I haven't written anything meaningful on this thing in a long time but I wanted to write about a few things. I am still in Bogotá and feeling much better. I even went out last night. This is a significant improvement since Tuesday, which I spent in a Bogotá emergency room. Any day about which you can say, 'I spent 13 hours in a Bogotá Emergency Room´is a bad day. Tuesday was not bad because I was sick, though I was quite sick with the Malaria making me insane and dizzy, but the day was really ruined by all of the blood and needles and waiting that were involved. Those are three of my least favorite things in the world (and if you add cockroaches, I would go ahead and say they are my four least favorite things on earth). I sent Anisha, who, again, shares all of my fears, a pretty graphic e-mail about it. I don't care to relieve the memory so I'll copy and paste:
I went to the hospital to get blood tests and they took a vile of blood with a needle and did a test for hemoparasites which came back negative (big surprise since malaria is a hemoparasite). An hour later a doctor told me to go to the emergency room. So i waited in a Bogotá emergency room for five hours and before I saw a doctor who said, 'you seem like you have malaria, let's do that test again.' And then we're going to do another test to see if you have other tropical illnesses like dengue. And so they took TWO MORE viles of BLOOD with BIGGER viles and LONGER NEEDLES. And THEN both of those tests were negative, which indicated that I am fine, except that I was clearly not. SO THEN they put an IV in. I never realized how good american hospitals are until I got an IV in a colombian hospital.
The first thing you need to understand is that I have ENORMOUS veins. The second thing you need to understand is that I have a pathological fear of hypodermic needles. I've had IVs twice before when I had surgery, and it was EASY for them to stick the thing in my HUGE VEINS. But this nurse messed up FOUR TIMES putting an HUGE needle in me but missed the vein. (I'm shaking just writing about it). Thank god the FIFTH time she got it, but even when the needle was in, it was the worst IV ever. I had to spend THREE HOURS with a HUGE NEEDLE in my hand that was taped very badly and it made me shake and it was like living the squeemishness that you have when they draw blood and you don't want to look, except it was like doing that for THREE HOURS. IT WAS TORTURE. THEN THEY WANTED TO KEEP ME OVER NIGHT BECASE IT WAS LATE.
I said 'NO!' 'NO WAY AM I STAYING HERE SIMPLY BECAUSE IT'S LATE. TAKE THIS BIG NEEDLE OUT OF ME AND LET ME GO'. and THEY WOULDN'T TAKE THE NEEDLE OUT OF ME. AND I WAS MAD AND SQEEMISH and at one point I just started laughing hysterically and that hurt like hell because every time I moved I was shaking the needle in my vein and that made me squeem more and that hurt moree. IT was a vicious cycle or a Catch-22. I hated it.
So the nutrients they were putting into me drained after an hour of needle-in-hand terror, but I waited through TWO MORE HOURS before I removed the IV MYSELF. And then I left the hospital after quite the bureaucratic ordeal, an argument with a nurse, signing papers that said I was leaving despite their reccomendation not to (becase it was late), and paying my 30 dollar bill.
The ER was really sad. The waiting room was about 200 mothers crying about the condition of their babies and some people with very serious problems. I felt pretty terrible but the realization that there was a good chance that some of the children in the room would not live until tomorrow made me feel a lot... worse. At about 9 PM the gun shot wounds started to come in. While gunshot happen everywhere, I was shocked by how quotidian it was here. On the form you fill out explaining why you are in the ER you can check a box to indicate that you were hurt in a terrorist attack.
So here is what the doctor's opinion on what happened to me is: I had malaria that I must have contracted the day I got to Leticia and I treated it really early (saturday night) with anti-hemoparastics which explain why it doesn't show up on blood tests. There is no other explanation of the symptoms of the fact that the anti-hemoparastics work so well (unless it was Dengue, which has similar symptoms and is also a blood parastie). Because it was treated early, I am going to be fine. The intravenious nutrients, while painfull and I certailny would not have admitted it at the time, did help. I feel fine now.
This is the last time I want to write about my health.
In other news, I gave a lecture last thursday (moved because of the night I spent in the hospital). I talked about immigration, as this is in the news in the US and concerns Colombians in no small way (Miami being the third largest Colombian city in the world).
