Immigration Policy for an Age of Mass Movement

I believe it is the custom in your country to declare an interest at the start of any policy presentation. I would like to declare two.

First, although my accent may have fooled you, I am an American. Which means that I come to the question of immigration policy with a bias in favour of welcoming newcomers to the country of their choice. America has benefited from successive waves of immigrants, ranging from the Chinese who built our railroads, to the Eastern Europeans whose sweat clothed generations of Americans and whose imaginations created the film industry that still dominates world entertainment, to the Irish who long policed our streets and the Italians who undertook the manual Labour that effete natives found distasteful, and to the present-day Mexicans who tend our gardens and clean our pools, and Indians who drive our software industry. America is a country that believes in “starting over”, pulling up stakes and moving in pursuit of economic advantage if that proves necessary. Being highly mobile themselves, Americans have a predisposition to welcome those gritty enough to come to a distant and alien land in pursuit of freedom and a better life. Although many Americans have doubts about the ability of the latest wave of immigrants to contribute to society, the majority seem to agree that “The most successful immigrants have made stunning contributions to our economy and culture. Even less successful ones have worked hard and contributed to economic growth…. Most native-born Americans are better off because of them.” This comes as no surprise to students of immigration policy, who have long pointed out that “Most migrants come from a self-selected group of unusually motivated and organised individuals.”

Second, I am a Jew. As with many of my co-religionists, I come from a father who emigrated from Poland at an early age with nothing but the clothes on his back, and found a country so replete with opportunity that his children have been educated and have prospered in his chosen land. I therefore have a deep emotional attachment to people so desperate for survival that they flee their own countries, only to be turned back at the borders of countries that will not accept them, preferring to return them to certain doom or, at minimum, harassment, or to accept them only grudgingly.

These are the prejudices I bring to the subject.

The Role of Economics

But I like to think that I bring, too, the tools of economic analysis which, leavened with a bit of humanity, might just help us to dispel some of the cant that surrounds immigration policy, and begin to see the outlines of some steps that might be taken that satisfy the self-interest of countries that are the targets of millions of immigrants. Not that I suffer from the illusion that economic considerations are the ultimate determinants of immigration policy. Nor do I believe they should be. In the case of immigration policy, economic considerations will remain subordinate to a reconciliation of each society’s conflict between what one author calls “the desire that one’s society not become less homogeneous” , and its sense of decency and generosity to those huddled masses yearning to breath free.

Start where most economic textbooks start: there are three factors of production – land, labour and capital. Land is by definition immobile; capital, as we have seen in recent years, is highly mobile, a restless creature forever seeking out places where it can be put to its highest and best use, as measured by the potential rewards on offer; labour (in which is embedded what some consider a fourth factor of production, entrepreneurship) is somewhere in between these two in mobility.

Continue to the next chapter of any elementary economics text. The free flow of the factors of production to their highest and best use maximises prosperity. National income rises when farm lands are converted to residential communities and industrial parks; it rises, too, when capital is left free to move from dying to growing industries; and it rises when labourers are free to move from manufacturing industries that are in decline to service industries that are on the rise.

This is as true on an international as on a national scale. Which may be why attempts to attract capital by creating non-sustainable and artificial incentives to woo it end in tears, as do attempts to prevent its “flight” to greener pastures. And why only truly coercive states can build walls high enough to prevent brain- and brawn-drains when economic opportunities in other lands far exceed those at home, and why attempts by democratic target countries to stem the intake of “illegals” and “asylum seekers” are likely to be as successful as the failed attempts to staunch the importation of illegal drugs. It takes draconian measures to offset the lure of improved living standards, for, “like trade, migration is likely to enhance economic growth and the welfare of both natives and migrants; and restrictions on immigration are likely to have economic costs.” The incentives of immigrants to pursue jobs is overwhelming, and the incentives of employers to welcome them is strong. It is very difficult for any state to intervene successfully when demand and supply are attempting to converge at a price that both parties to a transaction find attractive.

