Kamala Harris's Tour: Disaster born of Pessimism

The press yesterday continued to pound the Vice President regarding her performance in Latin America.

From The Hill:

Biden allies and even some people close to Harris said they viewed her trip to Guatemala and Mexico as a “disaster,” as one put it. They said they were left wondering why she seemed so ill-prepared to handle basic questions like “Why you haven’t been to the border?”

“It wasn’t great,” said one longtime Biden ally. “A little cringeworthy too. I don’t know how they weren’t preparing for these questions.” Another ally was blunt: “It was terrible. I don’t know how else to say it.”

Slate asks Is Biden Setting Harris Up to Fail?

John Cornyn, Republican senator from Texas, said to me that he feels like Biden handed her a grenade, pulled the pin, and walked away. Politically, no one wants to touch immigration. It’s bad news to try to say that you’re going to fix the problem because it is such a complicated and seemingly intractable problem. That’s unfortunate.

This theme of intractability recurs in the article in The Hill:

Since the border is not a problem that can be "solved," one measure of Harris’s political skills will be how she studies it, issues a report and shunts responsibility back onto the Department of Homeland Security and its Border Patrol with as few people noticing as possible, said Cal Jillson, a professor of political science at Southern Methodist University.

Let's be absolutely clear. ​Illegal immigration is a man-made disaster, the direct and entirely predictable consequence of the Hart-Celler Act of 1965. Illegal immigration does not exist despite government policy, it exists because of it.​ To suggest it is intractable is risible and flat out wrong.

Ending illegal immigration is easy both in theory and in practice. Ad absurdum, we could simply give an H2 visa to whomever shows up at the border. In a more practical vein, the CATO Institute's David Bier recently suggested this approach:

[Many] factors affect migrants’ decisions, including perceptions of U.S. policy. But policymakers should not ignore the strong relationship between migration and jobs. One partial solution to control this migration already has a precedent. Congress should duplicate the success that guest worker programs have had at controlling illegal migration from Mexico. These visas are mainly for workers performing seasonal farm and nonfarm jobs under the H-2A and H-2B visa programs. With the option to enter and work legally more widely available, fewer Mexicans are choosing to cross illegally.

The 'intractable' part is making an offer to Republicans sufficient to induce them to increase the visa count. Because visas are issued vastly below their market value, migrant labor is a cost center for the government, and lawmakers have little incentive to authorize more visas. Why should lawmakers and US citizens authorize more visas when the windfall profits from these go to employers, migrants or recruiters, with the government left to pick up the tab? This then creates the current conundrum: an insufficient number of visas resulting in a black market in labor with all the associated manifestations: caravans, cartels, border jumping, fake asylum claims and the rest.

By contrast, if we allow the price of the work visa rise to its market value and size the visa offering to the quantity necessary to close the southwest border to illegal immigration, Republicans will have achieved their principal goal: ending illegal immigration across the southwest border. Further, if every incremental migrant represents net revenue to the government, Republicans should be amenable to expanding the program to the extent it is functioning acceptably otherwise.

None of this is rocket science. It is not new, strange or unimaginable. It is nothing more than a straight-off-the-shelf, legalize-and-tax policy.

But Kamala Harris does not know this. Like most of the rest of you, she sees illegal immigration as an 'intractable problem', a radioactive topic to be avoided to the greatest extent possible. And so a trip away from the border to Guatemala and Mexico, to chide leaders about their governance standards and lament the 'root causes' of immigration. But she wants no trip to the border, where sheriffs, mayors and border patrol agents -- and, yes, the press -- are going to ask why the Biden administration is allowing the hemorrhage of migrants over the border. Better to limit engagement to a quick trip to Latin America and then go back to your day job. That's why she was so unprepared. Why prepare for something you can't change?

This deep pessimism about illegal immigration is hurting us. It hurts the poor and vulnerable. It creates divisions in society. It means the Vice President has checked out on the topic and has damaged her reputation with the public.

And yet illegal immigration is not hard to solve. ​We need to liberalize the market, to let the visa price rise to its natural level, while understanding that we have to issue enough visas to keep the uncontrolled southwest border closed to illegal immigration.

And you -- you -- should ​sit back, take a breath, and consider that there may be another way to fix this problem. You need to be hopeful, optimistic and open-minded, because it is the conviction that the problem is intractable which is the greatest impediment to its resolution. That's the lesson of Kamala Harris's trip south of the border.

May Southwest Border Apprehensions: The Torrent Continues

US Customs and Border Protection today reported southwest border apprehensions for the month of May.

In May, apprehensions at the southwest border declined by 1,675 to 172,011. This was the highest for the month since 2000, as far back as our monthly data goes.

Interestingly, inadmissibles -- those showing up at official crossing points without necessary documentation -- surged in May. These rose by 55% compared to the previous month and are now above normal, with normal defined as the 2012-2015 average.

Three explanations come to mind. First, the organic apprehensions rate may be declining and inadmissibles are returning to normal with the end of the pandemic. That is certainly possible.

Alternatively, some apprehensions may be being reclassified as inadmissibles to make the former look more favorable. That is, with higher inadmissibles, the apprehension rate appears to be declining, if only modestly.

Finally, some of those who would have tried to enter illegally between official entry points may now be finding it productive to try their hand at official entry points. That is, some migrants are finding that they are gaining entry without papers even at official border crossing stations. The rapid rise in inadmissibles suggests that this may be the case.

​For the calendar year as a whole, we are projecting 1.2 million southwest border apprehensions​, much as we have for the last two months. This would make calendar year 2021 among the ten worst years for illegal immigration in US history and place us squarely back into Clinton era numbers.

I would note that any number of immigration analysts claimed that the illegal immigration surge of the 1980-2005 period was over and would never happen again. By contrast, we argued that relative wages, the number of US job openings, and the intensity of border enforcement would determine migrant flows. If the jobs were on offer, the migrants would come. And they are.

An alternative Guatemala speech for Kamala Harris

My name is Kamala Harris, and I am the Vice President of the United States.

Let me open by asking you a question: Who would like to work in the US?

[pause]

Who would like to work for any US employer, at any time, whenever you want, for up to nine months per year?

[pause]

Who would like to be able to do that for free?

[pause]

Well, I’ve got you there, because it’s not going to be free. Today, it’s not easy to get a work visa for the US. In the future, it will be easy, but not cheap. But I think the situation will be much, much better overall.

Let me give you a little history and tell you about where we would like to go.

In 1965, the US passed the Hart-Celler Act which ended the circular flow of Mexican migrants to the agricultural fields of California. But the jobs didn’t go away, and the Mexicans kept right on coming, as they had for decades. The border, though, became hard to cross, so migrants increasingly settled in the US without papers. Over time, these numbers became large and year-round and US employers became accustomed to hiring illegal labor. And that pretty much brings us up to date. Today we have ten million undocumented residents, seven million of them from Mexico and Central America. They are in the US illegally because they had no means of entering legally, even to take jobs most Americans did not want.

And they – you – are coming in large numbers again, both during the Trump administration and now during our administration. Why? Because the US has entered a period of demographic transition. Our older population is soaring and our workforce is stagnating. This is opening up vast numbers of jobs, particularly in the categories which can be filled by migrant workers. All of you know that. You know that if you can find your way across the border, you’ll immediately find not only work, but work which pays well.

So what should the US do? Some feel that we should strengthen border enforcement. And some feel that we should be a more humane and welcoming nation, and you know that we are trying to be true to those values in the Biden administration. But all that does not solve anything. It is just more of the same system we have used for more than half a century. The system does not work. It never has.

We need to try something new.

We can end illegal immigration by creating a legal channel for migrants to work in the United States. And that’s our goal. But the question remains, under what circumstances should we allow migrants in? Allowing everyone in will create massive unemployment and downward wage pressures among migrants and undocumented residents. So that won’t work.

We can reduce the number of migrants by charging a tax – a visa fee – to enter and work in the US. But what should that fee be? How many visas should we issue?

Well, if we want Republican support – and we cannot pass this legislation without it – then we have to close the southwest border to illegal immigration at a minimum. Consequently, we have to issue a sufficient number of visas to accomplish that goal, but we probably won’t get many more, at least at the beginning.

But that’s not enough. We also must prevent incoming migrants from creating unemployment and reducing wages. We can do that by issuing those visas at a market price – the price at which you value them. I think all of us here – all of you here – know that the right to work in the US on demand for the employer of your choice is a very, very valuable right. Think about the maximum amount you would be willing to pay for that right, and that’s pretty much how much it will cost. However, if you have passed a background check and can find a US employer willing to pay you enough to make it worth your while, you can come work in the US – come and go as you please – anytime you want. No need for caravans, asylum claims, cartel payoffs, trying to evade Border Patrol, or worrying about deportation. None of it. You decide when you want to work in the US and when you want to be here.

