A study by Becker et al, (1999) finds that there is little empirical evidence that higher population in more developed economies such as the USA reduces per capita incomes. This is contrary to the Malthusian view that greater population always lowers per capita incomes through diminishing returns. Becker et al (1999) conclude that in modern urban economies, increased density that comes with higher population and greater urbanization promotes specialization and greater investment in human capital, and also more rapid accumulation of knowledge.
2. Illegal immigration –is it an economic problem or a border problem
Chiswick 1999 (Are Immigrants favorably selected- An economic analysis) states that the person with the higher rate of return from migration will have greater propensity to migrate. The migration rate of return of low skilled/unskilled Mexican nationals taking into account the cost of the border crossing, risk of deportation and benefits of on-the-job training (professions such as gardening, roofing) is higher than the rate of return if they were to stay in Mexico and pursue work opportunities. In other words, it is an economic problem. The reason why we have Mexican nationals dominating the illegal workforce is due to the proximity to US and lower border crossing costs, therefore making it affordable for them to migrate. A comparable low skilled/unskilled worker in Ethiopia or Indonesia would have to spend a significant multiple of his annual income to attempt to enter the US illegally and the cost of deportation is quite high as he would have to spend the same or more capital to try and enter the US again. In comparison these costs are negligible for Mexican nationals.
3. Why do Mexicans migrate illegally?
A majority of the Mexican national immigrations are low skilled or unskilled workers. America does not offer a legal means for them to access work opportunities at this time. The guest worker program envisions such a work permit. The large wage gap between United States and Mexico is larger for those with lower levels of skill and this may generate a higher rate of return from migration to the US for low skilled workers. Mexican nationals, in particular, have a very low cost of migration, can penetrate the border easily even if it requires more than one attempt, and have a very low probability of being detected and deported once they have penetrated the border. Their cost illegal migration is low. The benefits of migration (even though illegal) included improved training opportunities (investment in human capital) and the much higher real wages obtained in the United States, even if the wages seem low by US standards. Usually training opportunities on the job come with lower than average wages- but in this case it is higher compared to country of origin therefore making it even more attractive to migrate to the US – even if illegally.
4. What does it cost to cross the border from Mexico?
Gathmann (2004) estimates that it costs around $410 to pay a coyote to help cross the border successfully. This is about two week’s wages for an illegal immigrant. (Becker 2004).
5. If it is only $410, why don’t we have other nationals also crossing the border?
The cost of crossing the border is $410, once you are in Mexico. However, for an Asian unskilled worker, you have to factor the cost of reaching Mexico which, based on airline fares, is at least $1,000 and the cost of procuring a visa to Mexico. In addition, lack of information network in Mexico, lack of Spanish language fluency and the high cost of deportation decrease the migration rate of return and make it unattractive for unskilled workers from Asia to attempt to cross into the US from Mexico.
6. Can we stop illegal immigration through the Mexican border by building a fence?
Gathman (2004) finds that increased border security increased the coyote fees from about $300 to $410. The coyotes also have become more specialized in response to increased surveillance and smarter in finding ways to circumvent border security. A fence may increase the coyote fees but it is unlikely to dramatically reduce illegal immigration as long as there economic opportunities in the USA.
7. If skilled immigration is good for the US – how many skilled immigrants are we allowing into the country?
The US has 140,000 visas annually for skill-based immigration. It does have a temporary worker visa for various types of skilled workers. The total number of skill based worker visas is estimated at 130,000 annually.
8. Why are there economic opportunities in the USA for illegal aliens? Don’t we have enough domestic workers?
USA has been experiencing near full employment for a decade. As the world’s largest economy grows at 3.5% supported by labor productivity gains, it still needs additional workers to support its growth – especially in the low skill sectors. This leads to the economic opportunities addressed by the illegal settlers.
9. Do illegal aliens make below minimum wages?
Statistical evidence does not indicate that illegal aliens receive wages that are lower than those of other workers with comparable levels of skill (Chiswick 1988). The low wages of illegal aliens are generally the consequence of their skill levels and not of “exploitation”.
