The Road to Dubai - New York Times
The New York Times

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.

Postd by Miriam Vieni