Fix Immigration Rules to Crush Black Market
America has a huge immigration black market. Millions of undocumented workers enter and leave the United States every year, without any regard for the legal channels. This is an urgent concern for both sides of the immigration debate.
One fix created by the Department of Labor, at the Obama administration's urgings, was implemented in March. It includes raising the minimum wage to $12.24 per hour for workers holding an H-2A visa for temporary farm workers. If the government's goal is to increase the size of the black market and the benefits from being an undocumented worker, this is the perfect program.
Based on data from 2008 (the most recent year available), 100,000 to 125,000 agricultural workers are residing in the United States illegally. That same year, 173,103 H-2A visas were issued. If H-2As were liberalized and the application process was streamlined and cheapened, at least 100,000 illegal immigrants could be brought out of the black market.
Nobody is against poor, often exploited laborers making more money. But raising the minimum wage for H-2A workers is not the way to do it. If a farmer has to pay more for the same amount of productivity, he isn't going to hire more H-2A-holding immigrants.
If anything, he'll hire fewer — and replace them with cheaper, undocumented workers. Farmers with the bottom line in mind would be more tempted than ever to dip into immigrant labor black markets.
It gets worse. Under the same regulatory framework, the Labor Department will force farmers to pay the full cost of background checks for all workers, the full cost of paperwork and applications, and the full cost of worker transportation.
All of those expenses, which run into the thousands of dollars per employee, add to the cost of employment. And they make black market workers thousands of dollars more attractive in comparison.
Even that's not all. Other proposed red tape includes paperwork detailing worker housing conditions and compensation schedules to comply with new DOL regulations. All labor contracts must be rewritten to acceptable DOL formats and specifications. All this paperwork must then stored by the government for each foreign worker hired.
The workplace inspections are probably the most destructive proposed reform. When government agents inspect foreign workers, work usually slows down or grinds to a total halt for days on end. The government couldn't make the black market more appealing if it tried.
Every single one of these reforms was proposed with the best of intentions. Their goal is to decrease illegal immigration, and to improve immigrants' living conditions. But it's pretty easy to see that these policies will badly backfire. In the end, results matter, not intentions.
What would give the results we're after? Liberalization. The whole reason the immigration black market exists is because the legal channels are so cumbersome and restrictive. Lighten the paperwork and regulatory burden, then. The more unattractive legality becomes, the more attractive illegality looks in comparison.
This is an urgent problem. Black markets are dangerous to a free society. Murder, smuggling of stolen goods and drugs, slavery, and more are part and parcel of immigrant black markets. Those truly destructive activities are easily avoidable — shrink the black market by making legal immigration easier.
That means making H-2A visas inexpensive, easy to obtain, and keeping the related paperwork and regulations to a minimum. That means no minimum wage hike. No costly background check requirements. People rarely break laws that are reasonable and easy to obey.
When legal channels cost too much in time and money, people will turn to illegal channels every time. That's how the world works. Getting rid of immigration's black market begins with admitting that fact.