On the Move

Humanity has always had a great migratory dimension. If it didn’t we’d still huddled in Africa.  Whether it was out of necessity, to seek economic betterment or curiosity or some combination, we have always been on the move. Yet today the idea of people changing their national location is under fire from one end of the globe to the other. Even the great melting pot, the United States, finds immigration both legal and illegal  under fire. The European Union is grappling with both internal and external migrations. Some nations such as Japan have never favored immigration. What a great time to determine what migratory policies are more likely to lead to “More”.

Throughout history a welcoming attitude towards “Strangers” seems to be associated an entity’s vibrancy and prosperity. Cross pollination of people benefited all. On the other hand those that cut themselves in self-contained entities remained stagnant backwaters. China and Japan limited contact with “barbarians” and lost their place in the upward march of mankind. Only when their leaders realized their own survival depended on a radical change of attitude did they crack open the door. Japan got the message looking down the cannon barrels of American  “black ships” and the Chinese communist party when they saw what happened to their communist brethren in the Soviet Union and Eastern Europe. Opening up to the world while still not welcoming large numbers of “strangers” among them and without institutional changes that would attract them, they used lower wages initially and copying of other People’s innovations to gain “More” for their peoples. The jury is still out whether their restrictive policies can sustain them in the future. If history is our guide the future may be dim without greater opening.

The question now is why present day migration has major political fallout? The Western World has become a magnet for multitudes of people looking for something better, but the problems and solutions vary greatly among the nations. Even though the US has a much longer history of successfully integrating immigrants than the EU, it is just as rocked politically as the EU. Strangely this comes at a time when what we call the developed world might look favorably on immigrants. These nations are either barely replacing their population as in the US or seeing actual  decline in their populations. These countries have elaborate programs to among other things take care of their aging populations that spreads the cost of these benefits between a number of younger people. We now have a lot older people supported by less and less young. In the US, social security at its inception had a ratio of 16 young supporting 1 social security recipient. Today it’s less than three. It is evident a further decline in this ratio will make this program an intolerable burden on the young. Too many old supported by too few young is a growing worldwide norm. Even China, thought to be the land of endless cheap labor, is faced with this future.

So why not open the doors to masses from areas of high birthrates to redress the balance? Given the social programs in place in the West, hordes of unskilled uneducated people not only won’t solve the problem, they add to the problems. In Europe these costs are even higher by the inability to truly integrate outsiders especially those from Moslem lands. Simply put, the early generations of low-level immigrants are a net drain on the host country’s treasury. Education, medical and welfare payments with little in the way of  offsetting tax revenue disqualify them as a solution. Business interests that favor low skilled immigrants would change their stance in  a minute if they had to bear the full cost of maintaining them.

Skilled workers present 180 degree different situation. Overwhelmingly they are a net positive. Strong contributors to the tax base, immigrants especially those with skills have proven to be entrepreneurial, forming 1 in 4 new businesses in the US. Over half (51%) of startups valued at a billion or more were started by immigrants. Obviously new and growing businesses are the ones adding employees and create the jobs of tomorrow. Immigrant or not, people with skills and a capacity to learn and continue learning aren’t the ones having employment problems. These people generally are employed full-time and among full-time employees there has been no decline in real incomes or living standards. In fact they have experienced healthy gains. The low skilled poorly educated everywhere will continue to face replacement by technology and forced to compete worldwide for a dwindling number of unskilled positions. That is why we have called for a complete revamping of our educational and training systems. Under these circumstances, adding to the problem of what to do with people with low skills is poor policy.

This brings us to the realization immigration is really a two-pronged problem. We need to limit any influx of the low skilled while putting out a big welcome mat for the skilled. Can this actually be done? Let’s look at nations with a similar past openness to immigration but are faced with the same present problems. Canada, Australia and New Zealand put the onus on employers not to hire the illegal. Hire them and you’re in big trouble. Those with skills get the welcome cards and those who aren’t better stay away because you can’t work here. Low skilled workers crossing our southern border have made it to the upper Midwest but don’t go the extra few miles to Canada even though that country has similarly advanced economy. They simply can’t be hired. They have no wall on their southern border, just control over jobs. Can this be done here? A few years ago Arizona passed a law that forced the employers to use the governments E-Verify System to check a job applicants immigration status. It resulted  in a great out-migration to other states. Even though the system wasn’t heavily used, just the threat was enough. Adopting the system or something similar nationwide would put us in line with the others resulting a similar outcome. Why come if employers lock you out?

We still would need a net in migration to balance our aging problems. We just have realize that we have to compete for and win the skilled immigrant. In this competition we have many advantages if we would just employ them. More than any other nation we educate the world’s top minds. If a foreign student completes their education here they should have a standing invitation to stay. Unless they’ve committed some heinous crime, this is a no brainer. For luring skilled from the rest of the world, we have enormous advantages. Even the skilled can be downtrodden. The political outsiders, women, minorities of all kinds including sexual orientation and victims of religious intolerance all can be attracted by our historic beacon. These people will enrich our lives and our treasury if we let them. Just as important, it will give us some leeway to bring in real if unskilled refugees. For instance in the middle east minorities from Christians s to Bahia are persecuted with no political power to change anything in an angry sea of Muslims. We still have to be true to ourselves and welcome the truly downtrodden

Once we have control over in migration, we will have to deal with those already here illegally. The cost and dislocation from rounding up an estimated 11 million people and sending them home would be a huge waste. People now unable to work would have avail themselves to evaluation in order to sustain themselves. While most see these millions as Hispanics who snuck across our southern border, the truth is that at least 40% are people who came here legally and over stayed  their visas. Many were here on H1b visas meaning that they initially had skills not provided by the locals. If we are going to have to attract foreigners with skills it just makes sense to vet those here already and if they’re a positive give them a fine and let them get on with their lives and paying taxes. You might think that is unfair to those who waited in line but the skilled in any case would now go into expedited line. The unskilled would be very restricted in any case. Remember we need the skilled and educated going forward not the other way around.

