The sources of America’s immigration problems–and a possible solution

By Ron Unz | September 21, 2011

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The Politics of Rich and Poor

In recent decades, American society has undergone an almost unprecedented concentration of wealth, now reaching the point at which the top 1 percent possess as much net wealth as the bottom 90-95 percent. This same top 1 percent received over 80 percent of the total increase in American personal income between 1980 and 2005, and that trend has almost certainly accelerated since then. Late last yearNew York Times columnist Nicholas Kristof sounded the alarm that America might soon reach the extremes of wealth and poverty found in the notoriously polarized societies of Argentina and the “banana republics” of Latin America, then needed to retract that claim when he discovered that we had already long since passed most of those countries in that regard. And in a widely discussed Vanity Fair article, Economics Nobel Laureate Joseph Stiglitz characterized today’s America as being a country “Of the One Percent, By the One Percent, and For the One Percent.” This state of affairs is clearly not beneficial to the less wealthy 99 percent of our society, but he also pointed out that the obvious potential for social instability should deeply concern the more thoughtful members of the One Percent themselves.

Furthermore, much of this economic decline has been absolute rather than merely relative. Adjusted for inflation, median personal income has been stagnant for the past 40 years, and a substantial fraction of the population has seen a sharp drop in its standard of living, a situation almost without precedent in American history. Meanwhile, the costs of numerous budget items such as healthcare or higher education have risen very rapidly, thereby forcing more and more families into what Paul Krugman has characterized as a system of permanent “debt peonage” or what Warren Buffett has similarly described as a “sharecropper’s society.” As a result, nearly a quarter of American households have zero to negative net worth, and a single unexpected illness or economic setback can push them to the brink of destitution.

To some extent, this long stagnation in financial well-being has been masked by the material benefits derived from the exponentially growing power of our electronic technologies and also by the false sense of wealth temporarily provided by the housing bubble. But with the collapse of the latter, many Americans are finally discovering just how poor they really have become. And in many respects, this economic situation seems far worse in America than in most of the other wealthy countries we have long regarded as our economic peers, so it cannot simply be blamed upon problems of technological displacement or the rise of China or global free trade.

It is perhaps not entirely coincidental that this 40 year period of economic stagnation for most Americans coincides exactly with 40 years of rapidly rising immigration levels. After all, the concept that a huge influx of eager workers would tend to benefit Capital at the expense of Labor is hardly astonishing, nor does it require years of academic research into the intricacies of economic theory.

Consider, for example, the case of self-educated union activist Cesar Chavez, a liberal icon of the 1960s who today ranks as the top Latino figure in America’s progressive pantheon. During nearly his entire career, Chavez stood as a vigorous opponent of immigration, especially of the undocumented variety, repeatedly denouncing the failure of the government to enforce its immigration laws due to the pervasive influence of the business lobby and even occasionally organizing vigilante patrols at the Mexican border. Indeed, the Minutemen border activists of a few years back were merely following in Chavez’s footsteps and would have had every historical right to have named their organization the “Cesar Chavez Brigade.” I think a good case can be made that during his own era Chavez ranked as America’s foremost anti-immigration activist.

But today’s union leaders have grown almost completely silent on the obvious impact that large increases in the supply of labor have on the economic well-being of ordinary workers. A crucial explanation is that for reasons of citizenship and language, the overwhelming majority of immigrants are employed in the private sector, particularly the small-scale non-unionized private sector. Meanwhile, population growth tends to increase the need for teachers, police officers, firefighters, and other government employees, thereby benefiting the powerful public-sector unions that today completely dominate the labor movement.

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This relates to another perfectly valid criticism raised by anti-immigration activists, namely that the net fiscal impact of many immigrants is substantially negative. The notion that large numbers of immigrants and their families subsist on welfare or that Mexican immigrant mothers often have five or ten children is sheer nonsense. Immigrants actually have very high labor force participation rates and relatively low rates of welfare dependency, while the vast majority of their families stop at two or three children, a number somewhat higher than that of today’s native-born whites but really no different from the typical American family during the hallowed 1950s. And since, as mentioned earlier, immigrant crime rates are about average, there is no large additional cost for police or prisons.

