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Borjas on the Kennedy-Bush bill
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May 22, 2007, 03:56 AM
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Of the tens of thousands of economists in America, George Borjas is one of the handful who specialize in doing empirical research on the effects of immigration. His crucially-needed expertise has taken Borjas all the way to an endowed chair at Harvard, yet few other economists have followed his successful career path, preferring to theorize (and moralize) about what immigration ought to be doing based on a handful of bumper-sticker notions. An interesting case of market failure that some economist should investigate ...

Borjas writes to fellow Harvard economist Dani Rodrik:

1. The thing I object to most in the proposal is the amnesty of 12 million illegal immigrants WITHOUT addressing the fundamental border enforcement problem. For a number of reasons (fairness, incentives), it is irresponsible to address the question of what to do with the current 12 million illegals without first resolving the issue so that we do not have to revisit this again in a few years. I have no problem with taking some sort of action that will bring the illegals "out of the shadows" at some point. But it`s probably prudent to do nothing about this until we make sure that this is not a problem that will recur yet again.

2. As for the guest worker program, I think that your perspective [in favor of a guest worker program] involves more than a little wishful thinking. Can you really guarantee that the guest workers will in fact be temporary workers? How are you going to get them to go back? Have you thought about how the U.S. judicial system will react to a lawsuit brought about by someone who doesn`t want to get into the plane ride home? What`s to prevent them from becoming illegal immigrants in the end?

Think of the German experience. As a very wise person once said about that experience: "we wanted workers and we got people instead." Guest workers tend to get sick, tend to get married, procreate, etc., and all of these inevitable life events open up entitlements in the U.S. system that cannot be ignored—some of which are very costly. So your guest worker idea is, to a significant extent, a permanent immigration increase being sold as a temporary inflow.

Now, you and I can debate over whether such an increase is desirable. I don`t think so, but I`m willing to be convinced otherwise if you can prove to me that the gains to "us" are sufficiently large (and it is the definition of "us" that we probably disagree most about). But the debate must be conducted in a transparent and honest way: this is not really about temporary workers at all, it`s really about permanent immigration.

And, again, because it is people we are importing—not just workers in a widget factory—there are non-economic issues that cannot be ignored (culture, language, security, etc.) unless you are proposing that the guest workers be packed away in some warehouse from the day they arrive until the day they are shipped back home.

3. I`m glad to hear you and I agree on the underlying economics—there are downward pressures on wages. I don`t know if Lant would agree—I saw him give a talk in Milan the other day and a big bullet in the PowerPoint was: no evidence of wage effects! It`s funny how people (on both sides of the political divide) are willing to put aside the elements of supply and demand when they want to argue for open labor flows.

4. The point system is great. I would love to think that, at last, someone paid attention to something I said! But I doubt it.