Article Immigration Problems Run Deep

World Apple Report, July 2007, Immigration Reform, page 1

Immigration Problems Run Deep
As we go to press, the United States Congress is still trying to hold together a bipartisan plan to reform the U.S. immigration system. The odds of success are not good. The fate of the legislation has implications for what may be possible in many other countries that are struggling with efforts to better manage immigration.

In general, the U.S. Congress is most decisive when it patches together a plan in private caucuses and votes on that plan in the dead of night. Faced with a "fait accompli", protestors and objectors swallow their pride and move on to the next legislative battle.

However, if a complex and controversial piece of legislation takes a long time to be enacted, it becomes a target for both those who oppose the legislation and for those seeking to make unrelated political statements. Countless objections can be raised and amendments proposed (as has occurred in this case) that undermine whatever cohesion the original legislation possessed.

What is the Fundamental Immigration Problem?
Even within the food industry in the United States, there are differing views about what the immigration problem is and about how to solve it. Most agricultural producers see lack of immigrants as the problem because there is such a critical shortage of farm labor. Some unions view immigrants negatively as increasing the supply of labor and driving down wages. Some school and hospital districts see immigrants as an unfunded burden on their services. Many ordinary citizens blame immigrants for changing the culture and character of their towns and neighborhoods. And, indeed, these are just some of the many relevant aspects of immigration.

However, the more fundamental problem of migration, whether immigration or emigration, is the basic mismatch that exists between the economic opportunities and living conditions that are available in different countries. Some of the most prominent mismatches driving current migrant flows are those between Mexico and the United States, North Africa and the European Union, Zimbabwe and South Africa, and South Asia and the oil-rich Gulf states One could cite many more examples.

Immigration will continue as long as those economic mismatches continue. The immigration problem cannot be solved by any single country acting on its own. It requires changes both at the source of supply of migrants and at the receiving end of the migrant pipeline.

The Economics of Migration
The economics of migration has been studied for at least two hundred years and has involved observation of migrant flows both within countries and across international borders. The supply of migrants increases (1) when population growth in any region outstrips job creation and (2) when the gap widens between potential income in a destination region and actual income in the region of origin.

Conversely, the demand for migrants grows when job creation in the destination region outstrips population growth. Demand is enhanced by the existence of migrant support groups in the destination region and is dampened by harassment of migrants in the destination region.

Much Migration is Still Within Countries
One of the single biggest flows of migrants since the industrial revolution began has been the flow out of agriculture and rural areas and into urban, industrial areas. That flow is still very large in developing countries like China and India.

In China, despite a quarter century of economic growth, per capita income of urban households in 2005 was 10,493 yuan, more than three times the 3,255 yuan per capita net income of rural households. Because of that persistent income discrepancy, an estimated 200 million Chinese have moved from rural to urban areas in the last twenty years, despite the many obstacles that national and city governments have put in their way.

Migration from Mexico to the United States
The contrast between per capita incomes in Mexico and the United States is even more stark. In 2004, GDP per head in the United States was $39,430, more than six times the GDP per head of $6,450 in Mexico. The gap between rural incomes in Mexico and average incomes in the United States is much wider. Similar gaps exist between incomes in the United States and those in many other countries that supply migrants to the U.S.

The Mexican population continues to increase by 1.4 million people per year, far ahead of Mexico's current ability to create jobs. In contrast, the U.S. economy has been a powerful engine of job creation for many years. The demand for migrant workers in the United States is large and diverse. Most migrants can find support groups to ease the pain of transition to a new culture and, until recently, the negative factor of official harassment was relatively muted.

The Economics of Illegality
The issue of when and where to migrate to close the income gap or obtain a job is separate from the issue of whether or not to do this legally. In general, control of the supply of legal permits for migrants to reside or to work in a destination region is in the hands of national, state or city bureaucrats or their agents. Decisions on the supply of permits to be issued rarely take account of the economic forces of supply and demand that are driving migration in the first place. As a result, the supply of permits and visas, whether in Shaghai or in Silicone Valley, often falls woefully short of the potential demand. Under the proposed U.S. immigration law, that shortfall is likely to continue.

