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The Economics of Immigration in the United States (Anson '21)

Sponsor: Jenny K.


This semester I did a lot of reading to delve into the economic incentives and motives for immigration into the United States. I wrote a final paper exploring the motives created by the current immigration system and how its structure affects the function of labor and agriculture in our country.


 

On Thin Ice: Illegal Immigration in America


The United States for much of its history was a country attracted immigrants and one where immigration was barely regulated, even when nativist sentiment dominated. That changed at the end of the 19th and beginning of the 20th centuries with the emergence of a new immigration system. The system created perverse incentives that encouraged illegal immigrants to come to the country to then be exploited for cheap labor. They may have worked for better lives for themselves and their families, but the laws created an environment that ensured that they can never be secure in this.

The immigration system in the United States was borne of a mixture of federal law and regulations enacted by different Congresses and administrations. Prior to 1882, immigration to the US had effectively no restriction imposed by the federal government.[1] In 1882, Congress passed, and President Hayes signed the Chinese Exclusion Act in response to nativist sentiments and political pressure. The new act was not “a repudiation of the traditional asylum concept of immigration” but rather of Chinese immigration which was seen as a separate issue.[2] It was a slippery slope in terms of regulating immigration thereafter. For five years, immigration was left untouched, until 1887, when a movement to require literacy tests for immigrants began to make headway. It was led by a prominent economist, Edward W. Bemis, and sought to reinforce the working man of America by prohibiting the entry of the Poles, Jews, Slavs, and Italians who might undercut his ability to make a living.[3] The movement was the bedrock on which the future immigration system was formed. It also clearly targeted those who did not fit the desired WASP status. While there were multiple efforts in the years leading up to the First World War to create a restrictionist immigration system, they were all defeated due to the fact that immigrants and foreigners made up a significant portion of constituencies in the democratic system, and politicians on both sides did not wish to alienate them. The movement steadily gained in strength and numbers even as its laws and proposals were repeatedly defeated.

The First World War broke the dam that was holding the reservoir of nativism back. When the United States found itself at war with the very people that its citizens had sought to keep out, the exigencies of war required that no Germans, or subjects of the Austro-Hungarian Empire, or Eastern Europeans be allowed into the United States. Suddenly, there was nativist sentiment everywhere. Being German became de facto banned in the United States. Congress passed its third literacy test bill, and for the first time, the President did not veto it. With the conclusion of the war, there was no rush to withdraw the new regulations surrounding immigrants and the ability of foreigners to emigrate. The restricitionist view was bipartisan. Conservatives feared an influx of un-American hordes while labor leaders feared that plentiful foreign labor would undermine their ability to negotiate with employers.[4] The political pressure of both sides was brought to bear on Congress and the President, and it resulted in the Johnson-Reed Act which was passed in 1924.

The Johnson-Reed Act was the first piece of federal legislation that created an official system for immigration into the United States. It established quotas for each country based upon the population in the United States at the time of the 1910 census. For the first time, the government provided legal guidelines for the arrest and deportation of illegal aliens.[5] To facilitate this, a body for enforcing immigration law was required, so the Customs and Border Patrol was created as a part of this law. Congressman Albert Johnson explicitly stated that the goal of the Act was to reduce immigration from undesirable countries and ensure that immigrants were from “respectable European stock”.[6] With the enactment of the Act, a century and a half of relatively free movement between countries ended.

While the relatively free movement between countries was no more, chap labor was still required. The Bracero program was a plan where the US government gave visas to Mexican citizens to come work in menial jobs and agriculture seasonally during World War Two while labor was in short supply. It became well known in Mexico as a way for poorer laborers to be able to make a living for their families. Even after the war, cheap labor was at a premium and it became a source for agricultural workers that would be given seasonal visas. While the number of spots were limited, it helped create an image of the US as a place where better wages could be had and people could work their way up.[7] The American Dream had spread to Mexico.

