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Immigration Policy: It’s the Incentives, Stupid.
Posted by: Jon Henke on Monday, March 14, 2005

McQs post on the lax approach to border security gives me an opportunity to point out the weakness of the plans that have been offered so far.   We're not just ignoring our borders, we're making policies to codify that problem, and poor arguments to excuse them.   Case in point, the Weekly Standard, in which Tamar Jacoby recently wrote...
Just ask experienced agents like Lee Morgan: 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.

Nonsense.   And coming from a magazine that advanced the "we can't stop all of them forever, so we have to do something about the root causes" argument for war in Iraq, I find this particularly weak.   It's true that a catch them after they've gotten here tactic would be as effective against illegal immigration as it is in the War on Drugs.  After all, they're willing to die to get here, and we're not willing to die to keep them out.  Advantage: illegal immigrants! 

But that's a strawman.    The key to dealing with illegal immigration is to eliminate the incentives that make them so anxious to come here, by cracking down on the businesses who hire illegal immigrants under the table.  It takes two to Tango, but we don't seem to take any interest in the US half of that illegal immigration problem. 

But, Jacoby argues, the new Bush policy would solve that incentive problem...

A new, more realistic policy would be much easier to enforce. ... 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...

As it is, illegals enter the country secretly to take jobs under the table, because businesses would rather hire low-cost illegals than higher-cost Americans. The White House plan stipulates that these heretofore-illegals would be matched to a US employer "when no Americans can be found to fill the jobs". 

But here's the thing:  a lot of Americans can "be found to fill the jobs".  Yet, businesses still prefer to hire illegal workers, because businesses would rather break the law to get low cost labor than pay the costs (higher wages, health care, payroll taxes, etc) of abiding by the law.  If Bush's policy is implemented, nothing about this will change.  

When a business is faced with the decision of whether to hire an American or to save money by hiring an illegal, they can make precisely the same choice they already make.   If businesses are willing to break the law to avoid the high costs of American labor, then they'll certainly be willing to break the law to avoid the high cost of legal immigrant labor. 

Bush's plan offers these choices:

  • You can pay the higher cost for an American worker, which you're already willing to break the law to avoid.
  • You can pay the higher cost for a legal immigrant worker, which you're already willing to break the law to avoid.
  • You can continue hiring illegal immigrants, and skip the higher costs.  Which is exactly what you're doing now.

It's hard to see how this plan offers much incentive to get illegal immigration on the books.   If businesses were so gung-ho about being legal, they'd have hired Americans already.  If their concern were simply putting warm bodies into jobs, we wouldn't have an illegal immigration problem in the first place.....or an unemployment problem.  

Waving a Green Card in front of those higher labor costs isn't going to magically make them any more appealing.   Jacoby is unacquianted with human nature if he thinks that...

Those already in the country illegally should be required to pay a penalty; they should have to wait just as long as other applicants for full legal status. While they're waiting, they should be required to fulfill a variety of additional obligations: hold a job, pay taxes, abide by the law, take English classes, and demonstrate their commitment to American values. Once they've met these terms, it might even make sense to require them to go home to pick up their visas.

...people willing to risk their lives to avoid the problems and uncertainties associated with legal immigration would jump at the chance to wrap themselves in that bureaucratic nightmare when they could just come across illegally.   "You'll get a penalty, no shortcut to legal status, and strict job-obligations.  You'll have to pay taxes, take English classes and jump through any other hoops we set up.  At the end of all that, you may or may not be allowed to stay here.   But we will definitely know who and where you are."

Yeah, I bet the illegal immigrants will be all over that.


Apparently immigration reform—and securing the borders of the country—is the hot topic of the day.  So I thought I would weigh in as well, if briefly.

One of the attractions to illegal immigrants is also the relatively generous system of public benefits we have in the US. Compared to Mexico, even a life of poverty in the US is one of relative security.  If you get sick, you can go to the emergency room for treatment, irrespective of your ability to pay.  Your children will receive a free education at public expense.