The Wave of Immigrants, Legal and Otherwise

So the populations of the world are on the move, propelled by oppression and poverty in some countries; attracted by job opportunities in the growing economies of the industrialized countries, or by the relatively generous welfare benefits available in the world's richer countries; and facilitated by the rapid communication of the availability of opportunities and the declining cost of transportation. The United Kingdom accepted 97,120 persons for settlement in 1999, up some 39% from the previous year, and almost double the number granted such a privilege ten years ago. The United States welcomes some 800,000 legal immigrants annually. Indeed, in America we are in the midst of what Harvard Professor George Borjas calls the "Second Great Migration [which] has altered the 'look' of the United States in ways that were unimaginable in the 1970s." To put the figures for our two countries in perspective: America, with about five times the population of Great Britain, welcomes about eight times as many immigrants every year. When I cite these figures many in Britain take them to suggest that they are less generous and welcoming than Americans, and quickly respond that theirs is a smaller country, and therefore has less room for immigrants. Perhaps. But it should be noted that space is not the constraint on the ability to accept immigrants – it is the decision as to how the available space should be used, in the case of Britain, to preserve a green and pleasant land, rather than to house and employ immigrants. I have no quarrel with that policy choice, and seek only to point out that it is just that – a policy choice.

But data for legal immigration tell only part of the story. A huge trade in illegal immigrants is now organized by highly efficient people-smuggling gangs that control train, truck, bus, shipping and hotel assets. Estimates of the number of people risking the perils that face illegal migrants in order to seek better lives in foreign countries vary. The most often cited is that of Britain's Home Office, which estimates that about 30 million people are smuggled across international borders every year in a trade worth between $12 billion and $30 billion annually, with 500,000 illegals entering the EU annually. European authorities estimate that trafficking has increased by some 50% in the past five years, that the most vulnerable to exploitation – “slavery”, in the words of Thomas Bodström, Sweden’s justice minister – are the estimated 700,000 women and children that are smuggled worldwide every year, about 120,000 of whom are among the 500,000 illegal immigrants entering the EU annually.

Europe is not the only destination of choice for the world’s immigrants. Just as illegal immigrants from China and eastern Europe pour through the Balkans into the EU , so Mexicans and Central Americans pour across the Rio Grande into America. The U.S. Immigration and Nationalization Service estimates that there are between five and six million illegal immigrants living in America, about half having come from Mexico. That number excludes the three million illegal aliens who were granted amnesty in the 1980s, and is swelled each year by around 300,000 immigrants arriving without necessary documents or simply remaining in America after their student or visitors visas expire.

Even if we allow for the tendency of bureaucrats to inflate numbers such as these as a predicate to requesting increased budgets, we must still concede that bringing desperate workers to where the jobs are is a very big business indeed. It is this illegal traffic, combined with rising fears that the identities and cultures of target countries are about to be obliterated, that has triggered a worldwide debate on immigration policy.

The Policy Debate

Debates about immigration policy are, of course, nothing new, either in America or in other industrialized countries. But two forces are operating to bring the debate to centre stage.

First, the sheer number of people on the move has increased enormously. The bringing down of the Iron Curtain and subsequent problems in the Balkans have opened a new pathway to Western Europe, and increased the number of people with good reason to pack their bags and seek safer and more economically attractive homes. The problems in Africa have increased the disparity between living standards on that continent and in Europe, making the dangerous trip to Spain more worth the risk. And America’s booming economy, with its almost insatiable demand for workers, combines with the porous borders characteristic of a democracy to provide an attractive target for immigrants from Mexico and points further south.

The second factor that has brought new urgency to the debate about immigration policy is the corporatisation of illegal immigration. No longer is the illegal a single brave soul, or family, that has trekked or sailed miles to find a more congenial home. With the exception of those trying to escape Fidel Castro’s tyranny, the lone entrepreneur has been replaced with well capitalised, internationally organised people-smuggling rings -- some 50 large ones, known as "Snakehead gangs", reportedly dominate the trade.

