Towards A Good Samaritan World

Thursday, February 24, 2005

The Weekly Standard voices its full-throated support for Bush's immigration proposal. Bravo!

[UPDATE: At the same time, while it's great to see a pro-immigration stance in a paper as influential on the right as the Weekly Standard, their logic is not always beyond reproach. For example:

Our immigration system is indeed based on illegality--on a long-standing and all but deliberate mismatch between the size of our yearly quotas and the actual needs of our labor market, particularly at the lower reaches of the job ladder. (my emphasis)

Now, to an economist, the phrase "the actual needs of our labor market" is meaningless. The labor market is characterized by 1) a labor supply function, and 2) a labor demand function, and the interaction between the two gives rise to an equilibrium wage. As long as wages are allowed to adjust freely, there should be no "mismatch" between quantity of labor supplied and quantity of labor demanded. There may, of course, be employers who are unable to find workers who want to do the jobs they offer at the wages they are willing to pay. But that merely shows that either 1) they should offer higher wages, or 2) if they can't offer higher wages and still turn a profit, the job in question should disappear because it is not an efficient use of social resources.

Then there's this rationale:

The idea is not to expand the total number of immigrants who enter the country each year, merely to provide those who are coming anyway--and would otherwise come illegally--with a safe, orderly, legal route. Assuming it works--assuming, as the White House does, that once most jobs are filled by authorized immigrants, there will be little incentive for others to come illegally--it's a simple, pragmatic solution, and that in itself should recommend it to conservatives.

But this is naive. In theory, the economy can create an infinite number of jobs if wages are low enough; in practice, not an infinite, but certainly a very large number. What would stop the flow is not that all the jobs would be filled, which will never happen, but that real wages would fall far enough that there was no longer an incentive for people to come. Again, in theory, the US base wage would have to fall to the world base wage; in practice, it would not have to fall that far, but certainly a long way.

The Standard also offers a hint of the human rights argument for immigration (which is ultimately my view):

Cutting off illegal immigration would require thousands more men on the border, routine sweeps in every city, roadblocks, roundups, massive deportations, a national ID card, and more... we as a nation aren't going to deport 10 to 12 million foreigners. However much they dislike the idea of illegal immigration, the American people aren't likely to have the stomach for that.

Well, I don't they will either, but let's not get complacent. Rather than relying on the decency of the American people, let's be on the safe side and buttress it. If people thought they had to, they might go along with draconian measures against immigration. There's a tendency for immigration advocates to use arguments that are probably misleading, and people are likely to feel, rightly, that they are being tricked. The real solution to immigration is harder.

I'll put my ideas on that in the comments.


  • My basic idea is that instead of restricting immigration, we should tax it. I'll concede right off the bat that the resulting system will be unfair, with hard-working immigrants being taxed extra to put money in the pockets of the American-born. No doubt the left will cry "exploitation" and they will be right. But it's equally evident that it is an improvement over simply shutting them out. Why? Because no one has to come. To allow people to immigrate, at the price of extra taxes, is to give them another option, in addition to whatever options they had before. You never make someone off by giving them one more option.

    I've discussed this before in the post "The Right to Migrate," but I'll rehash here.

    My policy would allow anyone to live and work in the US (except in special, explicit national security cases), as a matter of right. The only stipulation is that they would have to pay a deposit at a US consulate equivalent to the cost of deporting them to their home countries (plus a small amount to help them get on their feet there.) They could be deported at their own request in case of destitution. Deportation would thus serve as a substitute for a social safety net, and the deposit would "preimburse" the government for the cost of deporting an immigrant.

    Four variables would be available to policymakers to manage the flow of immigration.

    1. The surtax threshold. If immigrants earned an income above a threshold specified in law, all income above the threshold would be subject to a surtax. This threshold could be set by legislators, but it should never be reduced for immigrants after they had arrived. Thus, if the surtax were set at $30,000 when an immigrant arrived, and then was lowered to $20,000 a year later, the immigrant would still be subject to the $30,000 threshold. But if the threshold were changed in the other direction, it would be raised for all immigrants. If legislators wanted to deter immigration, they could lower the threshold.

    2. The marginal surtax rate. I envision a rather high marginal surtax rate, so that when ordinary and special taxes were combined, immigrants would face tax rates of 70-80%. But this could be raised and lowered to influence immigration flows.

    3. The reimbursement rate to re-emigrants. If immigrants returned home, a certain share of the surtax they had paid (which would be deposited with the government and remain, in a sense, their property) would be returned to them. This rate could be 50%, 70%, etc. A high reimbursement rate would encourage guest workers; a lower rate would encourage permanent immigrants.

    4. The citizenship threshold. After a certain quantity of surtax was paid, immigrants could 1) stop paying the surtax, and 2) receive US citizenship if they so desire.

    If these proposals were implemented, I think we would see dramatic changes in the nature of our society and in our world. The American-born would become visibly privileged, and some would flourish, but some would have a difficult time of it, competing with a very large influx of immigrants. Poverty and squalor, which at least to some extent have been banished by the welfare state, would rush back in and be more visible, which would strike some as a moral regression; but actually it would not be, because we never did overcome extreme poverty, we simply used borders to blind ourselves to it. There would be strong economic growth and a sustained technological, economic, and entrepreneurial revolution. Our reputation in the world would improve greatly-- nothing America could possibly do would help our reputation more than this-- even though a lot of immigrants would probably have a difficult and bitter experience and go home disillusioned. Slums and crime would appear, and a certain ethnic segregation would characterize our cities (more so than at present) but all sorts of cheap products would appear and at low prices. Despite the hardships, the unsettling changes, the confusion, the net effect would be a marvel, and the world would look on America as a place of wonders and miracles, as in the 19th century.

    "I've heard that in America, every man's a king
    With just a snap of your fingers you can have most anything..."

    By Blogger Lancelot, at 4:36 PM  

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