by Charles M. Miller
President Obama’s Mexican trip brought disappointing news to the U.S. Hispanic community: Immigration reform action in Congress would be postponed until 2010. The President cited in his August 9,2009 Mexico City remarks that healthcare reform, energy legislation and financial reform would all come first in 2009. What the President forgot was that first on the American public’s 2009 wish list is economic recovery.
Four days later the Cato Institute, the libertarian, free-market think tank issued a report concerning the effect of immigration reform on the U.S. economy, finding that immigration reform efforts made by Congress and the president could have a major economic impact on the welfare of U.S. households. Debunking popularly held beliefs that the estimated 8.3 million unauthorized workers in the United States lower the incomes of U.S. households, the Cato Institute study concluded that legalization of these workers would actually result in income gains for American workers. The report found legalization would lead to potential gains to U.S. households represented in higher wages, investment income, employment, and government revenue. The report found the net effect to government spending to be manageable compared to the net gains for American workers and their households.
A Wall Street Journal editorial citing the Cato Institute report, found that “re-enforcing the deeply flawed immigration status quo, rather than reforming it, isn’t doing the economy any favors.” The WSJ may be understating the case for the economic need for immigration reform now.
Immigration reform as a phrase has come to mean a compromise between two apparently conflicting goals: The legalization of the estimated 13 million unauthorized persons in the U.S. and the institution of workplace and border enforcement measures that will discourage future illegal entries and employment. That was the grand compromise that was reached in 1986 when President Reagan signed IRCA, the last major immigration reform bill. IRCA legalized 1.7 million unauthorized workers and instituted the I-9 identity and authorization verification system with graduated penalties.
Much has changed since 1986. Hispanics are a major demographic for both the economy and the politics of the U.S. The economic downturn adversely affected the Hispanic worker in America in human terms and as part of the statistics that are now being analyzed. It is clear that one key factor in the return to consumer confidence will be measured by whether the Hispanic consumers return to retail stores in December. What is crystal clear for our country’s economic future is that our nation’s economy will not rebound without a recovery in California, Arizona, Nevada, Colorado, New Mexico and Texas, all states with substantial Hispanic populations.
The question for President Obama and Congress is whether they understand that immigration reform, the grand compromise, will drive the economic recovery. The 13 million persons are here and most of them are employed already. It is important that this segment of the work force be employed under the terms of the laws that affect other American workers: Taxes, Social Security, wage and hour laws need to be enforced. The best way to accomplish this is to provide humane and efficient employment authorization to those workers who deserve the opportunity to work hard and build their own version of the American dream.
Critics of immigration reform have traditionally raised the argument that the newly-legalized workers will take jobs away from U.S. workers. That criticism implies that the unfair hiring practices and exploitation of the undocumented workers do not already exist. The truth is that the undocumented workforce exists in far greater numbers than ever before. The best protection for the unemployed American worker is to make sure that unfair hiring practices do not continue.
An indication that the Obama administration has already made that enforcement decision was its continued support of the FAR E-Verify rule. The Bush administration in 2008 had published a final rule that required government contractors and subcontractors to place a clause in their government contracts requiring the use of the E-Verify electronic verification system. Homeland Security Secretary Janet Napolitano has recently signaled the Obama administration’s continuing support for the FAR rule and the E-Verify system for future U.S. hiring.
Bringing the millions of undocumented workers into the legal system will guarantee that employers who want to obey the law will be able to fill out the I-9 form, and if they are E-Verify member employers, secure confirmation of a legal hiring for compliance purposes.
The economic recovery will fuel more hiring by employers. But without a realistic way of employing a major segment of the U.S. workforce, the existing violations, and the exploitation of the undocumented will continue.
Immigration reform will end two forms of unfair economic advantage that lawbreaking employers currently hold-they hire the undocumented, pay them lower wages and fail to share the tax burden that their lawful competitors disproportionately shoulder. The unfair advantage of unscrupulous companies can only be eliminated by immigration reform in the earliest stages of the recovery. The economic recovery requires immigration reform now.