This has added a tragic urgency to the arguments about immigration. In Great Britain, 58 Chinese attempting to enter Britain illegally from Belgium died when the ventilation system in the container truck in which they were secreted malfunctioned. In America, Mexicans being led across the border by smugglers are frequently left to die attempting to walk across the deserts of Arizona, prompting Mexican president Vicente Fox to declare at his inauguration, “The violent deaths of my countrymen on the border are simply intolerable.” Africans attempting to reach Spain often drown in the attempt, a matter of little concern to the smugglers who provide transport for them.

Very often, those who succeed in entering the target country illegally are so indebted to the ring that smuggled them in that they are forced to work at virtual starvation wages, or in illegal trades such as drug running and prostitution, to pay off their debts to the smugglers, who routinely charge £2,700 for passage from Bosnia to the EU, £2,500 for a “genuine Italian passport” , and as much as $24,000 to transport a person from China to Britain. The fees are so high that the United Nations Office for Drug Control and Crime Prevention reckons that people-smuggling is now a more lucrative racket than drug-smuggling.

Coping With Illegals

As with the drug trade, so with the people trade, the first reaction of policy makers is to interdict the traffic -- step up border patrols, set up mechanisms for international cooperation, increase the penalties levied on those caught aiding immigrants to enter a country illegally. In America there are calls for more border guards, and longer and higher fences along the Mexican border. In Europe, the fifteen leaders of the member nations of the European Union met in Portugal and pledged to intensify cooperation to beat such cross-border crime by increasing jail terms for smugglers, and by sending immigration officers from Britain (10), Italy (5), Germany (3 or 4), Austria (4), Denmark, the Netherlands and Greece (1 each) to Bosnia and Croatia to train local police.

In France, the problem of illegal immigration is solved in a typically French way – it is passed on to other, kindlier countries by a policy known as “allez vous promener”, and a refusal to adhere to the Dublin asylum convention, pursuant to which the country where a refugee first enters the EU has the responsibility for processing an asylum application. “We cannot expel them from France, there is no point in detaining them and so we just let them go,” one police officer said, presumably with a Gallic shrug.

In Britain, lorry drivers are now fined £2,000 for each illegal found hidden in their vehicles, and the Prime Minister and his Italian counterpart are calling for 14-year prison terms for persons profiting from the trade in people, while at the same time promising to protect those “fleeing persecution.” Whether traffickers who willy-nilly save people from persecution by trafficking in them should be driven from business is a question the Prime Minister chooses not to answer. And he is not alone in his ambivalence. In America, the very groups that are calling for stricter border controls are so appalled by the number of deaths of illegal immigrants in the Sonoran desert that they are leaving bottles of water for the use of those Mexicans who do succeed in evading U.S. border guards.

Although we will never know just how many immigrants would arrive in richer countries if all efforts to limit their numbers were suspended, we do know that those efforts cannot by any stretch be called successful. The number of illegal immigrants swarming across the borders of all industrialized -- read, "rich" -- countries is increasing. In Britain, the special police unit set up to staunch the flow of immigrants concedes that the number sneaking in to Britain through the port of Dover has increased by 500% in the past six years. Germany, France, Spain, and Italy all report a similar rise in the tide of hopefuls migrating to where the jobs are.

What to do? The policy of stepping up enforcement procedures clearly is not working. In America and in Britain, as well as in some European countries, periodic recourse to amnesties for illegal immigrants is the politicians’ way of accepting the fact that past restrictions have not barred entry to the degree intended, and that deportation is either impossible, inhumane, uneconomic – or all three. Which does not mean that such measures should be abandoned. After all, no geographic area can legitimately claim nationhood if it cannot control its borders and who may enter its territory. Or at least try.

Nor is the policy of attempting to distinguish among types of immigrants proving very successful. In America, Britain and other countries, for example, efforts are made to distinguish between those immigrants seeking "asylum" and those "merely" seeking economic advantage. But separating real from bogus asylum seekers is often difficult, not only because the immigrant has every incentive to concoct tales of persecution that officials in the host country have no way of challenging or verifying in many cases, but because the definition of persecution is not always clear cut.

