As I understand the rationale for a Wall on the Mexican Border there are two perceived benefits: 1. Ceasing the flow of illegal immigrants and 2. Reducing the flow of illegal drugs.
I am in favor of both of these objectives but am convinced that the wall is not the most cost-effective solution. While a wall does serve as a significant symbol of our intent it will have little impact. To better understand the issues, it would be wise to examine the “demand” that we have created for both illegals and drugs. This week’s post will focus on the first objective.
The demand for illegal workers is fueled by big Agriculture and other firms that desire a supply of low paid workers with a good work ethic. I actually have no problem with this as long as their workers are properly documented and have legitimate resident cards or work visas. We probably make the process of securing resident cards too cumbersome for these workers and if that is the case the process should be streamlined. In addition, any firm that regularly employs workers that originate from South of our border should be regularly audited. And any violations should involve extremely severe financial penalties (say $20,000 or more per occurrence after the first offence plus jail time). The current penalty system is not adequate. Currently most fines are broken down to the following: First offenders can be fined $250-$2,000 per illegal employee. For a second offense, the fine is $2,000-$5,000 per illegal employee. Three or more offenses can cost an employer $3000-$10,000 per illegal employee. A pattern of knowingly employing illegal immigrants can mean extra fines and up to six months in jail for an employer. Seasonal foreign workers It is legal to hire these workers, but the process is extremely cumbersome and overstay enforcement is lacking. Overstay is a bigger problem than what any wall will prevent. For these workers an employer must obtain a single, valid temporary labor certification application from the U.S. Department of Labor (DOL). The DOL will certify the application only if it is convinced there are no U.S. workers for the position (after the employer has advertised in the local newspaper), that the job is temporary, and that the employer will pay the required wages. The employer then must file a petition with the U.S. Citizenship and Immigration Service (USCIS) to approve the employment. Finally, the foreign worker must appear at a U.S. Consulate in the home country to obtain a U.S. visa. Generally, it takes three to four months to complete all of the steps necessary to obtain an H-2B visa; however, sometimes it takes longer because of government delays and because there is a quota on the number of H2-B visas that can be issued each year. Overstay offenders are not that hard to control, but do employers really want that to be an enforcement focus? Workplace raids vs. paperwork raids After multiple efforts, Congress passed the 1986 Immigration Reform and Control Act, which stated that employers couldn’t knowingly hire unauthorized workers. Employers must attest that they made a good faith effort to verify the eligibility of workers by completing an I-9 form. The documents are easy to counterfeit, so the federal government developed an online employer verification system in the 1990s under President Bill Clinton, and the use of it soared after 2007. That system, now known as E-Verify, is currently voluntary, though some states mandate it for certain employers. (The Corker-Hoeven amendment to the Senate immigration bill would make it mandatory.) E-Verify spending dramatically increased under President George W. Bush & Obama. Why are many states resisting this enforcement step? At times, members in Congress have called for stiffer workplace enforcement. But when the reality hit home in their districts and led to complaints from business owners, politicians urged the federal government to ease up, according to border expert and University at Albany professor Rey Koslowski. That’s why border security has been more politically popular to fund than worksite enforcement. (We should note that a significant percentage of people working illegally don’t cross the border; they simply overstay their visas.) Under Bush, workplace raids on factories & meatpacking plants received much attention. But after Obama the federal government eased up, according to a border expert the Department of Homeland Security unveiled a new strategy and ditched the workplace raids, which also tended to punish employees, in favor of “paper raids” (I-9 paperwork audits of employers to determine if they complied with employment eligibility verification laws). “ICE will focus its resources within the worksite enforcement program on the criminal prosecution of employers who knowingly hire illegal workers in order to target the root cause of illegal immigration. The change was dramatic: the number of I-9 audits soared from 503 in 2008 to more than 8,000 in 2009. Under Obama, ICE announced sanctions against major employers. That included a $1 million fine against Abercrombie and Fitch that grew out of an I-9 inspection in November 2008 while Bush was president, and the termination of hundreds of workers at Chipotle restaurants. In 2007, ICE arrested 92 employers, while in 2012 it arrested 240, according to ICE. Final orders — rulings at the end of the case which show employers violated hiring rules — also increased under Obama. In 2007, there were two final orders, while in 2012 there were 495. In conclusion: Make E-Verify mandatory, require departure evidence for all visa workers & adopt meaningful offender fines.
Stay tuned for more on the wall next week
We’re number 1
We love traveling. On a recent trip to Iceland we were greeted by our rental car agent at the Airport. She was picking up us and another couple of ladies that had reserved cars. Their rental office was located about 5 miles from the airport terminal. While process the rental agreement we were discussing our touristy plans. The agent mentioned that many Europeans have a problem with Americans. One of the ladies brought up the “ugly American” view, but the agent stated “No, that is not the problem”. When pressed she gave it considerable thought before her reply. “My best way to describe the issue is that we view Americans as naïve.”
What she meant by this is that most Americans do not realize that every other country has real value and that the US could “learn” from other countries. America is not the best at everything. Saying so does not make it so.
Making America great again is an attractive notion. I wonder if the road to greatness can be achieved by recapturing the glory days, or if we need to recognize that the world has changed and we need to better understand how to compete in the new environment?
When I was starting a career, my view was that the primary factor that made our country the best was the can-do attitude of our entrepreneurs and the work ethic of the work force. I remember swelling with pride in this assumed knowledge. I no longer feel this way. One measure of productivity is per capita GDP (Gross Domestic Product). While have maintained a top 10 position among all countries for decades we are far from #1. There are several “so called” socialist countries with equivalent or higher productivity.
An unfortunate area where the US ranks number one is healthcare cost per capita. We currently are spending 16% of our GDP on healthcare and that rate has been increasing for decades. If you factor in just this one item and view net, per capita, GDP after healthcare expenditures we fall 6 positions.
I remember a time when we stood at the top of the heap in terms of standard of living. This factor is a combination of: Life expectancy at birth, infant mortality per 1,000 live births, mean years of schooling of adults, safety, expected years of schooling of adults & gross national income per capita. While we still rank in the top 10, we have been again passed by several “so called” socialist countries.
Are we willing to evaluate our performance and learn from others that are doing a better job? If we make it past that hurdle are we willing to make the changes leading to improvement? Is our rental car agent correct about Americans being naïve?