The fiscal difficulty lies not on the expenditure side but on the tax side. Most immigrants, especially illegal ones, work at relatively low paid jobs, and the various taxes they pay simply cannot cover their share of the (extremely inflated) costs of America’s governmental structure, notably schooling. Furthermore, for exactly this same reason of relative poverty, they receive a disproportionate share of those government programs aimed at benefiting the working poor, ranging from tax credits to food stamps to rental subsidies. Immigration critics have persuasively argued that the current system amounts to the classic case of economic special interests managing to privatize profits while socializing costs, wherein immigrant employers receive the full benefits of the labor done by their low-wage workforce while pushing many of the costs—including explicit income subsidies—onto the taxpayers. Obviously, all these same factors are equally true for non-immigrant Americans who fall into the category of working-poor, but the large continuing inflow of low-wage workers greatly exacerbates this basic fiscal problem.

Immigration and the Political Trap

But even if we conclude that our high immigration levels represent a serious national problem, is there any possible solution? The political reality is that both major parties are enormously dependent upon the business interests that greatly benefit from the current system and are also dominated by disparate ideologies—libertarian open-borders and multicultural open-borders—whose positions tend to coincide on this issue.

As an extreme example of the bizarre ideological views of our current political elites, consider a less-publicized element of the immigration reform plan that President George W. Bush trumpeted during his 2004 reelection campaign. This provision would have allowed any foreigner anywhere in the world to legally immigrate to America if he accepted a minimum-wage job that no American were willing to fill, an utterly insane proposal which would have effectively transformed America’s minimum wage into its maximum wage. Naturally his opponent, Sen. John Kerry, saw absolutely nothing wrong with this idea, though he did criticize various other aspects of Bush’s immigration plan as being somewhat mean-spirited.

Furthermore, while significant Democratic support for curtailing immigration appears almost unthinkable given the party’s internal dynamics, a committed Republican effort—unlikely though it might be—would seem doomed to failure due to the racial aspects of the issue. Republicans would immediately be subjected to withering Democratic attacks in the media—whether or not these were fair or sincere—and as a result would lose much of whatever remaining non-white political support they still retained, while the GOP plan would never have the slightest chance of gaining majority support in Congress, let alone a filibuster-proof majority. The Republicans would suffer massive political damage without any possibility of achieving legislative success, and knowing that, would never undertake the effort. So they don’t.

After all, even strictly enforcing existing immigration laws is almost impossible in our current political and media climate. Although the press has recently highlighted the hundreds of thousands of undocumented residents annually deported under the Obama administration—and this has sparked a sharp political backlash among his pro-immigrant supporters—such a number is negligible compared to the estimated total of 11 million or so. Only the most utterly egregious employers of those workers have ever paid serious penalties, and the dollars involved are usually trivial compared to the economic benefits of ignoring the law. In almost all cases, “employer sanctions” have amounted to just a (small) cost of doing business. When both worker and employer have a strong mutual interest in evading a law, enforcement becomes very difficult and cumbersome, just as we have seen in the case of our endlessly violated drug laws.

Even so, attacking the employment side of the equation remains the most effective approach. Virtually all immigrants come here for jobs, so eliminating government benefits would merely serve to further immiserate millions of families, who would remain in this country regardless. Having immigration agents conduct random sweeps through ethnic neighborhoods would engender enormous fear and anger and also deter immigrants from reporting crimes, while constituting a massive violation of traditional civil liberties. Even building a fence and doubling the border-patrol would probably have just a small impact across such an enormously long border, not least because an estimated one-half of all illegal immigrants enter the country legally and then overstay their visas. If the magnetic appeal of the American job market could somehow be reduced or eliminated, such ancillary measures might prove useful, but if the jobs remain, the immigrants will remain here as well.

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