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Money Is Free to Move Across Borders, So Why Not People?

by Alejandro Reuss

Jul 26, 2013 | Economy



In this age of mass migration, U.S. immigration policy has mixed relative openness to immigration (since 1965) with nativist hostility toward immigrants.

On the state level, we have seen a wave of anti-immigrant legislation (like the Arizona “papers, please” law). On the federal level, the militarization of the U.S.-Mexico border coupled with spasms of workplace raids. Recent reform proposals, including the bill passed by the Senate, have coupled “guest worker” provisions with still more military-style immigration enforcement. Nativist fantasies of walling off the U.S., of course, are doomed to fail. Given the harm such measures cause in economic and human terms, it would be bad if they succeeded.

Immigration today is inextricably bound up with globalization. The international movement of people, no less than international trade or investment, connects countries economically. Globalization in its current form, however, has been shaped by the wealthy and powerful to their own advantage. This is obvious when we compare the treatment of the international movement of capital to the international movement of people.

Instead of untrammeled freedom for globetrotting corporations, we should have guarantees for people of the right to move, live, and work where they wish. That would be good for workers by reducing labor-market competition and by strengthening their bargaining power.

Under the guise of “equal treatment of investors in similar circumstances”—as put by the World Bank—international trade-and-investment agreements have guaranteed corporations’ ability to invest abroad without fear of unfavorable government intervention. A NAFTA tribunal, for example, notoriously decided against Mexico in a case where the government had blocked foreign investment in the form of a toxic-waste dump.

International agreements, in contrast, have varied dramatically in their treatment of migration. The European Union allows nearly unencumbered migration between member countries. NAFTA, on the other hand, has created a three-country zone where goods and capital can move with little restriction, but people face harsh barriers to migration.

The U.S.-Mexico border is one of the most militarized in the world—lined with razor-wire, armed patrols, and even drone aircraft—and undocumented immigrants live in constant peril of arrest and deportation. A recent article in The Economist paraphrases economist Gordon Hanson on the results of U.S. immigration policy: “inflicting economic self-harm by spending so much to keep workers out.” The self-harm hardly compares to that inflicted on migrants.

We can see the operation of unequal power in three ways.

First, undocumented immigrants lack political power. In addition to being denied political rights like the vote, their insecure status poses an additional obstacle to legal social protest. On the other hand, the increasing significance of Latinos as an electoral constituency is a political counterweight. Many Latinos rightly see attacks on “illegal immigration” as thinly veiled attacks on them, so immigrant-bashing politicians risk a backlash. That’s why some Republicans are talking immigration reform now.

Second, labor wields far less political influence than capital. It is employers, not labor, who have gotten what they wanted from trade-and-investment agreements (mainly the ability to locate operations where labor costs are low and government regulation lax). While organized labor has not always (or typically) championed immigrants’ rights, U.S. unions have turned more pro-immigrant, especially as they have come to see immigrants as crucial to their futures.

Third, global corporations have powerful governments on their side. The U.S. fights for agreements protecting the interests of U.S.-based companies. The governments of many lower-income countries advocate in favor of their nationals abroad, but they have less muscle on the international scene. Unsurprisingly, these efforts have been less successful.

Imagine, instead, that the contours of political power were reversed. Instead of untrammeled freedom for globetrotting corporations, we would have guarantees for people of the right to move, live, and work where they wish. Instead of the “equal treatment” for global investors under trade-and-investment agreements, we would have equal treatment for workers, regardless of nationality, wherever they worked.Today, discrimination on the basis of national origin is a central principle of immigration law. Even though U.S. labor laws, on their face, cover all workers regardless of immigration status, everyone knows this is a fiction because undocumented immigrants’ precarious legal status keeps them from reporting violations to the authorities.

That would be good not only for immigrants, but also for workers in general, by reducing labor-market competition and strengthening workers’ overall bargaining power. As legal scholar Anna Christensen put it, in the context of Europe: “Equal treatment of foreign and domestic workers … is no threat to the position of domestic labor. If anything, the reverse is true.”

That is a far cry from the current situation. Indeed, it is a far cry from the Senate bill, which includes still more money for coercive enforcement measures, plus guest-worker provisions that would leave immigrant workers largely at the mercy of their employers.

Equal treatment, however, is the immigration reform we need.


Alejandro Reuss is co-editor of Dollars & Sense.

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