What the Right Gets Wrong About Immigration

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Immigration has been so important to the development of the United States that our national motto — E Pluribus Unum — refers to it. Out of many, one. But these days right wing fear-mongers led by Donald Trump have caused many of us to oppose robust immigration. Tightening immigration, especially for counter-factual or racist reasons, is contrary to this country’s long-term economic interests. But it is fair to question how well immigrants integrate into existing society and to consider what costs we incur along with the benefits.

Integration is the process by which immigrant groups and the host population come to resemble one another. Integration depends on the participation by immigrants and their descendants in the major social institutions of the country, such as schools and the workforce, and their social acceptance by other Americans.

In some developed countries, such as France, integration has been a problem. But not here. First and second generation immigrants represent one out of four members of the U.S. population.

These immigrants have become Americans, embracing American identity and citizenship, serving in the military, working hard in jobs up and down the economic spectrum, and enriching American art, music, and cuisine. Immigrants are home owners, taxpayers, college students, and contributors to American society across the board.

Many of the following statistics and comparisons come from The Integration of Immigrants Into American Society, published by the National Academy of Sciences in 2016.

Education. Despite large differences in starting points of their parents, most second generation immigrants — men and women — meet or exceed the schooling level of  third+ generation native born Americans. This is, in part, because many immigrants are already highly skilled when they arrive.

More than a quarter of our foreign-born now have a college degree or more. Educational integration is more challenging for Mexican and Central American immigrants and their children, who start with lower levels of education and English proficiency.

Labor Force Participation. First-generation immigrant men have high employment rates. This is especially pronounced among the least educated, who are more likely to be employed even than comparably educated native-born men. Obviously, they are filling a need in the U.S. economy. Immigrant women begin with lower employment levels than natives but reach parity by the third generation.

Competition with Native Americans.  Unskilled immigrants (both lawful and unlawful) compete with those most similar to themselves in the U.S. economy – immigrants who arrived just before them and unskilled, undereducated natives. Unskilled immigrants may reduce employment opportunities and slightly lower wage rates for these competing groups in the short run. But they have no effect on the overall longer-term availability of jobs or the wage rates in the U.S. economy.

Political Ideology and Party Identification. Immigrants tend to be less committed to one political party than native born Americans. The largest percentage of foreign-born (44%) consider their views to be moderate, while 31% consider their views to be conservative and 25% to be liberal. When it comes to political parties, the foreign born are much more likely than native-born to consider themselves  “independent.”

Crime. Increased prevalence of immigrants is associated with lower crime rates — the opposite of the common right-wing trope. Among men ages 18-39, immigrants are incarcerated at one-fourth the rate of the native born. Cities and neighborhoods with high concentrations of immigrants have much lower levels of crime and violence. This is born out by a Cato Institute study which looked at crime conviction statistics in Texas for 2019.

Still you hear that immigrants, especially illegal immigrants crossing our southern border, harbor large numbers of drug-related criminals. Donald Trump, playing on racist fears, claimed that Mexican immigrants were drug dealers and rapists. Others now claim that the Biden Administration’s border policy is allowing large quantities of fentanyl to enter the country. That is baloney. Here are the facts.

Most of the people convicted of fentanyl trafficking between 2018 and 2021 were American citizens, not Mexicans or asylum-seekers. In FY 2021 American citizens were 86.2% of those convicted. Still, Mexican drug cartels are responsible for the bulk of fentanyl entering the U.S. The drug is transported by land, sea, air and even tunnels to safe houses in Los Angeles, Phoenix and El Paso, to be distributed across America. No absurd border wall will be effective in stopping fentanyl because the traffickers don’t wade across the Rio Grande.

While We Dither on Immigration Policy, Other Countries Take Advantage. Recently, The Wall Street Journal published an article detailing how Canada has opened up its immigration system to foreign-born workers in America on H-1 temporary visas in a clear bid to lure away highly-educated foreigners frustrated by the restrictive U.S. immigration process. H-1 visa holders have advanced degrees and are eagerly sought by tech companies who are unable to find similar U.S. workers.

Canada’s proposed work permit would allow H-1B visa holders to move to Canada without a job and look for one once they arrive. The types of immigrants who would qualify for the program could also quickly become permanent residents under that country’s merit-based points immigration system.

So while we suffer from political fear-mongering and Republican opposition to immigration that has no factual support, we will continue to lose ground to other countries and put our long-term economic security in jeopardy. This is insane.

 

 

We Need More Immigration, Not Less

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Thanks to Donald Trump, many at the right-wing fringe of the Republican party peddle fear about immigration. To hear them tell it, we are in jeopardy of being overrun by benefit-stealing, swarthy criminals from south of the border. But this is a false narrative designed only to reap political advantage among an older, conservative political base. Scratch the surface of this anti-immigration narrative and you will find racism.

