”, renegotiate NAFTA and invest 100 billion dollars into Mexico. Quite simply, I see no reason to lock Mexicans into their poor country while we try to improve into a better one. I think the 4.5 times wage multiplication for a Mexican who works in the United States is a more immediate and effective stimulus to the wealth of Mexicans as opposed to some complicated, expensive plan to invigorate Mexico’s economy. Let Their People Come.

Howley vs Waldron on Singapore

When I read Arthur Walrdon’s contentions post bemoaning the high out-migration rate of native Singaporeans and the high portion of Chinese workers in Singapore, I had a good feeling he was deeply wrong.  But because I don’t know a whole lot about the Singapore’s worker population or its immigration patterns, I didn’t post about it.  Instead, I pointed Kerry Howley to the post and hoped she would apply her real knowledge of migration, Singapore and Southeast Asia to Waldron’s fear of Chinese workers.  Well, she did, and so everyone should now go and read her post.

I Agree, I Agree!

I know Will Wilkinson is a “libertarian” and I’m a “liberal” and thus I’m supposed to think that he hates poor people and wants to take their malnourished bodies and convert the carbon in their bodies to diamonds to encrust his Cadillac which runs on the blood of factory workers who he ruthlessly beats while they make toys out of pure lead and so on…but I have to agree with just about everything he says in this post.  Here’s the best bit:

As I’ve argued before, I think this conception of cosmopolitan liberalism almost got lost in the Cold War, during which cosmopolitan, internationalist ideals were largely ceded to the communists while liberalism rode out the red tide by tying itself defensively to nationalist feelings in those nations with a more or less liberal identity. The Cold War has been over for almost twenty years now. It is time to get back to the project of securing world peace through extending the scope of mutual cooperation. It is time to get back to the cosmopolitan ideals of liberal humanism…

So a guest-worker program would have a real short-term benefit to the U.S. in terms of increased border security, return migration, and labor market efficiency. The medium-term benefit of a large guest worker program aimed at our neighbors to the south is this: Once the program is established and has demonstrated its efficacy, it will be possible to make a persuasive case for further North American labor-market integration, pushing toward a common North American labor market. In the long term, large regional labor markets, such as the EU and a North American market (and a South African market, an African market, an Asian market, etc.) can begin to integrate, moving us toward the ultimate liberal aim of an open world of mutual cooperation.

It’s unclear if Wilkinson and Kerry Howley are the King and Queen of the new Cosmopolitan Libertarianism, but its refreshing to see self-styled libertarians who don’t think that freedom stops at the Southern border.  It’s ironic that as much of the “mainstream” libertarian movement represented by Cato and Reason have become strong advocates for international labor mobility, the nativist/asshole/Old Right libertarians represented by Paul, Rockwell and their ilk are having their moment in the sun.

PS - While we’re bashing nationalism, let me just say that I hate the Patriots.

Sweet Serendipity

It’s really amazing when a writer decides to devote a good chunk of time to feature writing and blogging about one of the few topics you actually care deeply about.   I am of course speaking of Kerry Howley’s recent tear explaining and justifying guest worker programs and the case for greater labor mobility. Her response to Megan McArdle criticisms of guest worker programs is just about perfect, and this last bit is a pretty damn good statement of faith for us labor mobility advocates:

 Our current policy is one of coercively preventing cooperation. In saying “we can’t let people into this country unless we confer upon them all the rights and duties of citizenship,” you are saying that we need to violate their right to move freely and cooperate unless we can give them welfare benefits. But that’s backwards.

This is why humanitarian economists can be enthusiastic about even a tiny guest worker program; the bundling of labor market access and citizenship is an obvious obstacle to global prosperity. Establishing the two as distinct matters.

So will we send home pregnant guest workers? I hope not, but maybe. Will we force companies to provide health insurance for young, healthy people who come here wanting to work? Probably. Will we allow guest workers to marry Americans? I don’t see why not. But none of these concerns comes close to justifying a system that locks people into poverty and out of our labor markets based on conditions of birth. (emphasis added - MZ)

While I’m on this kick of compulsively linking to and praising everything Howley writes, her interview with Laura Maria Agustin is quite illuminating.  While most of it concerns bad statistics and fear mongering among those who talk about “human trafficking,” Agustin and Howley’s basic point about migrant workers is very important:

People may feel under the gun, but people who end up leaving home to work abroad have mixed motives. They may be poor and without many choices. But they also are normal human beings who have desires and fantasies. They daydream about all the same pleasurable things that richer people do. The human ability to imagine that things can be better, that getting ahead is possible, are in play. These motivations mix together in the project of leaving home—legally or not—to go somewhere else.

