Immigration is a key policy issue heading toward the 2016 elections. so it is interesting to see how well the candidates apply economic analysis. The Wall Street Journal reports on Ohio Gov. John Kasich’s views (which are not reported on his campaign website).
Anna Louie Sussman reports that Kasich “on Sunday called for a path to legal status for undocumented immigrants in the U.S., as well as a guest worker program to meet the needs of the labor market.”
“The 12 million who are here, we ought to find out who they are,” [Kasich] said on CNN. “If they’ve been law-abiding over a period of time they ought to be legalized and they ought to be able to stay here. There are people who contribute a lot to the U.S.”
Kasich’s statement includes important ambiguities. The first is what constitutes “law-abiding over a period of time” (emphasis added). Without clarity from Kasich, his statement can mean almost anything at all. For example, few would say that an unlawful alien ought to be allowed to stay after committing murder. However, none would be allowed to stay if “law-abiding” means complying with U.S. immigration and labor law. Few would be eligible if “law-abiding” also meant no commission of identity theft.
The second ambiguity concerns what it means to “contribute a lot to the U.S.” Unlawful aliens could “contribute” very different ways, such as by paying taxes greater than the summed value of public services they utilize and benefits they receive. They also could “contribute” by supplying labor at a price US citizens and legal permanent residents are unwilling to accept.
Also, there is a key logical error here. If Kasich is correct that “we ought to find out who they are,” it must be true that we currently do not know who they are. and if we do not know who they are, we cannot know the extent to which they “contribute a lot to the U.S.” Conversely, if it is stipulated that they “ought to be able to stay here” because they “contribute a lot to the U.S.,” then it doesn’t matter “who they are.”
A reasonable inference is that the contribution to the US Kasich has in mind is to labor supply. This inference is supported by Kasich’s call for a guest worker program. The vast majority of unlawful aliens are unskilled. Elementary economics teaches that adding to the supply of unskilled labor increases the quantity of unskilled labor demanded, and decreases its price.
There are winners and losers from such a policy. Winners are those on the demand-side for unskilled labor. Losers are US citizens and permanent legal residents in the unskilled labor market.