Ocasio-Cortez's View of Immigration and the Economy

Bad signs for the 116th Congress

By Andrew R. Arthur on January 3, 2019

Alexandria Ocasio-Cortez, the new representative of New York's 14th electoral district, has been making news since the day of her primary election upset over 10-term Rep. Joe Crowley in June 2018. If her Twitter feed is any indication, that will continue through at least the 116th Congress, and not in a good way for disadvantaged Americans or legal immigrants.

Specifically, on January 1, 2019, she tweeted:

There are six ideas in total, but two caught my eye.

First, AOC (as the representative-elect styles herself apparently, an abbreviation that will cause serious confusion among the employees of the Architect of the Capitol, who actually keep the physical plant on the Hill running), in her third point states: "Make Min Wage = Living Wage."

The poverty guideline for a single-wage earner, according to the Department of Health and Human Services (HHS), is $12,140 for the 48 contiguous states. Logically, that is what HHS considers to be a living wage. The Department of Labor (DOL) reports that 21 states and Puerto Rico have either no minimum wage, or a minimum wage that is equal to the federal minimum wage of $7.25 per hour. The remaining 29 states, the District of Columbia, Guam, and the Virgin Islands have minimum wages that range from $13.25 in D.C. to $7.50 in New Mexico (I am not sure what the extra two dollars per eight-hour day gets one in the Land of Enchantment, but it is their law).

In any event, using the federal minimum wage, and assuming a 50-week work-year of five eight-hour days per week, an annual wage would work out to $14,500, $2,360 over the poverty guideline. So I guess the current minimum wage is a living wage.

I assume, however, that AOC is assuming a higher living wage. According to Time, she ran on a platform calling for a $15/hour "baseline" minimum wage, so I assume that is what she deems a minimum "living wage". Again, at eight hours a day for 50 weeks, that equals $30,000 a year. According to HHS, that is sufficient to keep a family of five above the poverty guideline.

Thinking back to my minimum-wage jobs (the lowest I remember getting paid was $2.00 an hour as a busboy, plus whatever tips the wait-staff opted to share), I then would have likely been in favor of a $15 minimum wage, too. Of course, there's no way that my first boss (a former Baltimore Colts linebacker) would have paid $15/hour to a 16-year-old without a high-school degree (yet) and no work experience, so I likely would have had no job at all.

As Reason magazine noted in April 2016, California "Gov. [Jerry] Brown Admits $15 Minimum Wage Does Not Make Economic Sense, Approves It Anyway". That article contains the following quote from Governor Brown:

Economically, minimum wages may not make sense. But morally, socially, and politically they make every sense because it binds the community together to make sure parents can take care of their kids.

Reason focuses on the adverb "politically", and I would agree with their statement: "Politics don't hold communities together. But they can keep entrenched interests in power." That said, however, Governor Brown and my former boss would have been in agreement about the economics of the thing.

This is a key point. No one I know overpays for anything, except when there is a charitable purpose behind it (and even then there are limits). This is as true as it relates to labor by an employer as it is to a consumer purchasing a good or service. And the laws of supply and demand being what they are, the more you have of any good or service, the less you will pay for it, all other things being equal. That is why minimum wages exist to begin with, because at the lower end of the labor-skills spectrum, there are more workers competing for jobs, and therefore lower wages.

Which brings me to AOC's fifth point: "End For-Profit Prisons & ICE Detention." There is much that can be said about the cost-effectiveness of for-profit immigration detention, and it is a subject that I will take up soon. For the moment, however, I want to focus on the second part of that point: "End ... ICE Detention."

In post captioned "Are 'Alternative to Detention' Programs the Answer to Family Detention?", my colleague Dan Cadman wrote about the deterrence value of detention:

After all, it isn't just about making illegal border crossers comfortable in their surroundings while they await their inordinately protracted immigration hearings. It is — or at least should be — a matter of establishing mechanisms that deter other families from making the journey. Each day, each week, and each month that former neighbors in the countries of origin see that family members haven't been repatriated, and are in fact faring well here, signals to them that perhaps the benefits do outweigh the risks; especially if, after having been released, they can still opt out by absconding once they make the cost-benefit analysis that hanging around is no longer a viable option and relief from an order of removal has become remote.

Put another way, the more aliens who enter illegally who are released, the more aliens who will enter illegally with the expectation that they will be released, too. Or, as I wrote in a December 2018 post:

[I]f your purpose in entering the United States illegally is to live and work in the United States, the more quickly you can do so, the better. And although people may have different opinions about the precipitating factors that prompt foreign nationals to leave their homes (violence, persecution, poverty, a higher standard of living, reuniting with family and friends), almost all agree that once those foreign nationals are in the United States, they want to live and work in the United States.

Most of those who enter the United States illegally have low levels of education. As my colleague Steven Camarota explained in an October 2018 post:

As we pointed out in our prior study, research by the Center for Immigration Studies, the Pew Research Center, the Heritage Foundation, and others have all found that a very large share of illegal immigrants have relatively few years of schooling — most have not completed high school or have only a high school education. ... [T]hey tend to earn wages commensurate with their education levels and, as result, they typically have low incomes on average, though there are individual exceptions.

Given this fact, they will be competing for jobs with immigrants who have already arrived and native citizens and nationals with low levels of education. In other words, the fewer aliens who are detained, the larger the labor pool will be for low-paying jobs, and the less that employers will have to pay to hire workers.

You don't have to believe me. In her August 3, 1994, testimony before the Senate Committee on the Judiciary, the late civil-rights icon Barbara Jordan, then-chairwoman of the U.S. Commission on Immigration Reform stated:

Unlawful immigration is unacceptable. Enforcement measures have not sufficiently stemmed these movements. Failure to develop more effective strategies to curb unlawful immigration has blurred distinctions between legal and illegal immigrants. ... The Commission is particularly concerned about the impact of immigration on the most disadvantaged within our already resident society — inner city youth, racial and ethnic minorities, and recent immigrants who have not yet adjusted to life in the U.S.

Nothing has changed in the intervening 24 years.

Like gravity, the laws of economics do not respond to political whims. If the U.S. government were to open its borders to all who wanted to enter illegally (which is what would happen if ICE detention were eliminated), and to enforce a $15.00 (or higher) arbitrarily mandated "living wage", there would be fewer jobs to go around, even assuming that higher wages stimulated some level of economic growth. Too many workers would be pursuing too few jobs. And the big losers would be "inner city youth, racial and ethnic minorities, and recent immigrants who have not yet adjusted to life in the U.S."

Such proposals might be a good way to "build an audience". They are a bad way, however, to protect the most disadvantaged in our society, which should be the first job of any so-called "public servant".