Should Immigration Policies Be More Welcoming to Low-Skilled Workers?
Immigration is a topic that stirs passions globally, judging from the responses to this month's column, says HBS professor Jim Heskett. Readers suggested ways to bring immigration policy into alignment with the reality of what is happening at borders and in workplaces around the world. (Online forum now closed. Next forum begins January 6.)
Low-skilled immigrants: burden or opportunity? Immigration is apparently a topic that stirs passions globally, judging from the responses to this month's column. As Nauman Lodhi pointed out, "Tough times give rise more than ever to tough thoughts powered by emotions." Kamal Gupta commented that responses to the question of whether immigration policies should be more welcoming to low-skilled workers assumed that the issue was limited to the United States. Gupta reminds us that it could just as well have applied to India. But Gupta concludes that "the world has dismantled a lot of trade barriers, which has led to global prosperity. The only big barrier remaining is movement of humankind to regions which offer better prospects."
A number of respondents took issue with this. Some equated low-skilled workers to illegal immigration. Phillippe Gouamba put it this way: "We currently have 12 million undocumented Mexicans inside the US and we do not know what to do with them …." Other arguments included those of Tony Eckel that "economic benefits of any worker immigration … is limited exclusively to the labor consuming entity … (it is) a classic form of cost shifting." J. Boxer points out that "there's a high cost to cheap labor, and that cost (free education, free health care, etc.) is passed on to the state and the taxpayer, generally." Eloton Fowler said, "Our history has been to use technology to replace high cost labor, and importing unskilled workers to keep costs low takes away the initiative for technological advances …." And Sam Heffner, invoking the noted economist, Milton Friedman, pointed out that "before he died, the great Dr. Friedman acknowledged that in a (more or less) welfare state the economic arguments for open borders do not pertain."
Those who claim to have worked with immigrants appeared to have different views. C. J. Cullinane commented that "most seem to have one thing in common, they educate their children." K. B. Ackerman describes low-skilled workers in the warehousing industry in the Southwestern U.S. as "by and large … dependable and hard working, and their children will probably have better jobs than they have." As Irv Williamson put it: "Why would anybody consider limiting access to the best employees …? (They) produce the best values for their employers." Joanna suggested, as an alternative, that "major corporations have solved the problem by going to where the cheap labor lives …."
Phil Clark, reminding us that the U.S. is a nation of immigrants, asked, "Why do immigrants, legal or illegal, come to America? To work." He would address the issue by: (1) (greeting) "all immigrants with a social security card" (implying payment of taxes, Medicare, etc.) and (2) requiring employers to "pay immigrants with check or automatic bank payments," with fines or worse for non-compliance.
Do these suggestions address the basic issues? How do we bring immigration policy into alignment with the reality of what is happening at borders and in work places globally? Are low-skilled workers a burden or an opportunity? What do you think?
In spite of, or perhaps because of, the world's economic woes, debates regarding immigration policies continue. It has been nearly ten years since the topic of immigration was last addressed in this column. At that time booming economies such as that in the United States were experiencing increasing numbers of illegal immigrants. European countries were pondering policies regarding a flood of guest workers, some legal and some illegal.
These issues tend to arise at times of economic growth or stress. The differing rates at which countries emerge from the recent global economic crisis will determine future immigration "hot spots" attractive to potential immigrants. In the U.S., a country with an estimated 9 to 11 million undocumented immigrants, the issue promises to resurface in the coming months. And who knows? Given China's growth, aging population, and potential shortages of labor, it may even become one of those hot spots.
Responses to an oversupply of potential immigrants have favored the talented over the low-skilled. Favored destination countries have been able to choose the "best" immigrants, whatever that means, and such practices have generally been condoned politically. But recent studies suggest that both legal and illegal immigration of low-skilled workers to the U.S. have effects that have been overlooked. They raise questions as to whether much the same is true elsewhere in the world and whether some countries have been pursuing immigration policies contrary to the interests of their citizens.
A study by Daniel Griswold of the Cato Institute of several pieces of research concludes, for example, that in the U.S. immigration has not expanded the size of the "underclass," which he defines as people living "in households earning less than $25,000 a year or without a high school diploma." Instead: (1) new waves of immigrants populate the "underclass," enabling others to move up the income scale, (2) Hispanic immigrants play this role at present, enabling (or encouraging through education) all groups (including other minorities) to move out of poverty, (3) the Pew Hispanic Center estimated that male illegal immigrants aged 18 to 64 had a very high 92 percent labor force participation rate in 2004, (4) rates of incarceration for immigrants are lower than for native-born Americans, and (5) crime rates have declined in cities and regions of high immigrant concentrations, reflecting national trends since the early 1990s.
The Cato study concludes that there are "strong, positive arguments… for pursuing a policy of expanding legal immigration for low-skilled workers." Such a policy could, it is claimed, free up resources currently employed along borders to deter illegal immigration. According to a second Cato Institute study produced in Australia, such a strategy could even benefit from a "visa tax" that otherwise illegal immigrants would be able to pay in lieu of much higher "smugglers' fees" for illegal entry.
Note that these findings are cited by an organization that advocates strongly for free trade and generally less government. But do the hypotheses they advance deserve closer examination? Are the findings peculiar to the United States, or do they have relevance for other parts of the world? Should immigration policies be more welcoming to low-skilled workers? What do you think?
To read more:
Peter B. Dixon and Maureen T. Rimmer, "Restriction or Legalization? Measuring the Economic Benefits of Immigration Reform," Centre of Policy Studies at Monash University, Australia, published as Cato Institute Center for Trade Policy Studies Free Trade Bulletin No. 40, August 13, 2009.
Daniel T. Griswold, "As Immigrants Move In, Americans Move Up," Cato Institute Center for Trade Policy Studies Free Trade Bulletin No. 38," July 21, 2009. (The quote is from page two of a print-out of this document.)
Jeffrey S. Passel, "Unauthorized Migrants: Numbers and Characteristics," Pew Hispanic Center, June 14, 2005, p. 25.