An Examination of the Premises Underlying a Guestworker Program

By Mark Krikorian on June 19, 2001

Testimony prepared for the U.S. House of Representatives
Committee on the Judiciary
Subcommittee on Immigration, Border Security, and Claims
June 19, 2001

Mr. Chairman and members of the subcommittee: Thank you for offering me the opportunity to testify at this hearing on guestworker visa programs. My name is Mark Krikorian, and I am executive director of the Center for Immigration Studies, a non-profit, non-partisan research organization in Washington which examines and critiques the impact of immigration on the United States. Among its many activities, the Center is a subcontractor to the U.S. Bureau of the Census on an evaluation of the immigrant data in the Bureau's new American Community Survey.

With new administrations in Washington and Mexico City, there has been much discussion of a new guestworker program with Mexico, presented as a way to satisfy employer demands for low-skilled labor and to legalize today's large illegal immigrant population. Some guestworker proposals would include non-agricultural workers in addition to farmworkers, unlike our last major experiment with this concept, the Bracero program, which was limited to agriculture and was discontinued in 1964 because of flagrant abuses. Some of the other low-skill occupations for which guestworkers might be imported would be in the hotel, restaurant, construction, landscaping, and other industries.

In all the discussion of this issue, however, there has been no examination of the assumptions underlying any guestworker proposal. With the subcommittee's indulgence, I will endeavor to explore these assumptions and assess their validity.

Assumption 1. The flow of workers from Mexico is inevitable.

The bedrock assumption underlying a guestworker program is that the flow of workers from Mexico is unstoppable, a natural phenomenon like the weather which we are unable to influence. Therefore, it is said, managing the flow in an orderly and lawful manner is preferable to the alternative.

On the surface, the flow of Mexican immigration may indeed seem inevitable; it is very large, rapidly growing, and spreading throughout the country. But a longer view shows that this flow has been created in large part by government policies, both in the United States and Mexico. And, government policy having created the migration flows, government policy can interrupt the flows, though a social phenomenon like this is naturally harder to stop than to start.

Migration is often discussed in terms of pushes and pulls - poverty, oppression, and general societal dysfunction impel people to leave their homelands, while high wages and expanded economic and social opportunities attract people to this country. While true, this analysis is incomplete because it overlooks the connection between the sending country and the receiving country. No one wakes up in Timbuktu and says "Today I will move to Milwaukee!" Migration takes place by way of networks of relatives, friends, acquaintances, and fellow countrymen, and few people immigrate to a place where these connections are absent. Consider two countries on the other side of the planet - the Philippines and Indonesia. Both have large, poor populations, they are neighbors and share many cultural similarities, yet there are more than 1 million Filipinos in the United States and only a handful of Indonesians, and annual immigration from the Philippines is routinely 40-50 times greater than immigration from Indonesia. Why? Because the ties between the United States and the Philippines are numerous and deep, our having colonized the country for 50 years, and maintained an extensive military presence there for another 50 years. On the other hand, the United States has very few ties to Indonesia, whose people tend to migrate to the Netherlands, its former colonial ruler.

At the end of the Mexican War in 1848, there were only a handful of Mexican settlers living in the Southwest, many of whom soon returned to Mexico with the Mexican government's assistance. The migration of Mexican workers began in a small way with the construction of the railroads beginning in the 1870s and later with the expansion of other industries. But the process of mass migration northward to the United States, and the development of the networks which made further immigration possible, began in earnest during the Mexican Revolution of 1910-1920. The Cristero rebellion of the late 1920s was the last major armed conflict in Mexico and was centered in the states of west-central Mexico; partly to prevent further trouble, the newly consolidated Mexico City regime adopted a policy of encouraging emigration from these states. The power of government-fostered migration networks is clear from the fact that even today these very states account for the majority of Mexican immigrants to the United States.