 Others may have come across our borders illegally but had or by now have gained skills. Again, why kick the very kinds of people we seek to recruit? Fine them and also let them get on with their lives. This leaves the unskilled illegals. Those that are hard-working, many with families with US citizen children, we need to see as part of our ill educated low skilled anywhere in our country, an undeveloped resource. The lawless and shiftless give us no reason to retain them and if we can send them back so much the better. We suspect this won’t prove to be a great number.

One of the ways to develop our unskilled under educated resource is by internal migration. The European Union to some extent allows for free migration between member states, but this has caused huge problems and is a major reason for a possible British exit from the Union. Language and cultural differences loom large in Europe.  In the US we may have regional dialects but for the most part we have far more in common than divisions. Americans by any standard are migratory. Everybody or their ancestors came from somewhere else. (Please don’t bring up native Americans, they too came from elsewhere, just earlier).  Lately our internal migrations have slowed down. Being trapped in a low opportunity backwater whether it be in a big city ghetto or a played out mining town in Appalachia usually means a unnurturing environment which can lead to generations of unfulfilled dreams. Moving can break this chain. Even when nature caused of movement out of areas of generational low achievement. In New Orleans after Katrina, great numbers had to leave for places such as Houston. Many never went back. They had found better lives in environments that were more upbeat. They saw the possibilities for a better future. The low skilled that made their way to North Dakota during the fracking boom were taught skills by private entities out of necessity and were put to use immediately. Whatever happens in the future , these people now have useful skills and work habits. Retraining at government expense in a stagnant area will never approach these results.

How then  can we make it easier for our people to leave areas of low or no growth or just opportunity elsewhere and just as important remove impediments to internal migration. Presently it looks like this:

Places Lived001

We have a solid majority of people who live in a different local from where they were born but lately this mobility has slowed. Have we encouraged  obstacles to movement? Sometimes for the best of reasons we entice people to take actions that appear to be positive, but in fact have the opposite result. Encouraging home ownership, especially by the young sounds great. Why pay rent and have nothing to show for it? Get a home with little or nothing down and build wealth. Beyond the disaster weak mortgages have caused, they can actually impede mobility. Unless you are well enough off to actually pay income taxes, the mortgage interest write-off is useless while the costs of maintaining a home are very real. Remember houses suck money. Worse in a downturn whether local or widespread, houses can become unsalable or only saleable only at a loss. Just when you should be off to greener pastures, you’re anchored to your home. Given the likelihood of moving during your lifetime it make no sense for younger lower-income people to be tied down to a house so why does our government encourage it?

You may not be crazy about your job and maybe there’s not a lot of room for advancement but you and/or family really need that employer-provided healthcare. Factor in a retirement plan and taking the risk of moving even for a potentially much better future becomes problematic. That’s why Dave’s Plan for Healthcare and Savings (Series under Policy starting in Oct.18 ’14) is so superior to what we have today. Everyone is covered and because it’s yours it’s completely portable.

State and local licensing often isn’t transferable between states. If you’re a beautician in Detroit,why not reciprocity in North Dakota? If you must have professional licensing and we aren’t convinced it’s always necessary, at least make it uniform throughout the US.

Welfare programs from food stamps to Section 8  housing once applied for and received in one’s home area can prove to be a perceived or real barrier to relocating. Reapplying and waiting for help to be re-instated could be daunting to people who exist on that aid. A possible solution would be to bundle a recipient’s aid in an annual cash package deposited monthly. Milton Friedman proposed doing just that decades ago. The idea  has been in some form been resurrected by Charles Murray in his book “In our Hands : A Plan to replace the Welfare State”. ( A revised edition will be out later this month). This somewhat mirrors how Dave’s Plan handles Medicaid and something similar could be added to Dave’s Plan’s already established institutional relationships and usage of the IRS Computers to make the whole package totally portable. Not everyone will avail themselves to a potentially brighter future in another place but enough will to improve the prospects of the country as a whole.

What about education? Actually in today’s world one of the major reasons for people to move to a different locale is to find a better place to educate their children. In fact one of the most important reasons to locate in one area over another is the quality of their schools. If we deregulate our educational system by simple cash vouchers as we have advocated then maybe people wouldn’t have to leave home to find a decent education for their children. Detroit given its wonderful location on the Great Lakes could again be a great city with growing in migration if it would just adopt policies friendly to “More ” that say Singapore has. We won’t hold our breath. People want to go where they might achieve their dreams. Public Policy should support them and never have policies that impede people s progress.

 

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