Guest workers are also, paradoxically, less likely than illegal immigrants to become permanent residents. The U.S. already has a number of smaller–and less well-designed–temporary-worker programs, and there’s no evidence that workers in those plans routinely overstay their visas. Mexican workers, contrary to popular belief, do not, generally, intend to live their entire lives in the U.S. Instead, as the sociologists Douglas Massey and Jorge Durand concluded after a comprehensive study of immigrant attitudes and behavior, most want to work “for short periods to generate an alternative source of household income . . . or to accumulate savings for a specific purpose,” like buying a house in Mexico. This is harder to do as an illegal immigrant than as a guest worker, both because illegal workers are paid less and because when an illegal goes home he runs the risk of getting caught. One remarkable study found that after border enforcement was stepped up in 1993 the chances of an illegal immigrant returning to Mexico to stay fell by a third.
Here is the full piece. Please leave comments of high quality. Let’s try two new norms for comments. First, don’t say anything stronger against another commenter (or blogger) than "I don’t agree with you John." Second, it is fine if you are commenting on a single thread more than once, but you should be adding new arguments and material, not just debating with another commenter.
Addendum: Megan Non-McArdle makes excellent points about civility.
Except that Europe shows – guest workers are human beings, develop roots in a community and stick around, they are not interchangeable cogs in some machine that can be used and discarded at will. It undermines native labor (why hire a native if you can get a completely and totally compliant foreigner?) and introduces an element of unAmerican serfdom to the American labor market.
Here is http://borjas.typepad.com/the_borjas_blog/2007/05/on_guest_worker.html>George Bojas on Guest Workers:
“The key problem with practically all proposed guest worker program is that they have no credible mechanism for ensuring that guest workers return home after their visa expires. Before anyone retorts by citing the case of Malaysia or Singapore and arguing that those countries provide examples of successful policies that we can follow (as compared to, say, Germany), let me point out the obvious: The United States is not Malaysia or Singapore and most Americans would like to keep it that way. According to news reports, a (guest worker) maid in Singapore who gets pregnant gets deported within a week. I don’t think that’s the way that the situation would be or should be handled in the U.S.”
I can see it now, when the time comes for all the guest workers to go home, some intrepid oh-so-noble NY Times journalist reports on all these poor guys that want to stick around, they’ve worked hard, they’ve paid their taxes, contributed to this grand old nation, why, OH WHY, can’t they stay? Aren’t we a humanitarian nation?
And so the whole point of the guest worker programme falls apart under I tidal wave of emotion, and they stay forever.
Or as the writer Bojas quotes in reference to the German experience put it: “”We wanted workers and we got people instead.”
And the pregnancy situation Borjas talks about is a good point. Under current US law a foreigner who has a baby on US soil is entitled to citizenship, a crazy notion which most European countries have done away with, but how would this work under the guest worker programme. If the law weren’t changed then all a guest worker would have to do to gain citizenship is get pregnant.
But Tyler, isn’t debating with other commenters part of the whole fun of leaving comments?
Surowiecki cites a study finding that after border enforcement was stepped up in 1993 the chances of an illegal immigrant returning to Mexico to stay fell by a third.
I would like to see more of this before I except the premise.
Surowiecki presumes this is because the immigrant finds it difficult to return to Mexico.
But the alternative that the flow back to Mexico fell because the
illegal migrants were afraid they could not return to the US a second time would seem to make more sense.
If so, if would pretty much negate his entire argument.
This is interesting. I want illegal immigrants to stay in the U.S., to become citizens, to have children who speak English, and to assimilate into general American culture. I think this is a much better result than having them go back and forth between the U.S. and Mexico, having their kids speak primarily Spanish, and maintaining more of a connection to their old country than their new one.
It seems as if increased border enforcement, by “trapping” illegals in the U.S., might be the best way to bring about my goal of assimilation.
Thus, I think I now support increased border enforcement.