And it’s not the most desperate, like famine sufferers, who manage to undertake a migration. In order to go abroad you have to be healthy and you have to have social capital, including a network that will get you information on how to travel and work. You need some money and some names and addresses; you have to have at least some official papers, even if they’re false. You need at least a minimal a safety net. People at the most disadvantaged social level rarely get into this situation.

When you hear many in the global left decry the conditions in which people migrate within countries or across borders, one gets the feeling that the actual people who are migrating aren’t people who make decisions with the best interests of themselves and their families at heart, instead they are proletarian pawns swept about by the harsh logic of neoliberal economic policy.  This leads to those people being able to ignore the actual reasons migrants have for moving, and instead place all their energy into criticizing NAFTA or the WTO for supposedly forcing these poor people across the border.  There is, of course, little talk of the gains of, say, Indonesian migrants working in Singapore or Pakistanis working in Arab countries.  Instead, they are poor people who are being cruelly exploited, with little or no agency of their own.  And so when critics of guest worker programs seemingly ignore the voices of the people most affected (ie - the guest workers) it’s fairly worrying.

Please, Be My Guest

I’ll join the rest of the Reason Happy Hour attending crowd in saying that Kerry Howley’s cover story looking at the guest worker program in Singapore and labor migration more generally is well written, incredibly informative, powerfully argued and mostly correct. In the last bit of the article, she deals with liberal objections to large scale guest workers programs, namely that such programs create an inegalitarian, hierarchical system, whereby guest workers have few rights, are largely at the mercy of their employees, disconnected from their families and aren’t even second class citizens: instead, they have no hope of citizenship. While these concerns are certainly valid, they are only tenable if you severely understate the economic gains migrant workers accrue and see the action of allowing fewer immigrants as morally neutral.

To properly frame this debate, it’s good to know exactly what the gains are from labor mobility and guest worker programs. Dani Rodrik estimates that a Mexican guest worker increases his income by $17,500 simply by working in the United States. With 200,000 workers a year over ten years, that adds up $35 billion for migrants from poor nations. To put that number in perspective, our current foreign aid budget is $23 billion and the projected gains for poor nations due to multilateral trade liberalization are $30 billion. If you look at American barriers to labor migration as essentially locking workers from poor countries into poverty and denying them enormous income gains simply by virtue of where they were born, the less concrete concerns about a guest worker program seem almost minuscule. Howley phrases this question best, “Does it reflect better on the American character to lock poor people out than to permit them entry on limited terms? “

Sure, Howley and myself would prefer that borders simply be open, but in today’s political climate, a guest worker program is probably the best we can hope for. And as long as Yglesias et al can’t offer us another politically viable way of getting more foreign workers here, guest workers are the way to go.

Also check out Howley’s response to Matt Yglesias on her heretofore undiscovered blog.

H-1B For You and Me

Lost in the immigration debate is a clear cut case where the US just needs more of a specific type of worker: high tech workers. Perhaps I’m biased in this regard - I am…umm….intimately connected to the dynamic economic engine that is the high tech Greater Bay Area, and maybe it was having a close relative work for a company at which he was one of the few native born Americans, but the case for allowing more high skilled immigrants under the H1-B program is pretty unambiguous. Intel’s Chairman Craig Barret’s Washington Post Op-Ed makes this point rather forcefully:

The U.S. system forces thousands of valuable foreign-born professionals — including badly needed researchers, scientists, teachers and engineers — into legal and professional limbo for years. Not surprisingly, many are considering opportunities in competitor nations — even those who have lived in the United States for years and have graduated from American universities.

To be competitive in the global economy, U.S. companies depend on specialized talent coming out of U.S. graduate schools. These scientists and engineers are often foreign-born, as more than half of U.S. engineering master’s students and PhD recipients are international students. Yet America shuts the door on many of these highly educated graduates, forcing them to look abroad for opportunities — and our competitors are capitalizing on our failed policies.

The strangest thing about the H1-B/high skilled immigrants debate is that many of those who are against lifting the H1-B quota also bemoan the outsourcing of high tech jobs to China and India. The connection between these two phenomena appears to be obvious, but I guess not quite everyone gets it.

