Imagine that a new U.S. president, different from the one we just elected, set out to maximize the number of illegal Mexican immigrants. Maybe he or she saw electoral advantage in this, or maybe just thought it was the right thing to do. But how to achieve that end? Imagine also that I was called into the Oval Office to give advice.
I would start by recommending an enormous new program of fiscal stimulus and construction. Let’s rebuild our roads, bridges and power grids, and put up some new infrastructure as well, including perhaps an unfinished border wall. That will require a lot of labor, and Mexican labor, including that of the illegal variety, is common in the construction business. The financial crisis, and the resulting freeze-up in the housing market, was a major reason why Mexican migration to the United States went into reverse, so a new building program might counteract that trend.
But wait, that’s not enough. When state and local governments hire people to perform labor, they insist on some pretty serious documentation of legal employment status. The federal government does the same. So the stimulus plan will have to be designed to evade such enforcement possibilities.
How? Well, profit-seeking private contractors are less concerned with the legal status of their workers, provided they have some kind of plausible deniability. They’ll sometimes hire illegal immigrants on the basis of falsified papers, or seek out contractors who don’t even ask for documentation. In other words, we’ll have to run the stimulus program through private contractors to get the maximum inflow.
By the way, infrastructure programs will help illegals in other ways, more than would citizen-focused Social Security or Medicare benefits, for example. Illegal immigrants use roads and mass transit and electricity and other forms of infrastructure all the time. And they won’t suffer much if subsidies for health insurance under Obamacare are reallocated to construction because it was so hard for them to get those subsidies in the first place.
Fiscal stimulus, however, is not enough. Why not try to wreck the Mexican economy by developing an adversarial relationship? Let’s criticize or even humiliate some national leaders. Then we could renegotiate the North American Free Trade Agreement, or at least threaten to do so, to scare away foreign investment from Mexico and lower jobs and wages there. Many more Mexicans then would probably cross the border to work illegally in the U.S.
Bullying also could talk down the peso, by stating or insinuating that Mexico won’t be getting such a “good deal” any more. A weaker peso would bring more Mexicans into the U.S. because the desire to send remittances back home is a major reason why many Mexican workers move north. If a given dollar is worth more pesos, Mexicans who love their families will have that much more reason to cross the border and work, legally or illegally.
How about corporate tax reform? The listed U.S. corporate income tax rate of 35 percent does seem high relative to other rich countries, and it encourages American capital to go abroad or stay abroad. A more reasonable corporate rate would boost American investment at home — supporting, if only indirectly, the demand for illegal Mexican labor.
Income tax cuts might help as well. Lower rates would probably encourage people to reenter the workforce. Some of them will need maids and nannies to take care of their children, and that hiring may pull in more illegal immigrants from Mexico. Since it’s often the higher-income mothers who make these hires, we need to concentrate the tax cuts along the upper part of the income distribution.
Most of all, we need to make America great again. Why expect Mexican immigrants to come to a country that is crummy rather than wonderful?
After figuring out this all out, I suddenly realized that my advice is not needed. The president-elect we have, whether he knows it or not, already has figured out how to maximize the number of illegal Mexican immigrants.
Who ever said Donald Trump can’t solve a problem?
- Cowen is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include “Average Is Over: Powering America Beyond the Age of the Great Stagnation.”