Must the asylum seekers' life be threatened? Or his or her genitals threatened with mutilation? Or should he be granted asylum merely if his ability to earn a living is circumscribed in his home country for reasons of race, religion or what is now called “sexual orientation”? Those who generally oppose immigration contend that asylum status should be reserved for those threatened with, say, ethnic cleansing, and should be denied to those merely suffering economic persecution. Sounds sensible, until one remembers the early days of Germany's assault on its Jewish population, when a progressive tightening of the economic noose was taken by many Jews as a warning to get out, but who found no nation willing to accept them, leaving them to become victims of the German people’s Final Solution.

So confusion reigns: the American government has the bizarre policy of returning to Fidel Castro's tender mercies those Cubans unlucky enough to be caught by our Coast Guard while still in their rafts and boats, but offering sanctuary to those who make it to our beaches; women's groups argue that asylum should be granted to females threatened with genital mutilation or forced marriages in their native country; and the British wonder whether Gypsies are sufficiently at risk of harm in their native Romania to warrant granting them the right to stay in Great Britain, where their aggressive begging and widespread calls upon the country's welfare system are causing a storm of protest from the middle class.

Towards a Coherent Policy

So let's clear away some underbrush. No serious policy maker can defend "bogus" asylum seeking or "illegal" immigration. Nor can any serious policy maker argue that a nation does not have the right to control the amount and character of those it chooses to welcome as temporary workers or as permanent residents en route to citizenship.

But this tells us very little about just what immigration policy should try to do, for it is the policy itself that determines what is legal and what is not. It is possible both to oppose illegal immigration (and illegal anything, for that matter) while at the same time wanting to change the law that casts some, but not others, into the "illegal" category. So, too, with asylum seekers. It is policy -- policy that can be changed -- that defines the standards that distinguish legitimate from bogus asylum seeking.

Broadly speaking, there are three possibilities.

Immigration policy can be built on humanitarian principles: offer an “open door” to all those whose lives can be improved by taking up residence in the country they seek to adopt. This group of immigrants might be classified as

"...your tired, your poor,

Your huddled masses yearning to breathe free,

The wretched refuse of your teeming shore,

...the homeless, tempest-tossed....

A purely humanitarian, open-door policy does have its difficulties. Professor Borjas opens his book with a vignette: the 1979 meeting at the White House between then-president Jimmy Carter and China's Vice-Premier, Deng Xiaoping. When Carter urged Deng to respect human rights, among them the right of the Chinese regime's subjects to emigrate, Deng responded, "Well, Mr. President, how many Chinese nationals do you want? Ten million? Twenty million? Thirty million?" Had Carter picked a number -- which he wisely did not -- Deng might then have asked him which of the billions of Chinese he would like to welcome to American citizenship. So much for the wide open door.

At the other extreme, immigration policy might be based on the notion that a nation cannot allow any significant immigration without diluting its values, customs and mores, and becoming a multicultural hodge-podge of groups with such varied approaches to life and public policy as to become ungovernable. This “slammed-door” policy has its advocates in all countries, from historically liberal America to historically, well, less liberal Austria and France. These advocates would like to have a national review of their nation’s current policy, with the object of declaring a moratorium on immigration until..., well, until some policy can be devised that permits only a few to immigrate, that few being of a sort that does not threaten to dilute the native stock by adding to what those in this camp contend is the already unacceptable cultural, religious, and racial diversity of the existing population. It is too easy to dismiss this view as racist, or nativist. Although some opponents of immigration may indeed have such ignoble views, many who would ring-fence their countries are patriots who are devoted to the historic values of their nation, and who want to see those values preserved for the indefinite future.

A Policy Based on Self-Interest

Alternatively, and somewhere between the extremes of an open-door and a slammed-door immigration policy, is one based on the economic self-interest of the receiving country. Such a policy would be designed to admit only, or primarily, those immigrants likely to maximize the wealth of the native population.

