Friday, March 31, 2006

Workers and citizens - Some dilemmas of immigration (Paul Krugman)

We live in a world whose dynamics are shaped in large part by the complex interplay between states, political communities, and the capitalist world economy. The three co-exist, of course, often in mutually beneficial ways, but their inner logics are distinct and never without some tensions. In this op-ed piece, the indispensable Paul Krugman puts his finger on some genuine dilemmas that these tensions pose for democracy in the US (and elsewhere). It's not immediately obvious what practical conclusions we ought to draw, but the questions he raises here are ones about which we ought to be thinking very carefully and seriously.

(Some follow-ups come after Krugman's column, below.)

Yours for citizenship,
Jeff Weintraub
New York Times
Friday, March 31, 2006

The Road to Dubai
By Paul Krugman

For now, at least, the immigration issue is mainly hurting the Republican Party, which is divided between those who want to expel immigrants and those who want to exploit them. The only thing the two factions seem to have in common is mean-spiritedness.

But immigration remains a difficult issue for liberals. Let me say a bit more about the subject of my last column, the uncomfortable economics of immigration, then turn to what really worries me: the political implications of a large nonvoting work force.

About the economics: the crucial divide isn't between legal and illegal immigration; it's between high-skilled and low-skilled immigrants. High-skilled immigrants — say, software engineers from South Asia — are, by any criterion I can think of, good for America. But the effects of low-skilled immigration are mixed at best.

True, there are large benefits for the low-skilled migrants, who may find even a minimum-wage U.S. job a big step up. Immigration also raises the total income of native-born Americans, although reasonable estimates suggest that these gains amount to no more than a fraction of 1 percent.

But low-skilled immigration depresses the wages of less-skilled native-born Americans. And immigrants increase the demand for public services, including health care and education. Estimates indicate that low-skilled immigrants don't pay enough in taxes to cover the cost of providing these services.

All of these effects, except for the gains for the immigrants themselves, are fairly small. Some of my friends say that's the point I should stress: immigration is a wonderful thing for the immigrants, and claims that immigrants are undermining American workers and taxpayers are hugely overblown — end of story.

But it's important to be intellectually honest, even when it hurts. Moreover, what really worries me isn't the narrow economics — it's the political economy, the effects of having a disenfranchised labor force.

Imagine, for a moment, a future in which America becomes like Kuwait or Dubai, a country where a large fraction of the work force consists of illegal immigrants or foreigners on temporary visas — and neither group has the right to vote. [Regarding Dubai, see here. --JW] Surely this would be a betrayal of our democratic ideals, of government of the people, by the people. Moreover, a political system in which many workers don't count is likely to ignore workers' interests: it's likely to have a weak social safety net and to spend too little on services like health care and education.

This isn't idle speculation. Countries with high immigration tend, other things equal, to have less generous welfare states than those with low immigration. U.S. cities with ethnically diverse populations — often the result of immigration — tend to have worse public services than those with more homogeneous populations.

Of course, America isn't Dubai. But we're moving in that direction. As of 2002, according to the Urban Institute, 14 percent of U.S. workers, and 20 percent of low-wage workers, were immigrants. Only a third of these immigrant workers were naturalized citizens. So we already have a large disenfranchised work force, and it's growing rapidly. The goal of immigration reform should be to reverse that trend.

So what do I think of the Senate Judiciary Committee's proposal, which is derived from a plan sponsored by John McCain and Ted Kennedy? I'm all in favor of one provision: offering those already here a possible route to permanent residency and citizenship. Since we aren't going to deport more than 10 million people, we need to integrate those people into our society.

But I'm puzzled by the plan to create a permanent guest-worker program, one that would admit 400,000 more workers a year (and you know that business interests would immediately start lobbying for an increase in that number). Isn't institutionalizing a disenfranchised work force a big step away from democracy?

For a hard-line economic conservative like Mr. McCain, the advantages to employers of a cheap work force may be more important than the violation of democratic principles. But why would someone like Mr. Kennedy go along? Is the point to help potential immigrants, or is it to buy support from business interests?

Either way, it's a dangerous route to go down. America's political system is already a lot less democratic in practice than it is on paper, and creating a permanent nonvoting working class would make things worse. The road to Dubai may be paved with good intentions.