On the U.S. side, federal policies that established migration networks between the United States and Mexico arguably began in the 1920s, when Congress specifically excluded the Western Hemisphere from the newly enacted immigration caps so as not to limit the flow of Mexican immigrants. Then in 1942, the Bracero Program to import Mexican farmworkers was started under the cover of World War II, and it continued until 1964. About 4.6 million contracts were issued to Mexican workers (many were repeat contracts for workers who returned several times, so that an estimated 1 to 2 million individuals participated). By creating vast new networks connecting the United States and Mexico, the Bracero Program launched the mass illegal immigration we are still experiencing today. Illegal immigration networks were reinforced by the IRCA amnesty of 1986, which granted legal status to nearly 3 million illegal aliens, at least two-thirds of whom were Mexican. This new legal status conferred by the federal government generated even more immigration, legal and illegal, as confirmed by a recent INS report. And the federal government's recent decision to abandon enforcement of the ban on hiring illegal aliens has served to further promote migration from Mexico.

As a result of this series of government decisions, the flow of Mexican immigration to the United States is quite large. The Mexican immigrant population has ballooned from less than 800,000 in 1970 to nearly 8 million today, nearly half of whom arrived just during the 1990s. Since 1980, the Mexican immigrant population has grown by 348 percent, creating a snowball effect through the reinforcement of old networks and the establishment of new ones. If present trends continue, within a few years Mexico will have sent more immigrants to the United States in 100 years than Germany (currently the leading historical source of immigrants) did in more than 200 years.

Far from being an inevitable process with deep historical roots, then, mass immigration from Mexico is a relatively recent phenomenon created by government policies.

Assumption 2. The poor are overpaid.

The objective of a guestworker program is to secure workers from outside the country because current residents aren't seeking out the jobs available at the wages offered. Ordinarily in a free-market economy, when a prospective buyer can't find sellers to trade with, he increases what he is willing to pay until a seller comes forward. With regard to employment, if workers are not responding in sufficient numbers to job offers, employers offer more money, or additional compensation in some other form, in order to purchase their labor.

Assuming for the sake of argument that a labor shortage exists at the bottom of the labor market, one needs to ask whether Congress should interfere with the natural workings of that market to prevent wage increases. In other words, should Congress redirect the Invisible Hand? A guestworker program would do precisely that - by artificially increasing the supply of low-skilled workers, it would short-circuit any market incentives for employers to increase the wages and benefits, and improve the working conditions, for entry-level blue-collar workers.

Support for a guestworker program, then, must be based on the assumption that the poor are overpaid and do not warrant increased compensation. Is this true? It would seem not. The inflation-adjusted wages of full-time workers with less than a high school education actually declined more than 7 percent during the 1990s. Given that at least three-quarters of Mexican illegals lack a high school education, it is likely that guestworkers would be competing with the very people who experienced this drop in wages. What's more, high-school dropouts are already the poorest workers in our country, so the drop in wages caused by additional imported labor, or the rise in wages caused by the lack of such labor, would have a much greater impact on their quality of life.

The drop in wages has been even more pronounced among the subset of the low-skilled workforce which would be most directly affected by a guestworker program - farmworkers. According to a March 2000 report from the Labor Department, the real wages of farmworkers fell from $6.89 per hour in 1989 to $6.18 per hour in 1998 - a drop of more than 10 percent. A new guestworker program is likely to continue this downward trend in farmworker wages.

And wages aren't the only indicator. Of full-time workers without a high-school diploma, fully 54 percent are not offered health insurance by their employers. There are signs, however, that this trend may be shifting. Because of difficulty in recruiting and retaining low-skilled workers, the fast food industry, for instance, is beginning to offer medical and dental insurance. What's more, these employers, such as McDonald's, Burger King, and Taco Bell, are also beginning to offer 401(k) plans, stock options, home and car insurance, etc. The purpose of a guestworker program is to slow this kind of trend by removing the natural incentives for businesses to expand compensation. Passage of a guestworker program, then, would reflect the sense of Congress that the poor do not require the better pay that the market would otherwise begin to offer them in the absence of unskilled foreign labor.

Assumption 3. These are jobs Americans won't do.

Another premise of a guestworker program is that even increased wages and benefits will not attract sufficient workers to many low-skilled occupations. In other words, there are jobs Americans simply won't do, and foreigners, either as illegal aliens or as guestworkers, must be imported to do them.