In earlier times, it was possible to argue that this goal of enriching the host nation was served by an open-door policy, one that also served humanitarian purposes. After all, the tempest-tossed immigrants who were seeking better lives were willing to work hard at menial tasks, and did not seek aid from the state, relying instead on their own efforts and a bit of help from voluntary agencies and their families. They and their offspring were destined in the end to enrich the nation that received them. So a nation could benefit economically from its humanitarianism.

But then came the welfare state, creating the possibility that the immigrant might be seeking a hand-out rather than a hand-up. The emergence of the welfare state in industrialized countries made it impossible to continue to argue that a nation could do well by doing good -- that by adopting a relatively open immigration policy for humanitarian purposes it also served its economic interests by attracting only a valuable stream of eager new workers. So closing the doors to all who might be a burden on the state came to be regarded by pragmatists as the unambiguously correct policy.

But it is arguably no easier to distinguish immigrants who might add to national wealth from those who will be a drain on it, than it is to distinguish legitimate from bogus asylum seekers. For one thing, nations with declining populations need younger workers – workers whose prospective contributions to society over their working lives it is difficult to estimate at they time they seek to immigrate -- to carry the burden of the welfare benefits that have been promised to retirees. Germany, to cite just one example, faces a situation in which even a doubling of its immigration rate will not prevent its population from declining to 74 million from 82 million by 2040.

There is still another, although somewhat vaguer reason why it is difficult to determine just which immigrants will enrich, and which will burden, a nation. The Economist recently argued that, for a city to be attractive to the young, internationally mobile, entrepreneurial types who are creating the new businesses and most of the new jobs in the economies of all of the developed nations, it must be trendy, culturally diverse -- in short, "cool". That requires the presence of "young, trend-setting bohemians". And "for real bohemia you ... need immigrants ... to create cultural diversity and to challenge the complacent mono-culture."

Needless to say, these immigrants, a group that the young rich feel gives a place the "cool" that makes them want to live there, are often poor -- fledgling artists, fashion designers, musicians, even street vendors. Think of New York City, where the ambience created by the lower income inhabitants of Soho proved an attraction to those hip, high-tech, high income types who developed Silicon Alley even though they could as well have operated from California's Silicon Valley or Scotland's Silicon Glen. That the invasion of Soho by the new technocracy drove out the ambience-creating artists is a story for another day.

So what might seem a purely humanitarian policy of accepting penurious immigrants might not, after all, be devoid of economic advantages to the receiving nation. Indeed, even an informal policy of turning a blind eye towards poor, illegal immigrants, which policy has a certain appeal to those who think that immigration policy should be based on humanitarian considerations, has clear economic advantages. In America, for example, there is no question that without the some five or six million illegal immigrants estimated to be in the over-stretched labour market, upward pressure on wages and hence on inflation would be greater, interest rates would have to be higher, and economic growth slower. If you doubt that, just ask Federal Reserve Board chairman Alan Greenspan, who credits immigration -- immigrants now account for almost 12 percent of the civilian workforce, and 17 percent of skilled technical professionals -- with enabling the economy to grow more rapidly, without inflation, than it would have done had America somehow managed to close its borders to immigrants. Add to that New York City Mayor Rudy Giuiliani’s view that immigrants have contributed to his city’s “renaissance”, and you have at least a plausible argument that it is not so easy, after all, to separate potential wealth-creators from those who at the time of immigrating have dimmer economic prospects, but who may contribute to a stronger macroeconomy and eventually become quite productive citizens.

Britain is a case in point, a place where humanitarian instincts have had tangible economic rewards for the nation. It doesn’t take a very keen observer of the social and economic scene to notice that London’s hotels would be hard hit were unskilled immigrants not present to make the beds and empty the trash cans, that many construction projects would screech to a halt if every eastern European were deported, and that the availability of groceries and newspapers would be sharply reduced if all the Patels were sent packing. With the unemployment rate at a historic low, and the existence of an estimated 200,000 more job vacancies that there are unemployed people to fill them, the need for immigrants to supplement the indigenous work force is likely to increase. The humanitarian instinct that led Britain to welcome, or at least tolerate, increased immigration has not gone unrewarded.

