Economics, Politics, and Religion: Social Justice

Immigration is a hot topic these days.  Well, more specifically, illegal immigration from the south of the border into the United States.  While the debate continues, unfortunately to the lack of any constructive development, we are still unable to come to a conclusion regarding how we come to terms with migrants who enter the US extra-judiciously.  There are five basic conventional arguments, either for or against those who are staying in this country without proper papers.

Against:

·         They take away our jobs

·         They are a strain on our financial system

For:

·         Human Rights

·         Illegal immigrants provide important cheap labor

Neutral:

·         It’s not practical to extradite 12 million odd people who lack legality

All arguments for and against can be divided into three categories: legal, economic, and practical.  I believe that each one of these arguments is valid; however, some more than others.    While I believe that all three provide interesting dilemmas and solutions, neither one of them provides a solution by itself.  The reality is that illegal immigrants do provide cheap and crucial labor, but they do also take away jobs.   On the other hand, the argument that they are a strain on the system is absolutely false .  On the contrary, non-citizens cannot be naturalized if their role is not accepted beyond that of cheap labor.

Consider this: it is uncontestable that those who cross the border illegally are employed on minimum wage (or less).  Economics tells us that the lower ones income, the higher their marginal consumption rate.  In other words, a bigger chunk of their income goes on consumption than those who make more.  Furthermore, the less you earn, the more you spend on basic necessities as a portion of your income.  So while illegal immigrants don’t pay income taxes or social security, they do pay sales tax.  Oh, and they pay a lot of sales tax.  While I don’t know the connection between illegal immigration and sales tax, it is interesting to note that Southern California (a prime destination for illegal immigration) has one of the highest sales taxes in the entire country. 

Interestingly, if illegal migrants were to pay income taxes, they would get it back through income through tax returns (through Earned Income Credit—EIC—and other entitlements).  Therefore, legalization would mean higher taxes for middle-class and wealthy for an income transfer.  Is this country ready for that?

I don’t believe that there is a practical solution to illegal immigration at this point.  Logistically, it is impossible to send all of them back or profile them.  Realistically, the society needs illegal immigrants so that that the cost of our necessities and wants remain low.  The only solution is to reduce the demand for illegal immigrants.  This is only plausible if we raise the wages enough so that the citizen faction would consider competing for the jobs currently occupied by non-citizens.  This entails a higher price for basic necessities; consequently, reduction in desired goods.  This means a damp on consumer America!

The problem with the antagonists is that they believe the illegal immigration takes root in the supply factor.  To them, there is an over-supply and we need to stop it.  The protagonists don’t seem to understand the institutional dynamics that create the demand for illegal immigration.  It is not obvious whether they are willing to disrupt the institutional dynamics that sustain illegal immigration, from which they benefit. 

Those who consider illegal immigration a problem, they must first understand the demand side dynamics of the problem.   Those who do not consider it a problem; well, then, there is no problem.