Fortunately, this nativism is not broadly shared in America —  surveys by the Pew Research Center found that 59% of Americans believe that immigrants make our country stronger. And the pro-immigration sentiment is even higher in communities where immigrants live. To understand why we need only consider the facts. Immigration is not only helpful to the nation in the short run, it will be essential for our economic future. We need more immigration.

Today, the U.S. population is roughly 330 million, although the rate of increase has declined. New data from the Census Bureau show that our population has basically flatlined, growing only .12% in the year ending July 1, 2021. Eighteen states showed actual population losses during the same period. West Virginia has either tread water or lost population for decades running. The U.S. has been below the replacement rate of 2.1 births per woman since 1970.

Our population is growing older. Among six age groups — 0 to 4, 5 to 19, 20 to 34, 35 to 49, 50 to 64, and 65 and older — the 65+ group was the fastest growing between 2010 and 2021 with its population increasing 38%. The 0 to 4 age group declined the most, dropping 6.7% between 2010 and 2021.

The harm from these population trends is real. As older workers age out of the workforce, there will be too few younger workers to replace them. This will disrupt the labor market, reduce economic activity and wealth in general, and reduce income tax revenues. And here is a dirty secret about social security. Your benefits aren’t paid for by your own contributions, they are paid for by the contributions of workers who come after you. If there are fewer of them, the insolvency date for the social security system looms closer.

So maybe we should stop being afraid of immigration and begin seeing it as a tool to solve some of our problems. Adding immigrants can quickly improve the ratio of working to nonworking people. Immigration also helps with fertility rates. Foreign born people make up 13% of the U.S. population, but account for 23% of the births. The U.S. Census Bureau forecasts that without immigration and births to foreign-born mothers, the U.S. population would decline about 6 million between 2014 and 2060. With them it is forecast to grow by 98 million.

Increasing immigration doesn’t mean opening the borders to undocumented multitudes. We have an immigration system and it needs to be reformed so that it advances all our goals — border security as well as greater immigration of the right kind.

Trump’s absurd policy sought to reduce immigration of all kinds, even lawful immigration by highly skilled people. This runs counter to the approach of the smarter developed countries like Canada and New Zealand, whose policies promote immigration of skilled workers and will allow them to compete economically for decades to come.

But even the immigration of unskilled workers can help us. Despite increased automation, our farm economy needs farm workers. And unskilled immigrants fill positions throughout the economy that native workers can’t or won’t.

As for all these people lined up at our southern border? They want to work. Finding a fair way to accommodate that would not snatch jobs from native Americans or reduce wages. We are at full employment of native workers as it is. Ask any business owner how difficult it is to find people willing to work these days.

Recently a comprehensive bill addressing immigration was introduced in the House of Representatives by a bi-partisan group. The bill offers a solution for the asylum crisis at the southern border, funding several U.S. asylum campuses where hundreds of new asylum officers would rule on applications within a short time. Those whose applications are denied would be removed from the country.

The bill also involves increased funding for border security and the creation of regional processing centers in key Latin American countries to deal with asylum seekers and economic migrants before they arrive at our border.

But significantly, the bill addresses our need for additional workers. It creates “dignity status”  for undocumented people already in the U.S. with no criminal record, allowing them to work anywhere and have a path to citizenship after ten years. It would also create a renewable legal status for undocumented farm workers and increase the visas available for skilled workers. The bill is called The Dignity Act of 2023. I encourage you to read the summary online. There is a lot to like.

The New Civilian Climate Corps

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Immediately upon assuming office, President Biden issued an executive order addressing his climate objectives.  Prominent among these was the creation of a Civilian Climate Corps to tackle climate change resiliency and provide job training to underemployed youth.  The new CCC would be modeled on a popular New Deal program that put thousands to work on conservation projects during the Depression. From every angle the new CCC seems like a good idea, but its uncertain future is bound up with the stalled Build Back Better legislation.

The Depression-era program was known as the Civilian Conservation Corps, which ran from 1933 to 1942 and employed roughly 3 million young men.  They were set to work fighting wildfires, building more than 100,000 miles of roads and trails, 318,000 dams and tens of thousands of bridges.  They strung telephone wire where it had never been before.  They dug erosion-control ditches on private land and helped farmers with other land conservation projects.  Many of the fire towers, state park buildings and other structures built by the Corps are still in use.

