I came across a review of Dr. Raúl Hinojosa-Ojeda, Associate Proffesor of Chicano Studies, report that seeks to project the economic impact of legalizing vs deportating Los Angeles's and California's population of undocumented immigrants. Raising the Floor for American Workers: The Economic Benefits of Comprehensive Immigration Reform is noteworthy because it a series of dramatic claims on the economic benefits of legalization and the costs of deportation. The most stunning claim is that deportation would cost the State of California $301.6 Billion and legalization would offer at least $ 32.3 billion in benefits. Here is a summary of the figures:
In general, any research that presents a policy as being overwhelmingly positive or negative, evokes my natural sense of skepticism. So, I decided to read the full text of his research and found that it was methodologically sloppy and more conceptual holes that a Swiss Cheese Factory! Here are but a few of the problems that I came across:
1. While he is correct that reducing the population of any given locality would shrink it's GDP, he does not ask the more important question of how it would effect Los Angeles's and California's per capita income.
2. He does not ask what connection (if any) does California's (largely) immigration fueled population increase have with its high cost of living and taxation and general quality of life.
3. Nowhere in the research is the cost of government services (medical, education, infrastructure, etc.) weighed against the economic benefits that undocumented immigrants offer. And while Dr. Hinojosa-Ojeda is correct to assume that legalization would increase gross tax revenues, he does not consider that legalization would make millions of individuals eligible for additional government services, which would impose added costs on the public. Whether this will offer net benefits or impose net costs on the public I am uncertain.
4. The built in assumption in his paper that legalized workers would enjoy dramatic increases in income are based on figures generated from the amnesty of 1986, which is highly problematic because our current economic climate is vastly different. Needless to say, relative to the late 1980's, unemployment is greater, wages are in decline (especially for low skilled workers) industries (like construction) that heavily employ immigrants are in dire straights and the supply of low skilled immigrant labor is far greater. And of course the number of individuals enjoying a 2011 amnesty would be considerably larger. After weighing the said factors, the optimistic wage increases that Dr. Hinojosa-Ojeda's projects are extremely doubtful.
5. Another even more problematic assumption is:
"the wages of native-born workers also increase under the comprehensive immigration reform scenario because the “wage floor” rises for all workers—particularly in industries where large numbers of easily exploited, low-wage, unauthorized immigrants currently work. Wages for native-born U.S. workers increase by roughly $162 per year for the less skilled and $74 per year for the higher-skilled."
I do not know of any antecedents in which an increase in the supply of labor in a particular sector of the economy resulted in an increase in a general increase in wages. In addition this does not factor in the increase in the costs of goods and services that would occur IF wages were to increase for (formerly) undocumented workers.
6. A more serious study would present the question of how employers that currently utilize undocumented workers would respond if they were legalized. The economic benefits and competitive advantage of undocumented labor arises from the lower labor and regulatory costs that they offer employers. Legalization would drive the cost of their labor to the levels of their documented counterparts, which would result in an increase in unemployment and / or the infusion of new undocumented workers to take the place of those who "existed the shadows of the black market."
7. When discussing the benefits of the 1986 Amnesty, he fails to consider its costs. Namely, the fact that the amnesty was followed by a huge increase in undocumented immigration.
8. When the professor presents the high cost of apprehending undocumented immigrants, he neglects to consider that there may be more cost effective and humane means of enforcement than border control, such as E-Verify.
9. He claims that the "declining birth rates in Mexico will likely accomplish what tens of billions of dollars in border enforcement clearly have not: a reduction in the supply of migrants from Mexico who are available for jobs in the United State." This is problematic because it does not consider that given the continued wage disparities between Mexico (not to mention Central and South America) and the United States, the desire to legally and / or illegally immigrant to the United States will remain.
10. Dr. Hinojosa-Ojeda's most farcical claim is that "enforcement only policies perpetuate unauthorized migration," implying that the only way to combat undocumented immigration is by increasing the level of legal immigration. Given the crushing poverty that exists in much of Latin America (not to mention Africa, Asia and the Middle East) the demand to immigrate to the United States by any means will always outstrip the number of available visas. And the underlying philosophical notion that by legalizing an act we make it desirable is an act of juvenile sophistry.
11. While he is correct that the removal of undocumented labor from Los Angeles and California would lead to very costly economic dislocations, he does not consider that just because a locality is heavily dependent on an economic activity does not mean that it offers a net benefit. For example, if the the drug trade were eliminated, countless Mexican banks and legitimate businesses would go under due to the loss of billions and billions of laundered narco-dollars, yet no one in their right mind believes that narco-trafficking offers a net benefit to the people of Mexico.
12. In considering the costs of the deportation scenario, he does not consider any possible benefits, like perhaps some of the many unemployed legal immigrants and native born workers would fill some of the vacant jobs.
13. The professor does not ask the obvious question of how American workers with the same mean skill level as their undocumented counterparts fare in the economy? Do they offer net costs or benefits to the municipalities in which they arise? This is essential given the fact that this will help us predict the impact that adding millions of individuals to the ranks of legal residents (with full access to government benefits) will have on financial state of California.
14. On a much broader and deeper level, he does not consider fundamental questions like:
Has our systematic failure to enforce existing immigration laws eroded the rule of law in the United States?
How are the second and third generation descendants of undocumented faring socially and economically?
What connection (if any) does California's demographic shifts have in its deplorable economic and fiscal state?
Relative to other cities and states that have experienced less pronounced demographic shifts, how does Los Angles and California fare?
I do not want to disparage Dr. Hinojosa-Ojeda, but his failure to consider the fairly obvious questions that I laid out would seem to indicate that his research is driven more by an activist impulse rather than by the search for truth. Chicano Studies is a valid area of academic exploration, but like other ethnic studies departments, it is heavily influenced by advocacy and activism. Of course, it is almost always noble to advocate on behalf of a cause or a group, but in many cases it is incompatible with intellectual honesty and the unbiased quest for knowledge. Hence, it makes a poor foundation for the creation of good public policy.
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