A bit on the economics/politics of the President’s immigration action.

November 21st, 2014 at 10:06 am

Over at PostEverything.

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11 comments in reply to "A bit on the economics/politics of the President’s immigration action."

  1. smith says:

    Of course the President’s actions are laudable because the alternative of deporting 11 million people is bizarre and unworkable.

    But those who praise the action must not ignore some negative consequences. It will encourages more illegal immigration. Obama himself admitted as much when the recent crisis over increased border crossings occurred, not entirely due to originating countries’ economic and political conditions. Ignoring the effect hurts the credibility of those not wanting to totally close the borders. Substantive change to beef up employer sanctions and penalties and better technology could go long way in solving this problem. It is a low priority for Democrats and Republicans who craft immigration policy mostly to help big business (vs the stated goals of helping immigrants or competing American workers).

    A more active foreign policy that promoted better working conditions, labor rights, and general economic conditions in originating countries would be even more effective. The move to privatize the Mexican oil industry is a disaster in the making.

    Hopefully the president’s actions will kill the previous bill, which does nothing substantial (despite claims) to provide immigrants with basic labor rights.

    Why is it so difficult for anyone to understand the negative effect of 10% of the labor force lacking right to strike, bargain, quit, change jobs, organize, move, ask for a raise, etc?

    • Larry Signor says:

      Smith, PERHAPS, President Obamas’ action will encourage more immigration, but the significance of this pales when compared to other motivations to emigrate to the US.

      “In Mexico, the average household net-adjusted disposable income per capita is 12 850 USD a year, less than the OECD average of 23 938 USD a year. But there is a considerable gap between the richest and poorest – the top 20% of the population earn nearly thirteen times as much as the bottom 20%…People in Mexico work 2,226 hours a year, more than the OECD average of 1,765 hours. Almost 29% of employees work very long hours, much more than the OECD average of 9%, with 35% of men working very long hours compared with 18% for women. Having a good education is an important requisite for finding a job. In Mexico, 36% of adults aged 25-64 have earned the equivalent of a high-school degree, much lower than the OECD average of 75% and one of the lowest rates amongst OECD countries.” http://www.oecdbetterlifeindex.org/countries/mexico/

      Mexico is more deadly and inhumane than ISIS…”More than 60,000 people have been killed from 2006 to 2012, according to the most recent data available from Human Rights Watch.” http://www.cnn.com/2013/09/02/world/americas/mexico-drug-war-fast-facts/

      Do you really think that President Obamas’ EAs are as motivational as these conditions? Life in Mexico is telling people run, don’t walk to the safety and economic security of the US. In spite of the DC shenanigans, we are still the land of opportunity. The mantra of poor Mexicans is, go North my people.

      • Ken Wallace says:

        I often see Mexico as an example of where the US is headed – more accumulation of wealth into the top tiers and massive poverty everywhere else. Some of the richest men in the world are Mexicans owning major industries with little competition (sound familiar?). The question is, how will the working poor react here in the US once the conservative distraction machine inevitable fails. If they give up on government, perhaps we too will develop criminal gangs and a corrupt sub-culture as an answer to the oligarchs.

    • Larry Signor says:

      Smith, You are correct in many of your views on the immigrant labor violations and the carry over to low wage domestic labor. You may have read this from EPI, but if not, here it is: http://www.epi.org/blog/president-obamas-executive-action-on-immigration-will-improve-the-wages-and-working-conditions-of-unauthorized-immigrants-and-u-s-born-workers-alike/

  2. Larry Signor says:

    This was a great move by President Obama. The only downside is that it could be undone by a succeeding President. As for the legality of it, Presidents Reagan and G.H.W. Bush took unilateral executive actions on immigration. Not many republicans criticized their EAs as illegal. Could there be just a little bit of personal animosity toward President Obama behind with the GOP freakout?

    • Kevin Rica says:

      Good point Larry,

      In fact, this move was a good example of the President’s unfortunate inability to think strategically. He thinks politically and in a narrow legal sense.

      If the Republicans capture the White House in 2016 (an unpopular two-term incumbent and a persistently weak economy make it theirs to lose), these 4 million people are hostages. If the Republicans are smart (there’s a first time for everything), they will offer to let those people stay under any conditions they choose. In exchange for that, they will then write the rest of a comprehensive immigration reform bill that will include the stuff the Dems wanted to keep out of “comprehensive,” such as effective (maybe draconian) enforcement. If the Dems refuse to compromise, the Republicans don’t have to close down the government, they just let the quasi-legal, temporary status expire for the 4-6 million most sympathetic immigrants because the Democrats won’t compromise.

      At that point, the Republicans will say that they drove the “grand bargain.” Each side got something and gave up something. They will take the political credit and the country will move on. The Republicans don’t even have to think that hard. It will just come one step at a time.

  3. Scott Monje says:

    I take issue with only one point. You say that the Republican House hasn’t taken action because the Republicans disagree with the Senate’s position. I would say that if the House Republicans had a position different from the Senate’s, then they could pass a bill different from the Senate’s. The real problem is that the House Republicans are so divided among themselves that they have no position. The Tea Partyers control the rhetoric, but they don’t have the votes to pass some of the nonsense that they promote. It’s similar to the instances last year when they tried to pass bills designed to implement the Ryan budget and had to pull them from the floor for lack of votes. That’s why they haven’t passed a bill and won’t in the near future.