Huckabee’s Immigration Cluelessness

It’s obvious that I disagree with Huckabee’s immigration plan, but it is a striking example of how unengaged and uninformed on policy he really is.  Similar to the Flat Tax that is the heart of fiscal policy, Huckabee appears to have just read Mark Krikorian’s National Review article laying out the plan, and has just adopted the entirety of it.  The ignorance displayed is unparalleled - I’ll let you figure out what I mean:

 Propose to provide all illegal immigrants a 120-day window to register with the Immigration and Naturalization Service and leave the country. Those who register and return to their home country will face no penalty if they later apply to immigrate or visit; those who do not return home will be, when caught, barred from future reentry for a period of 10 years.

This plank of the plan is bad on its own merits, it will surely discourage people from registering with the INS because Huckabee doesn’t explicitly lay out a plan to increase the visa quota for the unskilled immigrants he’s trying to get to leave on their own, they would have very little incentive to register with the feds, go back to their home country and then wait in line for god-knows-how-long to see if they can come back.

But ignore all those criticisms, surely the more important one is that the Immigration and Naturalization Service doesn’t exist anymore.  In fact, it hasn’t existed since March 1, 2003.  Most of its functions were transferred from the Justice Department to the Department of Homeland Security in March.  The administration side of the INS — registering immigrants, keeping track of citizenship status, sending out green cards — is under the purview of the U.S. Citizenship and Immigration Services, while the enforcement side of the INS is now mostly under U.S. Immigration and Customs Enforcement (ICE).  It seems like a fairly basic requirement for being President is knowing whether large Executive Branch agencies still exist.

Lant Pritchett Fact(s) of the Day

Small increases in labor mobility would dwarf the income gain of further trade liberalization.  From Let Their People Come.

  First, an expansion in labor mobility of the magnitude of 3 percent of the labor force in host (labor-importing) countries (an additional flow of around 16 million people) would lead to world welfare gains of $156 billion.11 Although a smallish (0.6 percent) fraction of world GDP, this is larger by nearly a factor of three than annual official development assistance in the 1990s and substantially larger than the same model’s estimate of the gains from all proposed remaining trade liberalization ($104 billion).12 These estimates are, if anything, conservative. The World Bank’s Global Economic Prospects report for 2006 focuses on migration. It uses the Bank’s standard general equilibrium model, LINKAGE, and estimates that for the same increase in the developed-country labor force (3 percent) the gain is more than twice as large, $356 billion, as the estimates by Winters and others (2002).13 The exact calculations depend on assumptions about wage gaps between sources and hosts of movement and the modeling of labor markets, in particular how “subsititutable” domestic workers and movers are, but in the end some simple arithmetic dominates. If, as the Jasso, Rosenzweig, and Smith (2003) estimates suggest, each worker gains $17,000 a year from the move, then 16 million people times that amount represents an annual gain of $272 billion. Moreover, these calculations are comparing a modest increase in labor mobility to all (further) trade liberalization. Hamilton and Whalley (1984) calculate that free migration could as much as double world income—which makes it very hard to stay motivated about the fractions of 1 percent that further trade liberalization can generate. These empirical results make intuitive sense. Goods markets are in fact quite deeply integrated, and though there are still gaps across countries in prices and evidence that the “border” effects inhibiting trade are still quite large, the price differences in goods across countries induced by restrictions on trade are very small relative to the observed wage gaps of as much as 10 to 1.

And while economists are, as a whole, more supportive of liberalized immigration than the general public, if one were to guess what economists think is more important by looking at their popular writing , it would clearly be free trade.  Sure, I support liberalized trade, but trade already is very, very open, and we are now mostly rolling back trade barriers at the margins.   Labor mobility, on the other hand, could be greatly increased.

Another useful comparison is that between labor mobility and development assistance.  We have a development assistance budget of 60 billion dollars, Pritchett estimates “Allowing an additional 0.5 percent of the rich-country labor force to enter from poor countries would produce gains in the monetary value of all official development assistance.”

Once again, if you want a how-to guide to improve the lives of the world’s poor, just read Let Their People Come. It’s free.

Illegal Immigration and Social Security: Kaus Style!

