December 4, 2014


"The coordination of mens activities through central planning or through voluntary cooperation are roads going in very different directions, the first to serfdom and poverty the second to freedom and plenty." Hayek
          Immigration has been a highly debated issue in our political economy. So important that our president addressed the nation regarding this issue just two weeks after the midterm elections last month. Laying out a four point plan, the president focused on continuing to strengthen our borders, streamlining the legal immigration process, providing a legal way to earn citizenship, and cracking down on undocumented workers. To quote the white house, "The President’s plan builds a smart, effective immigration system that continues efforts to secure our borders and cracks down on employers who hire undocumented immigrants." While the debate takes many positions across the political spectrum, most economist will agree that free labor mobility across borders will increase growth in the economy.
            In Liberalism, Ludwig von Mises makes a strong argument for immigration. Arguing for liberalism in the classic sense, Mises takes a starting point of property rights to argue for a system of completely free trade. Under this system, "capital and labor would be employed wherever conditions are most favorable for production." When, "it is discovered that there are sites more favorable for production than those currently being used, production shifts to these localities. Capital and labor tend to move from areas where conditions are less favorable for production to those in which they are more favorable." Mises goes on to say that the, "migration of capital and labor presupposes not only complete freedom of trade, but also the complete absence of obstacles to their movement from one country to another."
            Many workers follow the money to where real wages are the highest. This implies that they will migrate anywhere where they can obtain the most purchasing power with the recourses that are available. The direct result is wages in that particular industry will fall as more workers are available to fill those positions. Although we can take greater measures to secure our borders and increase requirements for immigrants, the end result is a higher cost to tax payers and immigrants alike. Increasing regulations and building a wall that surrounds our borders would do little in keeping out illegal immigrants and nothing to alleviate the catalyst causing the influx of immigrants to our country. Because of skill level, the previously low wages earned, and/or discrimination, immigrants are paid considerably less of a wage than their domestic counterpart. While many assume and argue this to be damaging and unfavorable to the American economy, considerable advantages exist. Primarily it provides opportunity for the average citizen to benefit themselves. These menial jobs being performed by immigrants drives the prices down in that particular industry. This allows for cheaper goods for the average citizen to make their way into the market and with more employees to choose from, the employer directly benefits. Further, it allows for the domestic citizen who would normally fulfill these jobs to focus on jobs that require a greater skill set, thus providing higher wages to the worker.
            The issue is that no comprehensive plan exists to combat the immigration problem and fix a defective system. While all sides are calling for a plan of action, this only exacerbates the problem. Making these uniformed decisions without the relevant information leads to second order consequences and any further legislation is only prolonging the dilemma, ultimately making it worse. There must exist freedom of movement across borders in order to alleviate the problem. Allowing these workers to live in the shadows and dodge the arm of the government permits for a drastic misallocation of resources and blinds the American public to how many undocumented workers are living here and particularly who they are. One example is within our already poor public education system. With thousands of cities around the country absorbing children of illegal immigrants into their local school systems, money gets diverted from other sectors to compensate for an already underfunded system. This could easily be solved by taxing the previously untaxed worker. By banning immigrants access to our country, we are raising the costs of the jobs they perform allowing more opportunity for others to import goods in those particular industries that could easily be produced within our borders.

No comments: