Thursday, November 26, 2009

Reversal of fortune/ Remittances now coming north from Mexico

The San Diego Union-Tribune 's editorial "Reversal of fortune / Remittance now coming north from Mexico" (November 25th, 2009) censures individuals who concern themselves with remittances, but perhaps falls short of grasping the larger economic picture.

For one thing, immigration restrictionists sometimes justify their call for a crackdown on illegal immigration by harping on the billions of dollars in remittances that illegal immigrants send home to relatives in Mexico. The idea that so much money is leaving the country really bothers them.

So do they feel any better knowing that some money is now entering the United States? Is this an argument for allowing illegal immigrants to remain here? That sounds silly.

But then so did the initial concern about remittances. After all, this is the immigrants’ money, and they can do with it what they want.

The Union-Tribune is certainly making a moral point. However, it neglects an opportunity to focus economic opprobrium on claims of its opponents. Specifically, it fails to "follow the money."

  1. U.S. companies/citizens pay immigrants for labor. These companies get more than or equal to what their labor is worth--otherwise, they wouldn't employ them.
  2. Immigrants receive money. They can spend it or invest it in the U.S. or elsewhere:
    1. spend it in the U.S., which is not a case the Union-Tribune's opponents appear concerned with.
    2. invest it in the U.S., which is not a case the Union-Tribune's opponents appear concerned with.
    3. spend or invest it elsewhere, in which case individuals who have been given these U.S. dollars in exchange for producing goods can do one of two things:
      1. Spend it in the U.S., in which case we are back in part 2.1
      2. Spend it somewhere else dollars are accepted, in which case we are back in part 2.3
The process is continued until everything is spent in the manner outlined in 2.1.

It seems that we are either giving immigrants pieces of paper that never impact us again in exchange for real labor, which is nothing anyone but immigrants would want to complain about, or the money is spent in the United States eventually, in which case the Union-Tribunes opponents would be satisfied.

The only reason that anyone would oppose immigrants in the United States is if immigrants were free-riding on U.S. welfare programs, not an unlikely prospect, given that around 15% of illegal immigrants have a bachelors degree or more, while 49% do not have a high school diploma.

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