Let me touch briefly on technology, because it is so central to the whole system. We are going to run the system on smartphones like the iPhone, and we'll make sure you have one. This will enable you to keep in touch with employers and it will be your primary interface with the government, for example, to renew your visa or to let us know that you have left the US so we do not charge you for those days. It will also allow us to be in contact with you. We want to create the most transparent, best protected migrant labor market – forget 'migrant', the best labor market of any sort, period – anywhere in the world. We’ll be in contact with you every month to see how you are doing, and you will have to opportunity to sign up for legal services to protect you from visa, workplace and sexual harassment issues, among others. Help will never be more than a touch of the button away.

You’ll need an official bank account where you will be paid. But we will arrange that your family can draw from that same account here with small transfer charges. No more high Western Union fees. And you’ll have health insurance in the US under Medicare. So, yes, the visa will be expensive, but it will come with lots of great features designed to keep you safe, healthy and in control of your own life. It is the future, and it is better. A lot, lot better.

We will be asking Congress for one million of these market-based visas over three years. Perhaps 200,000 of these will be destined for Guatemala. That’s not everything, and almost certainly not enough from the Guatemalan perspective, but it is still a large number and a good start.

Now, let me give you the warning you've been expecting in this speech. You know that the Vice President of the United States is not going to visit Guatemala without some hard conditions. Here it is. If you are detained by US Border Patrol or any other US law enforcement agency after July 1st of this year – about one month from now – you will be barred from the new program for at least five years. And that’s true not only for Guatemalans, but for every other nationality as well, including Mexicans, Hondurans and Salvadorans.

Of course, you’re not going to just take my word for it. So here’s the calendar. We will be working through the details of the program for the balance of the year and hope to have legislation about this time next year. If you’re thinking of taking a shot at the border after the end of June, keep it in mind.

Finally, we have an important condition which will influence the governance of your country. All countries participating in the program will have to accept incentives for their executive and legislative branches that link their pay to the economic growth of the country. In plain words, your political leaders will be incentivized – heavily incentivized with performance pay – to maximize economic growth while minimizing the amount of debt the government takes on. In the medium term, these sums will be paid by the United States from your visa fees under the supervision of the International Monetary Fund and the US Treasury. The faster the economic growth here, the more your decision-makers will be paid.

At the end of the day, the best protection the US can have against illegal immigration is not fancy visa systems, but prosperity in your country. No matter how many visas we issue, that will not solve Guatemala’s problems. We need this country to grow faster. A lot faster. We want the Guatemalan economy to double in size over the next decade. If we reach that target, you will not be so interested in working in the US and we will have less of a problem with migrant labor. We want to make sure your leaders are fully committed to accelerated growth, and we’re going to pay them generously for it. The incentives will be aligned to produce a rapid increase in prosperity here.

Let me conclude by again saying how pleased I am to be here today. With God’s blessing, it will mark the beginning of a new era, both for those of you who want to work in the US and for those of you who choose to work here. We look forward to a better future – a better future for all of us.

Thank you.

Faster asylum claims processing is no solution

The Niskanen Center reports on a bipartisan effort to enhance asylum claims adjudication:

Chiefly due to the ongoing concerns about processing asylum seekers on our southern border, Senators John Cornyn (R-TX) and Kyrsten Sinema (D-AZ) and Representatives Henry Cuellar (D-TX-28) and Tony Gonzales (R-TX-23) introduced the bicameral, bipartisan Border Solutions Act of 2021 last month.

At a high level, the bill establishes four regional asylum processing centers where DHS and partner agencies conduct criminal history checks, identity verification, biometrics collection, medical screenings, initial asylum interviews and credible fear determinations, and provide legal orientation. There are also a fair number of additional protections for children placed with sponsors, including mandating that HHS check in on children within 30 days of their release to a sponsor with a telephone call, and then every two months afterward, and enhancing penalties for trafficking. A pilot program is proposed to increase expediency of the process and efficient review of cases, and there are provisions for increasing personnel across the board: from judges and asylum officers to CBP and ICE personnel.

What is the point of faster asylum claims processing? Is it to more quickly deport those making such claims? Is it to usher claimants into the interior more quickly to facilitate their integration the wider undocumented population? Does the proposal simply hope to provide greater comfort to migrants while they await claims adjudication?

Or perhaps the sponsors think we are overlooking many legitimate asylum claims from the Northern Triangle countries. Many poor people live in bad neighborhoods in the Northern Triangle, but this does not historically qualify as a legitimate asylum claim. Or if it does, then millions of people in the Northern Triangle deserve asylum.

All this once again frames illegal immigration in the perps-or-victims context. ​Is this necessary? Can we not simply treat migrants as people who would like to work in the US for higher wages? Must we put them into some moral category in the process?

More elaborate asylum facilities will not end illegal immigration. They will not address the status of undocumented immigrants. Such an initiative is no more than policy bankruptcy dressed up as constructive engagement, a Hail Mary pass hoping for something, anything.

The simple reality is this: There are lots of menial jobs in the US that our citizens do not want, but which pay seven times the unskilled wage in Honduras or Guatemala. As long as that is the case, migrants are going to find one means or another to get across the border. Closing off one channel (or is it opening one up?) will simply move the action elsewhere, as it always has. After fifty-six years of unbroken policy failure, surely the proposed answer is not 'Try harder'? That's the next big idea?

How about this: Lift the prohibition on migrant labor and move to the legalize-and-tax system which worked fine for alcohol, gambling and marijuana. Let's try something really radical for a change. Something like the textbook, proven policy solution.

April Border Apprehensions: Worst since Clinton

US Customs and Border Protection reported southwest border apprehensions for the month of April earlier this week.

The numbers continue to show a border in crisis. Border Patrol apprehended 173,460 illegal crossers at the southwest border in April, the highest for the month since 2000 during the Clinton administration. In that month, Border Patrol detained 180,050 persons.

Based on prior years, January-April Border Patrol data would imply 1.0 - 1.2 million apprehensions for the year as a whole, similar to the 2004 - 2006 stretch.

And the numbers could go higher. In those years of crisis in the early 2000s, indeed for every year from 2000 to 2012 (with the exception of 2007, a year to bear in mind), April apprehensions were lower than those in March. This year, the trend is the opposite, with apprehensions rising 4,200 to April.

The data implies the reason.

An illegal border crosser coming to work in the US has a number of options for attempted entry. These include claiming to be a minor; entering accompanied by family, particularly children; or simply entering alone and taking one's chances with Border Patrol. The quickest, cheapest and least risky option is the entry of an adult male by himself -- if Border Patrol will allow him to enter the US interior. And this increasingly appears to be the case.

During the Trump border surge exactly two years ago, only 30% of those apprehended by Border Patrol were single adults traveling alone, and more than 60% of crossers came in family groups. The key to entry was bringing a child along. Those who arrived with children were let in; those without were largely expelled. Today, the numbers are exactly the opposite. In April, 62% of those apprehended were single adults and only 28% came in family groups. Clearly, entering alone today is far easier than during the Trump surge.

Moreover, the ratio of single adults to total apprehensions rose in April. In March, 57% of those apprehended were single adults; in April, this had risen to 62%, even as both the absolute and relative numbers of unaccompanied minors and families fell. In other words, in April, migrants were discovering that they needed neither to lie about their age nor bring along children to gain entry to the US interior. The data suggests entering the US interior has become easier even as the number of apprehensions continues to rise from already twenty-year highs.

This has any number of implications. The first concerns amnesty. Many analysts, including a number on this distribution list, have argued that granting amnesty to undocumented residents will no longer prompt a surge at the border, because all that ended in 2008. Given that we are now solidly tracking Clinton era numbers -- years when border apprehensions were at their highest -- no reasonable argument can be made that granting amnesty is unlikely to prompt illegal immigration. The US remains a huge draw for the undocumented, and anything that increases the appeal of entering -- for example, amnesty -- is likely to stimulate unauthorized border crossing. As a result, conservative and swing-state Democratic Senators like Joe Manchin and Kyrsten Sinema are likely to treat amnesty as radioactive. They will be in line with public opinion. In a recent Harvard-Harris poll, 80% of respondents deemed illegal immigration to be a very or somewhat serious problem for the US, with 47% saying "very serious". (See more at CIS.) If the border continues to hemorrhage, the public mood will likely continue to deteriorate, and moderate Democrats willing to support any kind of amnesty will be hard to find. Paradoxically, weak border enforcement undermines the case for amnesty.

Second, our model suggests that about 100,000 to 150,000 illegal immigrants are managing to make it into the US interior every month under the current regime, including those the Biden administration is releasing into the country but who will never show up for their court dates. Readers will note that I called for an H2-M visa program which would have allowed in an extra 1 million migrant workers over three years, about 350,000 of which would be allocated for a single year, say, 2021. We are probably already close to that in terms of illegal immigration, and certainly will be by early July. The US is likely to gain at least 350,000 ultimately undocumented residents this year -- and perhaps a lot more. Under a market-based program, in April alone, the US Treasury could have netted $1 billion in visa fees which instead will have gone to the Mexican cartels. We could have had background checks and completed paperwork for everyone entering the country, and south Texas and Arizona could have been spared the chaos at the border. There is a much, much better alternative.

