As illegal immigrants stream across the U.S. borders at a rate of 3 million a year, they provide both benefits and burdens for the economy.
As a recent issue of the Herman Trend Report1 reminds us, “A wide range of American employers use Hispanic workers as full-time, long-term employees, and as transient and temporary workers. Employers have found that these employees are most often dedicated and hard working.
“Undocumented Mexican workers in the United States are a primary source of day labor for landscapers, construction and home remodeling companies, cleaning contractors, and similar employers whose need for less-skilled labor may vary from day to day.”
According to a recent study by Robert Justich and Betty Ng of Bear Stearns, undocumented immigrants hold 12 million to 15 million American jobs, or 8 percent of the U.S. workforce. The pay is typically economical for the employer, but substantially more than the workers could make if they had remained back home in Mexico.
The study also estimates that between 4 million and 6 million of those jobs involve paying them in cash, usually a reasonable wage. This practice is illegal, of course, but enforcement authorities simply do not have enough staff to adequately police this shadowy segment of the economy. With low overhead, businesses employing this type of labor have a competitive advantage
Barron’s2 magazine estimates the GDP output of this underground economy at $970 billion. And it argues that if taxes were collected on this output, the government could wipe out the budget deficit and create a budget surplus.
Moreover, for U.S. citizens, as well as the federal and local governments, illegal immigrants bring a need for social services such as healthcare, education, food stamps, and police; an increase in the crime rate; and for unskilled American workers, competition for jobs at the lowest depths of the labor pool.
Justich and Ng contend that, “The social expenses of healthcare, retirement funding, education, and law enforcement are potentially accruing at $30 billion per year.”
Finally, the presence of undocumented aliens in the United States and their ability to move at will across borders represents a “national security risk” in this era of terrorism.
In recent months, this has prompted the governors of New Mexico and Arizona to declare a state of emergency along their borders with Mexico. The Governor of California expressed agreement with the gravity of the situation, but has stopped short of such a declaration.
This is not too surprising, considering that a recent poll by the Pew Hispanic Center found that, even among Hispanics, most feel the number of immigrants coming into the country should stay the same or be reduced, with only a third saying the numbers should increase.
This has brought to the forefront the urgency of addressing underlying causes. Most analysts agree that the problem lies in two areas:
First, an inability to effectively restrict the flow of illegal immigrants across the borders.
Second, an inability or unwillingness to deal with the 20 million illegal immigrants who are already in the U.S.
Let’s begin by discussing the issue of protecting the border. The quality of the security at the 2,000 miles of border between the U.S. and Mexico varies widely. In some places, such as near El Paso, Texas, the border is actually secure, thanks to chain-link fences, infrared cameras, and Border Patrol agents posted every quarter-mile, according to The Washington Post.3
But for several hundred miles of remote desert in New Mexico and Arizona, all that protects the U.S. border is a four-foot high fence consisting of three strands of barbed wire.
The good news is that some progress has been made in recent years, largely because of heightened concerns about terrorist threats since 2001. The government spends $7.3 billion a year to guard the borders, an increase of 58 percent since the terrorist attacks on Sept. 11.
Also, the number of Border Patrol agents has risen from 4,000 to 11,000, and Congress approved the hiring of another 1,000 agents this year. But even 12,000 agents are too few to guard 5,000 miles at the northern and southern borders of the country.
What can be done to stop the flood of illegal immigrants, without cutting off their contributions to the U.S. economy? The Trends editors have identified three promising solutions:
First, citizen volunteer groups can provide a stop-gap solution to the shortage of Border Patrol agents. For example, in Arizona in April 2005, a grass-roots group called the Minutemen Project used the Internet to recruit a squad of several hundred armed volunteers. The Minutemen kept watch on a 23-mile section of the border between Arizona and Mexico.
In California, a similar group called Friends of the Border Patrol announced that 300 retired policemen and citizens planned to guard the border near San Diego. California Governor Arnold Schwarzenegger publicly supported the Minutemen concept, and State Senator Ray Haynes is advocating the creation of “California Border Police,” to help patrol the border. According to Haynes, the state could offset the cost of the border police by spending less on services for a smaller number of illegal immigrants.