The participants in the Depression-era Corps were overwhelmingly male, white and poor.  A Time magazine article from the period described the 1938 Corps as 67% from “relief families” and another 29% from families “below the normal standard of living.”  Only 11% had finished high school.  Corpsmen were paid $30 per month, much of which had to be set aside either for dependents or to be drawn when the participants left the program.  This whole scheme was enormously popular with the Corpsmen and the public.  When back home the Corpsmen were treated as heroes.

The proposed new Civilian Climate Corps has a different name to reflect the needs of the present day.  The focus would be on job training for careers in the conservation space for urban youth who don’t normally have opportunities of that sort.  Biden proposes to spend a mere $10 billion on the new CCC, a small sliver of the proposed $1.75 trillion Build Back Better legislation. Pay would be $15 per hour plus health care and other benefits.  The jobs would mostly be short-term, following the model of AmeriCorps.  Perhaps 20,000 per year could be employed.

The new CCC would not become involved in politically charged climate issues. Its goals are noncontroversial and clearly stated in the executive order:

The initiative shall aim to conserve and restore public lands and waters, bolster community resilience, increase reforestation, increase carbon sequestration in the agricultural sector, protect biodiversity, improve access to recreation, and address the changing climate.

It is also unlikely to be a gap year for college kids from the suburbs.  Rather it would recruit from lower-income families and communities of color.

While the new CCC is not overtly designed to reduce political polarization, that would be a welcome byproduct.  The racial integration of military units during World War II and Korea, while not complete or perfect, went far better than critics thought it would.  It was largely responsible for a greater general acceptance of integration in later decades.  In 2006 a meta-study of over 500 studies in thirty-eight countries revealed strong evidence of the power of simple contact to reduce prejudice among groups.  Proponents of national service have recognized its power to serve as a binding agent and catalyst for democracy. Our racially and politically polarized society could use a dose of this. Instead, we sort ourselves into like-minded communities.

We are so polarized now that even the name Civilian Climate Corps causes opposition to the initiative. In October 2020, when the name was still Civilian Conservation Corps, 44% of Republican voters said they “strongly supported” the idea and 40% of Republican voters “somewhat supported” it.  In April 2021, after the initiative was renamed the Civilian Climate Corps, just 11% of Republican voters “strongly supported” and 33% “somewhat supported” it.  In a floor speech in the fall of 2021, Senate Minority Leader McConnell said the new CCC was “pure socialist wish fulfillment” and called it a “made-up government work program . . . for young liberal activists.”

Government cost accounting and revenue projections are often hard to penetrate and surely must be taken with a grain of salt. But since the new CCC would operate on a model similar to AmeriCorps, return on investment from that government program offers a clue of what to expect from a Civilian Climate Corps. The federal ROI for AmeriCorps and similar programs at the national level is 3.5.  That means that for every dollar spent on these programs the federal government alone receives $3.50 in returns from tax revenue gains and savings.  The federal cost-benefit ratio, calculated differently, is 17.3.  That means for every dollar spent on AmeriCorps and similar programs the return to society, program members and the government is $17.30.

Biden’s executive order directed the Interior and Agriculture departments to design the new CCC initiative “within existing appropriations.”  How this could happen is unclear. These departments were to have submitted a strategy report by April 2021, but that report is overdue.  Without financial support through the Build Back Better Act, or some other specifically targeted legislation, this worthy program is unlikely to get off the ground. And without support from West Virginia Senator Joe Manchin, Build Back Better cannot pass the Senate.

The Value of Increasing the Minimum Wage

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One obvious way to increase the value and attractiveness of working is to increase the minimum wage. The federal minimum wage has been $7.25 per hour since 2009 but Congress does not seem interested in increasing it. Individual states, however, can set a higher minimum wage. West Virginia’s minimum is now $8.75, having been increased in stages over several years. Many other states have done the same. Increasing the minimum wage puts more money in the pockets of low-income people who will spend it in the economy, reduces dependence on public benefits and costs taxpayers nothing. This is seriously good policy.

The Benefits

Raising the minimum wage not only benefits those whose wages were below the new minimum, it benefits most all workers in the economy. Let’s take the example of a hypothetical gas station and convenience store operation open 24 hours, similar to Sheetz. Suppose that before an increase in the minimum wage the store employs a total of four stock clerks paid at the federal minimum of $7.25 to stock shelves and clean up. The store also employs five cashiers at $8.50, two assistant managers at $10 and one manager on salary.

Now suppose that state raises the minimum to $9. Obviously, the stock clerks who were receiving the previous minimum wage will get an hourly raise of $1.75. In addition, the cashiers’ prior wage would be below the new minimum so they will also receive at least a $.50 raise.  But, more likely, the employer will want to maintain the spread between the wages of the stock clerks and the cashiers so the latter will receive an even bigger bump – let’s say to $10.25.

