In this blog post we will look at the angles three angles of immigration; the economic cost of illegal immigrations versus its gains, border security issues, and politics behind the law and Immigration in general.
Economic Cost vs. Benefits of illegal Immigration
Before any public policy is enacted a cost-benefit analysis has to be done. If the benefits out weighs the cost you go forward with the policy if the inverse is true you don’t. Now there hasn’t been an ostensible support of illegal immigration by policy makers but the lack of significant action to stop it, tell me illegal immigration has had tacit support for years. Why? The cheap labor from illegal aliens helps American business men by lowering the cost of labor which helps the bottom line. Plus many illegal aliens do the dirty, dull, and dangerous jobs (the three D’s) that many American will not do. Mexico has also benefited from the United States lax enforcement of immigration law. Remittances from illegal aliens sent to relatives in Mexico helps their economy and money from the drug trade is a boon to their economy (more on that later).
As far as economic cost of illegal immigration; illegal immigrants obtain wages below market prices and put downward pressure on the wages of legal working Americans doing the same work. Additionally illegal aliens want social services (welfare for the poor, schooling for children, healthcare etc). This cost wouldn’t have occurred if the illegal immigrants weren’t there in the first place. The federal government basically lived with the idea of businessmen benefiting from the labor and state/local governments and low wage low skill worker bearing the cost of this policy. However these realties have changed big time.
According to a department of Homeland security report illegal immigration in Arizona has increased form 330,00 in 2000 to 560,000 in 2008.(2) A 70 percent increase. This increase in illegal aliens is causing a huge increase in their social cost. Also, the benefits of illegal immigration have been diminished because the state of Arizona has begun to crackdown on the hiring of illegal immigrants. So the cost of illegal immigration is going up while the benefits are going down; forcing policy makers to adjust to this new reality.
Border Security and the Drug Trade
There is a drug war going on US-Mexican border. Drug organizations have a with ton of money (thanks to U.S consumption illicit drugs) and fire power(thanks to the black markets and shipments from many countries) are fighting each other and the Mexican Government for turf and shipment routes to the United States and unfortunately they are winning. Countless police chief and politicians have been killed and the Associated Press report stated that Mexican President Felipe Calderon says 28,000 people have been killed since 2006; the year the Mexican government under his leadership began to crackdown on drug organizations. (3)To get a better grasp of the drug trade check out the map below of the movement of drug to and through Mexico.
This map is from Stratfor a private intelligence company in which I’m a member (had to throw that in) notice the routes that go through Arizona. (4). One quick example of how drug moves across our southern border between July 29th and August 4, 2010 the US Border Patrol seized 8794 pounds of marijuana, 8 criminal aliens and 8 gang member.(5) The United states has to provided more technology, more manpower and more funds toward the securing of the southern border. I don’t intend to leave out the northern which need secure too but the difference between the two borders is Canada not in danger of becoming a failed state due to drug organization running the country. Canadian are not fleeing to America for a better life over burden Northern states. Plus we don’t have a history of hostility with Canada like we had with Mexico during the 19th century. Our political boundaries and cultural boundary are clear unlike the political and cultural boundaries with Mexico. Dr. George Friedman CEO and founder from Stratfor go in greater detail on this issue in his latest weekly Geopolitical report (6)
The Politics of Immigration in America
Immigration in general and the Arizona illegal immigration law in particular has become heated issue. Opponents of the law call supporters racist and xenophobic while supporters of the law call opponents ill-informed of the letter of the law and the dire situation on the border. I think one of the impetuses behind the law is the murder of a rancher named Rob Krentz back in March. He was prominent rancher and was allegedly murdered by an illegal alien in Cochise County (7); a county in southeast Arizona directly on the border with Mexico.
His murder set of a political fire storm in which the in Arizona voters demanded elected officials in the state and in Washington get the border and illegal immigration under control. Subsequently, the Arizona illegal immigration bill was crafted by the Arizona house and senate and signed by Governor Jan Brewer.
