Immigration Reform: A Democratic Response

September 21, 2017

In a discussion, I was asked my thoughts on how Sen. Brown D-OH should response to immigration reform.  I have shared my thoughts here.

The Oversupply of the Labor Market

Over the past few decades, the US labor market has been grossly over-supplied.  This market glut of workers is a major cause of income inequity and the decline of the middle class and the rise of working-class poverty.

We must recognize that government has a major impact on the supply of labor in the US market.  This is done chiefly through trade and immigration policy.  Sen. Brown’s criticism of the US’s  “free-trade” agenda, as outlined in his book “The Myths of Free Trade”, suggests that the Senator is fully aware of the impact that the open trade with China (the others) has had on the US labor market.

One way to conceptualize this trading relationship is to understand that trade policy has given Chinese workers access to the American labor market.  Thereby expanding the US labor market by tens if not hundreds of millions of workers.  What I find confessing and troubling is that Sen. Brown does not seem to acknowledge that our current historically high level of immigration both illegal and legal is doing the same, namely expanding the size of the US labor market.

Expanding the number of workers in a market only becomes a problem (high levels of population bring many problems unrelated to the labor markets) when the numbers and quality of jobs cannot keep pace with the growing number of workers.   It is also true that when this balance shifts in favor of employers that the quality of jobs is quickly eroded.

The balance of leverage in the labor market has been shifted too far in the favor of employers.  The evidence of this imbalance is clear in the economic data: income equality, the labor participation rates, the number of workers accessing government subsidies, temp and part-time work, lack of employer-provided healthcare benefits etc..

The labor market is beginning to tighten. This is good for US workers and for the economy overall.  But this rebalancing will put pressure on business.  We must be on guard for business carping about the shortage of workers.  Whenever a business makes a statement about the lack and quality of the available workforce I always add the phrase “at the wage and benefits that I am willing to provide”.  If a business truly cannot survive because that business cannot compete for a workforce, that is the market saying that that business plan is not viable and that its human and financial capital is better directed to another business.  Why, as a community or nation, would we want to prop up businesses that provide sub-standard wages and benefits?

Labor Market Floor

I believe that the concept of a “labor market floor” is not fully accounted for in the economic models regarding the effect of immigration, in particular, illegal immigration (black market labor) and guest worker programs on the labor market.   A criticism of raising the minimum wage is that it would necessitate increases in wages for employees up the employment ladder.  If this is true, which I believe it is, (and not necessarily a bad thing) the inverse is also true.  Access to labor willing to accept extremely low wages and benefits puts downward pressure on all wage earners.  In effect, lowering the floor in which employers can lower their wages and still attract a labor force.  This is also an issue with guest worker programs.

I have not even addressed the possible effect of automation on the labor market.  But illegal immigrants could see a major displacement in the industries and occupations that they occupy.  Bringing large numbers of foreign low-skilled workers (particularly those without basic English skills) into the legal workforce would likely put a burden on the US economy and the US taxpayer for years to come.

I could say a lot more about the myth of a labor shortage, and the role of trade and immigration on the labor markets.  And would be glad to do so if there is an interest, but let’s move onto the political and policy response to immigration and the labor market.   First, trade and immigration policy are linked.   Addressing one without the other leaves the door open to increasing the labor supply on behalf of business.  But for this discussion, we are focused on immigration.

Politics

First, let’s look at the political implications of immigration reform.  It is my strong feeling that Americans (and Ohioans) do not trust the Democratic Party to enforce our immigration laws.  I feel this is one major reason why Clinton lost the election. Hillary Clinton and Sen. Brown refuse to use the phrase “illegal immigration”.   Hillary failed to address enforcement of US immigration laws at all during her campaign.  The constant effort to conflate immigrants with illegal immigrants is particularly galling.  This and the effort to paint anyone concerned about immigration as a racist was counterproductive, pushing middle-class voters away from the Democratic Party.

American workers believe that wage competition from illegal and legal immigration is as real as the negative effects on the tax base.   Voters feel that the Democratic Party is in effect supporting open immigration and many have turned their backs on working families’ financial concerns to pander to a growing voting bloc, which is, in fact, growing because of the Democrats complicit support of illegal immigration.

The question the voters are asking is; how can the Democrats hope to enforce immigration law if the Party is not willing to deport an illegal immigrant who has done nothing more than violate our immigration law?!  The voters see a party looking for every excuse possible not to deport anyone.

