Clear evidence that US employers knowingly hire illegal workers

I discovered at Econbrowser the following statement from a story in the Arizona Republic...

"A 2005 report by the federal Government Accountability Office found that between 1985 and 2000, 9 million people got hired using this Social Security number: 000-00-0000. The report also found 3.5 million instances where a company had several employees using the same Social Security number. Most of the problem entries came from the food service industry and the construction industry."

Canada as a location for US companies to relocate foreign workers

A headline from today's Wall Street Journal says

"Microsoft plans to open a software development center in Canada this fall to attract talent and avoid U.S. immigration issues."

Yahoo picked up the story yesterday and elaborates that

"The Vancouver, British Columbia location will be one of only a handful development centers outside the company's headquarters in Redmond, Wash., the software company said Thursday. It previously announced plans to build sites in Boston and Bellevue, Wash."

Clearly, they picked Vancouver because of the ease of access to Microsoft HQ (only 140 miles apart).

It will be interesting to see if many other US companies choose to make a similar move.

Why manufacturing jobs are outsourced while farm jobs go to illegal immigrants

Primarily because US farmers as a rule don't understand that they need to brand and differentiate to offset the fact that farm products are commodities-shoes are a commodity as well, but look what Nike has done...

I think that an improved US farm policy would be to allow imports of many farm products currently produced in the US that are subsidized through federal payments and tariffs/quotas from countries with low labor costs. The key would be to turn family farmers into branding and distribution concerns. I believe that the average American farmer understands that the American food market breaks down into two segments: cheap and plentiful basic foods; and premium specialty foods. What the farmer needs to do is rather than bringing workers to farm his land is to arrange for crop production in say, Mexico, and then his task would be to manage the transport of the crop across the border and marketing the product to food processors and consumers. Distribution and marketing bring higher margins than commodity production and therefore this would improve the farmer's net income.

Ranchers are getting the idea to a degree as we are seeing some ranchers turning to marketing their beef as "free-range" and "hormone-free" and getting higher prices at the supermarket for that product.

In any case, changing this policy would likely significantly reduce illegal immigration into the US...

Mass migrations occurring in Europe

A thought provoking series of analyses of the prospects for economic growth in Eastern Europe has been posted over at demography.matters.blog which uses Poland's situation as a basis for a larger analysis. The posts include links to a number of primary data sources that contain a wealth of detail that would allow for more in-depth analysis.

The primary fact that caught my attention was a quote from the Financial Times which indicates that

"Poland has seen one of the largest peacetime migrations in history as about 1m people, many of them young, have moved west to find work, although there are no hard official numbers. There are estimated to be 250,000 Poles in Ireland, about 500,000 in Britain and more than 600,000 in Germany."

These emigrants are said to be primarily young college graduates. So Poland appears to be experiencing a classic "brain drain." The consequences of this are described in some detail; with the primary result being that Poland will have difficulty building up high-value industries due to the loss of the educated. One possible solution postulated by a commenter was that Poland could attract educated individuals from countries further east such as the Ukraine.

This sort of migration pattern and the resulting economic dislocations are in my view the inevitable result of the absorption of Poland and other eastern European countries into the EU and the application of the EU's regulations (and lack thereof) to flows of people and capital. In the long run, these changes will be beneficial to the EU as nationalism within the EU will break down as individuals' loyalty will shift to the EU and its institutions from their home states(nations). I think this process is analogous to the development of the USA as in its early days citizens in the US were more loyal to the individual states(Massachusetts, Virginia, and so forth); but as time went on and the federal government expanded its powers US citizens as a rule have come to see the federal Constitution and government institutions as a primary focus of loyalty and economic strength. As anyone familiar with US history can attest, this did not occur quickly or without significant stresses. However, the result is a country that is strong economically and militarily, with little internal armed conflict. Given the past history of countries in the EU, we can only hope that a similar outcome is in the cards for the EU.

Significance of migrant labour from eastern Europe

Macroblog has a nice post summarizing comments by "Bank of England Governor Mervyn King, reflecting on the Bank's performance over the past ten years"...good quote is "what we have to do with every variable that we look at, work out why it’s growing faster or slower than it was before and not to use some rather mindless regression"....

Macroblog includes comments in a similar vein by Federal Reserve Bank of Dallas President Richard Fisher: "How can economists quantify with such precision what the U.S. can produce with existing labor and capital when we don’t know the full extent of the global labor pool we can access?"...that's a good question...

Relationship between border apprehensions and economic growth

“A slowing US economy, resulting in fewer jobs, is discouraging immigrants from slipping into the United States, according to economists at Arizona State University in Tempe. In fact, falling border apprehensions may be an early predictor of where the economy is headed.

“If that’s true, then Americans should prepare for rough economic times ahead, says Dawn McLaren, a research economist at Arizona State’s business school.

“For the past decade, Ms. McLaren has been tracking the relationship between border apprehensions and economic growth. Every time apprehensions declined, the economy slowed about 12 months later, she found. “About a year before a recession, or a down cycle, there was a slowdown in the number of arrests” on the border.”

Bank of America and credit cards for illegals

David Yen over at Credit Slips points out that "To a lender a borrower who it knows is undocumented is in one way more attractive than a citizen or legal resident: he or she is effectively barred from filing bankruptcy. Strictly speaking, there is no requirement that someone be in the United States legally in order to be a debtor in bankruptcy. But someone who is undocumented and wants to stay in the country would be inviting trouble if he or she filed bankruptcy. A debtor now must present a picture ID and proof of social security number at the creditors meeting. Interim Bankruptcy Rule 4002(b)(1). The debtor must also provide the most recent Federal income tax return, or explain why there is none. Interim Rule 4002(b)(3). This should be enough to deter most undocumented borrowers from filing bankruptcy. If one does file despite this risk, whether out of ignorance or recklessness, the lender has a powerful threat -- withdraw the bankruptcy or else the trustee will be told the truth. At a minimum the debtor risks denial of discharge for presenting fraudulent documents. Deportation is much more likely; even prison is a possibility."

I think that Bank of America has certainly considered the issue raised here regarding the choice that illegal aliens will be faced with when they reach the stage in their finances where bankruptcy would be considered. Even if some kind of restructuring of the credit card debt needs to happen, the bank will prefer that over the card-holder filing bankruptcy. Although the outcry now is that B of A is aiding illegal immigration, I think that this will turn out to be a way to exploiting illegal immigrants financially because of the fear of deportation.

"Immigrants who wire money get help from the Fed"

That's the title of an article in the L.A. Times that describes how a "Federal Reserve-sponsored service allows customers without Social Security numbers to wire money through the Fed system to Mexico's central bank at little cost. In September, the Fed expanded the remittance program by allowing immigrants, legal or not, to open accounts at participating banks and credit unions in the U.S. or Mexico. About 27,000 transfers are made through the program each month."

Needless to say, this is controversial. The article references a number of organizations that are trying to get the government to stop this program, but a Fed official is quoted to the effect that "the program complied with the Patriot Act, the Bank Secrecy Act and other laws against money laundering. Customers must provide identification — a consular identification card or other picture ID — and banks regularly check the documents' authenticity, she said."

Peter Drucker on Demography

is the title of a post at Demography Matters: in my view countries(such as Italy) where nationality is based on ethnicity rather than a concept of citizenship such as the US are going to go through a serious crisis when the imported non-native workers demand political representation commensurate with their demographic profile in those countries. Some level of violence is likely, and we've seen a preview of that with the riots in France in previous years.