The Economics of Immigration

Conservatives were fond of pointing out that no one ever tried to cross the Berlin Wall toward the East. Man is genetically predisposed to seek freedom and better economic conditions.

This partly explains the flow of illegal immigrants from South to North. Per capita income in Mexico, $13,500, is one-fourth that of the United States and just slightly above Botswana. With the exception of Chile and Argentina, all other South American countries fall even below that level, which is also less than 82 countries worldwide, according to the CIA World FactBook. The Pew Hispanic Center estimates the average unauthorized family in the U.S. earns twice the per-capita income of their home country, which is probably many times more than their actual earnings. 

There are drug and human traffickers illegally crossing the border to be sure, and the potential for terrorists exploiting its porosity is high, but for the most part immigrants are motivated by economic reasons. Data from the Center for Immigration Studies supports the economic theory that labor, like capital, flows toward profit and opportunity. Indeed, illegal immigration falls sharply in recessions—from 12.5 million in 2007 to10.8 million in 2009—while the rate of legal immigration remains steady. 

Comprising 60% of the illegal population, Mexicans migrate in greater numbers in the spring and summer to work in agriculture, suggesting that American agribusiness may be complicit in encouraging seasonal unauthorized behavior, which influences legal immigrants less.

There is more than income that draws cheap labor to our shores. A 2007 Congressional Budget Office (CBO) conspectus of 29 studies in the field of immigration economics observes “most unauthorized immigrants are prohibited from receiving many of the benefits that the federal government provides through Social Security and such need-based programs … At the same time, the federal government requires that state and local governments provide certain services to individuals, regardless of their immigration status or ability to pay.”

Since the Supreme Court decision in Plyler v. Doe (1982), courts also have obligated states to provide services—public education and emergency medical care being the most costly—under the 14th Amendment’s equal protection clause. The CBO study concludes that although states’ and local governments’ costs for unauthorized persons are less than 10% of their total expenditures for these services, costs are not covered fully by either workers’ tax revenues (to the extent they pay them) or by federal aid.

Neither are costs of illegal immigration borne solely by the state. Cuban born Harvard professor of economics, George Borjas, whose website announces “Business Week and The Wall Street Journal … have called him ‘America’s leading immigration economist,’ ” has demonstrated the evidence “consistently indicates that immigration reduces the wage and labor supply of competing native workers.”

Libertarians may argue, correctly, that immigrants provide an economic service to extent their labor is in demand. In view of the foregoing data, others might view such an argument as “extreme apriorism” as libertarian Henry Hazlitt occasionally observed about his colleagues. William F. Buckley, Jr. later gave an example of the obvious impurities in such purist logic: open movement of labor is good, so more of it must be better—to illustrate why even private capitalism must suffer minimal regulation, respect for the law, and inviolate sovereignty.

A review of immigration policy should, therefore, balance the interests of the migrant worker with those of our native workers, the costs to the state with the costs to the federal government, and the economic well-being of the authorized laborer with that of the business in need of their services. Making our borders impenetrable will be ever more difficult if we ignore economic forces while continuing to offer desirable services that seem free to those on both sides of the border who circumvent the law for immediate gain.