Sunday, January 09, 2005

Immigration Issues, Part 2

After reading through comments from blog allies Downtown Lad and Sandi from Vista on Current Events, I started looking for more pieces of information on this current and pressing issue.

First, as Sandi pointed out, the NPR article on a recent poll conducted by NPR, the Kaiser Family Foundation, and the Kennedy School of Government at Harvard on Americans' attitudes towards immigration was a bit scant on details in the summary. After digging a bit in the results (available as a PDF in the sidebar of the linked page) and an analysis that appeared in my professional association's magazine, these points leaped out at me:

-- 72% of non-immigrants and 48% of immigrants are "concerned" about illegal immigration.

-- Among non-immigrants, 63% say taxpayers pay too much to provide services such as education and health care for illegal immigrants, 49% say too many people are entering the country, 56% say there is an increased likelihood of terrorism, and 54% agree with the statement that "the wrong kind of people are entering the country".

-- Perhaps most telling, the study found that 41% of all surveyed, including immigrants, felt that LEGAL immigration should be decreased -- a drop from the 59% found post-9/11.

Given those figures, it isn't hard to see how Arizona passed its Proposition 200 requiring much greater scrutiny of immigration status to access certain publicly-funded services. Obviously Americans think there is a problem with immigration. A series of articles and reviews centering around the controversial book "Mexifornia: A State of Becoming" by Victor Davis Hanson (which I recommend as reading, btw) that discuss the issue in greater detail can be found here.

As DTL pointed out in his own way, we as a country are always looking for the low-cost way to do things. On first blush, using illegal immigrants seems to be the best option for businesses -- first off, since you can pay in cash, you avoid the cost of payroll tax and unemployment insurance (at minimum a 15% cost savings). Second, their status makes them much less likely to file complaints for your violating the Fair Labor Standards Act (governing overtime) and other laws designed to limit cost-cutting at the expense of your employees. Both of these translate into a competitive cost advantage, which in general means that you get more business. Obviously, if you get caught, there are penalties, but for most businesses, the risk of getting caught is far smaller than the benefits that can be recognized.

Unlimited immigration, as the Wall Street Journal advocates, is certainly an option -- by letting everyone in who wants to come, we vastly increase the size of the labor pool, which will drive down wages and decrease the compensation cost of doing business. However, my concern is that our tax system is not designed to capture revenue best when personal income drops. In order to maintain what we do have in terms of current revenue and to cover the increased costs of the rapid addition of people, especially children and families, to our existing systems of mandatory public education and other social services, we will require much greater taxes on business -- which will reduce the cost advantage of cheaper labor and constrict economic growth. The current situation in which Europe finds itself -- while immigration to there has been more difficult, the cost per immigrant to social services is much greater -- mirrors what we would likely see in the United States under unlimited immigration.

Looking at this from a strategic perspective, what scares me is that we have not established a shared set of values as to what we want to accomplish with immigration. In my perspective, immigration serves a vital need in the United States by providing labor to perform tasks that would otherwise have to be done by more highly-skilled individuals at greater cost to time and money AND by providing skills currently in shortage in the United States at a lower cost. In addition, I feel strongly from a moral and philosophical standpoint that it is in the United States's best interest to encourage immigration for those with particular skills or aptitude for learning them (this is my HR side talking, which is currently concerned with the coming "demographic storm" as the baby boomers begin to leave the workforce, taking their skills, knowledge, and experience with them unless successfully transferred to others).

The question is.....how do we do it?

From my side, I think we need to focus on revamping the tax structure in this country, especially on business, from a income and payroll basis to an output/value-added basis. I think we also need to acknowledge that immigrants fall into two groups -- those who want to work AND live here and those who just want to work here -- and review/update our current naturalization and immigration practices based on both.

Fire away, people.

1 comment:

Sandi said...

Jeff here is another immigration article I may be blogging tomorrow. It is a lot about identity theft.

[Excerpt]
"Ninety-five percent of the identity theft cases in Northampton were committed by illegal aliens," Morganelli said. "I really believe this is the No. 1 crime and security issue facing our country. But when we call immigration officials, they could not care less."

The experience of a man in California illustrates what can happen when an identity is stolen.

"Unbeknownst to him, an illegal alien was using his identity for six years," he said. "The victim could not prove it was not him working in those states. A federal tax lien of $42,000 was placed on his assets. Creditors also placed liens. He could not qualify for loans because of his supposed bad credit history. It was a mess."

In a recent raid, 27 illegal aliens were arrested, Morganelli said. "Not one was detained even though they had stolen identities. The county judge said they only were here to work. They were released one week after being picked up."

Even if they plead guilty, they usually spend no more than a week in jail, he said. A judge accepting their guilty pleas will issue a "determination of guilt" that essentially says they do not deserve to be punished. "If Immigration does not detain them, the illegals get letters telling them to show up for their hearings. If they show, they show. If they don't, they don't."
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