Mickey Kaus gets counterintuitive and claims that high levels of illegal immigration aren’t the boon to Social Security that they are often thought to be:

I’ve always been told by defenders of the system that one of the main safety valves, should it begin to look insolvent, was the ability to let in more immigrants– increasing the crucial worker-to-retiree ratio. But to the extent the current immigration debate unexpectedly chases FICA-paying illegal immigrants away, and discourages admitting more legal immigrants, mightn’t it by the same token make Social Security less solvent than currently projected? … kf’s solutions: a) If the number of illegals actually falls dramatically, that’s what will make it possible to eventually get public support for a reasonable increase in quotas for legals; b) Find other ways to make the system solvent–like reducing the benefits of the affluent. If we have to raise taxes or cut benefits a bit more to make up for controlling the borders, it’s worth i

Kaus ignores two reasons why high levels of illegal immigration could still benefit social security. 1) To the extend that illegal immigrants are using fake social security numbers to get employment, they are the best thing imaginable for Social Security.  They still pay FICA taxes and won’t ever claim social security benefits.  2) Illegal immigrants have children in the United States who are citizens that will get legal employment and pay into the fund like everyone else.  It’s also unclear how we are chasing FICA immigrants away by tolerating large amounts of illegal immigration.  For example, our refusal to raise the H1B cap is a real example of having a policy that results in a low number of FICA-paying immigrants.

Kaus’ first supposed solution rests on the premise that status quo levels of illegal immigration is a bad thing, but I certainly agree that we should increase levels of legal immigration, just a matter of general policy.  His second solution is just the old Kaus tune — means testing benefits.  This shouldn’t surprise anyone, if there’s any discussion of Social Security in any imaginable context, that’s Kaus’ solution.

I’m trying not to sound too snarky here, but this post could have easily been written by a Kaus-imitating computer program.  Counterintuitive? Check. Explanation of how cracking down on illegal immigration will solve a certain problem/attempted debunking of a reason why illegal immigration could be good? Check.  Justification for means testing social security benefits? Check.  I’d say around 75% of Kaus’ policy-related posts include at least one of those elements, but it was impressive to see all three. The only thing that was missing was bashing teachers unions.

I Heart Western Union

Reading the New York Times piece on Western Union made me feel better about WU than any other company in recent memory. How can you not love a company who’s entire purpose is to encourage immigration and the transfer of money back to home countries. The anecdotes the article gives are great - Western Union reps in and immigrant detention center, sponsoring Filipino clubs in Saudi Arabia, trying to oust Tom Tancredo - but the underlying message is an even more heartening one.

This is a company that exemplifies how beneficial immigration is to the third world — more so than just about any change in trade rules or foreign aid. And the benefits are passed on largely through money transfers by Western Union. And what’s even more striking is how Western Union charges the most for their services — not only are their rates and fees higher than banks, but also are higher than any other money transfer services. And yet they still have the largest market share.

It would be easy for immigrant activists and assorted do-gooders to complain about Western Union’s fees and large profits — and they did, and Western Union had to pay out a multi-million dollar settlement. But Western Union decided to become the friend of the migrant, charge the same fees and are overwhelmingly loved by their clientèle. Just like credit snobbery gets in the way of the most innovative anti-poverty program - microfinance - so too could money lending snobbery slow down the most effective wealth transfer mechanism in the world. Fortunately, those who actually use Western Union wouldn’t stand for it.

“You could say they were ripping people off, or you could also say they’re providing a service that poor people desperately needed and were willing to pay for,” Mr. Terry said. “Any consumer company in the world would like to have the customer loyalty they have. They’re doing something right.”

It’s now accepted that the best way to get out of poverty is some involvement in the market, whether by labor or investment. The problem for financial institutions is that they are working on tiny margins — either they’re loaning small amounts of money with low expected returns or transferring small amounts of money. Thus, they need to charge high interest rates for loans and high fees for money transfers. Quite simply, it’s better than the alternative, which is financial institutions ignoring the global poor.

There’s Still A GOP Immigration Split

Kaus claims that the GOP has papered over their immigration differences, and now it’s the Dems who are split over the issue:

What’s changed? Well, President Bush–the main politician doing the GOP-splitting–is leaving the scene. The Republican electorate seems to have decisively turned against his illegal-immigrant semi-amnesty. Result: No more split! But the powerful GOP anti-legalization sentiment was obviously latent even in 2006. The MSM just chose not to notice.

While Kaus is certainly right that the main politician in the GOP’s pro-immigrant faction - Bush - is fading from the scene, the institutional forces behind comprehensive immigration reform aren’t going away.  After Bush leaves, the Wall Street Journal editorial page and the money-cons they represent will still be the driving force, as they always are, of the GOP.  Of course, this is all academic if the GOP is out of power for the 2-8 years following Bush, but the underlying dynamics of cultural and national security conservatives supporting restrictionist immigration polices and economic conservatives supporting more liberal ones don’t appear to be changing.  And while Kaus seems to be vainly hoping for there to be an insurgent Democratic movement against immigration, he’ll probably be hoping in vain for a while.  Unlike welfare reform, which had the support of a wide range of Democratic and liberal intelligentsia despite little interest group backing, immigration restriction — as of now –  has zero pundit/intelligentsia support of note and next to zero interest group backing.  Kaus will remain in the wilderness for a few more years, it seems.