With regard to jobs held by Mexican immigrants (who would be the main subjects of any guestworker program), this is partly correct. It seems very likely that most jobs held by Mexican immigrants are jobs that would not interest the majority of Americans, because they are generally low-paying jobs done by unskilled workers. However, it is also clear that there are millions of Americans who are already doing precisely these kids of jobs. There are 8.3 million native-born full-time workers without a high-school education, and an additional 3.4 million native-born part-time workers without a high school education. There is a good deal of evidence that these workers are in direct competition with Mexican immigrants - i.e., these are jobs that Americans will do and are doing already.

With the exception of agricultural labor, native-born and Mexican-born workers have a similar distribution across occupations. Thus, natives who lack a high school education and Mexican immigrants appear to be doing the same kind of jobs and are therefore in competition with one another. Another way to think about whether Mexican immigrants compete with unskilled native-born workers is to look at their median wages. If Mexican immigrants were employed in jobs that offered a very different level of remuneration than native-born dropouts, then it would imply that the two groups do very different kinds of work. But, in fact, the median wage of Mexican immigrants and native-born high school dropouts is very similar; the median weekly wage for native-born high school dropouts who work full time is $350, while the median weekly wage for full-time Mexican immigrants is $326. Like their distribution across occupations, the wages of the two groups seem to indicate that they hold similar jobs.

Other research has shown the same thing - that unskilled immigrants and natives compete for the same jobs. A report prepared by the Bureau of Labor Statistics concluded that native-born and immigrant high school dropouts are almost perfect substitutes for one another in the labor market. That is, they compete directly with one another for the same jobs. ("Skill Differences and the Effect of Immigration on the Wages of Natives" by David A. Jaeger, Bureau of Labor Statistics Working Paper #274, 1996). In a paper published by the Brookings Institution in 1997, Harvard economists George Borjas, Richard Freeman, and Lawrence Katz also found that natives and immigrants who lack a high school education tend to hold similar jobs and concluded that immigration had a significant adverse impact on the wages of natives without a high school education ("How Much Do Immigration and Trade Affect Labor Market Outcome?", Brookings Papers on Economic Activity, Vol. 1, 1997). And a National Academy of Sciences report also came to the same conclusion - unskilled natives and immigrants tend to compete with one another for the same jobs (The New Americans: Economic, Demographic, and Fiscal Effects of Immigration, edited by Barry Edmonston and James Smith, National Academy Press, 1997).

Assumption 4. A free market in goods requires a free market in labor.

President Vicente Fox of Mexico said in January, "When we think of 2025, there is not going to be a border. There will be a free movement of people just like the free movement of goods." This moral equivalence of trade and immigration is another assumption underlying a guestworker program.

But this equivalence can only be true if people are no more than factors of production. In fact, though, trade and immigration are fundamentally different; while an imported good can be discarded when it has outlived its usefulness, an immigrant is a human being, created in the image of God, and thus more than merely a labor input.

The desire to benefit from a person's labor without acknowledging his humanity is to be expected among employers, and has deep roots. Henry Ford once asked (though not in connection to immigration), "How come when I need a pair of hands in the factory, I always get a human being as well?" Likewise, after it became clear that Germany's post-war guestworker program had failed, one observer noted ruefully, "We asked for workers, but they sent us men."

Now there is no question that trade and immigration are similar in certain ways. Both alter the supply of labor and change the mix of skills in the economy. Whether the workers come or only the goods they have produced, the supply of some kinds of labor relative to others is increased. When we import goods, for example, we are importing both the unskilled labor that went into assembling the product as well as the skilled labor that went into designing it. To the extent that immigrants possess skills that are different from those of natives, they too will alter the mix of labor in the economy.

Whatever the similarities, it is the differences between trade and immigration that are most consequential. The moral issue alluded to above is the source of these differences - people are not objects. The great student of management, Peter Drucker, in his 1954 book The Practice of Management, acknowledged this, recommending "consideration of the human resource as human beings having, unlike any other resource, personality, citizenship, control over whether they work, how much and how well..." From this difference stem others; for instance that immigration, unlike trade, alters the supply of labor permanently, not just in the year that a product is imported. In other words, with trade, a society can quickly alter the mix of labor it consumes to suit its changing tastes and needs, whereas immigration is forever.