Things aren't all fuzzy kitties for illegals, but clearly by voting with their feet, they're indicating that it's far superior here than in Mexico.

Milton Friedman summed it up in a brief statement years ago.  You can't have both a welfare state and uncontrolled immigration.  The inducements, even with the relatively ungenerous benefits we provide compared to, say, our European cousins, are vastly superior to anything available in Coahuila or Chiapas.

The trade-off is clear.  We can eliminate the welfare state and allow open borders, or we can have the welfare state and crack down on both illegal immigration, and the employers who employee the...ahem..."undocumented worker".

Cake.  Have it.  Eat it.  Please choose only one. 

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Previous Comments to this Post 

You’ve got to work more on demand than supply, that much is clear.  That’s the problem with the War on Drugs, too.  Too much emphasis on ending the supply, not enough on reducing the demand.
Written By: Nathan
You can pay the higher cost for a legal immigrant worker, which you’re already willing to break the law to avoid.
Don’t you believe that would depend upon the price delta between the illegal and legal immigrant worker? (I don’t agree with Bush’s plan, either.)
Written By: Mark
URL: http://
Incrementally, yes.   But if you hire them legally, then you have to pay the market price for legal labor, plus payroll taxes, plus the bevy of obligations you have with US workers.   What’s the percentage in it for the businesses?    It seems to me that they’ll take a look at this plan, then go back to doing business the way they already chose to do business.
Written By: Jon Henke
Jon -

Only one point I would contend.  I’ve worked side by side Mexican, Brazilian and Irish ’illegals’ - and they work harder than any American on the job.  When you consider a decent paying day labor job is a months worth of salary over ’there’ it makes sense.   Given the choice between a lazy American and a motivated immigrant, I’ll take (as will the smart business owner) the immigrant -

Written By: tbone

Simple way to solve the problem:  Incarcerate all employers who break the law with a minimum one year in prison.  Just lock ’em up in a nice medium security federal prison.  Maybe some big old con will put them to work, the traitors.   

Not that the Dems were that good on the subject, but with Bush in charge, you can forget about it.  When will  people finally wake up and realize that Bush and his cronies don’t give a s*** about the middle class and middle class workers.  Just look at the recent bankruptcy bill.  Immigration is just one more issue where right-leaning middle class and lower middle class workers just agree to bend over and take it and effectively hand over their job to some illegal who will do it for one-third the wages and no benefits.

Bush was re-elected.  Therefore, we all agree with his immigration policy - why don’t you understand that?  Americans get what they deserve and they deserve Bush.   

Written By: mkultra
URL: http://
Nyet Kulturni states...
When will  people finally wake up and realize that Bush and his cronies don’t give a s*** about the middle class and middle class workers.

Yep.  Capitalists just want a society full of people with no money so they can’t buy anything.  You’re on to us, MK.
Written By: Mark
URL: http://
Therefore, we all agree with his immigration policy - why don’t you understand that?
That’s absurd even for you, mk. We can only vote for someone if we agree 100% with their policies? You condemn people on this site for supposedly blindly agreeing with republicans, then you turn around and demand 100% compliance if they voted for Bush. Do you ever wonder why people call you a troll? It’s not because you’s because you come across as a hypocrite in your disagreements.
Written By: JWG
The great thing about the illegal immigration issue is that is shows that Republicans and Democrats are two wings of the same bird of prey just as Pat Buchanan said.

There is an invasion going on and it is fully supported by the Establishment.

Resistance is futile... it would be wise to learn Spanish because America will only continue to transform into a bi-lingual country.

