An Altruistic Immigration Policy (Reuters)
Senior fellow Michael Clemens' work was referenced in a Reuters piece on immigration policy.
From the article:
Monday morning, the U.S. Supreme Court struck down much of Arizona’s controversial immigration law. It’s now confirmed that it’s not a crime for immigrants in the United States, even undocumented ones, to apply for jobs here.
That ruling dovetails with President Barack Obama’s recent decision to effectively forbid the deportation of upstanding young people who are in the United States illegally.
Immigration advocates rejoiced at both decisions, but neither the Supreme Court ruling nor Obama’s move resolves the economic dynamics that drive illegal immigration. Instead, they create a gray area for undocumented immigrants to live and work more safely here in the United States. The next logical step, reforming our guest-worker system to allow more non-citizens to work here outside of legal purgatory, would offer more protections to these workers and boost the economy, too.
For years, some immigration advocates and contrarian economists have argued that a formal effort to give jobs to foreign workers – even without citizenship – can help everybody. A guest-worker program might just be the most powerful tool to fight global poverty, and a chance to help economic conditions here at home, too, if we can embrace the counterintuitive but true idea that more foreign workers can help even when domestic workers are caught in high unemployment.
David McKenzie, lead economist of the World Bank’s development group, has, along with his fellow researchers, been examining the way migration affects migrants – not just the people they leave behind or the new communities they end up living in. They’ve found that improved labor mobility is by far the greatest way to give a leg up to low-income people around the globe.
“High-skilled immigration is going to be useful for the high-skilled migrants, but allowing lower-skilled workers in is directly going to improve poverty in poor countries,” McKenzie says.
The reason is that geography matters. Developing nations may lack key institutions and norms, from police forces to property rights, that make economies work, not to mention the relative wealth of investment capital, infrastructure and labor specialization that prevails in developed countries. Even low-skilled workers see huge advances in their productivity, and their wages, in a better ecosystem.
In a study of guest workers in the United States, Michael Clemens, an economist at the Center for Global Development, found that workers coming to the United States from developing countries saw immediate gains in productivity and wages: A Peruvian worker’s income increases 2.6 times, about the average, but emigrants from other countries see higher gains – Filipinos see their income grow 3.5 times over; Haitians see their wages expand seven times.
Comparing those gains with other programs that aid impoverished people around the world is instructive. In 2005, the microcredit lenders at Grameen Bank generated $30 million in new income to Bangladeshis. According to Clemens’s calculations, that same income jump could be generated by allowing just 3,000 Bangladeshi guest workers come to the United States for a year.
With many developed countries struggling to maintain their working-age populations and tax bases, it could be a long-term fiscal benefit for them as well. There’s also the value of these workers as brand ambassadors for the United States and its economic system. If they have a good experience here, they’ll spread appreciation for the U.S., helping it flex its soft power muscles around the world.
Right now, the United States only allows about 100,000 low-skilled guest workers in the country each year, compared with an overall workforce of 150 million. Given the figures behind the Bangladeshi example, even doubling that number could have a major impact on poverty in the developing world while being a rounding error to the U.S. labor market.
But won’t these new immigrants steal jobs from American workers? Actually, no. Letting in more workers at a time of high unemployment may not be popular, but study after study demonstrates that immigrants in a fair system don’t reduce native wages. They do bolster the economy, expanding the workforce to support an aging population. More low-skilled workers help with economic specialization across the economy, increasing productivity, not just for themselves but for everyone.
Just look at how restrictions on immigration have hurt the economy. Dwindling illegal immigration and tough immigration laws passed recently in states like Arizona and Alabama, and has resulted in the inability of many farmers to find much-needed workers, forcing them to leave produce wasted in their fields. Americans aren’t taking these jobs, and that’s a problem: A University of Georgia study funded by the state’s agricultural trade association found that farmers there had 40 percent fewer workers than they needed during the spring harvest, costing the state $390 million in economic activity.
Still, there are risks for the migrant workers. The Southern Poverty Law Center found that today’s limited guest-worker programs have resulted in worker abuse. In particular, the practice of linking a worker’s visa to a specific employer has left workers vulnerable to mistreatment, since that employer controls their fate. They have been cheated of wages, denied medical care for on-the-job injuries and forced to live in squalid conditions. If they protest, they face deportation or blacklisting. Private attorneys have little incentive to help them.
Reforms like ending the linkage of visas to specific employers and providing meaningful legal rights to the workers would go a long way toward fixing these problems. Other developed nations, like Canada and New Zealand, have been able to develop guest-worker programs that have successfully dealt with challenges like these.
What it comes down to, though, for the migration economists, is the simple math. In 2005, the World Bank estimated that easing immigration restrictions in developed countries around the world would deliver $300 billion annually to citizens in developing countries; that same year, developed countries sent only $180 billion in foreign aid abroad. That kind of benefit makes a guest worker program an investment with a very high return.
