Last month, Alex Segura, a member of the Federation for American Immigration Reform (FAIR) special interest group and founder of the Utah Minuteman Project, traveled from his home in Utah to Washington D.C. to protest/lobby for immigration reform. The issue of illegal immigration has and will continue to be a hot-topic for political pundits and candidates as the attention paid to our undocumented friends from the outside ebbs and flows in response to the political climate. One thing is clear, the presence of illegal immigrants affects our social and economic systems and impacts us at all levels of government and commerce in profoundly significant and complex ways.
Since 1986 (when President Regan signed into law SB 1200 which created an amnesty program) it is estimated that there may be as many as 20 million undocumented people in the U.S. at present time with 500,000 more entering illegally each year (although that number may be decreasing with economic recession). It is a little late to try to slam the door for those 20 million people which, to me, is akin to a sunk cost. Will we now throw good money after bad trying to deport illegal aliens?
Illegal immigration cannot be ignored. But is it economically efficient to round ‘em up and put on a bus to Mexico? I think the economic realities of the issue are surprising.
The cost burden of correcting “the problem” will be transferred to government agencies not intended to deal with the scope of work. The Internal Revenue Service will “discourage” businesses (mostly small businesses) from utilizing undocumented labor but that is not really their job or best skill set. The transfer price will be high to law enforcement if given the task of discovering, detaining, and/or deporting 20 million mostly non-violent individuals. If law enforcement is spending time and resource on immigration, there must be a steep opportunity cost to other law enforcement activities. Imagine the impact of non-amnesty on the judicial system. It is mind-boggling to think of our courts trying to deal with the disposition of so many immigration cases. Think of all the frivolous litigation that would have to wait! The U.S. would have to appoint an Immigration Czar and create new quasi-judicial and administrative agencies just to process illegal aliens, if we can catch them. These are avoidable costs. And from a purely economic standpoint it would also destroy the cheap labor underpinnings of our capitalistic system labor inputs would go up causing a leftward shift in supply curve and increasing prices and movement along the demand curve for industries affected by undocumented labor (just about every industry utilizes undocumented labor in some segment).
In an attempt to avoid a bottomless cost center which is pursuing illegal aliens, an amnesty program can actually turn the issue into a profit center. Suppose that in order to get resident alien status with work visa an undocumented worker had to accomplish 4 simple things.
1. Come forward voluntarily and apply for amnesty.
2. Pay a fine/fee of $2,500 for entering the country illegally and to process application.
3. Pass a background screening (to exclude applicants with drug, weapon, violence crime, sex offenses, whatever) and English language proficiency exam.
4. Obtain an employer sponsored bond in the amount of $2,500 per worker to be employed. Now the employer shares the accountability of their hired labor.
Given the economic cost of after-the-fact law enforcement and adjudication of undocumented aliens, advancements in technology that would allow for better management of an amnesty system and a fee structure that could at least off-set the transfer costs of the program, it is more economically feasible to again offer amnesty to undocumented workers in the United States.
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