10A066 Border Control by Jim Davies, 11/7/2010

The barber shop in my town is a great place for lively discussion, and for me last Thursday was no exception. A gentleman was being clipped who offered the opinion that government was needed for "national defense and control of the border" but not much else; I congratulated him on the "not much else" bit and suggested lines of thought for the other two. They are, I dare say, quite common delusions.

Defense I'll leave for tomorrow, but let's consider borders. I happen to be an immigrant myself, so I began by agreeing: Yes, if the border was open you'd get all kinds of riff-raff entering America, for example people with weird ideas and British accents (I grew up in England.) Politely, he paused for thought.

As with so many other puzzles of "public policy" it's good to consider motives. Why would a penniless Mexican want to move to the USA?

The usual answer given to that is that he and his family want to sponge off US taxpayers, to receive welfare. However, that simply fails to withstand scrutiny. It's been found that on average, immigrants (illegal and legal, both) receive less welfare than native-born Americans. So that can't be the motive. Further, "illegals" are eager to keep a low profile from INS thugs, so they pay more tax than they need, then often don't file a return. Eventually they may have a hard time proving they are "entitled" to social security, and if so that means they are paying in to that scheme but not drawing out; that is, we are doing quite well at their expense.

A more honest answer is that the Mexican wants a better price for his labor. He may have few skills and poor English, but he's happy to accept minimum wage, for a job for which a native might demand $12 an hour; and that is why immigrants are resented. They form low-price competiton for labor.

Notice the winners and losers, here. Obviously the immigrant wins, for he maximizes his return on labor. His American employer also wins, for he gets the work done for a lower cost, meaning he can make more profit and use some of it to expand his business and keep his prices low. Therefore his customers (we) win, and so do the extra people he can afford to hire (also us, in some cases.) So who loses? - those potential employees who priced their labor too high, who were not willing to work as hard for the dollar as their competition. This loss will (absent government welfare) stimulate them to moderate their demands for high pay, or (better) to work harder.

They have, after all, all the home-team advantage especially in language. The immigrant can often not speak more than a few words of English, so the native can bring employers more (accurate, reliable response to instructions, for example.) If they work well, they have nothing to fear. Competition always stimulates excellence; it's how markets function. America consists entirely of immigrants and their descendants, and it's worked out pretty well.

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