Why Harsh Immigration Crackdowns Will Never Work

With Washington deadlocked over immigration, states and localities have stepped into the void and passed all sorts of laws and local ordinances. They say that the states are laboratories of democracy, and the results can tell us a lot.

Arizona's new "enforcement only" immigration law, which mandates the use of an electronic verification system and subjects employers to the loss of their business license for hiring the wrong person, has turned out to be a disaster that might rank up there with the Edsel or New Coke in the pantheon of bone-headed ideas.

The state had a very low unemployment rate when the law was passed -- it was, at least in part, a "solution" to a problem they didn't have. Unemployment was at 4.1 percent when the law went into effect in January and had been at 3.7 percent when a judge upheld the measure in early 2007.

Lawmakers are now scrambling to undo the shock they've inflicted on the state as up to 8 percent of the population -- according to one estimate -- have decided to hightail it out of Arizona en masse. The people of Arizona are learning that immigrants not only supply labor, but also demand goods and services in turn -- and the labor that goes into them. They're also learning that newer immigrant communities have a mix of people with different legal status all jumbled together, and that when there is a widespread perception that politicians (and citizens) are attacking immigrants, it doesn't much matter that some differentiate between those who are "legal" and "illegal" -- Arizona is losing citizens and lawful permanent residents among that eight percent drop in population.

Arizona is now faced with labor shortages, and when combined with the loss in demand from all those worker-consumers, the whole enchilada might end up costing the state's economy tens of billions of dollars. [In the video window to your upper right is a brief CNN report on the aftermath of the Arizona law.]

The goal of reducing the population of unauthorized workers was accomplished, but it was not a gradual decline so much as a catastrophic shock to the system. The unintended consequences haven't been pretty, and now the very lawmakers that thumped their chest about getting tough on illegal immigration are trying to enact some sort of state-level guest worker program in order to bring those undocumented immigrants back to the state -- workers who would still be considered "illegal aliens" in Uncle Sam's eye if they succeed (Arizona can only make them welcome -- states have no constitutional authority to adjust people's immigration status).

The Arizona law was touted as a model of the get-tough enforcement approach to immigration control, but it should serve as a warning to those engaged in the national debate. Unauthorized immigrant workers now make up an estimated 4 percent of the U.S. work force.

Destined for failure

Advocates of using more law enforcement as the primary mechanism of controlling immigration to the Unites States often portray their opponents as belonging to an "open borders" movement. Obviously, such a "movement" doesn't exist within the mainstream debate, but it's a necessary straw-man. Without it, they'd be left to argue that we should not reform a deeply dysfunctional immigration system and we should not look closely at the pressures and rewards that motivate Americans to hire undocumented workers and immigrants to bypass the legal system -- we should just arrest, detain and deport more people, and otherwise maintain an almost-universally loathed status quo.

That's a very weak hand. It's an approach that violates an iron-clad axiom of public policy: when given the option, it's always -- always -- preferable to get people to choose not to do things that society doesn't want them to do -- in this case, bypassing the legal immigration process -- by adjusting their incentives than it is to wait until they do it and then punishing them for it after the fact.

The 35-year "War on Drugs" offers the best example of how short-sighted ignoring that axiom can be. There's a mountain of data showing that drug treatment -- which decreases the demand for illegal drugs over the long haul -- is far cheaper and much more effective than locking up the users. Yet, in response to public outcry, we spend billions of dollars on law enforcement and give short shrift to treatment. The results speak for themselves: 1 percent of the American population is behind bars, we're loathed in most of the "source countries" where we throw billions of dollars in "security assistance" and, obviously, the illicit drug trade is alive an well in America.

Getting local: A tale of two approaches

Arizona's experience is not unique. A number of communities have passed measures "criminalizing" illegal immigration -- turning what are now misdemeanor violations into serious felonies -- making it a crime to "harbor" or assist an unauthorized immigrant and enacting a variety of other workplace and housing restrictions. Last September, the New York Times reported similar problems with the approach in a number of communities:

A little more than a year ago, the Township Committee in this faded factory town became the first municipality in New Jersey to enact legislation penalizing anyone who employed or rented to an illegal immigrant.

Within months, hundreds, if not thousands, of recent immigrants from Brazil and other Latin American countries had fled...

With the departure of so many people, the local economy suffered. Hair salons, restaurants and corner shops that catered to the immigrants saw business plummet; several closed. Once-boarded-up storefronts downtown were boarded up again.

So last week, the town rescinded the ordinance, joining a small but growing list of municipalities nationwide that have begun rethinking such laws as their legal and economic consequences have become clearer.