I’m skeptical of pretty much anything Borjas writes on immigration because of his tendency to cook books and an apparent hostility to most immigrants, But the discussion of the European case is bad for a number of reasons. First, the European case involved people who came not on fixed contracts or for definite terms but with indefinite terms but no official right to stay permanently and no right to move to citizenship. Additionally, the main countries with guestworkers in Europe did not, and do not, have birthright citizenship. It was these two conditions together that gave rise to the real problems with guest workers in Europe. But these problems can be avoided through the design of better systems. As Tyler notes, we _have_ several guest-worker programs in place in the US now and we don’t have the same problems that, say, Germany did in the 70′s. So, that’s a red herring, almost always put out by people who either don’t understand the relevant situations or who, like Borjas, probably due but are just trying to confuse the issue due to anti-immigration sentiments. A much better take than Borjas’s can be found in Howard Chang’s article, “Liberal Ideals and Political Feasibility: Guest-Worker Programs as Second-Best Policies”, 27 North Carolina Journal of International Law and Commercial Regulation 465 (2002).
(I don’t fully agree with Chang’s article but it’s the best things I’ve read on guest workers.)
Excellent comments, thank you all, as always…
I agree with adrian in the first comment.
I think we should do effective enforcement of the currrent immigration laws first. Then, we can talk about how to reform the immigration laws. Many people see guest workers as a better alternative to illegal immigration, but, why not deal with illegal immigration using stepped up enforcement and a national id card.
We should also increase legal immigration in a manner to improve the nation’s ability to thrive in the 21th century. I am susceptible to utilitarian arguments but shouldn’t we help people in countries that are the worst off before helping people in mexico.
Even if “guest workers” go home, they still amount to Marie Antoinette economics. In other words, a scheme to redistribute income from the poor to the rich. Logically, any “guest worker” plan should be accompanied by tax hikes on the wealthy to compensate the loosers. Of course, this will never happen.
However, the real problem is that many will never go home. Since unskilled households impose net tax costs far in excess of their contribution to society, they constitute a net welfare loss to society as a whole.
In other words, “guest workers” make society poorer, not richer. Why do libertarians advocate losing transactions? To demonstrate their moral superiority over the rest of?
As has been famously said about the European guest worker programs, which seemed like a good idea at the time: “We wanted workers but we got human beings instead.”
To translate that into econo-speak, there are huge externalities to guest worker programs, so the usual glib analogies to the benefits of free trade are highly inadequate.
Guest worker programs privatize profits while socializing costs. Economists are damaging the reputation of their profession by reflexively shilling for special interests’ attempts like this to profit by handing costs over to the public.
Read how wonderfully the guest worker program is working for both guest workers and natives (U.S. citizens) in the Pacific islands that are U.S. territories:
http://www.msmagazine.com/spring2006/paradise_full.asp
http://www.tompaine.com/articles/2006/05/09/sex_greed_and_forced_abortions.php
check out this letter:
http://www.chamorro.com/community/tsablan_cnmi.html
Money quote…”inability to compete against guest workers willing to accept low wages..”
So you end with guest workers who toil for less money and live in fear of being deported for causing trouble at work or elsewhere while the unemployment rate of the citizens skyrockets. That seems like a formula for trouble to me.
Tyler,
I wonder why you insist on leading with your chin in so many discussions of immigration — e.g., using the term “sanity” in your heading? Surely, by now you’ve realized that you just end up getting taken to school in the comments, demonstrating that you don’t know much about immigration and haven’t thought hard about it. So why do you keep it? I’d love to hear you discuss the incentive structure you face that overrides the normal human desire not to look bad in public.
Steve, you certainly have thought hard about immigration. Unfortunately, you haven’t thought well. Tyler “leads with his chin” because he’s actually conversant with the theoretical and empirical literature on the effects of immigration, and doesn’t rely on irrelevant anecdotes and ill-informed invocations of the supposed law of supply and demand. (The idea, for instance, that the experience in the Northern Marianas tells us anything about how this new proposed guest-worker program, which includes a raft of protections for workers and allows them to change jobs if they want, would work in the US, is absurd. And there is no evidence you can cite to support your assertion that most of the new guest workers would be Asian.)
