Immigration and the Labor Market: Why Building Walls and Yelling at Children Just Won’t Work

Let’s start with two beliefs that one cannot logically hold at the same time but which many people do anyway:

  1. Belief One: America should be a capitalist nation in which government does not interfere with the free-market system
  2. Belief Two: The government needs to seal off the borders to prevent illegal immigration.

These beliefs are logically incompatible because it is the free market that drives immigration. As long as employers in the United States pay wages for agricultural and domestic work that are much higher than they are in other countries, but substantially lower than most Americans are willing to work for, then there will be immigration.

If American policy does not allow enough immigration to meet the demand for labor, there will be illegal immigration, with or without walls. That’s how markets work.

In a functioning political climate, immigration would be kept in check by the market. Our immigration policy would — through work visas or day-worker permits or some other mechanism — make sure that we allowed enough workers in to the country to take all of the available jobs.

Those who came in illegally would not be able to stay for very long since there would be no way for them to earn a living.

If American policy does not allow enough immigration to meet the demand for labor, there will be illegal immigration.
Michael Austin
In a dysfunctional political climate, however, the power of the state must be brought in to oppose the power of the marketplace. Walls must be built, borders must be patrolled, force must be used. And, in the meantime, crops must rot in the fields and low-paying jobs must go unfilled because the national labor force is not willing or able to do all of the jobs that need doing.

We are in a dysfunctional political climate. Our immigration policies make no attempt to determine how many people we actually should allow in the country legally to meet the market demand for labor. Rather, they seek somehow to simultaneously placate the sentiments of those on the left and the reflexive nativism of the loudest and angriest voices on the right.

Though pretty much everybody in Congress agrees that we need to reform our immigration system, it has become politically impossible to do so.

Republicans who speak out even minimally for immigration reform, such as former House Majority Leader Eric Cantor, leave their right flank open to a potentially career-ending primary challenge. Those who try to act unilaterally on the issue, such as President Obama, risk exceeding their constitutional power and being overturned by the courts.

So people are yelling a lot about walls. And they are taking to the streets to harass the children of immigrants, yelling the same sorts of abusive epithets at these children that people 60 years ago yelled at African-American children who attended integrated schools.

Americans are acting badly, and, while they shout at the most innocent victims of a bad set of policies, the nation is experiencing the worst agricultural labor shortage in its 230 year history.

The things that we are experiencing now — the violence, the unrest, and the labor shortages — are predictable side effects of trying to use the power of the state to reverse the natural currents of the marketplace. And the greatest irony of all is that the people who are doing most of the shouting are the same ones who are supposed to believe in the unparalleled awesomeness of a free market system.