"I don't think people knew there would be such an economic burden," said Mayor George Conard, who voted for the original ordinance. "A lot of people did not look three years out."

Oklahoma passed a strict ordnance against undocumented immigrants at a time when its unemployment rate was the fourth lowest in the nation. "We have 97 percent employment in Oklahoma," State Sen. Harry Coates told me last year. In the oil fields, starting pay for unskilled labor is $18 to $20 an hour, but employers can't find enough workers in the area to staff their operations. "We've shot ourselves in the foot by running off willing workers for willing employers," Coates said.

Fortunately, expanding the security state to track down unauthorized immigrants is not the only option for lawmakers -- we can do better.

During the 1980s and early 1990s, California saw an explosion of new arrivals, mostly from Mexico and many without proper papers. But beginning in the mid-1990s, Los Angeles successfully "deflected" an estimated one million new Mexican immigrants to other locales by cleaning up the largely unregulated shadow economy that provides the jobs that many come to the United States to work (similar to the approach I advocate on the national level).

In part, the deflection resulted from the local labor market becoming saturated. Researchers talk about the existence of "transnational social networks" -- networks that extend from countries from which people migrate to destination countries -- and have found that those considering emigrating from their homeland generally have a very good idea of the job market in whatever city or state to which they might be headed. When the availability of jobs declines in a given area, new immigrants tend to move elsewhere, to places with a strong economy and available jobs.

But there was also a significant policy component -- California raised the minimum wage several times during the 1980s, and by 1990, it was 12 percent higher than the national minimum. Beginning in the middle of the decade, L.A. then cracked down on employers who ripped off their employees, forced them to work in sweatshops or otherwise violated California's stringent workplace laws.

UCLA sociologist Ivan Light, author of Deflecting Immigration: Networks, Markets, and Regulation in Los Angeles, explained how the use of wage and other workforce enforcement measures played a vital role in the effort:

Slums and sweatshops had long been illegal in Los Angeles, but the enforcement of anti-slum and anti-sweatshop ordinances, as well as the enforcement of minimum wage laws, had been lax.

To combat immigrant poverty, high-profile law enforcement of these ordinances sharply increased beginning in the late 1980s and continued through the 1990s. Although enforcement of ordinances and wage laws did not eliminate sweatshops and slums, enforcement did slow their growth below the rate of immigrant influx.

In effect, the enforcement of anti-slum and anti-sweatshop laws helped push, or deflect, Mexican immigrants from Los Angeles to other parts of the United States. At the same time, enforcement succeeded in upgrading the living standards of the 63.3 percent of Mexican immigrants who were not deflected. If the bottom third of any income distribution is removed by deflection, the average income of those remaining will increase.

Light neglected to state the obvious: the effort also raised the living standards of U.S. citizens and other residents who were working in the same previously unregulated "Wild West" economy.

Every policy creates some winners and losers, and many come with unintended consequences. L.A.'s crackdown on workplace violations caused some minimum-wage employers to leave the state, or the country, for friendlier climes, and Light noted that while "a higher minimum wage can drive away jobs for low-wage immigrants," it can "also drive away low-wage jobs that native-born teenagers and minorities rely upon." There are additional labor costs, of course, which must be shared by employers and consumers.

The net result, however, was that Los Angeles shifted the incentives that had drawn millions of new immigrants to its environs, and it did so with a policy mix that was far more comprehensive than just locking up or deporting a lot of otherwise innocent working people.

As a local approach, the effort did nothing to change the immigration picture at the national level -- those million immigrants who were deflected from L.A. simply chose other destinations. But if enacted on a national level, and paired with other measures -- like reforming the legal immigration process so it's not an Orwellian nightmare to get through -- we could deflect a large share of new immigrants considering making the move to the United States before they actually make it.

There are a couple of lessons that can be taken away from all this. Both strategies are intended to "deflect" new immigration away from a community. The side effects of the immigration enforcement strategy include shocks to the system: lost business, rapidly declining populations, workers thrown in jail, families divided and communities of legal residents and citizens feeling the same sense of siege as those here "illegally."

The "side effects" -- if you want to call them that -- of deflecting immigration by fixing a dysfunctional process of legal immigration and then enacting higher minimum wage laws and enforcing worker safety, wage and other workplace standards is that both the citizens who work at the lower end of the job market and the immigrants who are absorbed into our communities end up with a significantly better standard of living.

Ultimately, the noisy and often emotionally fraught debate about how people feel about immigration obscures a far more serious one about how best to manage it. Given the option of costly, showy enforcement actions that offer little hope of being effective and cause serious negative consequences, or a comprehensive reform of the system that treats immigrant workers with dignity and raises the living standards of Americans at the bottom of the economy, there's really no contest.