[P.S. My good friend (and former student) Mark Gerson, who happens to be a Republican, objects to Paul Krugman's remarks in the first paragraph of this piece:
For now, at least, the immigration issue is mainly hurting the Republican Party, which is divided between those who want to expel immigrants and those who want to exploit them. The only thing the two factions seem to have in common is mean-spiritedness.
This is a fair complaint, up to a point. I know very well that Mark supports open immigration on generous and principled grounds (with which I happen to sympathize myself). He believes that potential immigrants deserve the kinds of opportunities that America offered our grandparents, and he also believes immigrants have always contributed in valuable ways to the vitality and diversity of American society. I also know quite well that a lot of other Republicans are pro-immigration and pro-immigrant for similar reasons; their perspectives on immigration may or may not be open to argument, but they are not mean-spirited.

It would be wrong to suggest that the desire of employers for cheap and easily exploitable labor is the only force within the Republican coalition pushing in favor of looser immigration. And it would certainly be silly to pretend that Democrats have a monopoly of virtue on these issues, or that Republicans have a monopoly of mean-spiritedness. It should be noted that Krugman doesn't actually make either of these claims, but it also seems fair and appropriate for me to emphasize that I wouldn't endorse them.

On the other hand, when it comes to identifying key forces within the Republican political coalition who are pushing for a guest-worker program, and who have tended to favor lax enforcement of existing controls on illegal immigration, then I think honesty compels us to recognize that big-business interests who are interested primarily in cheap, non-unionized labor with little political leverage do play a major role, as Krugman correctly points out. In fact, as a matter of hard political realities, it seems clear that their influence is critical in counteracting anti-immigration tendencies within the Republican coalition (which helps explain why some of the sharpest political disagreements on immigration policy are played out within the Republican Party). I must confess that, rightly or wrongly, I don't believe that people like my friend Mark control the current political agenda of the Republican Party.

But at all events, none of this really affects the key substantive issues raised by Krugman's argument, particularly: (1) that the needs of the economy are not always identical with the concerns and requirements of a democratic political community; and (2) that an expanded guest-worker program might address the needs of employers and the purely economic interests of some immigrant workers, but potentially at the cost of weakening the link between access to the American labor market and access to full citizenship in American society. I know Mark and I agree that, everything else being equal, the link between immigration and citizenship should be strengthened, not weakened.

Yours for reality-based discourse,
Jeff Weintraub]

[P.P.S. I also want to add that, whatever we might all conclude about the practical details of immigration policies, I fully endorse the sentiments expressed in these remarks by another friend, Brad DeLong:
I think that we should focus on [Krugman's remark that]: "the net benefits... from immigration, aside from the large gains to the immigrants themselves, are small." Particularly, we should focus on [Krugman's passing reference to] the "large gains to the immigrants themselves." The net benefits from immigration including the large gains to the immigrants themselves are enormous. We shouldn't forget that.
We should be taking steps to equalize America's income distribution: more progressive tax brackets, more public provision of services, a more generous Earned Income Tax Credit, a higher minimum wage, a greater focus on education [and I could add some others, including an attempt to resuscitate the labor movement]. But tight restrictions on immigration are a really lousy anti-poverty policy: one with enormous excess burdens measured in money, and truly mammoth excess burdens measured in utility.
It is worth emphasizing that overall impact of low-wage immigration will depend in large part on the whole range of other legal, political, institutional, and socio-economic policies and conditions in place ... which means that it's not useful to consider immigration issues in isolation.

Yours for the American dream,
Jeff Weintraub]

[And a further P.S. Mark Kleiman, who recently posted a usefully thought-provoking discussion of immigration issues on his blog ("Six theses on immigration policy"), sends me the following response:
I think everyone is missing the main point here. Whatever level of immigration occurs, we should work as hard as possible to make sure that as much of it as possible is legal, because illegal immigration is a crime problem, a terrorism problem, and mostly a disaster for illegal immigrants and their children. So we should expand both legal immigration and enforcement against illegal immigration to squeeze down on the size of the illegal underclass.
I agree completely that this is a crucial point. Not the only crucial point ... but very, very crucial. --Jeff Weintraub.]

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