Now the assistant managers will also have to receive a bump to keep them better compensated than the cashiers. The salaried manager will have to be paid more than the new total compensation of the assistant managers, which would include higher hourly pay plus overtime, so even salaried employees might benefit. In this way an increased minimum wage ripples through the employee ranks and the larger economy.

Raising the minimum wage thus puts more money into the pockets of low and middle income workers who will actually spend the money rather than save it. The more money in circulation, the greater the wealth-creating effect. This wealth creation is also “revenue-neutral” for governments since the increase in wages is not paid for with tax money. In fact, an increase in the minimum wage creates more taxable income for governments and fewer government costs in the form of Medicaid, food stamps and other forms of public assistance.

A 2016 report by the Economic Policy Institute concluded that an increase in the federal minimum wage would “unambiguously” decrease government spending on public assistance:

Among workers in the bottom three wage deciles, every $1 increase in hourly wages reduces the likelihood of receiving means-tested public assistance by 3.1 percentage points. This means that the number of workers receiving public assistance could be reduced by 1 million people with a wage increase of just $1.17 an hour, on average, among the lowest-paid 30 percent of workers.

The Costs

Business groups are the typical opponents of increasing the minimum wage. The reason, of course, is that wages are a significant component of the cost of operating a business, particularly restaurants. But businesses constantly have to deal with increasing costs of all kinds, including labor costs. Successful businesses develop strategies for dealing with these increasing costs.

Rarely will a business go under because of a rise in the minimum wage and if one does it was probably not a viable, long-term business anyway. And an increase in the minimum wage applies to all employers so there is no one who will have a competitive advantage, unless it is one that operates more efficiently.

Perhaps in recognition that their business reasons for opposing a higher minimum wage are a bit selfish and unconvincing, opponents argue that the workers themselves will suffer from an increase in the minimum wage. According to this argument, if employers are required to pay employees more they will hire fewer employees or will give existing employees fewer work hours.

But this has never made sense to me. Assuming the employer has a constant level of work, employees paid at the minimum, whatever that is, will still be the least expensive way of doing that work. Hiring fewer employees at the bottom would simply mean that existing workers will get more hours, not fewer.

Opponents are fond of pointing to one-off studies that show employment loss as a result of increasing the minimum wage. A study after the recent Seattle wage increase did find some employment loss among the lowest-skilled portion of the workforce. There the minimum wage was raised from $9.47 to $13 in two years. But usually employment loss is found only when there is a large increase in the minimum wage like this. 

Meta-studies allow us to put these one-off studies into perspective. Meta-studies use a set of well-defined statistical techniques to pool the results of a large number of separate studies. A comprehensive meta-study in 2013 revealed that there is no statistically significant employment effect created by moderate increases in the minimum wage. In the last decade, influential studies using restaurant industry data in many U.S. counties and regions have concluded that minimum wage increases have “strong earnings effects and no employment effects.”

This conclusion has an explanation, or rather several explanations. The natural impulse of employers to hire fewer or fire more expensive employees is balanced by several “adjustment channels.” Some of these involve reducing other employment costs, such as reducing work hours, non-wage benefits or training costs. While the empirical evidence is not conclusive, it suggests that employers don’t adjust by cutting hours or other forms of compensation. If an employer has a steady volume of output it must generate, cutting hours is not an option – unnecessary hours would have been cut before. 

Another adjustment channel is simply to increase prices to pass along to consumers the added costs of new wage levels. While some of this does happen, employers do not substantially pass on to consumers the higher costs of employment. Studies have shown that a 10% increase in the minimum wage will result in between a .4% and .7% increase in prices. 

An increase in the minimum wage does not result in the termination of existing employees because the cost of recruiting, hiring and training even low-wage workers is so high that employers would rather retain even higher paid current employees. And a worker who is paid more is less likely voluntarily to leave a job. A 2012 study found “striking evidence” that separations and turnover rates for teens and restaurant workers fall substantially following a minimum wage increase.

Some argue that increasing the minimum wage will hasten the replacement of workers by technology. For many types of work automation is inevitable. This is no argument to underpay workers in the meantime.

Congress does not seem in any shape to increase the federal minimum wage, although the new Democratic majority in the House may take a run at it. Instead, the progress is being made in the states. In early November 2018, voters in two red states approved ballot initiatives raising the minimum wage – to $11 in Arkansas and $12 in Missouri. Perhaps the West Virginia Legislature will see the wisdom of making a similar change. Doing so will cost taxpayers nothing and the benefits to working people and the economy are clear.  