I have warned my friends at Heritage, CIS and FAIR that an insistence on absolute sovereignty at the border is a losing proposition. Right now, conservatives are getting creamed, not because they have to be, but because they are unwilling to confront the reality that it is virtually impossible to beat a black market. The central issue of illegal immigration is a border with wages four times higher on the nothern side than the southern side. Moreover, the US is desperately short of workers at the moment (another Biden special), but in any event, the country will suffer structural shortages in minimum wage categories for the balance of the decade. The migrant who can make it over the border will have a job, and with the incredible upward wage pressure at the low end, maybe a job paying eight times the wages of the Northern Triangle countries. We are not going to beat the black market in migrant labor. We have never beaten the black market in migrant labor, and frankly, have not beaten any other black market either.

Conservatives must come to grips with the sober reality that, if we want to end the chaos on the border and the abuse of our immigration system, we need to recognize the wage differentials at the border and integrate those into a migrant labor model which also delivers on the critical conservative objectives of safety, propriety, conformity and compensation. It's not hard to do, and the Biden administration, working with some key Republicans, should do it.

For now, though, the border continues to spin out of control, with little sign of improvement anytime soon.

Conformity and Illegal Immigration

In designing policy, we employ ideologies in a consulting sense, that is, explicitly incorporating ideological considerations into the policy framework. Both egalitarianism (socialism) and free market liberalism are well understood. By contrast, conservatism has no functional definition, and therefore 'conservative policy' is easily mistaken to mean anything appealing to white, southern Christians.

We use liberal to mean 'pertaining to the individual' and conservative to mean 'pertaining to the group and its members.' Try that definition the next time you use or see the term 'conservative'. You'll find it helpful. For example, our definition makes FAIR and CIS conservative institutions in that their expertise is in membership policy. They are all about who is and can be a member of the group -- the country, in this case -- including the conditions for obtaining membership and sanctions for those violating membership rules, for example, deportation of illegals.

Our framework for ideology is entirely consistent with neoclassical economics and therefore allows us to explicitly incorporate conservative considerations into a given economic policy which may also have liberal and egalitarian (a form of liberal) components. It gives us a bigger toolbox and a new way to view old problems.

*****

In designing a market-based visa policy, I have referred to the ordinary conservative objectives of safety, propriety (legality), conformity (following customs) and compensation (paying one's way). All of these pertain to the relationship of the individual member to the group. (Confirm it for yourself.) In this note, I would like to highlight the issue of illegal immigration and conformity.

Yesterday's Washington Times carried a story about undocumented migrants riding the train across the US border, accompanied by the photo below.

Is riding a train like that illegal, strictly speaking? Maybe not. But for the middle of the road suburban voter, it is surely inappropriate. It creates a sense of unease about these migrants, that they are rabble, an unwashed horde and a threat to society. Of course, this semi-legal form of transportation is part of the entire undocumented migrant journey, which also finds some illegals packed into tractor trailers or dozens to an SUV. It may not be illegal per se, but it brands these migrants as undesirables. And that branding casts a shadow on Hispanics more broadly. It influences the public's feelings not only about illegal immigrants, but also about race more generally.

In a market-based system, all this disappears, and migrants will use more conventional conveyances. From the Northern Triangle, most migrants -- even those in minimum wage jobs -- will travel to the US by air, just as in the photo below, from the Guatemala City airport.

If you doubt that, do the math, and you will find flying is actually cheaper than the opportunity cost of trudging up Mexico or even traveling by bus. In a market-based system, those sitting astride the train would instead have passed through the airport. And anyone who flies is more or less a regular person. It changes the public's perception of those people on the train -- even though they would literally be the same people as those flying in. Thus, when I speak of 'conformity', I do not mean how one holds a teacup, but rather behaving in ways that the general public perceives as within societal norms. Riding on top of trains, or crammed like sardines into a tractor trailer or an SUV, is not normal. By contrast, hopping a flight from Guatemala City to Houston (which may have its own sardine-like qualities) is normal.

Therefore, note that a market-based system not only increases legality, it also materially addresses conformity. It allows migrants to conform to standards the US public considers normal. In that, it will improve migrants' standing -- and by extension, enhance the standing of Hispanics more generally -- in the public mind.

There is more at stake here than whether we close the southwest border to illegal immigration or grant amnesty to some portion of long-standing undocumented residents. At stake, in important ways, is how many Hispanics feel about themselves and how they are perceived by society. Legality enables conformity, and taken together, they are foundational for achieving dignity and equality.

Prohibitions and Institutional Racism

The evils of institutional racism in policing has dominated the news in recent days. Much of this appears implicitly attributed to attitudes. By contrast, we believe that black markets, which arise from the enforcement of prohibitions against proscribed goods and services, are the principal source of institutional racism. As undocumented migrant labor is also a black market, we think the topic is worth a closer look.

In all cases, black markets arise from a government attempting to prevent the voluntary sale and purchase of a proscribed good or service. Critically, black markets are businesses, not opportunistic crimes. They have all the characteristics of businesses, including human resources, organization, strategy, manufacturing, R&D, warehousing, transportation, distribution, finance and sales. And like ordinary businesses, black market companies have suppliers, customers and competitors. They are not at all like crimes of opportunity, say, robbing a liquor store.

Nevertheless, black market businesses differ from legitimate businesses in one key respect: they lack the state's protection of property rights. Indeed, the state is actively trying to shut them down. Black markets businesses like the illicit drug trade are therefore compelled to safeguard their own property rights. A drug dealer can't complain to the police that someone stole his cocaine stocks or sue an employee who failed to deliver a package or stole a mattress full of cash. All of these property protection services, which are externalized to the state in an ordinary business, must be internalized in a black market business.

The first order of business is the provision of security to protect the cash, inventory and assets of the firm. And that means men with guns. Economies of scale also matter, therefore black market businesses often require 'turf' where the security forces of a given black marketeer outnumber those of the proximate competitor. In Mexico at the US border, these are called 'plazas', the gateways to the US market. In essence, the lack of legal protection leads black marketeers to create personal security forces -- in effect, armies -- which dominate a specific geographic area. Put another way, prohibitions create local druglords like El Chapo or Pablo Escobar. These are not random events, but rather the deterministic outcome of business processes in an industry lacking formal legal protections. Prohibitions create gangs, mafias and drug cartels.

Corruption, intimidation and murder of police, politicians and the press are also business imperatives. As the government seeks to dismantle black market businesses, black marketeers must take every possible measure to preserve the franchise, and this includes paying off, intimidating and otherwise disposing of threats from the authorities or the public. Prohibition era gangster Al Capone once stated that he spent half his revenues on these activities. Doing so is intrinsic to the survival of the business.

And then there is the matter of human resources. Black marketeers cannot simply advertise for hit men or drug mules on Indeed.com. They cannot sign employment contracts with confidentiality, non-compete or ordinary termination or notice clauses. All potential employees are a source of risk to steal goods or money, or betray the employer to authorities or rival gangs. For this reason, gangs tend to be built around personal loyalties as a substitute for formal employment arrangements. These loyalties are first to family, and indeed, many mafia 'families' are quite literally that, at least at the top. (See the excellent movie, American Gangster, for example). Beyond this come friends from the neighborhood and then people of a similar ethnic background. Importantly, these people show more loyalty to the group than to the dominant society. So it was, for example, with Sicilian immigrants, who demonstrated allegiance to their narrow ethnic community rather than the wider society. As a result, the players in a black market very likely come from a minority group distinct from the dominant society. Moreover, that group will be characterized by poverty and a lack of education. Poverty matters because the relative cost/benefit ratio is more favorable on the lower economic rungs. The risk/reward ratio of drug dealing for a middle class accountant is not particularly compelling. By contrast, for a poor, young black man in the economic desert of the inner city, drug dealing may look more attractive. The risks are worth the reward under the circumstances.

A prohibition, therefore, can be used to predictably undermine minority communities. Such prohibitions will lead to black markets and consequent enforcement efforts. Black market businesses will almost certainly involve poor minorities with loyalties distinct from the majority society. These black markets will require security provided by men armed with guns -- gangs protecting 'turf' -- and this area will be ruled by a government within a government, where much effort is spent on undermining the official authorities like the police and elected officials. Such neighborhoods will be characterized by high levels of violence as various gangs seek to increase their territory. Gang territories will often devolve into 'no-go' zones for the general public and deter the establishment of conventional businesses, leading to urban blight.

