Stuff I think you should know

Thursday, December 15, 2005

The US economy

President Bush has recently been promoting his proposals for a large temporary worker program as a way to effectively enforce immigration laws. As Mr. Bush presents it, such a program to address growing concerns over the flow of illegal workers would rest securely on a "win-win" basis in the following ways:

-- The willingness of temporary workers and employers to participate in the program would allow both to "win."

-- The US economy would benefit from higher productivity without increasing tax burdens for existing public services.

-- US politicians would gain support from employer groups or sympathetic ethnic or religious lobby groups pushing for such policies.

-- Mexico would "win" by exporting surplus workers who send back hard currency to their relatives.

Yet these win-win scenarios do not reflect likely realities. Decades of experience with such temporary worker programs in high-wage liberal democracies worldwide show that neither the programs nor the migrants turned out to be genuinely "temporary."

Mexico is unlikely to realize sustained benefits from exporting workers. Migrants' payments sent back to relatives wane over time, and such payments can stimulate land price inflation, conspicuous consumption of imported goods, and rising inequalities of wealth rather than stay-at-home development.

In the past, proponents have declared that such migrants would require very little in public expenditures. Yet universally, some temporary workers find ways to bring their families to join them, and then become substantial beneficiaries of existing government-financed programs such as public education, healthcare, and safety-net services for low-income residents. Politicians have also discovered - too late - that temporary worker programs really are labor subsidies to low-wage sectors such as garments, labor-intensive agriculture, and in-home personal services, retarding efforts to raise the level of national wages and productivity.

Temporary-worker programs are often portrayed as a legal and humane alternative to unauthorized migration. But they fail to acknowledge that the last major Mexico-US temporary worker program, the so-called bracero program, actually was the initiator and accelerator of today's large-scale unauthorized migration. The same is true across Western Europe, where "guest worker" programs based on similar claims were embraced during the economic booms of 30 to 40 years ago. Their "guests" for temporary work were transformed into millions of permanently resident "foreigners," who today have very high rates of unemployment and welfare dependency.

Most current proposals involve some form of "legalization" to "clear the slate" of about 11 million unauthorized residents, usually via a gradual process by which unlawful residents can earn legal immigrant status by doing farm or other work. Here, too, the record is more than clear: Such policies have a dismal recent history. In 1987-88, 2.8 million unauthorized migrants obtained US legal status. Yet despite this massive legalization, the farm labor market in California again is dominated by unauthorized workers.

Given this history, one might wonder why some US politicians are now proposing yet another guest-worker program. The subject is driven by odd coalitions of long-antagonistic regional, ideological, economic, and ethnic interest groups. Both conservative Republicans and liberal Democrats see the potential to gain large numbers of additional political and financial supporters. How? Conservatives expect to draw voters who favor their traditional social and cultural values. Liberal advocates expect to swell their political constituencies by favoring income redistribution policies, organized labor, affirmative action, and so on.

Of course both expectations cannot both be right. In politics, if someone gains, someone else loses. In addition, while guest worker and legalization proposals are being promoted as panaceas to reduce unauthorized migration, all contain the very seeds of their own failure. The most likely outcomes actually would be to increase unlawful flows across the borders.

Why is a guest-worker program being pushed? Because some employer and ethnic lobbies expect to benefit substantially and rapidly. There would be costs, but these would be slower to appear, and would be paid for by the federal and local governments rather than by the interest groups that benefit. The result is politics driven by small, concentrated, and well-financed interest groups that expect to profit significantly in the short term.

People, as economist Adam Smith once observed, are "the most difficult baggage to transport over borders." Among those who have carefully studied recent experience, there is an overwhelming and concise consensus: There is nothing more permanent than temporary workers.

1 Comments:

Anonymous Blue Cross of California said...

Great blog I hope we can work to build a better health care system as we are in major crisis as health insurance is a major aspect to many.

12/20/2005 8:31 PM

 

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