 

The West Virginia Workplace Freedom Act

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In early February 2016, West Virginia became the 26th state to adopt a “right to work” law, called the Workplace Freedom Act. The new law does not simply prohibit an employer and a labor union from requiring membership in the union as a condition of employment. It goes further and also forbids requiring an employee to pay any dues or fees to a labor union as a condition of employment. The law was vetoed by Governor Tomblin on February 12, 2016 but that veto was overridden by the Legislature on the same day. The new law was to take effect July 1, 2016.

Outlawing any required fee payment to a union is a significant step for West Virginia to take. It reveals that our Legislature was not so much interested in protecting employees from compulsory membership in an organization they might not support, as it was in financially crippling labor unions. In so doing the Legislature advanced a conservative political agenda of long standing. It is the financial harm created by the new law that led the West Virginia AFL-CIO and a number of individual unions to seek an injunction in Kanawha County Circuit Court. The injunction was granted on August 11, 2016 and the implementation of the law postponed until a full decision can be rendered.

To understand this legal and political struggle, a little background is necessary. Unions can gain the right to represent employees only within a bargaining unit — a plant or department. Being an employee in a bargaining unit is not the same as being a dues-paying member of the union. But once a union becomes the bargaining representative of employees in a unit, it has the right and obligation to bargain for and prosecute grievances for all of them, whether or not they are dues-paying members. This frequently involves large sums for trained staff, arbitrators, meeting halls, offices, libraries, and more.

Over time, union security contract clauses were developed requiring an employee to become a dues-paying member of the union within a certain period after employment. If he refused, the employer was contractually bound to terminate him. But because unions engage in political as well as bargaining activity, federal courts refashioned the deal so that no employee is obligated to pay dues for political activity to which he does not subscribe, but can be required to pay a “fair share fee” to cover the collective bargaining and grievance activity the union must provide him. This was the status of the law in West Virginia until last year.

In 1947, Congress allowed individual states to forbid union security clauses altogether. Almost immediately, states in the south and west passed “right to work” laws. Recently as the strength of Republicans grew in state legislatures, RTW laws passed even in industrialized states like Wisconsin and Michigan. Not wanting to be outdone by their conservative brethren elsewhere, the West Virginia Legislature took up the issue in January 2016. The Legislature commissioned a study by WVU predicting the effect of a RTW law on union membership, job growth, GDP growth and wage growth in West Virginia.

The method used in the WVU study was to compare the group of states with RTW laws to the group without them on these various economic factors for the period 1990 to 2012. To determine whether the RTW laws actually caused any of the observed differences, a complicated regression analysis was used. The WVU study predicted that the rate of union membership in West Virginia would fall by around 20% as a result of the adoption of an RTW law. The study also predicted a long term .4% employment growth benefit and a .5% annual increase in GDP growth.

But the WVU study found no causal relationship between RTW laws and wage growth, even though nearly all other studies like this have found a robust negative effect created by RTW laws on state-wide wage growth. For example, a 2015 study by the Economic Policy Institute found workers in RTW states earned $1,558 less per year than similar workers in non-RTW states. These results did not apply just to employees covered by a union contract but to all employees. “Where unions are strong, compensation increases even for workers not covered by any union contract, as nonunion employers face competitive pressure to match union standards.”

Behaving as if the modest coercion involved in requiring an employee to pay a fair share fee was an outrageous affront to liberty, the Legislature blew past the economic benefit to all workers that exists in non-RTW states. The Workplace Freedom Act states that a person may not be required to “pay any dues fees, assessments or other similar charges . . . of any kind or amount to any labor organization.”

The legal attack by the AFL-CIO on this law is that the state has unconstitutionally deprived unions of their property without just compensation by prohibiting them from charging nonmembers the proper fee for the services unions are required to provide. Ken Hall, President of Teamsters Local 175, testified that members would end up paying an extra $172 in union dues to cover services provided to employees who benefitted from them but refused to pay. These arguments were enough to convince Judge Jennifer Bailey of the Kanawha County Circuit Court to enjoin implementation of the law until a full decision could be made in the next few months.

It is hard to predict how this legal battle will be resolved. Like any human institution, labor unions have had their share of bureaucracy, incompetence and corruption. They have also had their share of success in advancing the interests of working people. Unions improve the economic lives of members and non-members alike. Progressives don’t generally support coercion, but requiring a fair share fee from non-members who benefit from union representation seems appropriate. What is really at stake is not some grand concept of freedom and liberty. It is instead the economic viability of unions and the Republicans in the Legislature know this. Without viable unions, corporate power to set compensation will be virtually unchallenged and working class compensation will continue to stagnate.