Black markets do not explain all the ills of poor areas. Nevertheless, about two-thirds of the murders in Mexico, for example, can be linked to the war on drugs there. The US prohibition in alcohol in the 1920s appears to have led murder rates here to double. If you are concerned about inner city gangs and gun violence, bear in mind these are business imperatives for the drug market, which prohibitions will tend to drive into the poor, minority communities. Guns and gangs are not random manifestations. They serve an essential business purpose. Therefore, if you want to get rid of the guns and gangs, start by lifting the prohibition. Do that, and it will be easier to take away the guns and dissolve the gangs. In such an event, police may feel less threatened, and the risk of tragic encounters between minorities and the police should diminish. Ending prohibitions is the best single way to overcome institutional racism.

And indeed, we are seeing some positive early data. The electorate in Oregon has voted to decriminalize hard drugs. And of course, marijuana is being legalized state by state, and perhaps nationally as well in the coming year.

This is not to minimize the harm of certain prohibited goods, hard drugs in particular. A call for legalization is not a recommendation for unthinking laissez faire policies. Nevertheless, we need to be cognizant of the enormous costs of prohibitions, which are often far worse than the problems they ostensibly seek to solve.

So it is with the black market of illegal immigration. As with other historically prohibited items, it is time to legalize migrant labor. Doing so will end all the horrors of the migrant journey in short order. But it must be done in a fashion which protects US employment and wages and respects the societal considerations of the general public, including conservatives. We believe this can be achieved with a pool of one million H2-M visas over three years offered at a market rate. This is an attainable goal.

*****

I perceive a deep pessimism and lethargy in the policy world, that everything that could be known is known, and that policy must devolve into repeating the worn mantras of left or right. In truth, we don't know everything. We are not at the end of the future. Many new, interesting and constructive policy approaches are available to us. We just have to open our minds a bit to see that the world could be different tomorrow.

Deterring the Migrants the Right Way - The Numbers

The Biden administration is at a turning point. Even now, it is beginning to double down on the enforcement-based policies of the Trump administration. For those who seek legal status for undocumented immigrants, the window is closing. History shows that the opportunity to normalize the status of undocumented immigrants may not recur for a decade or more. If you want to try something new -- perhaps something as radical as the textbook policy solution -- now is as good as it gets.

In our last post, I argued that illegal immigration is materially a black market. The border jumping, wall climbing, caravans, fake asylum claims and the rest arise for lack of a legal channel for migrants to enter the US to work. Create a legal channel, and all the cruel and bizarre manifestations of black markets will disappear by themselves in as little as one month. To combat illegal immigration, the government should do less, not more.

The plain vanilla version of doing less is 'open borders' of the sort championed by, say, CATO or a number of the libertarian economists over at George Mason University. How would that work in practice?

Polls have shown that as many as one-third of Mexicans and Central Americans would want to work in the US, representing a potential pool in excess of 20 million unskilled migrant workers, with the vast majority of these currently earning not more than $2.50 / hour, assuming they are employed at all.

Prior to the pandemic, the effective minimum wage in the US was about $10 / hour, probably higher now. About 20 million Americans work for these wages. Therefore, the pool of potential minimum wage workers from Mexico and Central America (MCA) is about the size of the total minimum wage market in the US, 20 million in both cases. Put another way, there is a large potential pool of minimum wage migrant labor in the MCA countries, even by US standards.

What would happen if these migrants could enter the US at will with a free visa subject only to a background check?

Our pre-pandemic analysis of JOLTS labor market survey data showed 2 million open jobs which could be filled by unskilled, non-English speaking migrants. For the moment, let us assume that all these jobs were open as advertised and filled solely by MCA migrants. What would be the impact on employment and wages?

Let's start with employment, assuming no impact on wages. After the 2 millionth job was filled, the next migrant would show up offering to work for less or willing to provide better service. As a result, we might expect this influx to create unemployment. And in fact, high unemployment would be rational for incoming migrants. Our analysis suggests that those earning $2.50 / hour in the MCA countries would be willing to work for $6.50 / hour in the US, a wage sufficient to cover higher US expenses and an hourly wage premium to make it worthwhile to leave their homes. If they could earn $10 / hour, it would be rational for them to come to the US even if they expected to be unemployed 40% of the time. Further, if they were unemployed 50% of the time in the US, they would still be making as much net as working full time at home. Such unemployment does not represent indolence or some lack of moral character, but rather rational economic behavior: In some cases, it's better to earn a higher hourly wage and work fewer hours, particularly when that wage is four times your normal rate. This implies, however, that open borders with just the MCA countries could draw in 50% more migrants than the jobs available, and assuming two million jobs, that implies one million unemployed migrants hanging about the US.

And this situation could persist for some time. As unemployed migrants are absorbed, those remaining in the large pool of MCA migrants would have an incentive to come to the US with a willingness to remain unemployed for 40% of the time. Unemployed young men have a propensity to get into trouble, and the US public -- even in the vanishingly remote chance that it would ever support an open borders policy -- would be unwilling to countenance the side-effects for more than a presidential term.

Alternatively, open borders could be felt more in wages than employment. Incoming migrants could push down wages to their Relocation Wage, the hourly wage needed to make it worthwhile to come to the US, about the above-noted $6.50 / hour for Mexicans. This would make a mockery of those seeking increased minimum wage laws, with the result that either unskilled US workers would see higher unemployment, potentially much higher unemployment, or have to work off the books at wages below the much-maligned Federal minimum wage of $7.25 / hour. Such pressure could fall disproportionately on the unskilled black community -- a critical Democratic constituency. But even more so, it would affect the unskilled, undocumented immigrant community.

We tend to think of undocumented residents and illegal immigrants as being the same. But in many ways they are not. Most undocumented immigrants have been in the US for fifteen years or more. They are established here, with long-standing jobs or businesses. They quite possibly have raised their own children here, who may be both US citizens and think of themselves that way. They are closer to undocumented Americans than migrant Mexicans or Central Americans. Importantly, most of them are earning $10-12, not $6.50, per hour. In many cases, incoming migrants could easily displace the incumbent undocumented working population. As a result, open borders with the MCA countries promises to be a disaster for undocumented US residents. Thus, there is a very good chance that the 2,000,001st migrant is not displacing another recent migrant, who is also willing to work for $6.50 / hour, but rather a long-established undocumented resident costing his employer $12 / hour. Open borders, therefore, should yield one million unemployed unskilled Hispanics, but the brunt could be borne disproportionately by those who arrived before the Great Recession. By implication, long-time undocumented residents and incoming illegal immigrants are not one interest group. They are two interest groups, and at high levels of migrant entry, have diametrically opposed economic interests.

If open borders would be unacceptable, perhaps we could stem the flow of migrants with a modest visa fee. In his book 'Open Borders', GMU economics professor Bryan Caplan suggests an entry fee of $1,000, equal to about 50 cents per work hour. What would be the effect?

It certainly would not discourage any of those migrants coming across to take those two million jobs, as they would still earn far above their Relocation Wage (the US wage necessary to induce them to leave home). It would, however, influence both wage pressures and the number of unemployed migrants in the country. At the extremes, it would reduce migrants' willingness to remain unemployed to about 35% of the time or reduce the effective minimum wage from $10 to $7 / hour for those jobs which unskilled migrants could fill.

What if we raised the visa fee higher? For example, a fee of $2 / work hour would see the optimal unemployment rate fall to around 22% -- still very high -- and the maximum wage impact would be $1.50 / hour, that is, reducing wages to $8.50 / hour for jobs which unskilled migrants could fill. Even a $2 / work hour fee would not be sufficient to protect incumbent workers and sustain public support.

If, however, we let the visa rise to its market value -- which we estimate around $3.50 / work hour -- the incentive for unemployment falls to zero and the wage impact is also zero. That is, migrants would have to earn the prevailing US minimum wage of $10 / hour to cover both the visa fee and their own Relocation Wage (which includes a premium for coming to the US). This allows virtually no unemployment and no undercutting of prevailing wages. This is the expected result of the bidding process for visas.

Therefore, protecting the domestic workforce -- primarily the undocumented Hispanic workforce -- from migrant competition requires a market value for our proposed H2-M, market-based visa. This minimizes disruption to domestic labor markets and helps ensure public support for the program. If you want to protect the undocumented resident population of the US, then you want incremental visas to be issued at a market rate.

Moreover, the market price is essential to end illegal immigration. Let's go back to where we started:

The migrants depicted above are willing to clash with Guatemalan security forces because they believe they will never have access to a US H2 visa. Practically speaking, they are right, because the US government issues H2-A and H2-B visas far below their market value and therefore demand vastly outstrips supply. If the US government issues our proposed H2-M market-based visas below market value, they will immediately stock out, no different than the H2 visas today. Remember, even in a market-based visa system, no more than 5% of the migrants in the picture above will receive an H2 visa of any sort, including an H2-M visa, at any given point in time. We maintain order in the market, however, by ensuring that H2-M visas are available on demand, in unlimited quantities, 24/7. And we can do that at the market price -- but not below it.

