William Hawkins
2006-12-04 08:00:00.0
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WASHINGTON -

On Nov. 9, just two days after the Democrats took control of both houses of Congress, President George W. Bush met with Mexican President-elect Felipe Calderon at the White House.

The lead item on the agenda was “the issue of migration.” Calderon stated that “we both stressed the need to have a comprehensive vision with which we can move forward.”

Democrats have provided the votes for Bush’s comprehensive plan of granting amnesty for illegal workers already in the United States and creating a guest worker program for future immigrants. Bush believes that with the new Democratic majorities, reforms can finally move forward.

The business community is also thought to be a block of support for the president’s program that will further swell the number of available workers. The priority given to border security by a majority of Republican congressmen prior to the election did not sit well with several major business groups.

The Chamber of Commerce has been lobbying for the Senate’s Comprehensive Immigration Reform Act, which was passed in May, but held up by opposition in the House. The Senate bill contains a guest worker program and avenues for certain illegal workers to achieve lawful status.

Such a course is not in the long-term best interests of most business owners any more than it is for Americans in general.

Firms that hire illegal workers for lower wages, fewer (if any) benefits, and sometimes off the books entirely, do so to gain a competitive advantage against firms that obey the laws and only hire within the legal labor market. Honest business owners are placed in the difficult position of having to choose between emulating the unlawful behavior of rivals or risking the survival of their own companies. No one should condone a system that creates this kind of ethical dilemma.

Though the “comprehensive” plan is supposed to curtail illegal immigration, it is clear that its proponents oppose a vigorous program of border or workplace enforcement. Their objective is to maintain the status quo of an essentially open border. Thus, even after reform, millions of illegals will continue to operate outside the system.

The higher costs for health, education and welfare, not to mention crime control, that result from such a large increase in the number of people living in poverty is substantial. This financial pressure is already undermining state and local governments, school systems and hospitals.

Robert Rector of the Heritage Foundation has concluded that the Senate bill “would be the largest expansion of the welfare state in 35 years.” His research shows “the U.S. has imported poverty through immigration policies that permitted and encouraged the entry and residence of millions of low-skill immigrants.”

Taxpayers end up subsidizing the employers who hire low-wage workers. Society advances by alleviating poverty, not by importing more of it. Yet, after decades of anti-poverty efforts and a focus on expanding the middle class, reformers now argue that there is a shortage of impoverished people and more should be imported.

The country does not advance by substituting “cheap labor” for technological progress. From colonial times forward, America has had a relatively tight labor supply. This has stimulated the accumulation of capital to improve productivity, and hence the income and living standards of employees. The development of “labor saving devices” is undermined if “cheap labor” is seen as an easy substitute for investment in new methods.

A study last year by the Federal Reserve Bank of Philadelphia found “plants in areas experiencing faster less-skilled relative labor supply growth adopted automation technology more slowly, both overall and relative to expectations, and even de-adoption was not uncommon.” De-adoption of technology? Such short-sighted decisions undermine the long-term advancement of economic prosperity and national capabilities.

Creating a large underclass of uneducated, impoverished toilers is a business model that looks backward, not forward. It does not expand the middle class market that most businesses need to reach to sell their goods and services.

Businessmen stand to lose more in the long run from the increased tax and regulatory burdens that an alienated, proletarian voting block will support than from the deceptive, short-term gains from lower labor costs.

William Hawkins is Senior Fellow at the U.S. Business and Industry Council in Washington.