Mark Trahant: Economics of immigration reform

Monday, May 28, 2007  

"Immigration reform is about two things: our nation's values and the economy. Forget the first -- save the debate about principle for another day -- and explore some of the economic impacts.

In a narrow sense, immigration reform proposals might as well be called business reform bills because of the way they create a new regulatory landscape. This will be as true for large corporations as it for mom-and-pop shops.

Business has always been an executor of government policy. Beginning in ancient Egypt, business acted as a tax collector, carrying out the government's need for revenue by adding a sales tax to goods or services. Businesses pay a minimum wage as required by legislation. And, for most of this past century, employer-based health care has replaced the public health role carried out by governments in other industrial nations.

Business already is the government when it implements policy or collects taxes. But should business also enforce immigration law? You could argue that business already does when it benefits from an increased labor pool. Many industries, such as construction, rely on migrant workers.

The Council on Foreign Relations published a paper recently, "The Economic Logic of Illegal Immigration," which quantified the net economic impact as "modest." On one hand, consumers benefited from illegal immigration at about .03 percent of gross domestic product, while there was a small increase in the government benefits paid to illegal immigrants. "Given the uncertainties surrounding this sort of calculation, one could not say with much confidence that this impact is statistically distinguishable from zero," wrote Gordon Hanson, a professor of economics at the University of California-San Diego.

"From an economic perspective," Hanson wrote, "the question for policymakers becomes whether the cost of halting immigration would significantly outweigh the possible benefits.""

Get the Story:
Dollars and sense of illegal immigration (The Seattle Post-Intelligencer 5/27)

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