To take only the most obvious example, Giovanni Peri is about as diligent, rigorous, and unbiased student of immigration as you could imagine, and his conclusions — based, again, not on anecdote but on data — about the economic effects of immigration completely contradict yours, and support Tyler. Explain clearly and precisely why Peri’s work is wrong, and then we might bother to listen to you.
Finally, there are not huge externalities to guest-worker programs in the U.S. On the contrary, it’s inarguable that guest-worker programs are, on the whole, economically beneficial to the U.S.: under the new proposal, guest workers would pay taxes and have to have health insurance, and they would have no access to U.S. social services or things like Social Security. You could say that’s not so great for the guest workers themselves, but then there’s no doubt that they would be the biggest winners from this program, since their wages would be five times higher.
Peri’s recent work, such as http://www.econ.ucdavis.edu/faculty/gperi/Papers/california_wp_dec06.pdf (which concludes that immigration affects native workers’ wages only a little) looks at pretax wages and makes no allowances for cost-of-living or changes in employment rates. Social spending on low-wage immigrants and their children (plus spending on people displaced from employment by immigrants) comes from taxes on higher-wage workers. Immigrants impose costs (“externalities”) such as traffic congestion and housing inflation which are not subsumed into their wages. Even if immigration actually boosts some native worker’s nominal wage it may still decrease his real income or standard of living. I realize that Peri’s papers are silent on these matters, but for that reason you cannot just to cite Peri et-al. for the proposition that low-wage immigration is a net-positive for American citizens. Peri simply does not net out all relevant factors.
The children of illegals are not necessarily citizens under the Constitution. Remember the phrase “and subject to the jurisdiction thereof”, which excluded non-citizens like Native Americans. You may not like that source, but this from a liberal perspective says much of the same thing.
Personally I want as high a rate of immigration as possible that keeps the melting pot functional. I would prefer to have highly educated Indians and Chinese than more illiterate and possibly recidivist Mexicans … but I’ll take what I can get.
For American ideals to spread we need to keep up in the numbers race population-wise. We’ll have to deal with the annoying Aztlan types, just as we’ve dealt with industrial espionage from immigrants from numerous countries.
But, by and large, their children and grand-children will become American. Since I value American power and might in the zero-sum game of international dominance, I am willing to make that trade off.
It seems as if increased border enforcement, by “trapping” illegals in the U.S., might be the best way to bring about my goal of assimilation.
Thus, I think I now support increased border enforcement.
Yep — if illegal border crossings are difficult and expensive, people will come and stay. And the right people will come (those who are highly motivated and willing to make the U.S. their permanent home). Illegal immigration as ‘costly signaling’?
I wonder what are commenters priorities? For instance, if you complain about welfare costs, would you favor (or accept) increasing the immigration of high skilled workers?
Personally, I would like to see the border enforced, illegals deported, and all people legally awaiting visas be allowed to enter. I would accept much higher levels of immigration if skills were a dominant factor in deciding who entered. I think culture/assimilation is important, and I like the idea of a guest worker program, because many foreigners are not interested in citizenship. They just want to earn good money and then go home with a pile of cash. It sounds like those who want to help foreigners would like it too, because far more foreigners can enter. For instance, if we need 1 million workers, we can let in 1 million immigrants one time, or rotate 1 million guest workers every X years. They return home and employ the capital they earned to build businesses. It’s a win even for the people who cannot get a visa, whereas if a family emigrates, it can be an almost total loss to the nation. Nonetheless, the results of other guest worker programs around the world are not encouraging, although this is partially because of the nations conducting them (UAE, Hong Kong).
Here’s an idea, in exchange for an upfront fee around $10,000 a person could be granted a perm. visa entitling him or her to work and live in the US. If they wanted, they could apply to get citizenship. I would see three types taking advantage of such a program:
1. Those who are relatively wealthy to begin with. Doctors, technical types, and generally highly skilled workers. No problem there.
2. Those who have friends and family here who are very devoted and trust the integrity of the person they are putting up the $ for.