The difference between trade and immigration was remarked upon by Henry Simons, the pioneer advocate of the benefits of free market economics at the University of Chicago. He wrote in 1948 that "to insist that a free trade program is logically or practically incomplete without free migration is either disingenuous or stupid. Free trade may and should raise living standards everywhere ... Free immigration would level standards, perhaps without raising them anywhere."

Or, in the words of economist Hans-Hermann Hoppe, editor of the Journal of Libertarian Studies: "free trade and restricted immigration are not only perfectly consistent, but even mutually reinforcing policies."

Assumption 5. Guestworkers will go home.

The distinguishing feature of a guestworker program, as indicated by its name, is that the "guests" are expected to return home rather than settle permanently. This is an attempt to make the importation of people operate more like the importation of goods, such that only the product of their labor stays behind. Recent proposals have sought to ensure this in a number of ways - for instance, by suggesting that a portion of the worker's pay be withheld and paid out after he returns to his home country.

History conclusively shows that such efforts are in vain and that the "guests" stay long after the party is over - precisely because people are not things, and have their own plans and purposes. The Bracero program, for instance, was supposed to be a temporary expedient during a wartime emergency, yet once farmers became addicted to it, they devoted resources to lobbying to keep it rather than to mechanization and innovation. Thus the "wartime" measure lasted for 22 years.

Not only did the program last longer than intended, but it also dramatically increased Mexican legal and illegal immigration; during the 22 years the program lasted, there was a total of 4.6 million Bracero entries, but also 5.3 million illegal-alien apprehensions and more than half a million Mexican legal immigrants. Rather than work temporarily and go home, large numbers of Mexican guestworkers over time settled and served as magnets for further immigration, sparking one of the largest migrations in human history.

Overseas the story is the same. Germany has become a "reluctant land of immigration" because of its program for guestworkers from Turkey, Yugoslavia, and Italy. The number of these workers peaked in 1973 at 2.6 million, when the oil crisis prompted the German government to stop recruiting guestworkers. The government expected that the now-unemployed guestworkers already in Germany would leave, because of back-and-forth migration patterns like those alleged to exist for Mexican workers in the Southwest. Instead, the Turkish and other workers stayed, figuring correctly that neither job prospects nor the social safety net were any better in their home countries. What's more, now that they were established in Germany, they had their families join them, leading to an 82 percent increase in the number of foreigners in Germany between 1973 and 1999.

This could not have been otherwise. Once employers come to depend on foreign workers, they cease looking for alternatives, and foreign workers come to depend on their guestworker wages to support their families. In addition, guestworker programs distort the economy, as employers factor in the presence of workers in their future plans, vastly increasing the likelihood that the "guests" will move in for good.

The old aphorism is as true today as it has ever been: There is nothing as permanent as a temporary worker.

Assumption 6. There will be no significant cost to taxpayers.

The permanent immigration that always accompanies guestworker programs is relevant in examining another implicit assumption of supporters: That there will be no large fiscal cost to such a program.

In fact, because of the inevitable large-scale settlement of guestworkers and their families, friends, acquaintances, and fellow countrymen, the long-term budgetary fallout of a guestworker program would likely be enormous. The modern American economy increasingly rewards skilled workers, while offering very limited opportunities to the unskilled, a category that would include virtually all guestworkers and those who follow them into the United States. The best way to gauge the fiscal reverberations of a guestworker program is to look at the characteristics of current Mexican immigrants, since many of them who are now illegal would participate in such a program and because they are similar to the new guestworkers who would arrive from Mexico.

Due to their low levels of education, Mexican immigrants experience limited economic mobility in the United States. The average income of Mexican immigrants is less than half that of natives. While their income rises steadily the longer they live in the United States, even long-time Mexican immigrants do not come close to closing the gap with natives. According to data from the Census Bureau's March 2000 Current Population Survey, more than half of legal Mexican immigrants who have been in the United States for more than 20 years and their U.S.-born children (under age 18) live in or near poverty.