Saying that you will deport violent criminals is not enough.  To enforce immigration law you need to be willing to deport the most sympathetic illegal immigrants.  All the dilemmas surrounding illegal immigration, sanctuary cities, divided families, dreamers, are all a result of the ineffective ability of the federal government to enforce immigration law through deportation.

An immigration reform that cannot stop the flow of illegal immigration into the US will be a failure.  We simply cannot have a repeat of the 1986 reform.  The reality that we have today; that the best and quickest path to permanent residence and a better life for oneself and one’s family is through illegal immigration has to be put to an end once and for all.   Any reform that permits the reconstitution of the illegal immigration population in the US will be an abject failure.

Make no mistake that the goal of many who are trying to influence immigration reform is to increase the flow of immigration into the US.  This could be done with explicit provisions in the reform to increase legal immigration into the US or liberalizing the refugee flow into the US.  Or this can be done by subterfuge; hamstringing efforts of enforcement, leaving in place policies that incentivize and accommodate illegal immigrants living in the US.  There is a general attitude among pro-illegal immigration advocates that foreign nationals have a moral right to violate our immigration law.

Policy

On the whole, I would say that the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013 is too generous in terms of amnesty for illegal immigrants and too generous for business in terms of access to foreign workers.  Other than the addition of E-Verify it seems to be a rehashing of the Immigration Reform and Control Act of 1986 which was a farce and a complete failure.

One very important issue NOT addressed in the 2013 Senate bill is the dependents still living in the countries of origin of illegal immigrants who will be provided a path to citizenship.  A basic tenet of pro-amnesty groups is family unification.  It seems clear that their position would be that unification should always be on the US side of the border.  If the default policy was to be unification in the US, then millions if not tens of millions of foreign nationals would be eligible for legal immigration to join their family member(s) in the US, referred to as “chain migration”.  This policy of unification would have a massive effect on the CBO scoring of the law.  This is one reason that I feel a finite number of illegal immigrants and their dependents should be the policy.  Ever any discussing of how to deal with dependents that remain in the countries of origin would likely set off a wave on illegal entries into the US.

At this time I would point that CBO scoring does NOT address the effects on the state and local tax base.  The education cost of a unification provision could be a major problem for already underfunded big city school districts.  The other issue with CBO scoring in regards to immigration policy is that the CBO only looks out for ten years.  Immigration policy budget implications have a far longer timeline than 10 years.  In my estimation, many of the negative budget implications are outside of the 10-year estimates provided by the CBO.

Below I will provide a policy agenda that could have a real impact on reducing the oversupply of labor in the US through immigration and restore the voter’s faith that the Democrats party and the US government is serious about immigration reform and enforcement.

I do not believe for a second that Sen. Brown (or any other Democrat or business minded Republican) will adopt this platform.  It would require a paradigm shift in his thinking on immigration policy.  The Senator would be ostracized by his base, his donors, his colleagues, the party leadership and his family members.

  • A limit amnesty at a fitted a specific number of individuals. Say 5 million (including Dreamers). There is the possibility that there are far more than 11 million illegal immigrations current in the US.  Also, a large number of deportations would be necessary to convince all sides that the US government is serious about immigration enforcement.   And it would prevent new arrivals from trying to qualify for amnesty current or future.
  • The numbers of immigrates receiving amnesty would be back out of all future legal immigration.
  • The year total of legal immigration would be limited to 500k/per. This means that total new immigration other than the amnesty program would be zero for 10years.
  • The adoption of E-Verity employment verification
  • Ending all guest worker programs.
  • The end of birthright citizenship. The 14th amendment was never intended to allow foreign nationals to control our immigration policy
  • Apportionment and distribution of federal funds will be based on the total of legal residents (NOT on the total number of people present in the US.)
  • Electronic tracking of visas.
  • Increased internal and workplace enforcement. (This is key illegal immigrates most by quickly be identified and processed for removal (or otherwise adjudicated) before the moral dilemmas relating to legal immigration can arise.)
  • More funding of border checkpoints to prevent illegal activities at the border illegal immigration, illegal working in the US by people crossing the border daily, drug smuggling etc.. (Build a border wall across the whole US/Mexican border would be a colossal waste of money and better diverted to other initiative on the list above.)
  • Enforcement Enforcement Enforcement- All federal agencies (including the IRS and Social Security Administration) must provide any information that could identify or locate illegal immigrants to ICE.  All Federal, state or local laws and programs that make it easier for illegal immigrants to remain in the US should be eliminated; sanctuary cities, drivers licenses, etc..  No space or location in the US should be off-limits to immigration enforcement.
  • Recipients of amnesty must renounce foreign citizenship.  This initiative is directed specifically at Mexico who collects taxes on Mexican citizens living legally and illegally in the US (for which they provide no services).  This would disincentivize Mexico from encouraging its people to immigrate illegally (or legally) to the US

Of course, I am not able to address all of the issues and counterpoints surrounding issues of immigration in this short format.  Please contact me at any time so that I can address any questions, concerns and clarify any faults in my reasoning that may have been found.