I don't know which reform I do support with respect to immigration law, but I can criticize all of them. From what I can tell, the problem people in American have is a problem with ILLEGAL immigrants, who number 11.5 million and account for 4.5% of the labor force. I am stealing a summary from Gary Becker here, But it seems there are six different approachs one could take toward the problem of illegal immigration. It's important to distinguish these proposals from ways to address the IMMIGRATION issue. As long as the US is not legally open to everyone, there will be people illegally entering. These problems propose to deal only with them :
1) The US can continue its current policy of beefing up border security, and sending apprehended illegal immigrants back to Mexico, or wherever else they came from. Meanwhile undocumented workers who are not caught remain eligible for various kinds of health care, schooling for their children, and other benefits.
2) Illegal immigration could be discouraged by giving apprehended aliens jail sentences before sending them back to where they came from.
3) Employers could be punished for hiring illegal workers.
4) Illegal immigrants could be allowed to come, but would be ineligible for government transfers, such as health benefits or schooling (read: legally codified second-class citizenship)
5) Illegal immigrants could come and be eligible for all the public benefits available to other residents.
6) Illegal immigrants could be allowed to remain for a certain number of years if they have jobs, but then they would have to go back after their time expires, whether or not they are still employed.
Becuase I think none of these solutions 'work' (what it means to 'work' I don't know), I propose that the only thing that will reduce the number of illegal immigrants is that the United States complete the annexation of Mexico. By this I mean to say, nothing that is feasible will reduce the number of illegal immigrants:
1) The present policy of sending back apprehended aliens is not effective in deterring illegal immigration since many of them simply turn around and cross the border again. Various studies show that it is easy with enough persistence to come across from Mexico, guided by "coyotes" who do not charge very much relative to what immigrants would be willing to pay. I doubt whether the recent tightening up of border patrols will do much to raise the cost of crossing illegally. It is commong to read about people putting themselves in shipping containers for months at a time and risking their lives with very dangerous ploys to get into the country. This makes me believe that it is, on the margin, very costly to prevent one more person from entering the country, and ery unlikely that, once sent back, they will not try again.
2) It's both unpopular and cruel to give significant jail sentences to illegal aliens whose only crime is that they want to come to the US, usually seeking higher wages and better working consditions. Without such a punishment, immigrants will continue to cross the border in large numbers, attracted to earning that are greater by a factor between five and ten. Since a punishment is the only thing that really could deter them, and since that punishment seems both cruel and costly (locking someone up in a country before making them leave), illegal immigration is going to be a reality so long as the US remains a realtively better place to live.
3) The 1986 immigration law barred employers from hiring illegal immigrants, but it did not help employers determine when potential employees had forged documents. It is cheap to buy forged social security cards, green cards, and anything else that would certify an employee is in this country legally. Unless that defect is overcome, and it will not be easy, the courts will continue to be reluctant to punish employers for hiring workers who turn out to be here illegally.
4) As for allowing immigrants to come and work but denying them government services like education and mandatory legal protection, I think this would be a perhaps acceptable solution if I would convinced that immigrants were a costly burden in terms of the services they use, but when you consider that most of them pay social security tax and are ineligiable for benefits, they are probably a net wash (though the effect is disproportionate, becuase education is the burden of local governments and social security taxes are paid to the federal government). Given what I think is a pretty negligable cost, I don't think it is in any way acceptable to have second class citizens who cannot attend public schools and are not afforded mandatory legal protections on the basis that they were born south of the Rio Grande. This is the kind of solution that is easy to talk about before the fact, but when there are groups of children not in school and sick people unable to go to hospitals, we realize it was not a very desireable solution. That said, even if we did this there are plenty of people who would be happier in the United States without government services than in their native countries.
6) Finally the president's proposal. In 2006 he said:
"I propose a new temporary worker program that will match willing foreign workers with willing American employers, when no Americans can be found to fill the jobs. All who participate in the temporary worker program must have a job, or, if not living in the United States, a job offer. The legal status granted by this program will last three years and will be renewable -- but it will have an end. Participants who do not remain employed, who do not follow the rules of the program, or who break the law will not be eligible for continued participation and will be required to return to their home.
Employers who extend job offers must first make every reasonable effort to find an American worker for the job at hand. Employers must not hire undocumented aliens or temporary workers whose legal status has expired. All participants will be issued a temporary worker card that will allow them to travel back and forth between their home and the United States without fear of being denied re-entry into our country.
