In yet another case of the law of unintended consequences (which virtually anyone could have predicted), Alabama’s HB56 law was meant to drive illegals out of the state to purportedly “free up jobs” for native Alabamians. Well, guess how that worked out? They don’t want the damn jobs. See, it’s too easy to live off Uncle Sam. If it’s a choice between 99 weeks of working a real job or 99 weeks of free checks from the government, what do you think people are going to choose more often than not?
According to this recent BusinessWeek article, employers simply can’t find enough workers to fill the roles traditionally employed by illegal immigrants, so the next best option is to import legal immigrants. Refugees from Africa. Frankly, I’m glad people like this have an opportunity to come here and work hard for a decent life – surely better than what they left. The article has an interview with an Eritrean refugee making $10.85 an hour cutting chicken breasts. That’s not bad money for someone with no prior skills or a US education leaving a hot zone, right? So, good for him. And shame on Americans living off the public teet. The unemployment rate there is 8.5%, both higher than the national average, and like our US average, also artificially low because so many people have “left the workforce”. So, there are plenty of people NOT working that should be working, yet these jobs go unfilled. I guess they don’t really need the money that bad?
Illegal Immigration – A Mixed Bag
It’s real easy to get on one side or the other on this issue due to your “emotions”. But it’s deeper than that. There are legal, moral and of course, economic implications. I lay out my full thesis here in “Both Sides of the Illegal Immigration Argument” and yes, back in 2010, I predicted this exact predicament in that Americans will simply not do the jobs that illegals do (for the going market rate, of course). So, while Alabama leaders may be patting themselves on the back for expelling countless illegal immigrants, now they’re just importing legal immigrants who are on the books being paid more than the same labor they just sent over the border to other states. Aside from the anecdotal chicken farm story in the BusinessWeek article, the media has been reporting on all kinds of labor shortages in the state ranging from farmers scaling back production to considering turning prison inmates loose to replace lost workers. Homebuilders and contractors were left out to dry as well, as workers jetted in the days leading up to passage of the law.
They basically traded low cost labor for high cost labor without budging employment prospects for their existing citizens. Nice one.
Does That Mean We Should Just Accept Illegal Immigrants?
No, see we used to be a nation of laws. Now, we’re a nation of politicians pandering for votes for the ever approaching next election. So, we’ll probably remain in this perpetual state of kicking the can down the road for decades (remember Obama’s campaign pledge on immigration? I totally forgot, since nothing happened). But this situation tells us a few things. It’s one of the few controlled experiments where we can see what the real impact is on a particular stance on immigration. Here are a few takeaways:
- No matter how bad the jobs situation, millions of Americans would sooner not work, than work tough jobs.
- Employers don’t want to pay legal residents to do this sort of work. When they do, they have to pay more in payroll taxes, higher wages, and other hard costs. This, of course, results in either passing on costs to consumer or smaller margins/insolvency to the firm.
- There are plenty of people outside the country willing to do the jobs Americans won’t. If it’s easy enough to import them, they will.
In many ways, this is the theory of comparative advantage at work? Perhaps Americans shouldn’t be doing unskilled work in large numbers and instead should be focusing on the training and education geared toward higher complexity skills. That would be all well and good if that’s what was actually happening though. I have a hunch there’s not a new Renaissance of Alabamians pursuing PHP programming, nanotechnology and biomedical engineering degrees though. In a free market, that is how things should progress. But when you have insane unemployment benefits and an ever increasing nation of takers rather than givers, this is what you get. Eastern Europe.
So, damned if you do, damned if you don’t. If you continue to just live with the illegal immigrant situation, yes we benefit from lowers costs and a flexible labor force. But you have the other issues to contend with. If you enforce laws, after fighting expensive lawsuits and taking a publicity black eye, you then end up with labor shortages. The only real answer is a final solution to immigration reform – a federal law that addresses the situation long-term, which no president has ever seriously undertaken.
What Are Your Thoughts on Illegal Immigration, Jobs and a Solution?