The State of the Union. A response. #SOTU

President Barack Obama’s recent State of the Union Address shed light on various issues that the United States faces today. One of the more controversial ones is immigration reform. President Obama has repeatedly stated the current system is broken and that nothing short of complete reform can fix it. In this vein he has decided to take executive actions amid at helping build a system that allows America to live up to its heritage as a nation founded by immigrants. Regardless of what one thinks about the President’s initiative it is important for each American to understand some of the complexities associated with immigration. Of particular importance is to understand several of the economic aspect that is associated specifically with undocumented workers. Through a better understanding of some of the economic issues associated with undocumented workers it is possible to think through appropriate responses from various perspectives including a theological one.

In developing an analysis of undocumented workers of the United States I have chosen to use true cost economic theory. True cost economics evaluates goods or services while also taking into consideration negative externalities. Negative externalities are the costs of the harmful effects of a good or service on the environment etc. (“True Economic Cost,”The Economic Times, 2015). Taking this into consideration allows one to consider how a good or service can be misused in large quantities without concern for its effect on the environment. As a caveat, any analysis of immigration from an economic perspective has its limitations because human capital although it can function as other forms of capital such as social or economic is inherently different. There is a different set of concerns that one must take into consideration when thinking about undocumented workers. For this reason true cost economics has a twist from a theological perspective as it relates to immigration. As part of the working definition of true cost economic negative externalities should also involve the cost that immigration policies has on moral sensibilities. Negative externalities consider the impact of undocumented workers policies on Christian/ religious values. Ultimately, true cost economics from a theological perspective should involve the moral cost of a good or service. This is especially true when good is used as a generic term to help analyze human relations with respect to economic production.

As debates ensue on the particularities of reforming immigration policies it becomes more important to understand some of its many complexities. Typically when evaluating an issue from an economic stand point a cost-benefit is used. Such an analysis can be helpful here when trying to understand some of the intricacies of undocumented workers. First, it is important to dispel some of the misconception of undocumented workers. Perhaps one of the biggest myths is that no one benefits from the use of undocumented workers. Many have stated that undocumented workers are exploiting the American economy and reaping all of the benefits from hard working tax paying United States citizens. Law Professor Francine Lipman has stated that undocumented workers have actually bolstered the U.S. economy in several ways. They invest in the economy through their purchasing of goods and services and the consumption of various products has actually created more jobs in some respect. Also, contrary to popular belief they do in fact contribute to social security, Medicaid and unemployment programs without being able to fully reap their benefits (Francine J. Lipman, “Taxing Undocumented Immigrants: Separate, Unequal and Without Representation,”Harvard Latino Law Review,Spring 2006).

These immigrants pay social security pay roll taxes without being eligible for the benefits of social security. What many do not know is that each year the United States reserves around seven billion dollars in social security earing in what is called “earnings suspense file.” This money is reserved for W-2 files that cannot be connected to a social security number. This money is usually attributed to illegal worker who never see any of this money (Robert Mcnatt and Frank Benassi, “Econ 101 on illegal immigrants,” BloombergBuisnessweek, April 6, 2006). Another common myth about undocumented workers is that immigrants are taking all of the American jobs and subsequently hurting the economy. These immigrants do indeed consume a large portion of low-skilled labor jobs. However, many American benefit from their consumption of low-skilled and low paying jobs. The cost for food in most restaurants, agricultural products, and various goods has decreased as a result of employer’s ability to pay illegal immigrant far less than American workers. In fact, the negative impact of undocumented workers on the economy is far less than the impact of automated machinery with respect to job displacement. Another benefit of undocumented workers is the de facto effect it has on the American wage labor system. The income of undocumented workers is spent relatively quickly because in many instances banking systems and other services customary to most Americans is not a viable option. This means that the income of undocumented workers does not factor into the earning potential of American workers. In fact employers have the ability to raise the minimum wage of the average worker because of the money they save from paying undocumented workers substantially less .It is estimated that approximately eight million jobs are dependent on the employment of undocumented worker labor (Bureau of Labor Statistic in the United States Department of Labor, News Release, January 16, 2015). This serves as brief overview of some of the economic benefits from of undocumented workers.

Equally important to this analysis is an overview of some of the economic costs of undocumented workers. It has already been established that the majority of Americans would not notice the economic cost of undocumented workers. Various researchers have noted that those without a college education would be the only group that would be dramatically affected by a reduction of undocumented workers with respect to employment. It has been noted by the Center for Immigration Studies that in the year 2000 the influx of undocumented workers had reduced the wages of American workers without a high school diploma by almost eight percent (George Borjas, “Increasing the Supply of Labor Through Immigration: Measuring the Impact on Native-born Workers,” Center for Immigration Studies, April 2004). Another aspect of undocumented workers that is often discussed is its impact on the education system. According to the Congressional budget office as late as 2008 undocumented workers made up approximately four percent of the students in the public education system. It is also a fact that many of these students require ESL classes and extra assistance in other course work to be successful. This causes an added economic burden on the public education system. There are also various studies that explain how costly it can be to detain undocumented workers. The issue of undocumented workers and health care has also become a critical issue for many. According to recent studies less than one percent of Medicaid spending has went to undocumented workers. Although these immigrants typically are not eligible for the benefits of Medicaid they do receive emergency medical care via Medicaid (Will Dunham, “Medicaid spends 1 pct on illegal immigrants: study,” Reuters, March 13, 2007 ). This means that undocumented workers do place a financial burden on the health care system albeit a relatively light one.

What can we derive from this brief cost-benefit analysis of undocumented workers, for this a return back to true economic cost theory is necessary. It definitely appears that there are certain economic benefits for our current undocumented workers policies. It could even be argued that the benefits outweigh the cost of undocumented workers. It also appears that some of the associated costs have been exaggerated by public perception. However, both these cost and benefits must be weighed against some of the negative externalities. Another observation that can be made from this brief analysis is regardless of the cost and benefits undocumented workers the group that suffers the most are the immigrants themselves. The benefits from undocumented workers can at best be described as exploitative of the immigrant labor force. Simultaneously, although the cost of undocumented workers has a somewhat negative impact on the economy it is the immigrants that suffer the greatest harm from its negative effects. This occurs in the form of lower educational attainment, fewer employment opportunities, and few health benefits. In essence fewer opportunities in what has been historically described as the land of opportunities. The exploitative nature of current immigration policies qualifies as negative externality and has implications from a theological perspective.
So what can Christian religious values teach us about how to deal with undocumented workers policies in relation to a cost-benefit analysis? Truthfully this depends on who you ask. While the specifics of an adequate policy will not be discussed here it can start by asking the right question about how to limit the effects of negative externalities. For this a turn to Luke 10: 25-37 is helpful here. This particular passage is the infamous parable of the Good Samaritan. Jesus is asked “who is the neighbor,” at which point Jesus tells the parable to explicate what precisely a neighbor is. Perhaps this is the question that Christian should ask themselves first as they evaluate the issue of undocumented workers and its policy implications. Through asking this question first it is possible to put the negative externalities at the forefront of an analysis of undocumented workers

One thought on “The State of the Union. A response. #SOTU

  1. Curt Day

    The problem with the analysis above is that it needs to put more emphasis on the moral costs of exploiting undocumented workers. For unless these costs are front and center, then the exploitation of others is an almost certainty and will be done on a heartless costs/benefits basis. In addition, unless the moral costs of exploiting undocumented workers are given a higher priority, we will be blind to how the current system does not work and needs to be changed or replaced.

    Finally, what is eventually needed in the discussion on undocumented workers are the foreign policies embraced by our country that causes undocumented workers to seek employment here.


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