This program expects temporary workers to return permanently to their home countries after their period of work in the United States has expired. Some temporary workers will make the decision to pursue American citizenship. They will not be given unfair advantage over people who have followed legal procedures from the start. I oppose amnesty, placing undocumented workers on the automatic path to citizenship. Granting amnesty encourages the violation of our laws, and perpetuates illegal immigration. America is a welcoming country, but citizenship must not be the automatic reward for violating the laws of America.'
If a good idea is an idea that solves the problems it seeks to solve, then this is not a good idea. You cannot solve the problem of illegal immigration by calling them legal immigrants for six years. That creates a bigger problem for a different president. There is no reason to believe someone who is illegal today will willfully leave after working in the US for six years. I'll go a bit further and say that there is every reason to believe that they won't. I can imagine the news stories in six years about the millions of well established, hard working, property owning families being forced to leave the country where their children are in school and leave the job they have been performing for the last six years.
Second, a long term policy of occasionally affording legal status to illegal immigrants only makes illegal immigration more attractive. Making illegal immigration exceptionally attractive is not heplful to someone who wants fewer illegal immigrants.
Assume for a moment we are sure that we want fewer illegal immigrants (I don't think this is at all clear): short of annexing Mexico, there are two things that will reduce the number of illegal imigrants in the country: making illegal immigration harder and making legal immigration from the home-countries of most illegal immigrants easier . I mentioned why I don't think making illegal immigration harder is going to be very worthwile so we are left with making immigration easier, which I personally support.
It is a usefull question then, what the cost to the United States is of allowing one more immigrant in legally? I believe it is a net gain becuase I believe that the bigger and freer the market for labor is the more likely it is that labor will be allocated to its most productive location. Why should anyone care if labor is allocated to its most productive location? Becuase this is what makes the economy effecient, or producing the most output with the least effort. It makes the most of everyone's skils. It is the same reason we like the division of labor in the first place, and don't like being self-sufficient in the absence of markets. In short, it is why people like markets.
But since it makes the most of everyone's skills, free flow of labor is unattractive to people who lack skills but live in places where skills are common. There are many Mexicans who would like to work in the US becuase it pays better (because the work is more productive) and there are many employers who would like to hire them at that higher wage. This is a mutually agreeable transaction. Unfortunately, there are also a lot of people who perform jobs that require little skill and that a lot of people can do. These people had the good fortune of being born in the United States where low skill labor pays relatively well (Now, I'm not saying these people are lucky people, they are generally poor high school dropouts in the US with no shortage of other problems aside from their lack of human capital).
So the problem is, while immigration is a net gain, there are people who immediately loose. This is the same problem faced when reduced tariffs allow the outsourcing of jobs. I also believe strongly that outsorcing or globalization are in the general long-term interest of society, but the same group of people will feel the burn. But it is not obvious that even the least skilled native-born Americans loose.
There are many who say that immigrants steal american jobs. This succumbs to the falacy that there are a fixed number of jobs in the economy. Immediately, the argument seems to make sense (And people like the Minutemen love to explain it in economic terms!): You have more people willing to perform a job so the price of labor goes down ('Supply and Demand!' they exclaim) and Americans are unwilling to work for low wages so immigrants do the work.
But if the price of labor goes down, opperating any business becomes more profitable. If I own a restaurant and my labor costs are, say, cut in half and let's say labor is half of my total cost, my resturant (and all other potential restaurants) could be as much as 25% more profitable (not a small 'raise'). The raise makes me or other investors want to build more restaurants or farms or Home Depots or whatever. What anti-immigration advocates don't realize is that the wage depends not only on the supply of labor but on the capital stock. Of course, this takes time. So you should have a lower wage, yes, but also more restaurants, and if you have a lower wage still, restaurant food or farm products or consumer services that employ immigrants will be cheaper, which means people will have money left over to spend elsewhere, creating new opportunities for employment and increasing the demand for labor. This is progress, and the theory would predict that, in the long run, there is no effect on the wages of native born workers, but that there are more good produced. And if there is complementarity between their jobs, both groups could expect to earn more because the total productivity of the workforce would improve.
The total effect of immigration on the wages of a native worker depends on the capital stock and the substutability of labor. If you have a college degree, immigration is probably not a threat to you since it tends to be low skilled. Immigrants compose 11 percent of the total work force but 24 percent of the workforce of high school dropouts. There is a greater degree of substutability, so these are the peole who stand to loose. (But I suspect the degree of substability is still small, based on what I imagine is a pretty strong preference for native born workers, all else equal).
