Wednesday, April 05, 2006

The real reason the Donks love illegal aliens

At the Financial Times, Martin Wolf attempts to explain the effects of illegal immigration to the economically illiterate:
In the absence of tough sanctions on employers, the chances of stemming the inflow are negligible. The question is whether such sanctions could be justified. They might be, for two reasons: the first is that uncontrolled immigration of unskilled labour is damaging to already socially disadvantaged fellow citizens; the second is that routine violation of such laws undermines the rule of law itself.

The economist who has argued for the first of these propositions most cogently is George Borjas of Harvard University. According to a simulation exercise by Prof Borjas and Lawrence Katz of the National Bureau of Economic Research, the real wages of US high-school dropouts would have ended up 8 per cent higher if Mexican immigration between 1980 and 2000 had been thwarted, but higher skilled immigration from elsewhere had still been permitted.

Similarly, Steven Camarota of the Center for Immigration Studies, a think-tank in favour of tighter controls, argues that the influx of low-skilled immigrants has already harmed native-born competitors. As the proportion of immigrants (both legal and illegal) in the labour force has risen, the proportion of relatively unskilled natives in work has fallen. Moreover, many unskilled natives have left the labour force: they are discouraged workers.

A standard counter-argument, wearily familiar on both sides of the Atlantic, is that immigrants are taking jobs that natives are unwilling to do. This is doubly wrong. First, the supply of labour is dependent on its price. Business people must know this: after all, it is the argument they use to justify soaring executive pay. Without the illegal immigrants, people would have to spend more on nannies, cleaners, farm workers and so forth. Second, most of the workers doing the jobs done also by immigrants are native-born. The obstacle is not the absence of native-born workers, but that they would have to be paid higher wages if immigrants were absent.
Amidst all the whining, that's the bottom line: illegal immigration means the citizens get stiffed. So what happens to them?
If unskilled immigrants drive down wages for such jobs, too, a hapless underclass will inevitably emerge.

Does this matter? The answer depends on whether extreme inequality is compatible with successful democracy. The precedents suggest, instead, that it is a recipe for populism, plutocracy, or a miserable alternation between the two.
And if there ever was a party of plutocrats that wants and needs a dependent underclass, it's today's Democrat party. Of course, it doesn't hurt that with today's lax voting rules they can get all the illegal aliens to vote for them too.