Thursday, January 08, 2004

The Immigration Plan
CNN has a basic primer.

Tyler Cowen at Volokh Conspiracy wonders about the plan's efficacy.

Key Quote -
The full details remain to be hammered out, but I see at least one obvious flaw with the idea. Most illegal immigrants do not much trust governments of any kind. Unless they expect a significant boost in wages, why should they step forward? To enjoy the benefits of U.S. federal labor regulations? Try telling that story around rural Mexico, where many of the workers come from. The only question is whether you get laughs or hostility in response.

I wonder also how employers of illegals should feel about such an offer to legalize the workers. Either wages will go up or not. If wages don't go up, workers won't step forward. If wages do go up, employers won't necessarily want illegal workers to step forward and may pressure them not to. There is also the question of what legal liability the employer would have, if his workers step forward and admit their illegality.

While I don't have a strong opinion about Tyler's point on the employee side, I am not sure if I agree with him on the employer side - here is why - look at the text of Bush's speech

Key Quote -
Employers must not hire undocumented aliens or temporary workers whose legal status has expired. They must report to the government the temporary workers they hire, and who leave their employ, so that we can keep track of people in the program, and better enforce immigration laws. There must be strong workplace enforcement with tough penalties for anyone, for any employer violating these laws

If the penalties are harsh enough, companies that violate the plan by prefering undocumented workers would have to face if they were caught not only the bad publicity (remember Wal-Mart) of cheating on the system, but also have to pay monetary damages, which could be greater than any cost savings of having undocumented workers. These monetary penalties could change the incentives that a corporation hiring undocumented workers faces by raising their expected costs (through more expensive risk of discovery), which would cause them to shift on the margin to more documented workers. The degree of the shift should depend on how much teeth the government puts into that section of the law if it is passed.

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