One way to test this is to look at cities with a large percentage of immigrants and compare them with cities with few immigrants. According to David Card, an economist at Berkeley, the relative number of immigrants doesn't make a difference in the wages, even for low skilled workers. But there is a problem with this: If it did make a difference, and wages at Wal-Mart were higher in Indianapolis than in Los Angeles because of the relative number of immigrants, the market would correct that and workers would leave LA to work in Indianapolis. There doesn't however, seem to be much evidence for this, especially since there is no obvious reason immigrants wouldn't go to where wages pay the most.
Another approach is that of George Borjas at Harvard. He tries to tease out the effect of immigration from national wage statistics. Borjas divides people into categories, according to their education and work experience. He assumes that workers of different types are not easily substitutable for each other, but that immigrants and natives within each category are (strong assumptions, I think). By comparing wage trends in categories with lots of immigrants against those in groups with only a few, he derives an estimate of immigration's effect.
In English: using regression analysis, he estimatees the value of a year of education and how well it explains (predicts) income, assuming years of education effect income linearly (each extra year increases income by the same amount). He can therefore estimate how much of a category's wealth is explained by their education level, but sees that education alone does not explain the difference in income. He observes that high school dropouts and people with no college experience earn less than more educated people, but they earn TOO MUCH less. Then he factors in the percentage of immigrants in each group and concludes that the percentage of immigrants in each group negatively affects wage even when holding for education (This was much harder to explain in spanish!).
His headline conclusion is that, between 1980 and 2000, immigration caused average wages to be some 3% lower than they would otherwise have been. Wages for high-school drop-outs were dragged down by around 8%.
There are a couple problems with this study too. He assumed that workers within the same category were perfectly substutable. That is, he assumed the only thing that explains the difference between the wage of a native worker and an immigrant are education levels, an assumption that would overstate the effect of immigration.
The much larger problem is that these numbers do not take into accunt the re-allocation of capital. He did not consider that people invest and build new factories because of immigration, and thus immigration's effect on wages could only be negative. The number of jobs increased because of immigration, which he ignores. When he adjusts for this, the effect of the overall average wages is zero and the effect on high school dropouts is less than five percent.
There is a tendency to want to have an bianary opinion: Immigration is either good or bad for America. But it's hard to talk about what's good for a nation of 300 million people. At the end of the day, I believe more immigration is not very bad for anyone and for most people it is are very good (a more efficient economy produces more stuff with greater ease). This kind of cost-benefit analysis does not take into account the real winners from immigration: immigrants. When I consider how much better many peoples' lives are because they have come to the United States it becomes very clear to me that in general there are not engouh legal immigrants in the United Satates. I think in general the conversation about immigration in the US ignores the effect on immigrants, which if we are concerned about the general welfare of the world, matters very much. The optimal number of immigrants in the United States depends on the extent to which they increase productivity, decrease wages, increase purchasing power, but also on the amount by which their own lives improve.
For this reason, I believe we probably have too many immigrants from Mexico and too few from Sudan. Assume that the first people who will break the law and risk their lives to get into the United States are the most desperate, or the people with the worst opportunities outside the US (this is partly why we have more illegal immigrants from poor countries than rich countries, it's also much easier to immigrate). Then the easier it is to immigrate from a nation, the less desperate the immigrants from that nation will be. Becuase it is easier to be an illegal immigrant from Mexico than any other country, the marginal immigrant (the person indifferent between illgealy immigrating and staying in Mexico) is probably in a much better situation than the marginal illegal immigrant in Sudan, who probably takes a much more serious risk when he tries to illegally immigrate.
That said, because I think the marginal Mexican immigrant is still improving his or her situation grately and is not a burden on society, I think more immigration from every nation is ideal. But it is a problem that, becuase illegal immigration (as opposed to legal immigration) is a common means of immigration into the US, people from Central America have an undeserved advantage over immigrants from Africa, Asia, or Eastern Europe. If we legalized more immigration we could make better decisions about who can come to the United States (that is not to say that allowing more Sudanese in will reduce illegal immigration from Mexico!).
