U.S. Border Control

Why we don't need open borders

by Dwight Sunada

As Congress deliberates on immigration reform, the pundits are already making claims about the supposed economic necessity of immigrants. These are specious claims. Here's why:

Claim 1: The percentage of American citizens without a high-school education is declining, so the American economy needs desperate illegal immigrants to do unskilled work. Educated Americans refuse to perform this kind of work.

Reality 1: Suppose that 100 percent of the American population had high-school diplomas. Would no one do unskilled work? Would we starve because no one would harvest the crops? The free market says, "No!" In an American society with only educated people, some of them would still work as menial laborers. The education of a person does not
determine her job; the demands of the labor market do. For example, during the dot-com recession of 2002, former computer programmers worked as waitresses and child-care providers due to a scarcity of high-tech jobs.

Even if all American citizens graduated from college, the free market would still assign enough American workers to perform unskilled work. We do not need desperate illegal immigrants to pick the vegetables and dig the ditches.

Claim 2: Stopping illegal immigration will worsen the unskilled-labor shortage. This shortage causes unskilled jobs to disappear, but does not cause their wages to rise.

Reality 2: The relationship between wages and labor shortages was evidenced by the dot-com boom. At its start in 1997, a computer programmer typically earned $60 per hour as a contractor. At the height of the dot-com boom in 1999, the shortage of high-tech labor boosted contractor wages to $100 per hour. Responding to this pay increase, American students flocked to major in computer science. The same would be true in the market for unskilled labor. As wages rise, more Americans would enter the unskilled-labor market, obviating the need for illegal immigrants.

When illegal immigrants flood the market for unskilled labor, they destroy this upward pressure on wages. A recent study at Harvard University proved that Mexican immigrants (of whom most are in the United States illegally) reduced the wages of American high-school dropouts by 8 percent.

Claim 3: Allowing the free flow of labor between Mexico and the United States supports the free market here. A guest-worker program facilitates the free market.

Reality 3: Via the flood of desperate immigrants, the non-free market in Mexico indirectly suppresses the wages of unskilled labor in the American market. When we allow this interference from a non-free market, how can we claim that we are still supporting a free market in the United States?

American companies in, for example, the food-processing industry, hate the free market because, in their view, the wages set by this market are too high. The companies hire illegal immigrants to lower wages. These companies are lobbying the government for a guest-worker program to allow them to legally use Mexican immigrants to suppress wages. Congress has eagerly obliged American agribusiness by setting the guest-worker program as the centerpiece of immigration reform.

Claim 4: We need the H-1B visa program to inject skilled workers from non-free markets (such as India and China) into the American market in order to eliminate a shortage of high-tech labor.

Reality 4: Supposed shortages of high-tech labor exist for the very same reason that supposed shortages of unskilled labor exist -- that is, neither high-tech nor low-tech companies want to pay adequately high wages to attract American citizens.

Why should Washington intervene to "fix" a labor shortage? Washington never intervenes to "fix" a labor surplus.

Claim 5: Increasing our population, by increasing immigration, increases our standard of living. So, we must open our immigration doors to illegal immigrants, H-1B workers or any other person who wants to live in the United States.

Reality 5: We can obtain the economic benefit of a large population -- without increasing immigration. Consider the U.S.-South Korea free-trade agreement. Without increasing Korean immigration, the agreement links 50 million Koreans to the American free market. In so doing, the agreement will increase our standard of living. We can increase our wealth further by taking an additional step: integrating all the Western free markets into a single free market of about 1 billion people.

Thus, there is no economic necessity for an open-border policy, a guest-worker program or an H-1B visa program. Yet, we should not close the door on immigration. There are many ethical reasons for admitting immigrants, guest workers or otherwise. However, we should maintain our honesty in discussions about immigration.

Dwight Sunada holds a doctorate in engineering and has worked in high-technology industries.