The conventional wisdom in the immigration debate particularly when dealing with Latinos is that Democrats like the huge wave of Latinos to America because when they become legal the majority vote democratic; while Republicans like illegal immigrants for the cheap labor they provided. Republicans across America especially in Arizona have shifted against illegal immigration becoming more concerned about the social cost and security issues than the economic benefits that illegal immigrant’s cheap labor could bring. An interesting shift I must say.
If the federal government put the resources and manpower on the borders first I think you could get broad support for immigration reform. I don’t think it practical to deport tens of millions of people as some on the right basically advocate when they say no “amnesty” but people on the political left got it wrong when they don’t see anything wrong with people who broke the law paying no price and jumping in front of other people who want to lawfully enter the country and become citizens seems like a moral hazard to me. We need serious people to come together and address this immigration issue head on. I think the creation of the Arizona law was understandable, certainly not a panacea; but a call for the federal government to do their job and stop dithering on this important issue. One of the stumbling blocks to the immigration issue and particularly illegal immigration from Mexico is the drug trade and unless we face the problem of American consumption of illicit drugs well be fighting an uphill batte to secure the southern border.
Endnotes
1) Arizona Senate. “Arizona new immigration law-SB 1070 as amended by HB 2162” azgovernor.gov. 23 Apr 2010. 04 Aug 2010. < http://www.azleg.gov/alispdfs/council/SB1070-HB2162.PDF>.
2) Michael Hoeffer, Nancy Rytina, and Bryan C. Baker. “Estimates of the unauthorized immigrant population residing in the United States: January 2008.” dhs.gov. Feb 2009. 04 Aug 2010. < http://www.dhs.gov/xlibrary/assets/statistics/publications/ois_ill_pe_2008.pdf>.
3) “Mexico: 28,000 killed in drug violence since 2006”. news.yahoo.com. 04 Aug 2010. 04 Aug 2010.
4) “Drug Routes” Stratfor.com 17 May 2010. 04 Aug 2010.
5) “USBP Weekly Blotter:July 29th- Aug 4th”. CBP.gov 04 Aug 2010. 04 Aug 2010.
6) George Friedman.” Arizona,Borderlands and U.S-Mexican relation”. Stratfor.com 03 Aug 2010. 04 Aug 2010.
7) Leo W Banks. “The Krentz Bonfire” tusconweekly.com. 29 April 2010. 04 Aug 2010.
I like the "middle-ground" stance you've presented here, Chris, because I agree that neither the left nor the right can seem to withhold their corresponding agendas in working toward an honest solution. I'll follow your three angle view in putting in my two cents.
ReplyDeleteI always find the economics of the issue so interesting because in all economic analysis there exists that magic point where all pertaining curves intersect and we establish an equilibrium. Obviously, we are not currently satisfying an equilibrium between the supply of "the three D's" (3D's) labor and the demand for such labor. No doubt there is disparity because there has been a staggering increase in 3D's labor supply while the demand continues to decrease. The numerics of this immigration issue that Chris rightly emphasizes, a 70% increase in illegal labor, more than likely bears the brunt of this increase of supply; however, the second source of the increase in supply is coupled to the cause of the labor demand decrease. That is, America's economy as a whole is suffering! (See Chris's 6-16 post). As Americans in "higher" labor markets (presumably unattainable by illegals) lose employment, they must resort to seeking jobs in the 3D's market. Likewise, as American production as a whole decreases, demand across all job markets decrease. It does not surprise me in the least that this issue is such a "hot" topic during an American economic downturn. During times of economic prosperity, we don't have such an influx of Americans seeking 3D's jobs potentially butting heads w/ the steady inflow of illegals. I offer no solution to this economic pickle; however, we can presume a day will come when America's economy is on the up and equilibrium will once again be sustained. How interesting will it be if we hit a day where our economic prosperity is such that the influx of illegals could not match the increase in the 3D's labor demand? Let's be optimistic!
I find that the kernel of this southern illegal immigrant issue lies in Chris's second angle: drug trade/border security. Humor me as I trace out my conception of the cause-effect path from illegal drug demand to immigration issues.