10. What is the cost of illegal immigration?
There are an estimated 9.3m as of March 2002 (Source: UNDOCUMENTED IMMIGRANTS: FACTS AND FIGURES Urban Institute Immigration Studies Program Jeffrey S. Passel, Randy Capps, and Michael Fix) based on the March 2002 current population survey. Using
There are 12 million and perhaps as many as 20 million illegal aliens in our country who are not eligible to get a Social Security card. Assuming that all 9 million false Social Security numbers on record were filed by illegal aliens, that leaves 3 million aliens that are not reporting their earning to the IRS. It is estimated that it costs the State of California $7000 to educate one child. The Federation of American Immigration Reform (FAIR) estimates that there are nearly 500,000 illegal alien children in California schools. That amounts to $35 million.According to a study by FAIR it costs California $10.5 billion to provide services to illegal aliens. It comes to $1183 per California resident.
11. What is the total number of immigrant visas granted annually?
Congress increased total immigration under an overall flexible cap of 675,000 immigrants beginning in fiscal year 1995, preceded by a 700,000 level during fiscal years 1992 through 1994. The 675,000 level to consist of: 480,000 family-sponsored; 140,000 employment-based; and 55,000 “diversity immigrants.”
In 2004, the total number of immigrant visas granted was 946,142.
12. How many H-5 visas will be granted if the Kennedy –McCain bill were to pass as envisioned?
Estimated 10million illegal aliens will be eligible to adjust their status to a legal work visa (H-5) and there is no cap on this adjustment. In additional an annual quota of 400,000 visas has been set for eligible workers from around the world. This number will be revised up by 20% annually if the quota is met on a given year and revised down by 15% if the quota is not met.
13. Can an H-5 worker apply for permanent residency?
Yes. They can either be sponsored by their employer or they can self-petition after four years in that visa status.
14. Can a skilled worker on H-1b visa self-petition for permanent residency?
No. Skilled workers, at this time, require an employer to sponsor their application.
15. What is the total number of immigrant visas available to H-5 workers?
The Kennedy McCain bill envisions 290,000 visas available for all employment based immigrant visas. This includes skilled and unskilled workers.
16. How many skilled temporary workers are currently in the US?
It is estimated that at least 1.275m temporary work visas were granted between 1995 and 2004. The adjustment to permanent residency takes over four years currently. With employment based visas capped at 140,000 for H-1b workers and their families annually. Our estimate is that there are at least 1.08m temporary workers who are potential applicants to permanent residency. We do not have the exact number of applicants for adjustment.Assuming an average family size of 2.0 – the total waiting list for the employment visas is 2.m (the visas take into account family members when counting down the visa numbers).
17. Will the H-5 workers compete for the same number of employment based immigrant visas with the skilled workers?
The answer to this question is not clear. Skilled workers have preferences for employment-based visas based on their skills and national importance. The proposed legislation does not answer this question clearly
18. Will the H-5 guest worker visa program solve the illegal immigration problem?
It provides a partial solution. It is our estimate that even with the guest worker program, there is an need for an additional 300,000 workers. The annual illegal immigration will fall by 50% in our estimate. The H-5B visa allows existing illegal aliens to adjust status without limitation and with little proof of prior work in the US. Mexican workers are best suited to leverage this loophole in the initial couple of years of this visa program even if they were not previously present in the US.
19. With limited immigrant visas – a large population of resident workers – what happens after the 6 year visa term?
It is likely that congress will be forced to provide annual renewals of visa after the 6 years – just as they do for the H-1b workers. This will create a large resident temporary worker population in the country who are not permanent residents or citizens.
20. Is there an incentive for workers to return to the home country after 6 years?
The legal incentive is to avoid visa overstay and breaking the law. In practice, illegal workers who become legal workers are unlikely to return to the home country because their return migration rate of return would not be attractive unless their home country economies have developed sufficiently. Their skills may not be required in their home countries and they may have extended families now in the US.
In case of highly skilled workers such as information technology workers from Asia, it is a different situation.Their economies are growing and there is anecdotal evidence that their return migration rate of return is attractive. Asian workers have not been able to bring immediate family members (parents) to the USA due to visa restrictions and therefore have less family constraints in the US. This could result in a brain drain.
References
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Filed under: Foreign Affairs, Immigration | Tagged: Becker, Coyote, Immigration, Malthus