The result was that after the cancellation of the Bracero Program, illegal immigration over the southern border increased by 1600%.[8] The new Act had created the incentive for immigrants to come illegally by denying a legal route to immigrants. The draw of better wages and the chance to “make it” was a powerful pull for migrants.[9] At the same time, the United States needed cheap labor. Agriculture is an industry where cheap labor is always desirable. In general, the working conditions are not worth what would typically be paid by the owners of the farms and it is dangerous as well as unskilled, and illegal immigrants are uniquely suited to being employed in those conditions.[10] As such, it is not a desirable job for American citizens, even the poor. They tend to have better prospects or refuse to live in the menial conditions provided.[11]

The quota system continued into the 1960s, but in an altered form after 1952. The Immigration Act of 1952 changed only one thing: the US could now deny entry to Communists, homosexuals, and other undesirables.[12] It furthermore established that a deportation could be executed on any alien who was in the country illegally regardless of how or why they were in the country. Along with the termination of the Bracero program, this laid the groundwork for the future duality of the immigration system in the United States. On one hand, cheap labor was very desirable, but the cheap labor could be thrown out of the country if it was there illegally. Despite the fact that the scientific basis on which the quota system was based was at this point seen as antiquated and wrong, the fear of inferior races was replaced with cultural assimilation, and the system stayed in place.[13]

In 1965, the final piece of framework for our current immigration system was put into place. While many provisions from the 1924 Act stayed in the law, the Hart-Celler Act subsumed many of the provisions of the 1952 Act.[14] The result of this was that there was a new system where preference was no longer given to those from certain countries, but rather to professionals or those who had families already present in the United States. There are seven levels of priority, and refugees are the lowest. Even before considering emigrating, a visa must be obtained at an American consulate stating that the prospective immigrant meets the requirements for entry, and the consul has wide discretion on if the immigrant meets the requirements, one of which is “good moral standing”.[15] A consul’s decision cannot be appealed. By putting refugees in the bottom tier of priority, the Act created an incentive to illegally immigrate if a visa could not be obtained or extended once in the country. Visas suddenly became very hard to get, and demand was growing. As such, if a visa could not be obtained, illegally immigrating suddenly became very attractive. It was not known or intended that the Act would create the incentive to illegally immigrate.[16] The issuance of visas fell by 40% from Mexico in 1965.[17]

Since there are illegal immigrants coming across the southern border from Latin America and they are willing to work for less than Americans would be, they are very attractive to prospective employers. In addition to the fact that they will work for less, they have very little perceived recourse if they are exploited or subjected to unsafe working conditions. At the same time, they fulfill a vital need and add to the American economy.[18] The duality where the migrants are needed by the farmers and subject to be deported at the same time is a direct result of the structure put in place by the 1924 and 1965 Immigration Acts. Although most illegal immigration is from overstaying a visa, those who have visas from Latin America tend to overstay and continue working in their jobs, which contributes to the US economy, they can be deported very quickly if arrested. The United States does not need to fulfill its responsibilities to the illegal immigrants once they are illegally in the country and it uses this fact to exploit the labor produced.

Illegal immigration is by no means limited to the southern border. Since the inception of the 1965 act, legal immigration from Asia increased by 500%.[19] The influx of immigrants was due to the fact that many Asians held high degrees and worked in specialized fields.[20] However, the visas on which they entered were generally limited in the time that could be spent working in the US. Many of these Asians ended up overstaying their visas and becoming illegal immigrants.[21] The situation in which they were placed was no different than that of the Mexican and Latin Americans who ended up working in the US under the fear of deportation or interaction with any authorities. The hiring of illegal immigrants is a boon for businesses because their workers suddenly have no legal recourse for any mistreatment and can be paid under minimum wage. It may not be right, but the law tacitly encourages it.

