The Impending Labor Crisis

Thursday, June 28, 2007

From time to time, I have looked at the immigration debate and noted that one of the biggest "problems with immigration" cited by more xenophobic conservatives, the "strain on social services", is not properly part of the immigration debate at all. If we didn't have a welfare state to begin with, this problem would not exist -- if, that is, it really exists at all: The cost savings we realize due to cheap labor doubtless at least helps prop up our statism-crippled economy in more ways than one.

But all that may change in the next couple of decades. According to economist Robert S. Dunn, Jr. of George Washington University, our mass influx of immigrants from Latin America and the Caribbean may soon effectively stop altogether.

According to the World Bank's 2007 Annual Development Indicators, in 1990 Mexico had a fertility rate of 3.3 children per female, but by 2005, that number had fallen by 36 percent to 2.1, which is the Zero Population Growth rate. That is an enormous decline in the number of Mexican infants per female. The large number of women currently in their reproductive years means that there are still quite a few babies, but as this group ages, the number of infants will decline sharply. If this trend toward fewer children per female continues, there being no apparent reason for it to cease, the number of young people in the Mexican population will decline significantly just when the number of elderly is rising. As labor markets in Mexico tighten and wage rates rise, far fewer Mexican youngsters will be interested in coming to the United States. Since our baby boomers will be retiring at the same time, we could face a severe labor shortage. [bold added]
We will thus no longer be able to realize the savings of cheap, plentiful labor -- but all things being equal, we will still be saddled with a bloated welfare state.

The current immigration debate is thus shown to be worse than fruitless because both sides agree on the premise that should be under intense debate: whether we should have a welfare state at all. Instead, we are given a false alternative: fence out or expel these potential new welfare recipients -- or simply make them into citizens, hoping they will vote to perpetuate the welfare system they presumably came to take advantage of, and then pander to them.

The real immigration problem (i.e., which isn't really caused by the welfare state or a deficient foreign policy) is that we make it unnecessarily difficult for hard-working people who want and deserve a chance to prosper to come over here and work. The current massive influx of illegal immigrants is masking this problem at the moment, but it would seem that it won't be doing so forever. We should be discussing how to make open immigration possible -- not how to compound already overly restrictive rules.

-- CAV


Jim May said...

A key element of doing that is to identify precisely what immigration law ultimately is: labor protectionism.

Having gone through the work visa and Green Card application process, and having prepped the paperwork for citizenship, I can tell you that the vast majority of the work involved pertains to the rigaramole employers must go through to prove that they "tried" to find an American to fill the position, but could not (that's called the "Labor certification").

On the other hand, very little of the process had anything to do with checking to see if I was any sort of criminal or terrorist (although this all happened pre-9/11). A police report showing a clean record, and three questions about whether I've ever been arrested, charged or convicted for a crime, were all I saw in that regard.

The concern over "stealing" a job from an American was always the foremost concern, far more than whether I was coming to blow Americans up.

Gus Van Horn said...

"A key element of doing that is to identify precisely what immigration law ultimately is: labor protectionism."

An important point and one that I actually wasn't thinking of, but should have!