 

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Can the Democratic Party Come Back?

January 12, 2017

A tectonic shift in the political landscape is taking place and the Democrats are in danger of being left out in the cold.  Just as the civil rights movement in the 60’s completely rearranged and upended what it meant to be a Democrat and Republican, a new alignment is taking place over America’s place in the global economy and in global affairs.

The two victories by Barack Obama obscured a party that was dying on the vine.  We all (now) know the numbers.  The oval office, both houses of congress, governorships, state legislators; the Democratic Party is in full retreat.  It is a party so desperately clinging to the past and past leadership that we need to ask if this party can right itself before it becomes irrelevant and obsolete.

The Democratic Party is psychologically wounded, lashing out at everyone and everything that they feel is to blame for the horrible injustice that has befallen Hillary Clinton, denying America the benefit of her obvious superior leadership, it was Trump the demigod, the GOP, sexism, racism, the media, the electoral college, the Comey letter, the Russians, the list goes on and on.  All of this thrashing about on the ground in a pile of tear-filled rage is pointless and ultimately harmful. We look like fools and sore losers, most importantly it makes us incapable of seeing our own faults that has led to this debacle.

Democratic vs. Republican has been usurped by globalization vs. populism. This realignment is occurring in the US and around the world.  Globalization has been uncovered as a cruel hoax.  Free trade, the global banking system, capital-friendly tax systems and mass immigration are doing real harm to the middle class.  The system is designed to drive down the cost of labor while exacting profits that flow to the 1%.  It is a system that is of course, unsustainable but the donor class is not interested in introspection on the society that is being created, or should we say being destroyed, and neither it seems is the leadership of the Democratic Party.

It is a bigger and much more dangerous mortgage lending crisis being played out over the course of decades.  When Bill Clinton took up the cause of NAFTA as a way to raise money for his presidential bid, the Democratic Party bought into free trade hook, line, and sinker.  Globalization became the defining economic policy of both parties right through to today.

Barack Obama missed this realignment, continued pressing forward with trade deals and wars when the voters were begging for relief.  This is the problem when you take your cues from the donor class whose interests are not in line with the voters.  The undercurrent of populism has been building for a long time but the donor class and the media manage to keep it from the light of day.  By playing to a system where it is verboten by the donor class to offer any alternative to globalization, the Democratic Party became a tool of the 1%.  Corporate Democrats may be more right on social issues but are really no different from corporate Republicans on the fundamental operating principles of our economy.

Obama/Clinton made no effort to address the concerns of the middle class.  They talked about the income inequality but refused to define a cause because that would have led to the only real conclusion; globalization is exactly the wrong policy to build broad-based middle-class prosperity in a developed nation.

The rise of Bernie and Trump was a direct result of the fact that they were operating outside the normal system of campaign finance and were free to tap the populist mood that lay dormant and unaddressed, the sleeping Giant of American policies.  The Democratic establishment just did a better job killing off the candidate of real change.  Whether Bernie could have won is missing the point, Bernie was the only Democratic alternative that broke through the donor class blockade. The Democrats are just as responsible, if not more responsible, for the Trump Presidency because we turned our back on the working families of America.

Democrats if you want to know why we lost it’s time to stop crying, passing the blame and look in the mirror.  Hillary lost because she was a product of the corporate establishment elitist globalist party system and Trump was not!!

The Democratic Party faces an existential crisis, can we break free from the clutches of the globalist donor class and if so where do we get the money to rebuild?  If the Democratic Party cannot come to terms with its failed and rejected policies and make real change in its’ policies and leadership, (and so far it seems wholly unwilling to do either), it is in danger of being a non-entity in American politics.  Without real substantive charge in the Democratic Party, the battle for power in American politics will be waged between the globalists and populists of the Republican Party.

 


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