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Immigration, Globalization and Sustainability

Immigration remains a significant problem. With some ten million illegal immigrants in the country, it has a major economic impact and troubling security implications. It is difficult to address because there are two basic principles in conflict, well encapsulated by Ruben Navarette's comment of two signs on the US border: KEEP OUT and HELP WANTED.

KEEP OUT focuses on respect for the law, concerns that illegal immigrants are taking what is not rightfully theirs, including jobs and services such as medical care and education. This is particularly frustrating when crime is directly involved, which is increasingly a concern in the current economic downturn as adults lose income and children go without supervision or activities. So there are now thousands, if not millions, of increasingly desperate, and destitute, non-citizens in the country.

HELP WANTED reflects the US need for an underclass which will work at hard jobs for low wages. This used to be the key to the Land of Opportunity as immigrants worked their way up the economic ladder and were replaced by newer immigrants at the bottom. Low wage workers provide benefits that even the most vociferous opponents of illegal immigration enjoy: lower prices for agricultural commodities, building construction and maintenance, child care and other services. Immigrants fill the low visibility jobs which grease our economy.

But these economic benefits also come with economic costs. Illegal immigrants take jobs from US citizens. It is US taxes which pay for the services they use, as well as the costs of extra police, larger court systems, prisons, and immigration enforcement. In this complex situation, it is not even clear if the economic benefits outweigh the costs or not. Low wages jobs also inflate some economic sectors, such as landscaping, which depend heavily on low wage workers. If employment of illegal immigrants were suppressed, these sectors would be forced to contract.

Addressing the immigration problem requires addressing two looming challenges: globalization and sustainability.

Globalization is making the world more and more interconnected. Overseas manufacturing is nothing new; US companies have been setting up production facilities abroad for many years. More recently, the rise of China with its vast manufacturing capability has significantly increased the attractiveness of overseas production for many US firms and seriously undermined the US job market. But there is a deeper global transformation than just the potential for overseas production - it is the potential for overseas intellectual work. The internet has suddenly put Indian managers, Chinese engineers, and Russian programmers in direct competition with skilled US workers, often providing comparable services at a fraction of US wage and benefit costs. Globalization has essentially eliminated the ladder of opportunity which previously existed for unskilled workers as even well paid citizens are being pushed off narrowing middle rungs.

For many years, the industrialized world benefited by what was essentially the remnants of earlier colonial systems in which global powers drained Third World resources -- raw materials, agricultural products, and brains -- for their own benefit. The United States, although not itself a former colonial power, also benefited greatly from these residual arrangements, particularly as it became the leading global economy. Now the information freely flowing on the internet and the rise of new economic powers, particularly China and India, are making it increasingly difficult to sustain a prosperous island of industrialized nations in a global sea of relative poverty. Around the world, citizens are demanding an increased share of global wealth. Just in the last couple days, for examples, there have been reports of indigenous Peruvians battling oil leases and Thai protesters challenging the established order.

This is also having a direct impact on the source nations for US illegal immigration. Mexico is the largest such nation and also provides a clear example of the new challenge. For years, the Mexican economy failed to provide for the welfare of its own citizens. The United States provided a safety valve as both an outlet for unemployed youth and a source of income for families left behind. Now that safety valve is clogging up. Mexico and other source nations are being forced to consider how to support their own citizens. The United States has to insist on and support such efforts. Turmoil in these source nations would mean dismal prospects for everyone, including the United States. So this is not just an immigration challenge, but a larger challenge of how to spread prosperity globally. US prosperity depends on global stability. With globalization, the United States can no longer be an island in a world of relative poverty, it cannot prosper by simply drawing assets from other nations. Immigration is now a symptom of an economically unbalanced world.

Sustainability is the other major challenge. The United States economy has always been based on a growth model. Population grew, output grew, companies grew, profits grew. Microsoft, starting in a garage and growing into a world leader, exemplified this mindset. So did the growth of insurance companies and banks based on the real estate market. Their collapse and the subsequent travail of the US auto industry against the background of globalization are making it clear that steady growth can no longer be a solid route to success.

Population pressures add to this as satisfying growing demands becomes more and more difficult. Energy demand grows as there is increasing competition for supplies, with resulting major price increases. Effects of global warming - rises in sea level, reduction of already stressed water resources, major shifts in agricultural patterns - will exacerbate this pressure, as will a US age distribution which moves steadily higher. Mesa Verde stands as a stark monument to an earlier population which overtaxed its resources. Off in the future, tourists may one day look at large sections of, say, Phoenix, abandoned when resource constraints undermined their viability. Whether the effects are so dramatically concentrated or spread more evenly across the nation, the growth model is running into the resource wall, a dwindling supply of the critical resources needed for our civilization.

Economic activity needs to return to some earlier models. Utilities, for example, had modest or even negligible growth, and produced modest, but steady profits. They were the bedrock for many stock portfolios. Greed altered this model, exemplified by the dot-com bubble, the effort to create some new business, rapidly grow it, sell it off and run. This produced a spate of instant millionaires who had negligible real input to the national economy. It also exacerbated a natural tendency to seek rapid wealth, helping to fuel the following real estate bubble. Steady profit from a steady business was no longer sufficient; stockholders came to demand short term growth.

US long term prosperity now depends on sustainability; the economy has to adapt to a steady state balance, to become self-sustaining. This is tied with another hidden cost of illegal immigration: it contributes significantly to a steady rise in the US population, a steady growth in demand for more of the resources which are becoming scarcer and scarcer.

So the short term response to illegal immigration -- less porous borders and better border controls - remains important. So does the pressure on employers to hire only citizens and legal immigrants. But this has to be accompanied by wage increases; only when legal workers receive a fair recompense for their contributions to the national economy will the pressure for illegal immigration abate.

US efforts cannot just be short sighted, they need to address the longer term issues, to promote global prosperity, particularly with our near neighbors, especially Mexico. This also requires the United States to set an example of how a nation can build a sustainable economy, how it can create a system in which even the lowest economic rungs have a share in the national prosperity.

Comments (1)

Dr. Karl Kettler:

Dear Dr. Corcoran,
Interesting BUT. The number of illegals is probably three times your number of 10 million. When I served on a U.S. Senate staff in the 1970-80s our numbers were already 12 million and although about 4 million became legal under Reagan they have been more than replaced and added to since.
Also the notion that our economy needs illegals or unskilled immigrant to perform jobs that U.S. citizens shy away from is deceptive since we find many of these migrants in high paying construction and other skilled and semi-skilled jobs.
Furthermore there does exist, in the U.S. a huge indigenous unskilled labor pool that should be used instead but for political reasons is collecting government assistance without work requirements instead.
There are many examples of modern nations doing quite well without unskilled and semi-skilled migrant labor suggesting perhaps that migrants in the U.S. serve a poltical rather than an need agenda.


Dr.Karl Kettler

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