Written By: skillet
URL: http://

My doing an essay for my scholarship. can u guys give me more political issues that bush needs yo change?

so far i have: bankruptcy plan, gun policy, safer court , immigration plan, foreing policy, obisity and our kids

Written By: Anonymous

"Immigration Policy: It’s the Incentives, Stupid" is on target.  The lack of internal enforcement of our immigration laws as regards the hiring of illegal aliens is THE big driver of mass illegal immigration.  Americans must realize that inept and/or craven leaders in Washington—particularly in the Senate—will not act until given instructions on what to do.

The best work on lack of employer sanctions has been done by the San Diego Union-Tribune.  My notes below on their report should prove helpful in guiding your senator on what he or she needs to do. 

Tom Shuford, Lenoir, NC

On the payroll: illegal immigrants
Enforcement is focused on border, not business
By Leslie Berestein
November 7, 2004

THE IMPORTANCE OF A WORD: "KNOWINGLY": "The Immigration Reform and Control Act of 1986 granted amnesty to more than 3 million undocumented immigrants already in the country. It also made it illegal to knowingly hire undocumented workers, establishing penalties that include fines of as much as $10,000 per worker and six months in prison for violators. But the operative word is knowingly. While job applicants must present identification proving their eligibility to work in the United States, employers are not required to verify its authenticity."

Philip Martin, a University of California Davis expert on immigration and labor issues: "In 1986, we basically said that you are off the hook if you get documents, which can easily be forged. We didn’t quite say that, but it came close."

SUBCONTRACTORS: LAYERED PROTECTION FOR EMPLOYERS: THE CLEANING INDUSTRY EXAMPLE: "The cleaning industry is rife with subcontractors who provide a layer of immunity for their clients. After immigration authorities found more than 250 contracted janitors working illegally in Wal-Mart stores last year, Wal-Mart officials denied knowledge of any wrongdoing, even though several of the company’s cleaning contractors had admitted to hiring undocumented workers in the past."

99% DECLINE IN FINES IMPOSED ON EMPLOYERS FOR BREAKING IMMIGRATION LAWS SINCE 1992: "Nationwide, work-site enforcement has declined significantly since the early 1990s, according to Department of Homeland Security statistics. Fines imposed on employers for breaking the law dwindled from 1,063 orders in 1992 to only 13 in 2002. Work-site arrests, warnings issued to employers and cases completed also dropped off sharply during this time."

TOOTHLESS EMPLOYER SANCTIONS: THE ONLY KIND CONGRESS WILL ACCEPT: "Some immigration experts say enforcement is weak because lawmakers find it more politically acceptable to reinforce the border than to crack down on businesses."

Wayne Cornelius, director of the Center for Comparative Immigration Studies at the University of California San Diego: "Congress was committed to passing a toothless employer sanctions law. It was the only way they could get it through. . . . There was a lot of pressure from business lobbies, from agribusiness, restaurants, hotels."

IN RARE INSTANCES WHEN SANCTIONS ARE IMPOSED, POLITICIANS INTERVENE: "Over the years, politicians have intervened on behalf of a number of employers caught hiring undocumented immigrants. Some employers who have come under fire are generous political contributors, such as Wal-Mart, which has criminal and civil cases pending."

MISERLY BUDGET FOR ENFORCEMENT OF EMPLOYER SANCTIONS REFLECTS PRESIDENT’S PRIORITIES: "Last month, President Bush signed a Homeland Security budget for fiscal year 2005 that granted $74 million for additional Border Patrol technology, including $10 million for unmanned aerial drones. Only $5 million was granted to strengthen work-site enforcement, a fraction of the $23 million enhancement initially requested."

PART OF THE SOLUTION: MANDATORY DOCUMENT VERIFICATION ON A FEDERAL DATABASE: "Congress did vote last year to extend a pilot Homeland Security program that allows employers to verify workers’ documents on a federal database at no cost. The program, used in California and five other states, is expected to be available nationwide beginning Dec. 1. But participation is strictly voluntary. This is perhaps why only 127 employers in San Diego County use it despite the fact that the program has existed in California since the late 1990s."

Written By: Tom Shuford

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