ReplyDeleteAmerica outlaws particular substances creating a black market -> The demand for such substances can hardly be supplied "in-house", so organizations from outside wish to capitalize (Colombia, Mexico, Canada, etc.) -> Naturally, Mexico's proximity and shared border with the US offers a sufficient avenue. Why so better than Canada? Mexico's initial economic state and low level of centralized governmental power provide an environment for cartels and illegal organizations to thrive (think back to the spike in organized crime in Russia after the fall of the USSR) -> Mexico's legitimate economy suffers as more emphasis and manpower is placed in cartels -> Wages of legitimate labor plummets as cartels continue to thrive -> Joint effort of US-Mexican goverments' "War on Drugs" place billions of dollars and manpower in an attempt to thwart the cartels’ successes, escalating friction (violence) in both countries -> The Mexican laborer is faced with two job markets: (1) potentially lucrative though dangerous employment within ranks of cartel or (2) finding "honest" employment for meager wages in Mexican dying legitimate labor markets -> There's actually a third option, (3) seek knowingly lucrative work in the US.
Obviously, I have not completely encapsulated this logic and there are holes present, but it is evident that America's substance demand / War on Drugs helps fuel illegal border crossings, not to mention Mexico's current boiling legitimate/illegitimate economic state. Chris, as I understand it, here you support the idea that beefing up the southern border security is an aspect of the solution to curbing both illegal immigrant crossings and illegal drug transport. I'm afraid this is where I'm going to have to disagree with you Chris. I find that a better long term solution to both of these problems lies in addressing the prevailing source of the problems: America's drug policy / War on Drugs. A liberalisation of America's drug policy has the potential to drastically diminish the black market that illegal drugs induce. I wish not to turn this blog entry into an illegal drug debate (physical effects of illegal drugs, treatment of addicts, decriminalization of illegal drugs, etc.). Perhaps that will be a topic for future entry. However, let us consider the effect that changing the legal status of cannabis might have. Marijuana accounts for close to half of the total illegal substances that are smuggled into this country. Coincidentally, nearly 3/4 of this smuggled marijuana comes through the Mexican corridor. Imagine the blows Mexican cartels would take by reducing there product by 75%! I'm not saying that this would not come without negative effects within the US, but there is potential here to confront Mexican cartels (w/ minimal violence) consequently curbing the influx of illegal immigrants from the south.
That's all I've got for now, but would still like to address the politics of the Arizona bill.
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ReplyDeleteDanny I agree with many of the points you raise. I will add the corruption of the police force is huge factor in Mexico inability to slow the trafficking of drugs. Also mexico has an interest in allowing the drug trade to keep going because he bring big dollars to their economy. As sad as that may be. As far as drugs laws and borders security goes. I don't think enhanced border security and liberalization of say marijuana is mutually exclusive. I think the legalization of marijuana has to be looked at seriously.
ReplyDeleteI am a 6 generation while US citizen from Arizona but living and working full time in Mexico which offers me a unique perspective on the immigration issue. All action has equal & opposite reaction. A few observations: 1. The illegal immigration and drug traffic are totally separate issues even though the cartels are using innocent laborers who try to cross the border for honest work as drug mules or decoys. There is no relationship between drugs traffickers and laborers other than they meet at the border looking for passageway; 2. While the US has been closing off the border to all types of crossing the drugs have to go somewhere and they have been staying in Mexico raking total havoc here. The violence has increased to scary levels all over. 3. Both the US & Mexican economies have been building for the last 100+ years around the capability to find work in the States when all else fails within Mexico and for this source of labor making it very complex and complicated for both sides for any change in policy. 4. Nobody wants it more than Mexico itself to solve the drug trafficking but the money laundering business hire many people and control may govt officials. 5. The idea if you can do it and get away with it then somehow its legal.... a century old custom based on Spanish/french Ruler's Law as opposed to our English Common Law background. 6. Many illegals in the States have wives and kids who are citizens so that if he is deported you breakup a family and make both homeless and burdens on both societies. Not to speak of the cost of rounding up and deporting millions of individuals. 7. The Democrats want the Latino vote so angering them they loose. The Republicans want businesses to be profitable but want zero amnesty so neither side will ever agree nor can they agree on a solution.
ReplyDeleteNow I see this blog is a year and a half old so nobody will ever read this
Bryan