No Better Foreign Aid than Labor Mobility to Help U.S. or E.U. Economy

Prices are falling for travel by bus, ship, train, car, and airplane. For tourists, this is good news. It now costs much less to tour the country and the world. As travel costs fall, tourist mobility increases.

The same is true for people looking for higher paying jobs. They too can now travel to distant parts of the country they were born in, plus can afford the travel costs to work in other parts of the world. Foreign aid efforts that “pick the low-hanging fruit” assist the most people at the lowest cost. Alleviating Global Poverty: Labor Mobility, Direct Assistance, and Economic Growth, Lant Pritchard, Center for Global Development, March, 2018, notes that the most effective foreign aid programs deliver benefits that are about 1/40th of benefits from simply allowing people from poor countries to work in wealthy countries:

The magnitude of the income gains of the “best you can do” via direct interventions to raise the income of the poor in situ is about 40 times smaller than the income gain from allowing people from those same poor countries to work in a high productivity country like the USA. Simply allowing more labor mobility holds vastly more promise for reducing poverty than anything else on the development agenda.

Alleviating Global Poverty: Labor Mobility, Direct Assistance, and Economic Growth

Legal rules that govern foreign labor, are very different than for tourism. Why is that? Tourists spend money for meals, housing, entertainment when they tour foreign cities and sites. But so do workers from other countries. Visiting workers purchase local food, rent or buy housing, and spend money on clothing and entertainment. Why are regulations for the U.S. and other countries so different for tourism than for labor?

Locals sometimes complain that tourists fill hotel and Airbnb rooms, pushing rates up, plus tourists crowd attractions like national parks, museums, and, say, Times Square in New York City or Hollywood Boulevard in Los Angeles.

Its a trade off: tourists create crowds in scenic places, but they also create local jobs as they spend money. People might say that workers visiting from other places and countries are different from tourists. Work is different, because…? Because there are only so many jobs?

As more tourists arrive and boost demand for hotels and local attractions, companies and entrepreneurs dream up more attractions and build more hotels. Disney Land and Disney World are crowded with tourists from around the world, but they can expand, and new amusement parks are developed to profit from more and more tourists.

Similarly, as more visiting workers arrive, they attract investments in more housing and entertainment, as well as more factories offering more jobs. Hotel owners make money and expect to profit from visiting tourists renting their rooms. Similarly, factory owners and farmers make money as visiting workers take on tasks that allow profitable manufacturing and agriculture.

The NSDA (public school) resolution on increasing legal immigration is connected with the Stoa (homeschool) topic on reforming foreign aid. The most effective foreign aid program would be to facilitate labor mobility. Most of the concern about immigration has to do with illegal or undocumented immigration, and a fear that these immigrants can be a burden of public schools, hospitals, housing, and local assistance programs.

Others, Republicans, for example, are concerned that as new immigrants become citizens, they vote for Democrats. Conservative websites claim illegal “vote-harvesting” by immigrants going door to door to provide and collect ballots, influenced the last election, especially in Los Angeles and Orange County.

The Los Angeles times first reported the story and then has published additional reports and editorials (all are behind a paywall). This is the sort of concern many have about new immigrants, that they can and will be politicized by activists.

However, most new immigrants are more interested in working and providing for their families than in voting to somehow influence elections and  public policy in America. Labor mobility isn’t really the same thing as immigration. Now that workers could fly from Mexico to U.S. cities for under $100, or travel for even less by bus, they can as easily travel home every few weeks or months as well. Italian migrant workers used to travel to Argentina each year for the harvest, then back to Italy, just as migrant workers traveled from Mexico to California for harvest, then back. U.S. labor regulations and the militarization of the Mexican border blocked this tradition, making life harder both for California farms and orchards, and for Mexican laborers and their families.

Providing documents allowing for work visas addresses all these issues. Guest worker permits should be at the heart of US immigration reform, writes Helen Krieble in The Guardian (February 21, 2013):

A simple work-permit system can solve the problem for future workers and those already here without authorization. Such a program doesn’t need to blur the line between legal worker status and citizenship. Nor does it need to treat different groups differently, as would the Dream Act, an agricultural jobs bill, or plans that grant green cards to certain students or military service members.

Red Card Solution webpage is here.

It is not just U.S. agriculture that is struggling to find labor. The Labor Shortage Is Acute in Many Industries (American Institute for Economic Research, February 20, 2019), reports the challenge is across U.S. industries: 

This is exactly the situation the United States finds itself in now. And it is worsening. Last year, the Associated General Contractors of America reported that 80 percent of its 27,000 member firms are having a difficult time filling openings for hourly craft workers.

The statistics are staggering in both their magnitude and breadth. By size, 79 percent of firms performing $50 million or less in work reported having trouble finding craft workers. On the other end of the spectrum, 82 percent of firms that performed $500 million or more in work indicated the same. The difficulties are, furthermore, being felt nationwide: 81 percent of contractors in the West and South, 80 percent in the Midwest, and 77 percent in the Northeast are reporting severe issues procuring labor; in 2017, those numbers ranged from 63 percent to 77 percent.

 The Labor Shortage Is Acute in Many Industries (American Institute for Economic Research, February 20, 2019)

And around the U.S. economics, similar labor shortages:

And the crisis extends far beyond construction: in many subsectors of agriculture, home care, transportation, and manufacturing, the same phenomena are being reported. An estimated 8 million people, representing 5 percent of the entire U.S. workforce, are either fleeing or laying low. Each is reporting lower productivity, longer production times, higher explicit costs, and perhaps worst of all a massive explosion of forgone projects and skyrocketing opportunity costs. Consumers are receiving fewer goods and services at higher prices and at times at subpar standards.

 The Labor Shortage Is Acute in Many Industries (American Institute for Economic Research, February 20, 2019)

Lant Pritchard’s book, Let Their People Come: Breaking the Gridlock on Global Labor Mobility (Center for Global Development 2006), is available on Amazon, (but link is to online pdf).

So, would an private sector work visa program be seen increased legal immigration policy reform as a foreign aid policy reform? It would be more a freedom reform than either. People may want to visit the U.S. to see the sights, or visit to work for a few months or years, or some combination of the two, benefit the U.S. economy. The billions of hours and dollars wasted each year standing in lines to visits or get permits to live and work are a cost that hurts Americans as well as people from other countries.

For more, here is Reason interview: The Red Card: A Private Sector Solution to America’s Illegal Immigration Problem: Issuing work permits to immigrants without a promise of citizenship would reduce illegal population, improve border security