The issue: Is the United States doing enough to discourage illegal immigration? If not, is there a way to enforce immigration laws without jeopardizing the labor force for agricultural areas such as SLO County?
Illegal immigration has been a hot-button issue for many years. Conservatives claim that undocumented workers take jobs away from Americans, do not pay taxes and are a heavy burden on social services. The most common “solution” they propose is immediate deportation en masse. Their proposed solution demonstrates ignorance of the disastrous economic consequences of such an action, not to mention that it would be contrary to very basic principles of capitalism, passionately espoused by them.
The major goal of a business in a capitalistic system is maximization of profits. Captains of American industry use it as their guiding principle. They take all possible measures to increase revenues and reduce costs in order to maximize profits. To reduce costs, they do not miss any opportunity to set up manufacturing operations in other countries with cheap labor. Similarly, they do not think twice about outsourcing services to countries where wages are lower. They buy parts for their products from foreign firms if it costs less.
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Don’t such business practices result in job losses for American workers? The same business executives, with the blessing of conservative politicians, claim they are job creators. Any tax increase proposal meets aggressive opposition with the argument that it would impair job creation. If it is so, then why have Bush tax cuts have not created more jobs?
Hypocrisy is not confined to captains of the industry. It also abounds among politicians. Many politicians make Arizona-like assertions and target undocumented workers as the root cause of job loss for Americans. The presumptive Republican presidential nominee, Mitt Romney, has taken a hard line on this issue. According to documents filed by Bain Capital with the Securities and Exchange Commission, when Mr. Romney was its sole shareholder, sole director, chief executive officer and president, Bain bought and managed companies that shipped jobs to other countries, including China and India.
Conservative consumers often complain about “illegal aliens” and “loss of American jobs.” Their hypocritical behavior is evident when the same people hire “illegal aliens” to mow their lawns, paint their homes, build fences around their yards and clean their homes.
Are these undocumented immigrants taking away jobs from Americans? Government data in California were analyzed by the Associated Press. The clear conclusion is that they don’t. Most U.S. workers do not apply for the kind of jobs filled by foreign workers, e.g., farm work. It is true even in places like San Joaquin Valley, where the unemployment rate is much higher than the national average.
Last year, Gov. Chris Gregoire of the state of Washington lobbied against a bill that required employers to determine worker eligibility. The farm labor shortage in Washington had created a crisis. Roughly 70 percent of the workers needed for seasonal harvests are “document challenged.” The governor’s concern is understandable because Washington is top producer of at least 13 agricultural commodities in the United States that are exported throughout the world. Besides agriculture, many other industries — construction, hotels, restaurants, dairy, cattle, nursery products and poultry — are heavily dependent on undocumented workers.
There is a common misconception that undocumented workers do not pay taxes. All of them pay sales and property taxes. Most undocumented workers are employed by companies that withhold taxes from their paychecks, including income tax and Social Security. They often do not file tax returns to avoid the risk of government attention; consequently, they don’t get any tax refunds, i.e., the money stays with the government. They cannot get welfare or any Social Security benefits. Their cheap labor drives down the cost of products and services for American consumers. Therefore, they directly contribute to the prosperity of all those who pay lower prices.
Any solution to the illegal immigration problem must be humane and must take into account the devastating impact on the U.S. and state economies if they were deported. Illegal immigrants play a central role in the state economy. Deporting them would undoubtedly result in closure of many businesses.
According to Giovanni Peri, a professor of economics at UC Davis, “Just doing away with them would be harmful from a human point of view and an economic one.”
Zaf Iqbal is past associate dean and professor emeritus of accounting of Cal Poly’s Orfalea College of Business. He volunteers with local nonprofits including Habitat for Humanity, the Retired Senior Volunteer Program and the Children’s Resource Network. He is president of the San Luis Obispo Democratic Club.