The second, more permanent solution is the building of a solid, unbroken concrete wall for the entire length of the border between the U.S. and Mexico. At some of the most popular crossings, parts of such a barrier are already being built. For example, a five- to seven-foot high concrete wall is being constructed to cover more than 120 miles from San Luis, Arizona to the Organ Pipe Cactus National Monument.
The Border Patrol announced that construction of the first section was slated to begin in August 2005, and the second section was to begin in November, according to the Associated Press.4 To prevent millions of foreigners from entering the country practically at will, the wall must be extended across the entire border.
In 2006 an RFP (Request for Proposals) will be issued for America’s Shield Initiative, or ASI ? a $2 billion, five-year program to expand the Integrated Surveillance Intelligence System, or ISIS, a Customs and Border Protection program that already uses more than 200 remotely monitored, day-night cameras and sensors to detect illegal border crossings.
ASI will add cameras and sensors to cover 6,000 miles of U.S. land borders and 2,000 miles of coastal borders and will be integrated with ISIS. ISIS itself has been trouble-prone, but much of this is due to the fact that it was rushed into service too quickly in the wake of 9-11. The Trends editors are optimistic that the state-of-the art ASI technology will dramatically increase our border security when it’s fully deployed by the end of the decade.
The third solution is to enact legislation that would tighten security at the nation’s borders, while also allowing a limited number of foreigners to enter the country as guest workers.
The most promising bill under consideration is the Secure America and Orderly Immigration Act of 2005,5 which was proposed by Senators John McCain and Ted Kennedy. It calls for using aerial surveillance technologies to enhance border security; for providing equipment, technical assistance and vehicles to help manage Mexico’s borders with Guatemala, Belize and neighboring countries; and to make better use of databases, training, and diplomacy to stop unwanted immigrants from entering the country.
At the same time, the bill would establish an Essential Worker Visa Program, which would create a new H-5A temporary visa category for people coming to the U.S. to perform labor or services not covered by H-1B visas or other worker visas.
H-5A applicants would have to maintain a residence in a foreign country which they have no intention of abandoning. They would have to pass security and criminal checks, pay a $500 application fee, and undergo a medical examination. If accepted, they would be allowed to work in the U.S. for three years, and could apply for an extension of three more years. Any alien who is unemployed for more than 45 days would have to return to the home country.
However, H-5As would be portable. Aliens admitted to work for one employer would be permitted to change to other qualifying employers.
H-5A workers would be entitled to the same labor law protections as American workers, and would be paid the prevailing wage for their work. Their employers would be responsible for their federal, state, and local taxes.
After four years of H-5A status, workers or their employers would be allowed to apply for permanent residency status.
The bill would make 400,000 H-5A visas available in the first fiscal year, and it would allow more visas to be added if the cap is reached during the year. For example, if the cap is reached by the first quarter, 80,000 new visas would be issued; if it is not reached until the fourth quarter, the number would be increased by only 20,000. The number of visas would then be increased by that amount for the following year.
This plan would let American companies fill job vacancies that don’t pay enough to interest U.S. citizens, and let undocumented immigrants work in the U.S. legally. It would also reduce the number of people entering the U.S. illegally, so the Border Patrol could focus on protecting the country from terrorists trying to enter the country.
The nation also needs to confront the second issue ? how to handle the millions of undocumented immigrants who are already in the U.S.
There are 20 million illegal immigrants in the country, according to a report by Bear Stearns. That’s equal to the combined populations of Alaska, Arkansas, Delaware, Hawaii, Idaho, Iowa, Maine, Montana, Nebraska, New Hampshire and New Mexico, according to The Detroit Free Press.6
The guest worker legislation needs to be expanded to include a mechanism for identifying these 20 million illegal aliens and determining their addresses and employers. Guest worker identification cards incorporating biometric data would ideally be issued to all those who signed up for the program.
Biometrics uses unique traits, such as fingerprints or patterns in the eye, to establish an individual’s identity. The U.S. government is spending hundreds of millions of dollars on research into making this technology work, according to The New York Times.7 It has created massive databases of fingerprints and unique facial characteristics to identify 45 million foreigners and 70 million U.S. citizens.
The Department of Homeland Security has implemented a biometric system that enables officers at all 136 Border Patrol stations to check the fingerprints of every illegal immigrant caught at the border. In the past year, they have identified more than 1,000 people who were convicted of murder or sexual assault, and 18,000 more who have committed violent crimes or drug offenses.