  4. Kevin Rica says:

    The President’s defense of the economics is masterpiece of deception (deceive: to mislead by a false appearance or statement). It based on the theory that there is no such thing as involuntary unemployment. (Do you buy that Jared?) See the direct quote below:

    “Employment Effects

    Theory suggests that these policy changes would not have an effect on the long‐run employment (or unemployment) rate, the focus of CEA’s analysis, as the additional demand associated with the expanded economy would offset the additional supply of workers.”

    Maybe that is true on planet Alpha Centauri 5, but not in 21st century America. If pigs had wings, maybe they could fly..

    How does one reconcile that with the article in this morning WaPo: “Why wage growth disparity tells the story of America’s half-formed economic recovery.”


    The Post’s story is based on real life in America. The President’s story is not.

    Almost all of the so called benefits come from allowing more high-skilled workers, not more janitors, who are the overwhelming number of workers affected.

    They report acknowledges academic studies (Borjas, Freeman, and Katz (1997)) showing negative effects of immigration on native-born workers, but just says that they reject them. They do accept the studies that support their case. That is to say, they accept all the research that supports their position and reject the rest. To paraphrase Paul Simon, “A politician hears what he wants to hear and disregards the rest, tra-al-la la..”

    The only alternative is that we continue to allow all illegal immigrants to say without effective enforcement. The only alternative they acknowledge is 100% deportation.

    They refuse to acknowledge the alternative of workplace enforcement beginning with e-verify and allowing the government to declare those who refuse to respond to no match letters as ineligible to work.

    That would do the job as intended under the last great “Comprehensive Immigration Reform:” Simpson-Mazzoli.

  5. smith says:

    This just in from the ministry of propaganda:

    If you want to suppress the wages of 3 to 4% of the working population here is how. Each year, make sure 10% of that segment is denied basic labor rights. All the numbers line up correctly by the way. 85,000 H1-Bs each year, with additional 20,000 or 30,000 because non-profits are exempt for limits, 1/2 are tech jobs according federal government reports on the program, which works out to about 10% as there are about 3 to 4 million computer workers (per Bureau of Labor Statistics). This according to all wage studies (even after underestimating effect due to downwardly nominal wage rigidities) is easily enough to lower wages just by weight of sheer numbers alone, never mind lack of labor rights. But although there is some very limited proposal in Obama’s executive order to enhance mobility, there is no one (save Senators Durbin and Grassley in previous hearings) speaking out, and even they don’t take the only easy, fair, and workable solution, end employer sponsorship.

    The ripple effect drags down the whole economy. Tech firms will break the law to suppress wages. http://dealbook.nytimes.com/2014/04/07/tech-firms-may-find-no-poaching-pacts-costly/ When that doesn’t work they buy off politicians to change the law.

    The plain fact is, if tech workers don’t get raises anymore, everyone is affected. There is no mystery why wages stagnate. Sure as minimums push wages up, higher wages in a well paid field, pull others by drawing more people into the field, creating tighter labor markets everywhere.

    Stop the press from buying the tech industry’s perversion of reform.

    • Not My Real Fake Name says:

      From – http://www.computerworld.com/article/2855642/displaced-it-workers-are-being-silenced.html

      “A major problem with the H-1B debate is the absence of displaced IT workers in news media accounts. Much of the reporting is one-sided — and there’s a reason for this.

      An IT worker who is fired because he or she has been replaced by a foreign, visa-holding employee of an offshore outsourcing firm will sign a severance agreement. This severance agreement will likely include a non-disparagement clause that will make the fired worker extremely cautious about what they say on Facebook, let alone to the media.

      On-the-record interviews with displaced workers are difficult to get. While a restrictive severance package may be one handcuff, some are simply fearful of jeopardizing future job prospects by talking to reporters.

      Now silenced, displaced IT workers become invisible and easy to ignore.

      This situation has a major impact on how the news media covers the H-1B issue and offshore outsourcing issues generally. To illustrate, The New York Times published a story Nov. 23, “Workers in Silicon Valley Weigh In on Obama’s Immigration Action,” which looked at the reaction to President Barack Obama’s executive actions on immigration.

      The Times spoke with visa-holding employees at tech firms who were frustrated by U.S. immigration policy. There were photographs of some of the people being interviewed, which means their employers welcomed the newspaper’s attention.

      The employee stories that the newspaper reported on are an important dimension of the H-1B story, but it’s not the major issue. It is not what makes people angry or tugs at the soul. (See: This IT worker had to train an H-1B replacement).

      The H-1B visa program is used as an engine of displacement by offshore outsourcing companies that employ visa-holding workers by the thousands. From the government data Computerworld has collected in recent years, these firms are applying for visas in ever-increasing shares squeezing out smaller firms. The tech industry’s solution is simple: Significantly raise the H-1B cap or remove it entirely.

      When a U.S. company signs an agreement with an IT services firm, that firm will bring in its visa-holding workers. The U.S. workers will train the foreign workers and then exit their jobs. They are often older workers. But the story that people will see in print or read about online, is the one about the promising tech start-up that’s having trouble hiring an H-1B worker. The national news coverage is skewed, with no simple fix to the problem.

      The system of job displacement involves silencing the workers most injured by the process.”

      (No raise this year for me. That makes 3 in a row. Beggars roam the BART trains now during the evening commute out of San Francisco through Oakland. Also saw a stationary helicopter over Oakland last night monitoring the progress of the nightly riots.)