3. Those who are good workers with good reputations who can convince an employer or financial institution to loan them the fee and let them pay it back with the higher wages they would earn working legally in the US.
This wouldn’t ‘solve’ the problem but it would take some of the heat off. The influx of these legal workers would compete with illegals making it a bit less economic to employ illegal workers. The fees would provide some decent revenue that could offset the costs incurred providing services to immigrants. Finally the fee would provide a market mechanism to select the best ‘type’ of immigrant.
The problem with this type of thinking is that such an act would make the problem worse, not better. Increase the visas and legal options for entering now and those entering legally will displace those entering illegally. The border is already enforced and illegals are deported all the time. Look up both deportations and those stopped at the border and I don’t doubt you’ll see those numbers growing dramatically.
You’re never going to get an air tight border where no one ever crosses illegally. Even a police state like Berlin couldn’t keep a trickle of people illegally crossing over the Berlin Wall which was a tiny fraction of the area that is represented by the US-Mexico border.
Can we assume that there will be limit on number of guest workers and some criteria to select who can enter?
So, unless yearly number of guest workers is 100 million, there will be millions of people around the world, including Mexico and rest of Latin America who want to come but quota for the year is filled.
There will be millions of people around the world, including Mexico and rest of Latin America who want to come but fail selection test.
Why would not those people just simply cross the border, the border that nobody among ruling elites wants to protect?
Upon illigal enter they might find labor market in slightly worse shape due to presence of X number of “guests”.
So they will underbid guests, and of course native workers, and will get jobs.
Unless there is a strong workplace enforcement, and elites have no intention to do that, illegasl will have no problems to underbid guests and natives: no need to pay min wage, no need to withold taxes, shift medical and other costs on public, etc.
Guests or no guests, in absence of employer sanctions the illegal immigration will enthusiastically continue till US wages that illegals could get will approximate wages they could get at home.
“I think areas that need to be addressed are:
1. Economic growth in Mexico.”
Bingo! Brilliant!
Why nobody thought about that?
If we make Mexico grow 300% a year, in 2-3 years they will be making US-level wages and problem is solved!
Next: Cure cancer by 2009!
I have two comments on the article..
First, increased border security is not a factor in preventing illegals from leaving the United States. There is no impediment to leaving this country. You buy a ticket and fly home. Ask any travel agency with a “Se Habla Espanol” sign in the window.. they make a good living selling one-way tickets to Latin America.
My second comment deals with the statement that illegal workers and guest worker programs only depress wages of those Americans without high school education. Arthur Laffer correctly asserts that the best form of welfare is a good paying job. So, who pays the welfare costs of those whose wages are depressed? By any analysis, guest worker programs are an indirect corporate subsidy and a burden on society. I would prefer to pay higher prices for tomatoes.
“Arthur Laffer correctly asserts that the best form of welfare is a good paying job”
Funny, but Laffer also favors Open Borders. Perhaps we can introduce Laffer to Laffer.
K. Williams,
“To take only the most obvious example, Giovanni Peri is about as diligent, rigorous, and unbiased student of immigration as you could imagine, and his conclusions — based, again, not on anecdote but on data — about the economic effects of immigration completely contradict yours, and support Tyler. Explain clearly and precisely why Peri’s work is wrong, and then we might bother to listen to you.†
Well, not exactly. In fact, Peri is notorious for ignoring empirical data that contradicts his theoretical models. Of course, his models (essentially Cobb Douglas) are constructed so that immigration can never reduce incomes. Not the sort of thing that enhances one’s credibility.
For example, Peri has published a new paper, Immigrants’ Complementarieties and Native Wages:Evidence from California (http://www.econ.ucdavis.edu/faculty/gperi/Papers/california_wp_dec06.pdf). This paper attempts to show that immigration has raised the real wages of workers in California, even high school dropouts. A few notes:
1. The empirical data (Figure 3, Change in Real Wage of U.S. natives, by Education group 1990-2004) actually shows large declines for high school dropouts. -17.6% in California versus -15.1% nationwide. Peri does not attempt to explain the large decline in wages of low skill workers (as best I can tell) or why wages fell faster in California.