This poverty guarantees high levels of welfare use. Even after welfare reform, welfare use among Mexican immigrant households remains much higher than that of natives. Based on Center for Immigration Studies analysis of the same Census Bureau survey, an estimated 33.9 percent of households headed by a legal Mexican immigrant and 24.9 percent headed by an illegal Mexican immigrant used at least one major welfare program. In contrast, 14.8 percent of native households used welfare. Moreover, Mexican immigrant welfare use remains much higher than that of natives even among those who have lived in the United for many years.

Also, more than half (52.6%) of Mexican immigrants do not have health insurance, compared to 13.5 percent of natives; Mexican immigration by itself accounts for 3.3 million or 29 percent of the growth in the size of the nation's total uninsured population since 1987. Even among legal Mexican immigrants who have lived in the country for more than 20 years, more than one-third are still uninsured.

It is unlikely that our society would want, or be able, to deny public services to the millions of guestworkers and those who will follow them. Much of the 1996 welfare reform that applied specifically to immigrants has been rolled back, and even those portions which remain have been almost completely negated by state decisions to provide benefits. Congress expressed unwillingness in 1996 even to give states the option of denying public education to illegal-alien children - so there would seem to be little likelihood that even a suspension of automatic birthright citizenship for children born here to guestworkers (as has been suggested by some) would have any effect in limiting their use of public services. There is, in other words, no way to avoid the high cost of cheap labor.

Assumption 7. Mass access to foreign labor won't slow innovation.

Another assumption that underlies a guestworker program is that the infusion of low-skilled foreign labor will not retard the process of technological innovation and increasing productivity. Unfortunately, elementary economics tells us that capital is likely to be substituted for labor only when the price of labor rises, something a guestworker program is specifically intended to prevent. A report released last week by the Federal Reserve Bank of Boston highlights this problem by warning that a new wave of low-skilled immigrants over the course of this century may slow growth in U.S. productivity.

In several industries, we have already seen this process of slowed technological development caused by unskilled immigration. A 1995 report on Southern California's apparel industry, prepared by Southern California Edison, warned of the danger to the industry of reliance on low-cost foreign labor:

"In Southern California, apparel productivity gains have been made through slow growth in wages. While a large, low-cost labor pool has been a boon to apparel production in the past, overreliance on relatively low-cost sources of labor may now cost the industry dearly. The fact is, Southern California has fallen behind both domestic and international competitors, even some of its lowest labor cost competitors, in applying the array of production and communications technologies available to the industry (such as computer aided design and electronic data interchange)." [Emphasis in original]

The threat to innovation posed by mass access to foreign labor, whether through illegal immigration or a guestworker program, is perhaps most evident in agriculture. During hearings on the proposed termination of the Bracero program in the early 1960s, California farmers claimed that "the use of braceros is absolutely essential to the survival of the tomato industry." Congress discontinued the program anyway and, as University of California economist Philip Martin has shown, the resulting mechanization caused a quintupling of production for tomatoes grown for processing, an 89 percent drop in demand for harvest labor, and a fall in real prices.

The competitive drawbacks of reliance on foreign labor are evident in other crops. For instance, a high-productivity, high-quality method of raisin production, called the "dried-on-the-vine" method, is not spreading as it should precisely because the widespread availability of foreign labor is a disincentive to raisin farmers to make the long-term capital investment to retrofit their vineyards. A guestworker program which would legalize the many illegal aliens in the raisin harvest would simply perpetuate this situation.

In sugar cane production in Florida we have seen the same phenomenon in reverse - the increased cost of West Indian guestworkers caused farmers to mechanize the harvest, yielding a radical increase in productivity, plus higher wages and more civilized working conditions for the remaining harvesters.