This changes the calculus for the migrants. The question becomes not 'Can I get over the border?' Of course, a background-checked Honduran could run the gauntlet as he does today, but it would be far easier to simply buy a visa online and book a flight to Atlanta. Therefore, the question will be instead, 'Can I find an employer willing to pay me enough to cover both the visa and my Relocation Wage?' We have a term for this in the United States. It's called 'a job search'. By this means, we convert a border security problem into a garden variety labor markets issue. The pressure moves away from the border and to the employer, where it organically belongs.

Of course, if we fail to issue enough visas, regardless of price, we will see illegal immigration revive at the southwest border. Therefore, we set a target for southwest border apprehensions, say 150 / day, and we issue more visas if the apprehensions rate exceeds this level. This underlines the chief philosophical difference between, for example, CIS and ourselves. CIS is aiming for absolute sovereignty. The US government is allowed to dictate the number of visas, and MCA citizens should respect that decision on US soil. The US government is the absolute sovereign on US territory.

By contrast, we think 56 years of futile attempts to stop illegal immigration suggests that absolute sovereignty is not feasible under real world conditions. We believe instead in constrained sovereignty. This begins with the premise that only a fool would get between a poor man and his job. Don't fight titanic economic forces. Instead, focus on channeling such flows to maximize the ordinary conservative objectives of safety, propriety (following the laws), conformity (following customs), and compensation (members should pay their own way). A market-based visa system can deliver all of those at a high level. A very high level. But the price of this approach is that the government is shaping flows, rather than mandating them. In a market-based system, if we need more visas to end illegal immigration, we issue more visas. It is in this sense that sovereignty is constrained. Notwithstanding, our analysis suggests we can close the southwest border to illegal immigration with a 3 x 350,000 tranche of H2-M visas (about 1 million incremental visas over three years) on top of the 300,000 H2-A and H2-B visas issued in 2019. As a conservative, would I gamble 1 million visas (that's $18 bn of revenue to the Feds over three years) for a shot at ending illegal immigration and normalizing the status of undocumented Hispanic immigrants?

Absolutely.

*****

President Biden is already beginning to turn to those Trumpian policies many of my readers decried as despicable and inhumane, notably resumption of construction of the border wall in places and the enhanced use of Mexican, Guatemalan and Honduran troops to better seal their borders. The Biden administration is doubling down on exactly the use of force depicted in the photo above. This is dreadful policy, but the inescapable result of an enforcement-based approach to illegal immigration.

We can do better, and I think we might find the necessary Republican votes to get there.

For my readers who are pro-migrant and on the left -- and some of you have close ties to the administration -- you are at the crossroads. You can propose something new, something with hope for a better future for millions of south of the border and the prospect of normalization for seven million undocumented Hispanics in the US. Or you can wait and hope that, ten years from now, we will not still be spinning our wheels in the rut of the last half century, wasting vast taxpayer resources in a barren and cruel effort to keep poor migrants from filling jobs needing them in the US.

Deterring the Migrants - An Enforcement-based Approach (Part I)

The Biden administration is facing the dual challenge of both deterring migrants from entering the US illegally and doing so without resorting to draconian enforcement measures. Today, we consider the options using the current enforcement-based (volume-limited) policy.

Under the current system, the US government sets the number of visas, H2's in this case, and then attempts to enforce the border around that quantity. For example, the cap count for FY 2021 for H2-B visas was set at 66,000. Because these visas are issued far below their economic value, supply is artificially low and demand vastly exceeds supply. As a consequence, the overwhelming majority of those who would like to work in the US have no realistic chance of ever obtaining a visa.

And that yields the picture below.

This photo from earlier this year depicts a caravan of Honduran migrants clashing with police in Guatemala. It is easy to see the picture as simple chaos, a mob without meaning. But that's not the case. To understand the dynamics, we can imagine ourselves in the Hondurans' shoes and consider their goals, motivations, and values. Clearly, these migrants want to go work in the US. They are not tramping up Central America because they love the Dodgers or want to visit Disney World. These migrants are enduring at best great discomfort, and at worst, risking not only their own lives, but those of their spouses and children. We might reasonably characterize them as 'highly motivated'. They are on the road to change the very course of their lives.

What is their belief about their chances to enter the US legally? It must be effectively zero. Why would anyone walk a thousand miles if they thought they could simply apply for and receive an H2 visa? They wouldn't. Rather, these people do not believe they have a shot at any H2 visa at all. Ever.

As a result, their downside is limited to the journey's discomfort and the risk of injury, crime victimization and death. If they succeed in entering the US interior, they are better off; if they fail, their losses are limited to the trek itself. Because these migrants have no hope of legal entry into the US, the prospect of apprehension at the US border is not a meaningful deterrent. In an enforcement-based framework, therefore, the US is short of both carrots and sticks to influence migrant behavior. The US cannot extend the reasonable expectation of obtaining a legal visa, and therefore the prospect of apprehension at the border and losing visa eligibility is not a meaningful deterrent. Instead, the administration is reduced to pleading: "Don’t come over," President Biden said during an interview with ABC News' George Stephanopoulos. “Don’t leave your town or city or community.”

Clearly, migrants weren't listening. It is naive and insulting to think that they would. Just look at the photograph. For these migrants, the decision is existential. They will make their choices based upon conditions on the ground, not based on pronouncements, laws, exhortations or niceties. No one is going to walk weeks to the US border and then concede to Border Patrol that they are really 21 when they have the prospect of entry if they claim to be only 17 years old. Migrants will work the system as it exists. If those ahead of them report that they were able to enter the United States, the following migrants will continue to push on.

So what policy options does the US have? First, all options are subject to political constraints. As I have elsewhere noted, the political limit for southwest border apprehensions is a maximum of about 40,000 / month. Above this level, the press will be talking of a crisis, and an administration will be bleeding political capital. That limits the scope for humane policies, and by and large, any given US administration -- be that of Bush, Obama, Trump or Biden -- will be forced back into volume constraints. Those Guatemalan police on the photo above are a volume constraint, as are migrant camps in Mexico or deportation from the US. They all seek to reduce the number of migrants entering the US interior.

This enforcement-based approach has delivered political and policy failure for every administration since Nixon. It does not work, and it never has. And it never will. Why would it? Any reasonable economic or market analysis will show it doomed to failure. (So why do Niskanen and Rand continue to promote it?) As a result, today's policy framework dictates that the Biden administration will be reduced to measures the left will consider mean and inhumane -- unless the administration is willing to invest its political capital in levels of apprehensions too high for the political tolerances of prior administrations, both Republican and Democrat.

The Public's Tolerance for Border Apprehensions

How many apprehensions at the southwest border will the US public tolerate before treating it as a 'crisis'? Put another way, at what level do migrant apprehensions become a political problem for an administration?

As it turns out, this number can be reasonably estimated. As a rule of thumb, Americans will accept southwest border apprehensions less than 500,000 / year as normal, that is, about 40,000 / month. If we allow for seasonality, then 50,000 / month is acceptable in the peak season of March to May, and 30,000 - 40,000 / month for the rest of the year, as we show on the 'Tolerance Limit' line on our graph below.

Using this framework, we can easily identify the respective border crises of Obama, Trump and now Biden, as well as incipient surges in late 2018 and again in late 2020 (and a pre-Trump surge in late 2016). The model accurately shows those periods when the media and the analyst community viewed border apprehensions as being at crisis levels.

If the Biden team wants to put the border crisis behind them as a political matter, they should be targeting no more than 50,000 monthly apprehensions at the southwest border to May and 40,000 / month thereafter.

We are a long way from there.

It wasn't Jacobson's fault, either.

White House border coordinator Roberta Jacobson became the first administration victim of the border crisis, with Reuters reporting that she "will retire from her role as coordinator at the end of this month." The border situation is not Jacobson's fault, just as it was not that of Homeland Security Secretary Kirstjen Nielsen, whom President Trump fired during a similar border surge in November 2018. Readers will recall my note on the matter.

Rather, the problem is the underlying construct of border policy. Under an enforcement-based approach as we have today -- one endorsed by the likes of Heritage, Niskanen and Rand (but not CATO) -- migrants must necessarily be treated as either criminals or victims. They are criminals because they cross the border illegally, lie about their age or motivation, work without permits, obtain fake social security cards and evade taxes. In most cases, at least three of five of these are true. These acts are justified in the eyes of the left, however, because migrants are 'victims', fleeing gangs and poverty, and migrants must be handled by sympathetic asylum courts while the administration conducts shuttle diplomacy to address the 'root causes' of illegal immigration. Thus, the current policy framework forces migrants to be treated as either sinners or saints, criminals or victims.

If illegal immigrants are to be treated as 'saints', then the result is 'humane' policy which involves losing control of the border and a political crisis for the administration. Hence Ms. Jacobson's scalp.

