[Mb-civic] The Road to Dubai By PAUL KRUGMAN

[Michael Butler]

The New York Times
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March 31, 2006
Op-Ed Columnist
The Road to Dubai
By PAUL KRUGMAN

For now, at least, the immigration issue is mainly hurting the Republican
Party, which is divided between those who want to expel immigrants and those
who want to exploit them. The only thing the two factions seem to have in
common is mean-spiritedness.

But immigration remains a difficult issue for liberals. Let me say a bit
more about the subject of my last column, the uncomfortable economics of
immigration, then turn to what really worries me: the political implications
of a large nonvoting work force.

About the economics: the crucial divide isn't between legal and illegal
immigration; it's between high-skilled and low-skilled immigrants.
High-skilled immigrants ‹ say, software engineers from South Asia ‹ are, by
any criterion I can think of, good for America. But the effects of
low-skilled immigration are mixed at best.

True, there are large benefits for the low-skilled migrants, who may find
even a minimum-wage U.S. job a big step up. Immigration also raises the
total income of native-born Americans, although reasonable estimates suggest
that these gains amount to no more than a fraction of 1 percent.

But low-skilled immigration depresses the wages of less-skilled native-born
Americans. And immigrants increase the demand for public services, including
health care and education. Estimates indicate that low-skilled immigrants
don't pay enough in taxes to cover the cost of providing these services.

All of these effects, except for the gains for the immigrants themselves,
are fairly small. Some of my friends say that's the point I should stress:
immigration is a wonderful thing for the immigrants, and claims that
immigrants are undermining American workers and taxpayers are hugely
overblown ‹ end of story.

But it's important to be intellectually honest, even when it hurts.
Moreover, what really worries me isn't the narrow economics ‹ it's the
political economy, the effects of having a disenfranchised labor force.

Imagine, for a moment, a future in which America becomes like Kuwait or
Dubai, a country where a large fraction of the work force consists of
illegal immigrants or foreigners on temporary visas ‹ and neither group has
the right to vote. Surely this would be a betrayal of our democratic ideals,
of government of the people, by the people. Moreover, a political system in
which many workers don't count is likely to ignore workers' interests: it's
likely to have a weak social safety net and to spend too little on services
like health care and education.

This isn't idle speculation. Countries with high immigration tend, other
things equal, to have less generous welfare states than those with low
immigration. U.S. cities with ethnically diverse populations ‹ often the
result of immigration ‹ tend to have worse public services than those with
more homogeneous populations.

Of course, America isn't Dubai. But we're moving in that direction. As of
2002, according to the Urban Institute, 14 percent of U.S. workers, and 20
percent of low-wage workers, were immigrants. Only a third of these
immigrant workers were naturalized citizens. So we already have a large
disenfranchised work force, and it's growing rapidly. The goal of
immigration reform should be to reverse that trend.

So what do I think of the Senate Judiciary Committee's proposal, which is
derived from a plan sponsored by John McCain and Ted Kennedy? I'm all in
favor of one provision: offering those already here a possible route to
permanent residency and citizenship. Since we aren't going to deport more
than 10 million people, we need to integrate those people into our society.

But I'm puzzled by the plan to create a permanent guest-worker program, one
that would admit 400,000 more workers a year (and you know that business
interests would immediately start lobbying for an increase in that number).
Isn't institutionalizing a disenfranchised work force a big step away from
democracy?

For a hard-line economic conservative like Mr. McCain, the advantages to
employers of a cheap work force may be more important than the violation of
democratic principles. But why would someone like Mr. Kennedy go along? Is
the point to help potential immigrants, or is it to buy support from
business interests?

Either way, it's a dangerous route to go down. America's political system is
already a lot less democratic in practice than it is on paper, and creating
a permanent nonvoting working class would make things worse. The road to
Dubai may be paved with good intentions.

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