2. As best I can tell, Peri uses a aggregate production function that would make it very difficult for immigration to ever adversely impact the incomes of natives in general, although that might not be true for specific groups. For reasons stated below, this does not appear to be realistic for California and perhaps not the nation.
3. Peri assumes that immigrants are almost entirely complementary to natives, even at the low end (but less so). He is quite aware that this is a contentious point and attempts to defend his methodology and conclusions. I can neither support nor refute his assertions.
4. Peri appears to be aware that his work is deeply contra factual, although this is never explicitly stated. Natives have been net leaving California in vast numbers (millions) for quite some time now. If immigrants were complementary, this should either not be happening or immigrants should be net leaving as well. Obviously this is not true. Peri attempts to refute this critique via a regression of some type. He offers no other explanation as to why natives would be fleeing California.
5. Peri rather explicitly does not even consider the possibility that immigration has impacted prices (mainly but not exclusively housing) in California. Peri deflates California wages using a national CPI, not a state one. This is highly contrafactual in my opinion. California’s population would be much lower (30% of California’s population is foreign born) without immigration and housing correspondingly more affordable. I cannot quantify the impact of immigration on housing costs in California, however it is certainly large. Note that the Census (but not the BLS) shows California housing to be roughly twice as expensive as the national average.
6. If one takes into account housing costs, Calfornia is considerably more expensive than the US as a whole and real wages corresponding lower. Indeed, California emerges as one of the poorer states (43rd) in the nation, if the local cost of living is taken into account. Given the linkage between immigration and prices, it would appear that immigration has markedly reduced real wages in California. Of course, this would account for the native outflux contra Peri
Because the topic of this thread is “(In)Sanity about guest workers, from James Surowiecki”
First, increased border security is not a factor in preventing illegals from leaving the United States. There is no impediment to leaving this country. You buy a ticket and fly home. Ask any travel agency with a “Se Habla Espanol” sign in the window.. they make a good living selling one-way tickets to Latin America.
Actually it does indirectly. If you used to have a migrant worker who crossed the border (legally or illegally) to do seasonal work in the US and then clamp down on the border you now present him with a different set of incentives. If he goes back he may not be able to get back accross when the next season rolls around. Perhaps it makes more sense for him to try to find other work in the US to hold him over until next season. Before he was literally just visiting but now he starting to lay down roots and making a home here.
Why, mainly because this particular choice is crucial and irreversible and once done cannot be undone.
err, well nothing that has been done can be undone. Then again nothing will stay the same no matter what we do.
Russia is recovering from 70 years of COMMUNISISM for Pete’s sake because the Russian nation still exists; but if the US changes into Mexico or Brazil, that change cannot be fixed. Surely few except “tveb† will be pleased.
The US isn’t going to change into Mexico or Brazil. By this do you mean English will be replaced as the default lanugage of the US? Doubtful, by the 2nd generation most Hispanics speak English very well, by the 3rd generation many Hispanic families worry that the children no longer speak Spanish anymore except on a street level. Despite the hysteria over bilingual advocates the fact remains if you live in the US and don’t speak English the person you’re hurting the most is yourself….which is why free English classes are almost always way overbooked and there’s a booming business for self-teaching English materials.
If you mean the US may turn into a developing nation like Mexico then the worst thing you can do to ensure that a huge population of people live in the US who have to work under the table and off the books in the ‘underground economy’.
Those favoring an end to the abuse of the 14th amendment might want to consider supporting one or more of the following:
1. HR1940
2. Declaring delivery rooms to be temporarily the sovereign territory of the country of origin of the illegal or tourist mother. The birth certificate would then show the place of birth to be the country of origin of the mother.
3. Seal the borders to all pregnant women.
4. Construct obstetric and triage hospitals south of the border at every border crossing. Transport all obstetrical and emergency patients to one of these hospitals rather than to a U.S. hospital. Split the cost with Mexico.
5. Follow the Singapore example.
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