The implied alternative, however, is a replacement who is going to be tougher on illegal immigration. We have seen this film before. The number of Border Patrol agents increased 14% under President Obama. The Biden administration will be forced into something similar -- and rather Trumpian -- as I have said before.

One would think that, in 2021, after three decades of increasing border staffing, yet another migrant surge would encourage decision-makers to consider alternatives beyond firing the scapegoat du jour. Not yet, apparently.

Let me once again reiterate that we could obtain vastly better outcomes by migrating to a compensation-based, rather than enforcement-based, approach. And let me add that hickjacking governance in Central America to serve US interests -- that is, to 'address the roots causes of illegal immigration' -- is also a trival matter. But you're not going to see the opportunity peering through a moral lens projecting migrants as either criminals or victims.

CBP March Southwest Border Apprehensions: Worst since 2001

US Customs and Border Protection issued March apprehensions and inadmisibles numbers today.

Border Patrol apprehended 168,195 persons at the southwest border in the month of March. This was slightly less than preliminary figures reported by the Washington Post last week. Notwithstanding, this is still the highest since March 2001, the first year of the Bush administration, when Border Patrol recorded 170,580 southwest border apprehensions.

At the current pace, apprehensions for calendar year 2021 could be forecast at 1.2 million, following the precedents of 2005 and 2006. The comparison may prove apt. Then as now, the stock market was hot and real estate prices were heading well into bubble territory. We have contended that black markets, like other markets, are demand-driven. Migrants look to jump the border when they know jobs are waiting for them. A hot US economy -- particularly one with work discouraged by fear of the coronavirus and generous unemployment benefits and stimulus payments -- may prove an irresistible draw for Mexican and Central American migrants looking to fill the gap in a tight US labor market.

As a result, barring a major modification of Biden administration policy, we might expect a level of illegal immigration this year not seen since the Great Recession. The situation is fairly described as a border crisis and a rolling policy disaster.

There are better ways to handle the situation.

*****

Inadmissibles have also begun to creep up. As the pandemic begins to pass and vaccines become more widely available, inadmissibles -- those who present themselves for legal entry at official crossing points but lack appropriate documentation -- are likely to begin to return more typical levels.

March Apprehensions: Worst in Twenty-One Years

US Customs and Border Protection, as has been its annoying habit in the last several years, once again leaked headline apprehension numbers before the release of its formal publication of monthly statistics. Per news releases, US Border Patrol apprehended 171,000 persons attempting to cross illegally into the US in the month of March, just as CBP forecast a few weeks ago.

March saw the highest number of apprehensions for the month since the Clinton administration -- worse than any March during the Bush, Obama or Trump terms. It is fair to describe the situation as both a crisis and a policy disaster.

And that's not all. We would expect apprehensions to continue to rise for the next couple of months. In such an event, apprehensions will compare unfavorably with the Clinton administration itself, the last time the US had a bona fide illegal immigration crisis in the eyes of most immigration analysts.

For purposes of comparison, during the last year of the Clinton administration, calendar year 2000, 1.6 million people were apprehended at the border.

We are not there yet, but the border remains visibly out of control and the Biden administration appears clueless in its response.

I would again add pro forma that this crisis could be ended purely with rhetoric were a market-based visa system in prospect for the migrant community.

"Worst in Twenty Years"

NBC News reported that Homeland Security Secretary Alejandro Mayorkas on Tuesday said that the U.S. is expected to reach the highest number of people apprehended at the U.S.-Mexico border in two decades.

Just how many is that?

Twenty years ago, in 2001, border apprehensions reached 170,580 in the month of March.

Here's how that looks on our monthly graph:

A level of 170,000 would be almost twice that of March 2019, during the surge of the Trump administration, which itself was the highest level since 2007. It is not an exaggeration to describe the situation as disastrous.

There has been some attempt to blame events on the Trump administration. In fact, the 2018 Sabraw ruling and the 2019 Omnibus bill largely gutted Border Patrol's ability to control the border with respect to minors and families. The Trump administration responded by jerry-rigging administrative procedures to compensate, including migrant camps in Mexico and strong-arming Guatemalan and Mexican authorities to clamp down on migrant caravans. The Biden administration in essence removed the pressure on the tourniquet, with the result that migrants are now gushing over the border.

The Biden administration has days to weeks to get the situation under control. As I have said before, expect the administration to turn back to the Trump playbook, with some fairly nasty policies to come.

And again, let me reiterate that all this could be solved in short order without draconian measures and to broad public satisfaction using a market-based visa program.

An Entirely Predictable Border Surge

The press has been replete with reports of a major uptick in illegal border crossings in the past month. Customs and Border Protection published numbers today, giving us insight into the month of February.

Border Patrol apprehended 96,974 migrants attempting to enter the US illegally across the US southwest border in the month of February. This was almost three times the level of one year earlier and the highest since 2006, that is, during the Bush administration. It was far worse than any February under either the Obama or Trump administrations. Nor should these developments have surprised the Biden administration. The surge was not only foreseeable, we actually forecast it.

In our November 23rd note, I wrote

...the numbers suggest the border problem will continue to worsen as long as the current 'catch-and-boot' regime lasts, possibly through Q1 2021. If so, the apprehension numbers in the December to March period could once again be eye-popping and a policy priority -- or at least a policy headache -- for the incoming Biden administration.

Not only was this qualitative guidance, we forecast the numbers, which can be seen updated with today's CBP data on the graph below:

Reported apprehensions were even worse than our forecast, which itself might reasonably have been characterized as 'alarmist'. That the Biden administration has been caught unawares is frankly surprising. The Obama administration had problems with its own surge, and consequently these issues should not have been novel or unexpected for President Biden. Expect some entirely Trumpian, and fairly nasty, measures to be implemented in the next month or so to control the surge.

I need hardly reiterate that all this could be resolved in short order without draconian measures if the Biden administration would consider a market-based visa program.

*****

Meanwhile, inadmissibles remain at abnormally low levels, depressed by the ongoing covid pandemic.

Seven reasons amnesty might succeed

The DACA program, covering children brought to the US illegally by their parents, is well known. Less remembered is the failed DAPA initiative of the Obama administration. Announced in November 2014, the program would have granted work permits to the undocumented parents of children born in the US. The current Biden amnesty would, by its very nature, cover this group.

If DAPA failed, why would a broader amnesty succeed now?

Here are seven reasons why it might, and one reason it might not.

The Passage of Time

The simple passage of time makes a claim of 'common law' residency ever more supportable. In 2014, the DAPA eligible might have been in the US only five years. Now, those very same people will have been in the US more than ten years, and many, more than fifteen. Their children will have grown up here. Even five years ago, most Americans agreed that undocumented immigrants should qualify for resident status in some form. That rationale today is even stronger. The passage of time by itself has changed the terms of the debate.

The Failure of Deportation

The legitimate alternative to legalization is deportation. President Trump was by far the most aggressive proponent of deportation in living memory. And yet, even under the Trump administration, the rate of deportation of undocumented residents without criminal records was only 8 in 10,000 per year. As a practical matter, the undocumented worker who avoid run-ins with the law already enjoys amnesty.

Further, the 2019 raids on Mississippi poultry plants demonstrated that the American public has no appetite for rounding up undocumented mothers and fathers, working in grinding, menial jobs, as their children watch them being arrested and deported. Entering the country and working illegally is an administrative crime, but not a moral one. Everyone has a right to try for a better life, and the American public has limited appetite to deport those who broke the rules in hopes of a better future for themselves and their children.

Therefore, the singular failure of the Trump administration has discredited mass deportation as a policy option, effectively leaving normalization as the only practical alternative if the undocumented are not to live in a legal twilight forever.

Relief, Guilt and Exhaustion

Many voters, even on the right, are breathing a long sigh of relief at the departure of Donald Trump. These were appalled by the treatment of migrants under Trump and may feel the time is ripe to balance the scales. Further, the Biden administration is enjoying some good will from the public. This will fade in the next few months, but for now, many feel the time has arrived for a more accommodating stance towards illegal immigrants.

Biden is not Obama

If Biden is not Trump, he is not Obama, either. Obama was demonized on the right as a true leftist and, it has been argued, on racial grounds. Joe Biden cannot be so characterized. To all appearances, Biden is a centrist to the core, a white Catholic guy who owns a Pontiac TransAm, one of the iconic sports cars of the working class. It is harder to paint Biden -- and by extension his amnesty bill -- as the product of a radical leftist.

Relatively Low Illegal Immigration Numbers

Border apprehension levels have fallen dramatically since 2000, and in particular, in the decade following the Great Recession. While 2019 saw a major surge and the prospects of large caravans remain a risk, the overall level of border apprehensions -- and by extension, illegal immigration -- has fallen dramatically in recent years. As a result, the public is perhaps not as aroused by the topic as it once was, and therefore amnesty may not be as resisted as it has been historically.