The United States created a system that is structured such that it exploits laborers and immigrants by incentivizing illegal immigration. The incentive is that it is so difficult to obtain a visa or an extension of one that one should just stay or immigrate illegally. In doing this, the United States is creating a very effective labor force because they will work for less and produce more, and the government does not need to guarantee their rights because they do not have all of the protections that citizens of the United States enjoy. The structure permits and encourages their exploitation through a variety of methods, but the end result is that for the United States it is a win-win situation.


 

Bibliography


Abrajano, Marisa A., and Zoltan Hajnal. White Backlash: Immigration, Race, and American Politics. Princeton: Princeton University Press, 2017.

Borjas, George J. Immigration Economics. Cambridge, MA: Harvard University Press, 2014.

———. We Wanted Workers: Unraveling the Immigration Narrative. New York: W. W.

Norton & Company, 2016.

Dinnerstein, Leonard, and David M. Reimers. Ethnic Americans: A History of Immigration. 3rd ed. New York: HarperCollins, 1993.

Hing, Bill Ong. Defining America through Immigration Policy. Philadelphia, Pa.: Temple University, 2004.

———. Ethical Borders: NAFTA, Globalization, and Mexican Migration. Philadelphia,

PA: Temple University Press, 2010.

Immigration Act of 1965, 8 U.S.C.

Jones, Maldwyn Allen. American Immigration. 2nd ed. Chicago: University of Chicago Press, 1998.

Lehrer, Warren, and Judith Sloan. Crossing the Blvd: Strangers, Neighbors, Aliens in a New America. New York, NY: Norton, 2003.

Massey, Douglas S., and Karen A. Pren. Unintended Consequences of US Immigration Policy: Explaining the Post-1965 Surge from Latin America. Accessed May 21, 2020. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3407978/.

Moretti, Enrico. The New Geography of Jobs. Boston, Mass.: Mariner Books/Houghton Mifflin Harcourt, 2013.

Portes, Alejandro, and Rubén G. Rumbaut. Immigrant America: A Portrait. 4th ed. Berkeley and Los Angeles, CA: University of California Press, 2014.

Rodrik, Dani. The Globalization Paradox: Why Global Markets, States, and Democracy Can't Coexist. Oxford: OUP Oxford, 2011.

Schlosser, Eric. Reefer Madness, and Other Tales from the American Underground. Boston: Houghton Mifflin, 2003.

Endnotes [1] Maldwyn Allen Jones, American Immigration, 2nd ed. (Chicago: University of Chicago Press, 1998), 212. [2] Jones, American Immigration, 214. [3] Bill Ong Hing, Defining America through Immigration Policy (Philadelphia, Pa.: Temple University, 2004), 58. [4] Leonard Dinnerstein and David M. Reimers, Ethnic Americans: A History of Immigration, 3rd ed. (New York: HarperCollins, 1993), 73. [5] Jones, American Immigration, 274. [6] Hing, Defining America, 62. [7] Dinnerstein and Reimers, Ethnic Americans, 113. [8] Douglas S. Massey and Karen A. Pren, Unintended Consequences of US Immigration Policy: Explaining the Post-1965 Surge from Latin America, accessed May 21, 2020, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3407978/. [9] Jones, American Immigration, 267. [10] Alejandro Portes and Rubén G. Rumbaut, Immigrant America: A Portrait, 4th ed. (Berkeley and Los Angeles, CA: University of California Press, 2014), 70. [11] Bill Ong Hing, Ethical Borders: NAFTA, Globalization, and Mexican Migration (Philadelphia, PA: Temple University Press, 2010), 120. [12] Hing, Defining America, 71. [13] Hing, Defining America, 73. [14] Immigration Act of 1965, 8 U.S.C. [15] Dinnerstein and Reimers, Ethnic Americans, 93. [16] Jones, American Immigration, 269. [17] Massey and Pren, Unintended Consequences. [18] George J. Borjas, Immigration Economics (Cambridge, MA: Harvard University Press, 2014), 151. [19] Portes and Rumbaut, Immigrant America, 88. [20] Jones, American Immigration, 270. [21] Dinnerstein and Reimers, Ethnic Americans, 117.



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