And in industries that are already moving toward increased productivity because of tight labor markets, a guestworker program would stall progress. Home construction, for instance, has seen a steady increase in factory-built homes (or components of homes), a development attributed by the National Association of Home Builders to the increased difficulty in finding workers. Whether the roof trusses and floor trusses are manufactured in a factory or entire panels or sections of the house, some two-thirds of houses and low-rise apartments are built with some factory materials, rather than "stick-built," i.e., built from scratch on site. This process has led to increased productivity and lower costs - and would be threatened by a guestworker program.

Assumption 8. Such a program is administratively feasible.

In any large government program, plans on paper must translate into policies on the ground. Supporters assume that this will be possible for a large new guestworker program. Rep. Lamar Smith, then chairman of this panel, estimated that 1 million workers might enter the United States under the agricultural guestworker plan approved by this panel last year. That bill would have required: the establishment of a national agricultural worker registry and a variety of user fee schedules and related collection processes; the creation of a nationwide employment-eligibility verification system; the policing of wage, housing, and other guarantees among that group of 1 million guestworkers; the provision of remedies, such as back wages and employer penalties, for violations of the rules; the commission of at least five new studies; and more.

The "prospectus" for Sen. Gramm's guestworker proposal says it would be for any kind of employment in any industry, thus ensuring that it would cover millions more people than the agriculture-only plan described above. This would demand even more Herculean efforts from the various administrative agencies. According to Sen. Gramm's prospectus, the plan would entail: a computer registry to monitor entry and exit of all guestworkers (and presumably everyone else entering or leaving the country, since there would need to be a way to distinguish guestworkers from others); a vast new amnesty program for illegal aliens already here, who would have six months to apply for a guestworker permit; an enrollment system for workers in Mexico, to be "devised by the government of Mexico"; a new identification card for all guestworkers; policing of employer efforts "to show that they had made a good faith effort to hire Americans"; stepped-up enforcement of employer sanctions against whatever illegals remain; establishment of commissions to set the number of guestworkers permitted to enroll based on regional unemployment rates; establishment of new funds to receive the payroll taxes paid by guestworkers, to be used for emergency medical care and individual retirement accounts; and more.

It is not explained how the Immigration and Naturalization Service and the Labor Department are supposed to be able to accomplish these goals. The INS, in particular, is overwhelmed, and cannot keep up with the current workload, let alone take on vast new responsibilities. Data reported through the end of April show that the backlog of applications for immigration benefits has grown from 2.8 million in April 2000 to 3.2 million in April 2001. Meanwhile the backlog of asylum applications remains at about one-third of a million and the number of deportations has actually fallen slightly. The only sign that INS is making headway is a significant drop in the backlog of citizenship applications. What's more, INS efforts to modernize its woefully inadequate computer systems have not yet borne fruit, as a General Accounting Office report highlighted last year. Furthermore, the president has placed a high priority on reorganizing the INS, by separating its service and enforcement functions. How could a vast new guestworker program be managed in the midst of a thoroughgoing institutional overhaul?

The outcome of burdening administrative agencies with the vast and varied new responsibilities of a guestworker program would be massive fraud. The amnesty included in the Immigration Reform and Control Act (IRCA) of 1986 is a case in point. As Paul Virtue, then general counsel of the INS, testified before this panel in 1999, "the provisions of IRCA were subject to widespread abuse, especially the Special Agricultural Worker (SAW) program." There were nearly 1.3 million applications for the SAW amnesty - double the total number of foreign farm workers usually employed in the United States in any given year, and up to six times as many applicants as congressional sponsors of the scheme assured skeptics would apply. INS officials told The New York Times that the majority of applicants in certain offices were clearly fraudulent, but they were approved anyway, since INS didn't have the means to prove the fraud. Some women came to interviews with long, painted nails, while others claimed to have picked strawberries or watermelons off trees. One woman in New Jersey who owned a five-acre garden plot certified that more than 1,000 illegal aliens had worked on her land.

