Immigration proponents say that these people that are here are already working and thus it won’t affect labor prices. Let’s look at these claims a little more. Currently, if you are here illegally, there is an assumption you are performing jobs that others, in legitimate status would not take, otherwise they wouldn’t work for lower wages. This might be true, what is true is a shadow economy is created. Anytime a market, labor or goods, is created through legislation a black or shadow market is created (Smith, 1759). So one group is right, they are taking jobs, at a lower price not type of job, that others will not take. If people come in a mass migration because they are legal, a few things could happen:
- The people currently in the shadow market move to the legal market, potentially pushing down labor prices long term. Minimum wage laws obviously will limit that drop, but that will then put a cap on the number of jobs hired at that level.
- Will decrease the need for unskilled and lower skilled jobs
- Potentially, since there will still be a demand for the shadow jobs, an influx of illegal immigration can happen. I don’t think this will happen at the rate everyone has stated. In 1986 when Regan and Congress worked together and put together a comprehensive immigration bill, the shadow market opened up and it did draw people but slowly over time and has increased lately due to other situations. Global issues helped create this influx along with the promise of the United States.
- In addition, there won’t be a large influx of people moving from shadow to the light, as most will still be skeptical of their legality and long term status. But there will be a hope there.
A way this can be handled is a holistic and comprehensive plan. The president’s actions will only put downward pressure on labor prices and increase costs overall and may not have been the long term solution he wants or the country needs. Immigration is not a bad thing, and in fact if done right can help the country fill positions that they can’t fill otherwise. Here are the detailed steps to put together a more comprehensive plan that can solve short term needs and develop a longer more stable economy.
- Find the returning military a job – They put their lives and families at risk and deserve this opportunity
- Support small business development and creations. By supporting people out of college and the military who might have interesting looks or ideas through some government subsidies with shares in the business if successful and a loan if failure occurs.
- Pass legislation that everyone that came over illegally, will be marked with a felony which will be removed after a 5 year period where they either served in the military or worked with us to rebuild our infrastructure. Two things occur here. We get assistance with much needed help. If they are rebuilding infrastructure we will assess higher income tax rates to recoup a penalty. It would be unfair to do this with the military due to their low wages and the risk in their job. The other thing is all workers will be given education that is skilled and can help boost the economy.
- Secure the border – Tougher enforcement, and anyone caught is immediately sent back and their home country fined and punished.
- Start programs with other countries responsible for higher immigration problems, giving them special assistance in training and development to build their economy.
Department of Defense website
Smith, Adam Wealth of Nations (1759) Free Press.
Rodney Mogen, is the president of solveurpuzzles, a business focused company. Helping Financial advisors and insurance agents solve their case troubles and issues. Rodney is also a small business advisor focused on developing financial strategies for small business owners and helping them develop their own strategy and ideas to grow, sell, develop the way they want. He is focused on creating proper financial strategies for Advisors and business owners to assist them in their day to day duties by solving their financial puzzles. Rodney is also the Director of Financial Strategy for The Evans Group. Check out more information at www.solvurpuzzles.com and the financial strategy work for The Evans Group at www.financialselectservices.com.