Don’t expect too much from immigration legislation

As Yogi Berra once said, “It’s deja vu all over again.”

Two decades ago, Congress passed legislation that was supposed to solve all our immigration problems. Yet it’s almost eerie how we seem to be talking about all the same issues now as another bill on the subject is being debated in Congress.

In the early 1980s, as now, thousands of people crossed U.S. borders illegally each day seeking work. Then, as now, increased border patrolling did little to stem the flow. Then, as now, employers happily turned blind eyes to the legal status of those willing to do unpleasant jobs at low wages.

A quarter-century ago, millions of such immigrants had lived here for years, holding jobs, paying taxes and having children. Hiring them was illegal, but there was little effective enforcement. Businesses claimed they would go broke if they could not hire low-skilled immigrants.

The Simpson-Mazzoli Immigration Reform and Control Act was supposed to fix all that. It increased requirements for employers to verify legal status before hiring. It supposedly strengthened penalties for employers who knowingly hired illegal immigrants. It offered a fast track to citizenship, effectively an amnesty, to those who had been here a long time. And it included pious commitments to stronger border enforcement. The act, people thought, would solve illegal immigration once and for all.

When Simpson-Mazzoli passed in 1986, there were 3 million to 4 million people living and working in the United States without having met the legal requirements. Now there are 12 million or more. What went wrong?

More importantly, what is different about the compromise currently before Congress that will guarantee greater success than the bill enacted two decades ago?

Economics is all about how people respond to incentives. How does the current proposal change incentives for anyone? What different motivation does it create for those already here against the law? What about for those still abroad who would like to come to our country for a better life? And what about for those companies that hire illegal immigrants, knowingly or unknowingly?

Be careful not to fall into the “they will have to” fallacy that plagues immigration debates. Supposedly, under the proposed law, some immigrants “will have to pay $5,000” or “will have to go back home every two years,” or “will have to return to their home country to apply for permanent status.”

Why will they have to do any of these things? Because the new law says they do? Existing laws prohibit crossing the border illegally and living or working in this country without valid permits. Existing laws ban hiring workers who do not meet legal eligibility criteria. If such laws are honored more in the breach than in the observance, what will another new law change?

One key issue is dealing with the 12 million illegal immigrants already here. Another is controlling future inflows. Addressing one issue does not necessarily solve the other.

It would be extremely difficult to deport 12 million people, many who have lived here for years. As columnist George Will pointed out, we “would fill 200,000 buses in a caravan stretching … from San Diego to Alaska.” It would be an enormous law-enforcement effort. There is little apparent public support for such an unprecedented effort. Pragmatism dictates some legal recognition of the de facto status quo.

It is not at all clear, however, that the current bill will motivate many existing illegal residents to regularize their status. On a day-to-day basis, how would their lives be different? Yes, it might remove pervasive fears of being caught in some immigration raid. But would that motivate many people to jump through the procedural hoops in the bill?

More importantly, how will legalization of the status of those already here and a temporary worker program change incentives for those still in other countries who would like to move here? It is not clear the bill will change much.

Legalization of those already here reinforces the belief that once you get across the border, something will work out for the long run. And while temporary work permits may simplify things for the lucky prospective migrants who get them, failure to secure one won’t make prospects for illegal crossing any worse than they are now.

The fundamentals are unchanged. There is a big earnings gap between the United States and Mexico or other poor countries. The cost of migrating continues to drop, despite increased border patrols, because of network effects and easier communication. And despite a few well-publicized raids, there is little punishment for hiring illegal workers. The bill does little to change these fundamentals. Don’t expect it to do much to change the outcome.

© 2007 Edward Lotterman
Chanarambie Consulting, Inc.