There is something that should be said about the burden immigrants impose on society. The New York Times ran a story that said immigrants, even illiegal immigrants, do not commit any more crime than native born citizens. The Minutemen criticize this statistic citing a the fact that the latino population has an incarceration rate much higher than the anglo population. I think this is profound racism in practice: when discussing immigration, we are not considering an anglo nation versus a latin population. The native-born, legal residents of this country are 15% latino and 15% black and 4% asian. They have ignored 34% of the country because they are not white. This supports my opinion that the minutemen are not motivated by rational economic motives but are a bunch of racists.
I don't know if i believe that illegal immigrants commit less crime or more crime. On the one hand, as an illegal immigrant, the cost of commiting a crime is high becuase it's very likely that you will be deported for even misdemeanors. On the other hand, when you are an illegal immigrant, you have no legal recourse in settling disputes and become an ideal target for crime, thus it makes sense that they would live in societies where crime is more abundant. One thing I am sure of, though, is that legal immigrants commit significantly fewer crimes than legal residents since the stakes are high and they do have access to the law and protection from the police.
If you believe that the only way to stop illegal immigration is to develop the nations from which illegal immigrants emigrate, it is important that immigration (legal and illegal) has a negative effect on the countries which immigrants leave. Immigrants, legal and illegal, tend to be exceptional. The type of person who leaves the land where he was born is not an ordinary person, but someone willing to take risks and accept large changes in their life. They are the sort of person a developing country like Mexico needs in their economy, becuase they tend to be entrupenurial. I remember hearing Carlos Salinas (former Mexican President/Caudillo) speak in Chicago; he finished his speach with a very moving appeal for Mexican emigrants to consider coming back.
This is why you see so many immigrants driving taxis or owning small businesses in big citties relative to their share of the population. There is no shortage of people able to drive a cab, but there is a shortage of people willing to take out at huge loan and invest $200k in a taxi medallion. The reason you don't see the same percentage of native born citizens driving taxis and building restaurants or their own grocery stores is because most people with that kind of work ethic or ambition who were born in the United States got an education and does something else. I have no trouble believing that most of the Cab drivers in Chicago would not be driving cabs if they had been giving a good public education in America. In countries where an education is not allocated to those most willing to work for it, (but allocated by something arbitrary like parent's wealth) you find abmitious people with little formal training. In my opinion, immigrants are exactly the sort of people most Americnas should want in their country and the fact that it is a nation composed almost wholly of immigrants explains why it is the most productive economy in the world.
Finally, I want to say something unrelated to economic effeciency, and that is that people born south of the 42 parallel and north of the Rio Grande river don't, for any reason I can explain, deserve more based on that merrit. Even the poorest people in the United States live with standards of health, security, and comfort unknown to more than a billion people in the world. (the second income percentile, the second poorest 3 million Americans, have a life expectancy that is at least fifteen years longer than some one billion people in the world). I simply cannot think of an ethical reason for disallowing desperate people who want to work in this country from doing so. I know a lot of people regard culture as being at risk when immigration is discussed. I do not know how I feel about such arguments, but maybe I'll think about it and write more later.
I also wanted to mention a solution that a lot of economists find attractive and that is the market solution, selling immigration rights in the U.S. If you had effecient capital markets, this would ensure that spots in the States were rationed to those most willing to work or who wanted to enter the most. These immigrants would be younger than older, as a young adult would have more years of a higher income to gain from the purchase. They would also tend to be more skillful workers, as these workers tend to gain the most from immigrating (read: doctors driving taxis in Iran). People who intended to leave the country after a few years would be discouraged.
If the government could pick a number of immigrants they wanted, they would simply fix the price so that the market cleared at that quantity. Say the U.S. charged sixty thousand dollars for the right to immigrate. If we assumed people are not capital constrained, the pay-back period for most immigrants of a sixty thousand dollar or higher entrance fee would generally be short-less than the usual pay-back period of a typical university education. For example, if skilled individuals could earn $10 an hour in a country like India or Iran, and $40 an hour in the United States, by moving they would gain $60,000 a year (no taxes and assuming 2000 hours of work per year). The higher earnings from immigrating would cover the fee in about a year. It would take not much more than four years to earn this fee even for an unskilled person who earns $1 an hour in his native country, and could earn $8 an hour in the U.S. On top of that, if one million people immigrate in a year, the U.S. will see 50 billion dollars in revenue.
I don't know how I feel about this. For one thing, I believe most people are rather capital constrained and the apparent fairness would be lost. Secondly, I think other constraints, like refugee status, make a more selective program desirable.