The consequences of disregarding administrative feasibility can linger for generations. During the first stage of the Bracero program, from 1942 to 1949, 10 percent of the agricultural and railroad workers' wages were put into a savings fund that was supposed to be paid to them after they returned to Mexico. This is similar to suggestions for a new guestworker program. Earlier this year, half a century later, four former braceros filed a class-action lawsuit against the U.S. and Mexican governments and several banks, alleging that much of the money was never repaid in Mexico. (Of the four "temporary" Mexican workers, three live in the United States.) This is part of what is sometimes referred to as a "reparations movement," modeled on black reparations efforts. It appears that Wells Fargo transferred the funds, but that they were "lost" by the Mexican banks. One lawyer for the plaintiffs estimated the withheld wages, plus interest, could be worth half a billion dollars. Even in 1945, a Mexican government report acknowledged that the savings program was a mistake because of administrative problems.

Assumption 9. There are no alternatives.

Even though all the above assumptions underlying a guestworker program are groundless, the final premise of such a program could trump all these concerns: There is no acceptable alternative. In other words, the migration networks from Mexico are so entrenched and the industries so addicted to foreign labor that there is no longer any way to stop the flow of workers without wrecking our economy and convulsing our society.

Fortunately for America, the defeatism implicit in this assumption is unfounded.

Rather than accept as given that U.S. and Mexican interests overlap in this area, sound policy making must start from the realization that the interests of our two countries regarding immigration are diametrically opposed. Our national interest requires that unskilled immigration, including from Mexico, be reduced as much as possible. The flow of illegal aliens from Mexico must be interrupted and ended, not institutionalized through a guestworker program. And there would be very little economic impact of such a move; Center for Immigration Studies analysis finds that Mexican immigration in the 1990s held prices down by, at most, two-tenths of one percent. As unlikely as this seems, it is possible because unskilled labor accounts for such a tiny share of economic output.

As for actually stopping illegal immigration, we know how, and need only muster the necessary will and resources:

  • Employer sanctions. Congress in 1986 finally prohibited the employment of illegal aliens in an effort to turn off the magnet of jobs attracting illegal aliens. But enforcement was lackluster at best and, in response to political pressure, the INS has in recent years essentially discontinued worksite employer sanctions enforcement altogether. To make employer sanctions work requires a number of steps, including: A large, permanent increase in the number of INS investigators doing worksite enforcement and prosecutors pursuing law-breaking employers; a national computerized system that allows employers to verify the work-eligibility of new hires (tests of such systems have been well-received by employers); and much stiffer fines and jail time for employers caught knowingly hiring illegal aliens.

  • Border enforcement. Despite significant increases in funding in recent years, efforts at the border are still inadequate. At any given time, there are perhaps 1,800 Border Patrol agents along more than 2,000 miles of border with Mexico. The Border Patrol needs to be at least double its current size and the border needs a system of fences and other barriers to help the agents in their work.

  • Legal immigration. While jobs are one of the magnets that draw illegal immigrants to the United States, the other, equally important, magnet is family and friends, the networks that make it possible to immigrate illegally in search of work in the first place. And these networks are created and nurtured by ongoing legal immigration. Communities of recent immigrants serve as magnets and incubators for illegal immigration, providing housing, jobs, and entree to America that would otherwise be very difficult to secure. And with at least one-fourth of each year's "legal" immigration made up of illegal aliens using the system to launder their status, the immigration system has evolved into a permanent, rolling amnesty for illegals. Limiting family immigration to the husbands, wives and young children of American citizens would be especially useful in stemming illegal immigration since it would serve to end chain migration. With the end of chain migration, the networks that drive illegal immigration would gradually atrophy, as immigrants here had less frequent and intimate contact with their home communities, moved to different neighborhoods, and assimilated into the American mainstream.

  • Finally, Congress can help allay the concerns of employers who have become dependant on unskilled foreign labor through transitional funding for research and development into new labor-saving technologies. This would be especially fruitful in agriculture, since the U.S. Department of Agriculture banned federally funded mechanization research during the Carter Administration. By promoting this kind of research - whether in agriculture, construction, garment manufacturing, or elsewhere - the federal government can help reduce the demand for labor which it fostered by permitting and encouraging unskilled immigration in the first place.

This examination of the assumptions underlying a guestworker program demonstrates that they are without foundation. Congress can use this information to finally bring an end to the period of mass immigration from Mexico - or it can supercharge illegal immigration by enacting a guestworker program.


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