The End of the Depression

The business cycle is also favorable. Foreigners are shunned during depressions, and we have argued that the Great Recession was indeed a depression. During a prolonged downturn, immigrants are seen as competitors for scarce jobs and simply more mouths to feed. By contrast, during an economic expansion, migrants are seen as helping hands to do needed work. While we believe a financial crash is coming in the wake of the pandemic -- the economy is over-stimulated with easy money -- the economy may remain largely on track and the incremental labor of migrants will be welcomed by the public. Amnesties are easier when the public is in a good mood, and it probably will be as the pandemic ebbs.

The Coming Labor Shortage

We have stated the US will face an acute labor shortage as we head towards 2025. But it could be even worse than that. A number of Americans near retirement age will have elected to permanently leave the labor force during the enforced vacation of the pandemic era. As the pandemic eases and demand returns, these workers will be missing. Therefore, the high unemployment of the last year could in short order be replaced by a historically tight labor market as early as, say, the fourth quarter of this year, and certainly by 2022. This again will tend to create a pro-immigration sentiment conducive to leniency for undocumented immigrants.

The Risks of Over-reach

The Biden administration has proposed legislation covering the gamut of Democratic objectives. And that was just in its first two days. Of particular concern is the call for a $15 / hour minimum wage. Our immigration policy recommendations are fundamentally about ending the evil of black markets. A binding minimum wage is exactly how one creates black markets. It is bad policy intrinsically. But it is even worse for illegal immigration. Raising the effective minimum wage from $10 to $15 / hour would create a huge incentive for illegal immigration. Illegal border crossing is driven by wage differentials, about $1.50 / hour in Guatemala and $2.50 / hour in Mexico versus $10 / hour in the US. A $5 / hour increase would represent roughly $30,000 in net present value to an illegal border crosser, most of which would ultimately end up in the pockets of intermediaries helping migrants enter the US illegally. Do the math, and a binding $15 / hour wage would result in a net annual gain of $5 - $10 billion to the Mexican drug and human trafficking cartels. It could potentially disrupt border control far more than a general amnesty. (I would note that a higher minimum wage should have no material effect on a market-based visa program.)

One is left wondering about President Biden's motivations in sending a laundry list of Democratic priorities to Congress. Does the administration intend to fight both an immigration and minimum wage battle in a 50/50 Senate? Or is the President merely pushing the pile across the table in order to demonstrate his fealty to his progressive supporters? If that's the case, which policies really enjoy his support and which are merely for show? It makes all his proposals look less serious.

*****

Assuming amnesty actually is the priority, the Biden team has effectively set the left edge of the illegal immigration debate. Both the passage of time and emerging trends are on their side. The electorate is exhausted by four years of political stress and simply wants to end the whole illegal immigration topic, even as the Trump administration has effectively gutted the viability and legitimacy of an enforcement-based strategy. The conflux of conditions are in the left's favor.

How will conservatives respond? If illegal immigration proves a true administration priority, the right will face a dilemma.

If 'no amnesty' sums up policy on the right, conservatives are condemned to a static defense which will either prevail or fall. But for the many Americans who want a solution -- any solution -- for illegal immigration, condemning long-term undocumented residents to a perpetual twilight is not an answer. Resisting amnesty may represent righteous vengeance and bile-soaked principle, but it is not constructive, not conservative, and little more than institutional cruelty after so many years. At some point, the public may have had enough.

In such an event, conservatives would do better to engage with the topic and set a defensible edge on the right.

Is that even possible? I think it is, and curiously, I believe it may come down to the views of a single person.

Amnesty for 11 Million

So much for unity.

On January 15th, the Los Angeles Times reported that the incoming Biden administration

plans to send a groundbreaking legislative package to Congress to address the long-elusive goal of immigration reform, including what’s certain to be a controversial centerpiece: a pathway to citizenship for an estimated 11 million immigrants who are in the country without legal status, according to immigrant rights activists in communication with the Biden-Harris transition team.

This is as expected. I have written on any number of occasions that an incoming Democratic administration might be expected to propose and successfully pass not only legislation resolving the DACA issue, but also a larger amnesty. The Republicans' bungling of the Georgia Senate elections makes it that much easier.

The matter of DACA is straight-forward. Those in the program are Americans in all but name. The issue should have been addressed during the Trump administration. It will be resolved now.

More interesting is the case of long-term undocumented residents. Beyond those in the DACA program, perhaps five million illegal immigrants have resided in the US for at least fifteen years. The case for normalizing the status of these 'common law' residents is sound, even from the conservative perspective. If we are not going to deport them -- and we are not in any great numbers -- then they should be given status to better maintain order in society, even absent humanitarian considerations.

But 11 million is a big number, likely requiring cross-aisle cooperation. What sort of incentive is being dangled to conservatives for their support?

As it turns out, nothing.

Marielena Hincapié, executive director of the National Immigration Law Center and its Immigrant Justice Fund, told the LA Times that the Biden administration would offer no additional enforcement measures to Republicans. “This notion concerning immigration enforcement and giving Republicans everything they kept asking for … was flawed from the beginning,” she said. Lorella Praeli, an immigrant and longtime activist in contact with the Biden team, added in the same article that the proposed legislation “will not seek to trade immigration relief for enforcement, and that’s huge.”

If the proposed immigration legislation is intended to promote unity and heal the country, one can hardly wonder what a divisive initiative would look like. The Biden proposal is in-your-face and all about payback. After the crude and dehumanizing treatment of illegal immigrants by the Trump administration, this is hardly surprising. But it is not constructive. President Biden will brand himself with the US electorate in the next ten days, establishing in the public's mind whether he really intends unity or whether he was just selling a bait-and-switch line. Unity may be an anachronistic notion a week from today.

This would be a pity, because the immigration initiative -- as well as many others -- can be couched in conservative, as well as progressive, terms.

Illegal immigration to the US from Mexico is an unintended (but easily foreseen) by-product of the Hart-Celler Nationality and Immigration Act of 1965. The act catalyzed a black market in migrant labor with a corresponding incentive for illegal immigrants to settle permanently in the US. This legislative framework needs to be replaced with modern legislation which acknowledges market forces at the border and provides a sound and sustainable means for allowing labor to flow back and forth in ways which meet conservative criteria. Specifically, such a program must acknowledge and collect from migrants the market value of the right to work in the US. This is the only way to effectively close the unsecured southwest border to illegal immigration: by monetizing the value of illegal entry and allowing background-checked migrants to pay that amount to the US government in return for on-demand entry to work.

But this is not enough. As a corollary to this approach, the domestic black market for migrant labor must be drained. That is, if legal migrants pay an entry fee but can work off the books easily in the US, then they will have an incentive to 'go dark' and join the existing US black market in migrant labor. Therefore, currently undocumented workers must be either legalized or deported. As I have written, undocumented immigrants who do not otherwise commit crimes already have amnesty in all but name. We are not going to deport them. Therefore, closing the southwest border to illegal immigration requires normalizing the status of undocumented workers already here. This is not a gift, a concession or woolly niceness, but rather a necessary requirement for unwinding 55 years of bad public policy. Providing legal status to 11 million undocumented residents is an integral part of creating functional migrant worker policy — even for conservatives.

By contrast, couching the matter in terms of being humane and kind, as Biden's activists have, is divisive and counter-productive. By framing the issue as us-versus-them -- nice Democrats versus mean Republicans -- the Biden administration is setting up immigration legislation as a win-or-lose test of strength based on party loyalties, rather than as a necessary modernization of law to meet requirements across the ideological spectrum.

This in turn guarantees that 11 million people will not receive legal status. At least some Republican Senators are likely to sign up for DACA legislation, and perhaps a few will vote for allowing long-time undocumented residents to receive legal status of some sort. Notwithstanding, a blanket amnesty appears highly implausible. Not even the Democrats are likely to offer such largess.

More likely, any amnesty will cover between two and six million people. That is what activists like Hincapié and Praeli are advocating as a practical matter: an important but ultimately incomplete win. By implication, however, 5-8 million undocumented residents will remain just that. And not for a year or two, but given the difficulty with which the US Congress births immigration legislation, for a generation or more. By framing the issue in partisan terms, the Biden administration's acolytes are guaranteeing that the suffering of millions of undocumented residents will persist for decades to come. Worse than that, the horrors of illegal crossing into the US will remain, as will exploitation of migrants by US employers. And many Americans will resent, indeed hate, those granted -- and granting -- amnesty and continue to look down upon Mexicans and Central Americans as, to use Trump's words, "bringing drugs, crime and rapists" to the US. If the black market is allowed to persist, these notions will thrive, and they will have some basis in reality, for black markets around the world inevitably bring crime in other forms.

Nor does it solve matters which will be on President Biden's desk early Thursday morning. ABC News reports that a migrant caravan 7500 strong is heading through Guatemala towards the Mexican, and ultimately US, border. Sooner or later, they will force the president's hand. Is the border now open to all comers? Or will President Biden resort to some part of the Trump playbook to keep the migrants out? Well-meaning activists will do nothing but make these crowds larger and more frequent.

