Print
Category: Mike Scruggs' Column

There are many people who say that our only serious immigration problem is that there are 12 million immigrants in the country who are technically illegal.  These people tend to believe that the only problem with 500,000 illegal immigrants per year is that they are, in liberal-speak,  “undocumented.” They believe that everything would be fine if legal immigration were made easier and employers could have more legal guest-workers. The problem with this is that our legal immigration levels are also unprecedented. Legal immigration is now averaging about 1.0 million per year. Previous to 1987, it averaged only 300,000 per year, and the rate of illegal immigration was much lower. According to Harvard labor economist, George Borjas, himself a Cuban immigrant, a total immigration level of about 500,000 per year is the maximum that will not hurt native-born Americans and their families.

That is in normal times, but we now have an official (BLS level U-3) unemployment rate of 10.0 percent, the highest in 26 years. But this rate does not include people who want a job but have become discouraged and not looked for one in the last four weeks. It does not include others who would like to work full-time, but who are only able to find part-time jobs. This broader figure (the U-6 rate) is now a whopping 17.3 percent. Politicians trying to portray the American economy to be in great shape tend to de-emphasize the U-6 rate, but it is a much more accurate measure of the labor economy. The official unemployment rate did include most discouraged workers before 1964, but politicians succeeded in toying with the calculation to make the American people feel better about the economy.

With 17.3 percent unemployment and underemployment why would any honest and thoughtful politician call for more immigration and larger guest-worker programs? First of all, employers and industry associations who use illegal alien labor and guest-worker programs make huge contributions to politicians who support amnesty and more immigration—whether legal or illegal. Secondly, the Obama Administration would like more new voters who support his policies. Most well-informed studies of recent legal and illegal immigrants project a Democratic advantage of between two and three Democrat votes for every Republican vote as a result of amnesty and relaxed immigration standards and numbers. There are other politicians who feel they will benefit by strengthening the numbers of their own ethnic group by immigration.  There are also some Republicans who either cannot operate a calculator or are willing to bend the Republican Party to more liberal social-welfare policies to get votes.

The proponents of guest-worker programs have usually gotten their way through generous campaign financing of their supporters in Congress and slick public relations propaganda prepared by in-house economists. I compare the latter to the “court “ prophets of the Old Testament. They compromise or deny the truth to earn their keep.

Guest-worker programs have the same impact on American workers and taxpayers as illegal immigrants.

In 1997, after several years of thorough study, the Commission on Immigration Reform, headed by the late Congresswoman Barbara Jordan, identified illegal immigration as a pressing national problem. After intensive study that commission adamantly rejected guest-worker programs as a solution. Past guest-worker programs exacerbated rather than relieved immigration problems.  The Commission specifically stated that a guest-worker program would be “a grievous mistake” and gave powerful reasons for rejecting such programs.

1. Guest-worker programs have depressed the wages of American workers.

2. Those most adversely affected were the unskilled and thus poorest segment of the labor force.

3. Foreign guest-workers are often more exploitable than U.S. workers.  They are less likely to complain of exploitive pay practices or unsafe working conditions.

4. The presence of large numbers of guest-workers in particular localities presents substantial costs in housing, healthcare, social services, education, and basic infrastructure that are borne by the broader community and even the federal government rather than by the employers who benefit from cheap labor.

5. Guest-worker programs also fail to reduce illegal immigration.  In fact, they tend to encourage more illegal immigration. Guest-workers themselves often remain in the country permanently in violation of the conditions of their admission.

(In addition, many agricultural guest-workers find a higher paying construction job and go illegal, creating a demand for more agricultural guest-workers who also go illegal as soon as they find a better job.)

In the joint hearings before the U.S. Senate and House committees on immigration, a distinguished member of the Commission, Rev. Theodore Hesburg, President Emeritus of the University of Notre Dame, carefully explained that:

“The idea of a large, temporary work program is tremendously attractive.  Perhaps a better word though, would be ‘seductive.’ There is a superficial plausibility to this argument, and the Commission gave it serious consideration for more than a year and a half….In the end, we were persuaded after much study, that it would be a mistake to launch such a program.”