In Nogales, Arizona, nearly 500,000 people were detained while trying to cross illegally into the U.S. from Mexico. The Border Patrol checked the fingerprints of each person against the FBI’s database, a process that takes two minutes, and found that more than 113,000 of them had criminal records. Even when foreigners apply for a visa, their fingerprints and photographs are compared to a database of 5 million criminals who are not allowed to receive a visa.
Also, facial recognition software uncovered 5,731 instances in which people tried to defraud the visa lottery program, according to the State Department. The software matches the applicants’ photos to 45 million photos of foreigners from previous applications. It reveals cheaters who have altered their names, used disguises, or submitted more than a dozen applications.
As the U.S. expands and refines its use of biometrics, it will be able to identify the least desirable immigrants at the borders. The government can then keep them from entering the country, or at worst, keep them behind bars until they can be deported.
For those already in the U.S., the cards should be issued free of charge. Fortunately, such a wholesale redefinition of their status would provide both the carrot and the stick needed to drive compliance. After a designated enrollment period, employers would be fined for employing illegals, and aliens without guest worker identification would be deported immediately without a hearing. Those with guest worker cards could travel on airlines, get driver’s licenses, and enjoy most other benefits of being resident aliens.
Looking forward, we offer the following three forecasts:
First, political pressure to secure America’s borders will continue to grow. As Americans increasingly perceive that the cost of immigration surpasses the benefits of cheap labor, they can be expected to vote for candidates who promise to tighten border security through the building of a wall or the widespread use of biometrics. And grass-roots efforts like the Minutemen will continue to call more attention to this issue.
Second, we expect an expanded bill similar to the Secure America and Orderly Immigration Act of 2005 to pass. In this way, the country can offset the labor shortage and benefit from the contributions of immigrant workers to the economy, while also reaping some of the billion of dollars in taxes that are currently uncollected. In return, the immigrants’ standard of living would improve, and some would be eligible to gain permanent residency status. We also expect future legislation to plug the “loophole” that permits people to become United States citizens simply by being born here. This anachronism makes little sense in an era when women run across the border in the ninth month of pregnancy simply to make their babies U.S. citizens.
Third, companies that traditionally employ undocumented workers will be forced to adapt, perhaps even making radical changes to their business models. Among the businesses that are most threatened by tightened immigration policies are some that are already squeezed by the labor shortage. These include farms, restaurants, hospitals, hotels, construction firms, landscaping enterprises, office janitorial firms, and housecleaning services. Paying taxing and benefits on every employee will be a burden to these firms, but a relief to government coffers. Some of these businesses, such as farms and hospitals, will turn to increased automation. Others, such as housecleaning and landscaping services, can make the transition to robotics, as we discussed earlier. Still others, such as construction firms and restaurants, may need to outsource maintenance jobs to outside firms that can take advantage of economies of scale to provide lower costs. However, some businesses will simply have to pay higher wages to the legal guest workers and intelligently pass those cost along to consumers.
References List : 1. To access the Herman Trend Alert article “U.S. Facing Surplus of Hispanic Workers?” visit the Net-Temps website at: www.net-temps.com/recruiters/hermantrend/?id=66 2. Barrons, January 6, 2005, “Going Underground,” by Jim McTague. ⓒ Copyright 2005 by Dow Jones and Company. All rights reserved. 3. The Washington Post, March 7, 2005, “An Often-Crossed Line in the Sand?” by Kevin Sullivan. ⓒ Copyright 2005 by The Washington Post Company. All rights reserved. 4. Associated Press, July 20, 2005, “Construction of Concrete Border Wall to Begin Next Month.” ⓒ Copyright 2005 by The Associated Press. All rights reserved. 5. For information on the Secure America and Orderly Immigration Act, visit:www.visalaw.com/05may4/3may405.html 6. Detroit Free Press, June 30, 2005, “U.S. Cant Ignore Toll of Illegal Immigration,” by Diana Hull. ⓒ Copyright 2005 by Detroit Free Press, Inc. All rights reserved. 7. The New York Times, August 10, 2005, “Hurdles for High-Tech Efforts to Track Who Crosses Borders,” by Eric Lipton. ⓒ Copyright 2005 by the New York Times Company. All rights reserved.
