“Give me your tired, your poor … your huddled masses … wretched refuse … the homeless,” implores the Lady in New York harbor. Little can she know that 11.4 million of these “tempest-tost” souls are already here, having arrived illegally, most from Mexico and points south. Some 4-5 million of those illegal, or “undocumented” immigrants to use the description preferred by pro-immigration advocates, no longer are threatened with deportation orders. President Obama has told officials not to enforce the law against parents with children who, having been born here, are American citizens, and to grant them the “green cards” necessary to seek jobs in the legal workplace. Temporary but similar treatment is to be given “for the benefit of the U.S. economy” to entrepreneurs, investors, and researchers.
Lawyers are doing what they do best, disagreeing with one another as to the legality of the president’s decision to by-pass Congress, a squabble that will eventually be settled in the Supreme Court. Economists are engaged in a more productive exercise, trying to determine the impact of immigration in general and the president’s edict in particular on economic growth and the labor market.
There seems to be as general agreement as economists are capable of mustering that increased immigration has a positive effect on the rate at which the U.S. economy can grow. As Diana Furchtgott-Roth, formerly chief economist at the U.S. Department of Labor, puts it in a comprehensive paper to be released on Monday by the Manhattan Institute, a think tank: “Immigration, on net, boosts economic growth. … It expands America’s work force and encourages business start-ups … [and] increases economic efficiency by supplying more labor to low- and high-skill markets.” Obama’s recent decision, say many economists, will add a bit of zip to the economy, already growing at an annual rate of 3.9 percent. A group at UCLA projects that in the short term the president’s action will add $6.8 billion to labor income, $2.5 billion to the tax collectors’ coffers, and create 160,000 jobs. The White House estimates that by the stroke of his pen Obama has added somewhere between 0.4 and 0.9 percent to GDP, or between $90 billion and $210 billion over ten years.
Why, then, the outrage by Republicans and many Democrats? In part because, as the old jazz ditty goes, “’T’Aint What You Do, It’s The Way That You Do It.” Most Americans have no desire to deport illegal immigrants whose children are U.S. citizens. But most Americans also worry that unilateral action by the president represents the exercise of just the sort of power that the drafters of our Constitution sought to deny any president lest they be faced with a homegrown version of King George III. Remember: the Americans who finally resorted to revolution originally sought to be ruled by parliament rather than the monarch. For “parliament” read “Congress,” and for “the monarch” read “the president.”
Then there are the political consequences—an eventual increase in the Democratic party’s core voters. The millions now safe from deportation will be augmented by another wave of illegal immigrants, hoping for similar generous treatment at some future date. That’s what happened after Ronald Reagan’s 1986 amnesty. These immigrants, when given the opportunity, will overwhelmingly vote for Democrats, who generally favor expanding the welfare entitlements that did not exist as a lure for earlier waves of immigrants. Republicans are uncomfortable with the reduction in the portion of votes cast by their own core—whiter, older, married, richer Americans—which will surely occur when the immigrants’ eventually granted path to citizenship leads into the voting booth.
But it is not only richer Republicans who worry about the consequences of the president’s move. Lower-income groups are also uneasy with allowing the beneficiaries of Obama’s largesse to enter the legal work force. George Borjas, the Harvard professor widely described as “America’s leading immigration economist,” says that immigration lowers the wages of American workers, including blacks and U.S.-born Hispanics. Other studies show that there is a ripple effect, as low-paid immigrants receiving work permits move into better-paying work. After Reagan’s 1986 amnesty, only 4 percent of until-then illegal immigrants remained in farm jobs, the bulk moving into better-paying construction work. Good for them, not so good for Americans faced with new competition. Borjas concludes that “immigration makes the U.S. economy (GDP) significantly larger, with almost all of this increase in GDP accruing to the immigrants themselves as payment for their labor services.”
Finally, immigrants put pressure on schools, hospitals, and other social services. Most congressmen and, of course, the president, place their children in private schools too expensive for most middle-class families (while refusing to support voucher programs that would provide better access to those schools for the less well-off), and have extraordinarily generous government-funded health care plans. They are unaffected by the turmoil caused in classrooms by the arrival of young children, eager to learn but who do not speak English and are often illiterate in their own language, or by the nightmare that is a hospital emergency room crowded with immigrants in need of medical attention but uninsured and with no means of paying for the care which most hospitals are legally required to provide. In short, policymakers are immune from the distributive consequences of illegal immigration, consequences that are the stuff of almost every gathering of middle class families they purport to represent. These impacts could be ameliorated by policies that transfer some portion of the financial benefits employers obtain from an expanded work force to impacted areas to relieve the strain on lower-income and middle-class families whose voices have difficulty being heard. In Britain, Prime Minister David Cameron yesterday announced plans for a new fund “to help meet the additional demands on local services” in communities that are struggling to cope with large numbers of foreigners, most of whom are entitled by EU law to enter the UK.
The pity of all of this is that Americans are a generous people, many from immigrant stock, most of whom would like to see the immigration system reformed in a humane way, and one that favors those waiting patiently in line for visas, rather than illegal entrants. My experience in states with large populations of illegal immigrants is that most people oppose illegal immigration but admire the hard-working illegal immigrants with whom they come in contact.
The prospect of real reform is dimmed by the president’s unilateral action, it having handed Republicans an excuse not to propose such reform. Worse still, opponents of the president’s unilateral action claim he has destroyed all prospect of cooperation on matters not related to immigration policy (why that should be the case is unexplained), and Obama continues to demonize anyone who points out that the recent elections suggest that those who disagree with him might have a few ideas worth listening to.
This continued partisan warfare represents a significant danger to the recovering economy. At long last there are signs that growth is accelerating, that job creation is creating pressure for a much-needed rise in average wages, and that the monetary authorities are inching toward allowing interest rates to respond to market forces. But we need a major overhaul of the tax system, sensible revisions of Obamacare, restoration of a bipartisan approach to foreign policy, and structural reform of labor markets to ensure that recent growth rates continue. Signs that we are in for two more years of squabbling by dyspeptic politicians suggest that such changes might have to wait until after the 2016 elections. Pity.
Fortunately, muddling through is an American talent, inherited by some, brought here by others.