The Derb Asks What’s Good For the Jews

Am I the only one that finds it all odd that John Derbyshire, the oddly charming, geeky, borderline bigot National Review columnist, is on Jewcy, is telling us American Jews where we should stand immigration?  He includes his usual rap about how immigration is bad because of negative demograhic and economic effects, but also tells us why, as Jews, we should oppose increased immigration:

My own impression, talking to these people, is that they actually believe it is good for the U.S.A. Indeed, given that most of present-day immigration is of either (a) Muslims, who are antisemitic almost to a man, or (b) Latin Americans, which is to say, people from countries where antisemitism is more common, and more frank, than it ever was in the U.S.A. (where do they think all the old Nazis retired to?)—given that, the persistence of extravagant pro-immigration sentiment among American Jews today is rather astonishing. Perhaps the only explanation can be that Jews have so thoroughly internalized the Good For America justification that it overrides the understanding—which they must surely possess—that it is Bad For The Jews.

Count me as one Jew that is happy that such simplistic and atavistic considerations aren’t part of most American Jews’ calculus in immigration.  Derbyshire’s reasons for why we Jews should, as Jews, oppose immigration are just mind bafflingly dumb.  He wants us to believe that poor Latin Americans are anti-semitic because their governments had liberal immigration policies in the 1940s and 50s, because of which both Nazis and  Jews made their home in Latin America.  Argentina boasts the world’s eight largest Jewish population, with 250,000 of us.  But this is all academic, the point is, it isn’t octo and nonogenarian former Nazis who are coming over the border from Mexico and Guatemala.  Derbyshire, I have to imagine, knows this, but because he has the absurd task of trying to convince the overwhelmingly liberal American Jewish population to go against their political, ethical and religious instincts and prevent the world’s poor from making a better life, he resorts to pulling BS justifications for curtailing immigration out of his ass.  His first implication, that Muslims who immigrate to the United States are “anti-semitic the man” is just another BS assertion that reflects little knowledge of the assimilation patterns and overall state of the American muslim community.

What’s more important about the Derb’s exercise is that it shows how much the American Jewish community has matured.  His attempts to justify a massive clampdown on immigration based purely on what’s Good for the Jews is clearly forced, the real reasons Derb believes are the “national” ones.  That’s because American Jewry knows that the time for looking at every policy by asking what’s Good for the Jews has passed.  We are no longer a despised religious and ethnic minority, huddling in urban ghettos, seeing WASP America as yet another oppressor in a long line going back to Babylon.  We can finally conceptualize polices by not making harried short term calculations, worrying about an imminent pogrom.  Instead, we can confidently express our political and ethical inclinations — both of which lead towards an open, liberal immigration system and say that the resulting polices are good for the Jews and good for America. What’s Good for the Jews and What’s Good for America, contra Derbyshire, are the exact same thing.

The Poverty of Immigration Thinking

Robert Samuelson attributes the current poverty rate to the increase in immigration.  And while it may well be true that many immigrants (mostly illegal) are poor and thus inflate our poverty rate, for them, they are much richer.  A part of me is a Will Wilkinson-Lant Pritchett type cosmopolitan.  And that person says who cares about an inflated poverty rate due to immigration?  The immigrants and their families are getting much, much richer.  Another thing Will reminds us about constantly, and sometimes I agree with him, is that countries don’t have wealth or poverty rates in any meaningful sense, people do.  So yes, Mexican immigrants may be poor in the US, but they’re supporting entire families and communities back in Mexico.

If you expand your frame of reference out to people (and their ancestors) who currently happen to live (and lived) in the United States and their economic gains, according to Samuelson’s numbers, we’re making across the board reductions in poverty.  Put simply, according to Samuelson, if you’re black or non-Hispanic white, since 1990, the poverty rate for your group has fallen (not by very much, and it’s crept up in the last seven years, but overall there have been reductions).  Samuelson says that Hispanics have accounted for all the of the gross increase of those in poverty and their poverty rate has, presumably gone up (though he never actually quotes a figure).  What Samuelson’s conclusions don’t take into account is how these individuals’ wealth has increased due to their immigration to the United States. If you think that immigrants are people before they go into the United States, you should be celebrating this data, if you’re Robert Samuelson, you’ll lament it.