He went on to point out some serious questions about effective control of temporary worker programs and further enumerated some serious failings of past temporary worker programs.

1. Temporary worker programs need some limits, which would require serious attention to effective enforcement.

2. It is difficult to turn off such programs once started.

3. A large program would build a dependency on foreign labor in certain sectors of  the economy.

4. Certain jobs would be identified with foreigners,” which would effectively stigmatize such jobs.

5. Without strict enforcement of employer sanctions against hiring other illegal immigrants, a temporary worker program would stimulate new migration pressures in the long run, exacerbating rather than curtailing illegal immigration.

Rev. Hesberg summarized his remarks to the joint committees with this conclusion:

“We do not think it wise to propose a program with potentially harmful consequences to the United States as a whole.”

Yet we have the U.S. Chamber of Commerce and other business associations advocating such harmful programs. Such programs may be an immediate advantage to their most powerful member companies, but they are damaging to American workers and the overall economy. Ironically, the Chamber is advocating government policies that would undermine the success of its own members in the longer term.

A 2007 study by the Center for Immigration Studies indicated that there was a 0.80 correlation between native-born unemployment and the percentage of immigrant workers in a given occupation.  Statistically, this means that 64 percent (0.8 squared) of the difference in occupational unemployment rates for native-born workers can be explained by the percentage of immigrant workers in an occupation. An implication of this is, that for every 100 new immigrant workers hired, 64 American workers are displaced. Another implication is that we only needed a third of the immigrant workers in the United States in 2007 and far fewer now.

At the end of the third quarter of 2009, there were 21 million native-born Americans either unemployed or forced to part-time work because they could not find full-time work. There are an additional eight million Americans of working age who have dropped out of the work force in recent years. Yet there are between seven and eight million illegal immigrants holding jobs. Mr. President, here are more than seven million jobs you can give back to the American people!

According to Borjas, competition from imported cheap foreign labor (legal and illegal) has suppressed American worker wages by more than five percent. Real wages for American workers has actually dropped in the last ten years. The overall impact on the American economy is $343 billion per year! It is no wonder that we are in a recession, workers are not spending, and businesses are not investing.

Excess immigration is wreaking economic havoc among the native-born who must compete with illegal and guest-worker immigrants. The broader U-6 unemployment and underemployment rate is over 22 percent for those with a high school education or less and over 31 percent for young people (aged 18-29) with a high school education or less.

The U-3 unemployment rate for young (18-29) blacks with a high school education or less is over 27 percent, and the full U-6 rate is just over 40 percent. The U-3 unemployment rate for young native-born Hispanics is just over 21 percent, while the broader U-6 rate is 34 percent.

The U-3 unemployment rate for the nine percent of native-born workers with less than a high school education is 21 percent, and their full U-6 unemployment and underemployment rate is over 32 percent.

Previous to 2000, 29 percent of immigrants were high school dropouts. The educational quality of recent immigrants is falling. Thirty-six percent of immigrants since 2000 are high school dropouts, running to 63 percent of recent Mexican immigrants.

The declining quality of recent immigrants is reflected in several areas likely to prove costly to American taxpayers. The proportion of immigrant households using at least one welfare program is 33 percent compared to 19 percent of native-born households. The poverty rate is nearly 50 percent higher than native households. Thirty-four percent of immigrant households lack health insurance, compared to 13 percent of natives. Immigration accounts for 71 percent of the increase in uninsured households since 1989.

The primary reason for these differences is lack of education. All these costs are borne by the taxpayers rather than employers.

Guest-worker programs hurt American workers, their families, and taxpayers, and are essentially a partial subsidy to employers replacing American workers with cheap foreign labor. American voters should not put up with it.

--------------------------------------------

Mike Scruggs is a retired financial consultant and corporate business executive. He holds an MBA from Stanford University and a BS from the University of Georgia.  He is a USAF combat veteran of the Vietnam War, holding a Distinguished Flying Cross and Purple Heart.  He was recently Chairman of the Board of a Classical Christian School and is a former Republican County Chairman.  He writes and lives in Hendersonville, NC.

Hits: 5982
0
0
0
s2smodern