The difficulty of separating humanitarian from economic considerations is not the only thing that is bedeviling policy makers. There is, too, a conflict between various interest groups. With lawful immigration restricted, employers are vying with each other to have the workers they need obtain the valued green cards that grant immigrants permission to work. Employers of high-tech workers are everywhere pressing for a relaxation of restrictions on workers with programming and other skills. This includes the UK government, eager to import, among other skills, more skilled hospital workers. Employers of workers at the other end of the labour market -- gardeners, bed-pan emptiers, unskilled construction workers, hotel workers -- are everywhere urging their governments to open their doors to applicants, and to relax efforts to hunt down and deport illegals.

Meanwhile, America’s trade unions, traditionally opposed to immigration, suddenly find themselves conflicted. They know that immigration puts downward pressure on the wages of native-born Americans without a high school diploma, and fear that job-hungry immigrants make handy strike-breakers. And they argue that even high-tech employers are pressing for more immigrants so that they will not have to bear the cost of training American citizens for the jobs opening up in the industries of the future, a claim very similar to that being made by German trade unions as they oppose the granting of green cards to computer programmers and the like.

But some unions also know that immigrants constitute the pool from which they will be drawing future members. The recent successful strike of janitors and office cleaners in Los Angeles provides a case in point. Los Angeles has long been hostile territory for union organizers. But Local 1877 of the Service Employees International Union was able to organize some 8,500 office cleaners, 98 percent of whom are immigrants from Mexico and Central America with their tradition of street marches and labour activism, into an effective economic and political force. Situations such as this are forcing unions in the hospitality, office, hospital and other industries to reexamine their traditional opposition to immigration, and to call for amnesties for illegal (the more polite term is "undocumented") workers and an end to prosecution of employers who hire them. These unions can count on support from the public sector unions, which see low-wage immigrants as potential new "clients" for the social services rendered by their members.

So the unions' once-solid opposition to immigration no longer is quite so solid. The AFL-CIO is in the process of re-examining its policy, in the hope of finding one that will satisfy both those unions that see immigrants as their members of the future, and “cases” to be processed, and those that see immigrants as threats to the wages and jobs of their members. And America's politicians, eager for both the votes of increasingly politically active Hispanics, and those native-born voters who are most affected by the social and fiscal problems associated with the current wave of immigration, are tip-toeing around the issue. The hard-line Republican opposition to immigration has melted as the proportion of Hispanics in the key states of California, New York and Florida has risen, and as Hispanics have come to outnumber blacks as the largest minority in the United States. And the Democrats no longer find the trade union movement united in urging them to shut our gates to further immigration. In the recent presidential campaign, George W. Bush showed off his fluency in Spanish, and the ever-wooden Al Gore peppered speeches with numerous “muchas gracias”.

Politicians’ Dilemma

But both political parties know that out there in the middle class there lurks a serious objection to the rapid changes in the "look" of America. They know, too, that America's unskilled workers -- the very ones most threatened by what has come to be called "globalization" -- are well aware that they are the ones who will pay the price for a continued influx of workers willing to work harder for less. So our politicians vacillate, and worry just what to do. No satisfactory policy being available, they temporize by raising the quota for this or that group, promising to crack down on illegals, and then granting them amnesty.

American politicians are not alone in their dilemma. European policy makers, too, find themselves caught between a rock and a hard place. Increased longevity combined with decreasing birth rates is creating the prospect of a larger and larger number of retirees receiving pensions paid for by the ever-rising taxes of fewer and fewer workers. And not only in Germany, a country whose demographic arithmetic I have already mentioned. One estimate has it that Europe would have to take in 100 million immigrants by 2050, rather than the 23 million it plans to allow, merely to keep its population from falling. Nevertheless, and despite Europe's need for a large number of young, tax-paying immigrants, no mass influx is likely to be politically ac