The costs of acquiring a permit or visa are high because of the cumbersome procedures and lengthy time span involved. The risks for the applicant for a permit are also high because at any time in the application process, he or she may be denied a permit or be subjected to additional requirements or delays. Individual migrants have to compete with rich and powerful corporations such as IBM and Microsoft for the few permits that are available.

Not surprisingly, then, in most cases, individual young migrants, already in urgent need of jobs and incomes they cannot obtain at home, deem the costs and risks of seeking legal entry as too high. When most migrants choose illegal entry, it is a clear indication that the laws of the destination country are out of line with the economic realities of migration. However, the illegal status of migrants puts them at risk of abuse from potential chaperones, employers, landlords and corrupt government officials.

The Quest for Citizenship
For most young migrants, their top priorities are finding an acceptable job, finding a place to live and being reasonably free from abuse or harassment. Their ties to their home country's culture, language and social norms remain strong, as does their desire to some day be able to enjoy the good life in their homeland. Migrants often speak about having their feet in two different cultures. Only after they have resolved the issue of where they truly belong and what sort of life they are willing to settle for, will they begin to think about issues like citizenship.

Being a citizen of their home country has brought them much suffering and little benefit. They are not in a hurry to seek the dubious benefits of citizenship in a new country.

Tackling the Fundamental Immigration Problem
To recap the arguments to this point, immigration within countries and across international borders is driven by powerful economic forces of supply and demand, the core one being a large mismatch between economic opportunities in their place of origin and in their targeted destination. Bureaucratic efforts to manage or control immigration at the destination increase the mismatch, raise the cost of legal entry and drive much migration underground. Underground migrants are vulnerable to many abuses. The prospect of citizenship in the destination country has little economic appeal to most migrants.

Seeking a Permanent Solution
The only permanent solution to large-scale international migration is to equalize economic opportunities in origin and destination countries. Few would advocate doing this by lowering economic welfare in the richer country, so most of the effort needs to be directed at raising economic welfare in the poorer country. Since World War II, countries as diverse as Japan, South Korea and Singapore have shown that economic welfare can be dramatically improved, even in the face of limited natural resources, by a combination of good government, sound economic policies and a commitment to progress.

Countries that remain impoverished, many with rich natural resources, have usually been plagued by government corruption, adherence to failed economic policies and the undue influence of traditional segments of society that resist change. The level of migrants leaving a country is a good indicator of a failed economic and political system. Too often, governments lament emigration on the one hand while secretly welcoming emigration of their young citizens as a safety valve for economic and political tensions that would otherwise engulf their country. They enjoy the inflow of emigrants' remittances. So, they are in no hurry to change the status quo.

Mexico is a classic example of such a failure. It failed to prepare its agriculture, industries or services for entry into the WTO or for participation in the North American Free Trade Area. It used the maquiladoras on its borders to mute competition in the Mexican interior. It used exchange rate devaluations to buy temporary respite from global competition. It still has not opened up key sectors such as banking, petroleum and telecommunications to the discipline of competitive markets.

Meanwhile Back in the Beltway
Much of the debate over immigration reform now raging within the centers of government (the Beltway) in Washington D.C., and radiating out across the United States, continues to ignore the fundamental economic drivers of migration. The long-term immigration problem has as much to do with the economic and political structure in Mexico and other suppliers of migrants as it has with any policies that are passed by the U.S. Congress. Until both the supply and demand for migrants is addressed, the problems of mass, and generally illegal, immigration will persist

While the consensus immigration bill, as originally proposed, offered at least some temporary respite for farm labor problems, there is a real possibility that any patched up version that gets passed may simply create further farm labor problems down the road.

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