Fence or No Fence, What’s All the Fuss About?

Immigration is still an economics thing.
By Larry Kudlow

It may well be that good fences make good neighbors, as the poet Robert Frost wrote. President Bush, in his excellent speech from the Oval Office this week, signaled acceptance of fencing as part of his plan to deal with the hot-button issue of illegal immigration, and the Senate has complied with an 83-16 vote to construct a 370-mile fence along the Mexican border. History has shown that immigrants in search of freedom and prosperity will climb over, tunnel under, or circumvent any fence. But if fencing helps pass a broad-based reform bill, so be it.

Fencing, of course, is but one part of the president’s renewed emphasis on immigration security measures. He would also end the “catch-and-release” sham, institute biometric ID cards, and beef-up military security on the border. This is all wise policy, although stupidity on the issue still runs rampant on Capitol Hill.

Amazingly, the Senate has passed another amendment to limit temporary workers to a mere 200,000 per-year, even though numerous studies say we need at least twice that amount. The Upper Chamber is also limiting the volume of skilled H1B workers, primarily engineers and scientists. These workers are crucial to American competitiveness, and if allowed into the country at much higher levels they would throw off more than enough tax revenue to finance public services for unskilled H2B immigrants.

Why legislators fail to understand the economics of this problem is beyond me.

Wage differentials between Mexico and the U.S. are huge — largely because of Mexico’s failure to liberalize its economy. So, as long as American job opportunities and higher wages beckon, immigrants in search of a better life will stream northward into the U.S. — fence or no fence. This has always been the heart of the problem.

The anti-immigration crowd also gets it wrong when it points out that the Senate compromise bill would increase the number of immigrant workers in the U.S. by roughly 61 million over the next two decades. This Heritage Foundation analysis has the fear-mongerers predicting a Mexican takeover of the United States. But we need these workers.

Due to the demographic shift being caused by the baby boomers, the ratio of working-age persons in the U.S. to retirees aged 65 and over will drop like a stone from the current 4.7:1 ratio to 3.5:1 by 2030, and 2.6:1 by 2040. With the Social Security and Medicare trust funds going bankrupt, how will we manage with so few workers per retiree? Will we let our whole economy stagnate like France, Germany, Italy, or even Japan? All of these countries suffer from shrinking workforces and top-heavy government taxation.

Well, the U.S. could maintain a 4:1 ratio of workers to retirees by admitting an additional 57.5 million workers over the next nineteen years, according to analyst William Kucewicz. This would result in an average annual population increase of less than 1 percent and a total of only 16.4 percent more than the 350 million projected by the Census Bureau for 2025.

Let’s also not forget that immigrants come here to work, raise families, and assimilate. They would in effect become a much-needed churchgoing blue-collar middle class — an all but forgotten demographic that is crucial to a healthy America.

And yes — they must speak English. President Bush was eloquent on the Melting Pot model of immigration, borrowing from Ronald Reagan’s City on the Hill vision: “Americans are bound together by our shared ideals, an appreciation of our history, respect for the flag we fly, and an ability to speak and write the English language. English is also the key to unlocking the opportunity of America. . . . [Immigrants] renew our spirit . . . and they add to the unity of America.”

Hotheaded conservative populists who equate temporary workers and a long-term path to citizenship with amnesty are dead wrong, and their calls for deportation are lunacy. Imagine U.S. security forces somehow putting immigrants and their families onto armed busses and shipping them back to Mexico. What would that say about our country?

Dead-of-night deportation raids smack of totalitarianism, not Americanism.

Bush addressed this very well: “There are differences between an illegal immigrant who crossed the border recently — and, someone who has worked here for many years, and has a home, a family, and an otherwise clean record.” His point is that henceforth, in the future, temporary workers will finish their jobs and go home before applying for permanent status.

As a recent Wall Street Journal editorial points out, Reagan wondered aloud about “the illegal alien fuss.” He signed a bill in the mid-1980s that legalized immigrants, and in the next twenty years the U.S. prospered as never before.

Bush now has a sensible new plan to solve the problem. I just don’t see what all the fuss is about.