Next week's presidential agenda item

On the other hand, the prospect of a market-based solution would disband this group in short order. These migrants are pushing forward because they need work and there is no legal means for them to enter the US for jobs open and waiting for them. Provide a legal means of entry -- at a market price -- and the need for caravans disappears because Central Americans can work in the US whenever they like. Rather than using volume constraints, which the soldiers in the picture literally embody, the US would be using the price constraints which create order, peace and stability in markets across the globe.

President Biden has called for unity and national healing. I take him at his word and believe this reflects his intentions. Nevertheless, the default setting in Congress -- and perhaps throughout the electorate -- is narrow-minded partisanship. If we are to successfully navigate contentious issues like illegal immigration, the Biden administration will require wider vision, one which considers not only the liberal, but also the conservative, perspective. In illegal immigration, as with a number of other policy topics, both liberals and conservatives need a law which serves the range of ideological interests better than the incumbent solution. This in turn requires greater sophistication in economic and stakeholder analysis, strategy, structuring and communication. Activists have their role, but passing comprehensive immigration reform will require more than that.

US Southwest Border Oct. 2020: The Surge Continues

For the month of October, US Customs and Border Protection reported 66,337 apprehensions at the US unsecured southwest border. This is 12,000 higher than the previous month and the highest for October since 2005. For context, October's apprehensions averaged twice the level for the month during the Obama years.

The dynamics here once again demonstrate the difficulty of trying to address black markets -- including the black market in migrant labor -- with an enforcement-based approach. I have written earlier of the 'whack-a-mole' nature of black markets. This is but another example, in this case driven by a change in enforcement policy. In March, the Trump administration issued a directive allowing Border Patrol to "swiftly expel migrants they consider health risks to their home country or their last transit country (in this case Mexico)," as Pew Research put it. Border Patrol might reasonably deem pretty much all illegal crossers as public health risks and briskly deposit them on the far side of the Mexico border. After a nice lunch and a rest break, these same migrants could take another crack at the border. Hence the swift rise in apprehensions of Mexican men. Whack-a-mole, indeed.

As we wrote last time, this situation looks to deteriorate until, at a minimum, a vaccine is made available to Border Patrol personnel, and possibly until a vaccine is made available to border crossers more generally (ironically). In any event, the numbers suggest the border problem will continue to worsen as long as the current 'catch-and-boot' regime lasts, possibly through Q1 2021. If so, the apprehension numbers in the December to March period could once again be eye-popping and a policy priority -- or at least a policy headache -- for the incoming Biden administration.

*****

The US border enforcement system is often described as dysfunctional, but it is in fact functioning just as specified. Rather, the specification is dysfunctional. But then why not change it?

Both left and right are stuck in an emotional mindset. On the left (note, on the left), CATO and GMU tend to see migrants as poor people requiring our help, and therefore, the goal of US policy is to be 'nice' to undocumented immigrants. The US should provide such migrants all sorts of support and certainly better-than-market terms.

On the right, undocumented immigrants are sometimes treated as barely human and entirely criminal, and thus police-style enforcement is called for.

In a market-based approach, such migrants are treated as regular people, intrinsically neither better nor worse than the rest of us. And like the rest of us, they need to make difficult trade-offs in life decisions, but are assumed -- even though they may be less educated-- as capable of making their own way. Such migrants are considered to be simply following economic opportunity and the hope for a better life. We make no assumptions about their moral character other than to note that they will play by the rules as enforced on the field, not as recorded in law or regulation.

The high conservative perspective therefore seeks to create order, not niceness, but at the same time rejects bullying and hatred. Order means safety, permission, propriety, conformity and compensation. Order, by extension, makes bullying and hatred not only unacceptable, but unnecessary, because it eliminates the principal causes of such hatred, notably illegal behavior. All this, however, must occur within the framework of constrained sovereignty. A blanket closure of the unsecured southwest border has proved and will always be impossible. However, a model which channels migrant flows using a market framework will work and produce outcomes acceptable to most conservatives, including closing the unsecured southwest border to illegal immigration.

​The challenges are not principally technical. We understand the dynamics of and fixes for black markets, and we have all the technology and technocratic skill to create an orderly border market. The challenges, instead, are in the heads of the think tank analysts​ who are captive to preconceptions about the nature of Latin American migrants, that they must either be coddled as wards of the state or prosecuted as criminals to be tossed in jail or deported. We see a third way. In a market-based system, we treat migrants as everyday people looking for a better life and willing to play by the rules if the incentives and processes are properly structured.

Demographics, Think Tanks and Immigration Policy

The prospect of a Biden administration has begun to lubricate the policy wheels at the various think tanks. This past week, David Bier of the CATO Institute laid out 52 reforms for the US immigration system. David is possibly the most sensible analyst in the immigration sphere and his proposed policies establish the benchmark by which other alternatives may be judged. Most of CATO's views are long-held, but they are worth reviewing for those readers not familiar with them.

I have been personally surprised by the strength of the right in the recent election. Moreover, I think Republicans have solid prospects to hold the two Senate seats in Georgia and therefore a majority in the Senate. By implication, CIS and FAIR -- not CATO -- look to be the winners of this election. CATO will need a tailwind if it hopes to see a meaningful share of its program implemented.

Demographics might provide the needed push.

The US Census Bureau updated its US population estimates this past week; econ blog Calculated Risk provides an analysis of the numbers well worth reading. In essence, in 2017 the Census Bureau over-estimated the 2019 US population by over 2 million; by over 3 million in 2020 if Calculated Risks' estimates prove correct. A miss of 2-3 million people over a three year stretch is huge.

An extrapolation of these trends shows the challenges ahead. A 'naive' regression analysis suggests that the US will face the now well-known European and Japanese problems of depopulation by the end of the decade. From 2030, the entirety of US net population growth will depend on immigration if family policy does not change otherwise.

​This will put both CATO and CIS on the horns of a dilemma. If individuals are choosing not to have children and that leads to depopulation, well, that's ok from the libertarian perspective. If depopulation is acceptable, however, then the patently visible, emerging case for higher immigration is potentially weaker.

By contrast, ​CIS and FAIR were founded upon the premise that over-population is a problem. Nevertheless, the data says that in the US, as in other advanced countries, the problem -- at least from the conservative perspective -- will soon be depopulation. And as ever in these matters, Hungary's Prime Minister Victor Orban foreshadows the associated politics with his 'procreation, not immigration' policy. This may be on the agenda in the US as soon as 2024, and probably not later that 2028. Where will CIS and FAIR stand then?

Last week's election demonstrated that nearly half of US voters are prepared to challenge traditional assumptions about left and right and beliefs about the legitimacy of democratic traditions and institutions. Demographic trends suggest that accepted notions of left and right will continue to be churned. In all this, paradoxically, social conservatives promise to be the radical force, even as fiscal conservatives and progressives fight to preserve the status quo.

Conservatives, Cannabis and Illegal Immigration

Marijuana legalization and market-based visas share common roots. Both seek to end a black market and replace it with a legalize-and-tax structure -- but not because its proponents are necessarily fans of either recreational drugs or immigration. Rather, the conviction stems from both theory and practice: black markets create worse side effects than the problem they are ostensibly designed to address. Prohibition created Al Capone. The war on drugs is responsible for half of the violent crime rate in US inner cities and perhaps two-thirds of homicides in Mexico. It is not a minor issue or inconvenience: black markets and related enforcement literally determine the culture and economic prospects of communities. Ending a black market with a legalize-and-tax policy will create materially better policy outcomes than persisting with ever greater enforcement efforts inevitably doomed to failure.

Marijuana legalization may be showing a path forward, as it is gradually gaining traction with conservatives. Bloomberg notes that "initiatives on the ballot in a handful of conservative states show Republicans are increasingly on board with legalization as well -- perhaps paving the way for an end to federal prohibition, no matter who controls Washington."

Piecemeal legislation has demonstrated, however imperfectly, that legalizing pot is not the end of the world. “People are just much less afraid of marijuana than they used to be,” said John Fanburg, co-chair of the cannabis practice at a New Jersey-based law firm, as he was quoted by Bloomberg.

Perhaps we will eventually arrive at similar place for a market-based approach to illegal immigration, one which accepts that fighting against titanic economic forces seeking to arbitrage wage differentials across the Rio Grande is pointless. Rather, migrants should pay the market value for the right to work in the US. In doing so, we can close the unsecured southwest border to illegal immigration while limiting the migrant headcount, create order in our own communities, and push migrant gross wages up to prevailing rates to protect domestic workers. The average American gets this. Perhaps at some point in the future, the dialogue on illegal immigration in professional circles will also turn to the traditional, proven remedies for ending black markets, including the black market in migrant labor. Conservatives' gradual acceptance of marijuana legalization shows that minds can be changed over time.