Whether due to Brownback or other factors, Kansas is doing very well.
That was commenter and putative policy analyst Steven Kopits, July 3, 2014. In the end, I think I was more right about the emptiness of supply-sider claims (such as those penned by Fed governor nominee-to-be Stephen Moore) than boosters like Steven Kopits.
Figure 1: Kansas GDP in mn Ch.12$ SAAR (blue, left log scale), and nonfarm payroll employment in thousands, s.a. (red, right scale). NBER defined recession dates shaded gray. Brownback administrations shaded orange. Dashed black line at Kopits assessment. Source: BEA, BLS and NBER.
Bonus: In this thread of comments, Steven Kopits also writes:
“…SNAP and Medicaid. These are programs for People Who Do Not Work.”
I betcha lots of working people, including those in the military, are surprised by the fact that because they receive SNAP benefits and are eligible for Medicaid, they are tautologically not working…
SNAP (Supplemental Nutritional Assistance Program) in large part feeds children, born to poor or disadvantaged families. This includes food trucks that drive to poor area communities/neighborhoods when public schools are out of session. Many of those children will not eat AT ALL when public schools are out of session. They will basically starve over the summer break without the SNAP program. If you know nothing else about “Princeton”Kopits, his attitude/stance on SNAP pretty much tells you the type of human being “Princeton”Kopits is.
I was on what I remember was called a “reduced” lunch program as a young person in grade school. If you qualified for the program (basically your parents would “prove” their income fell below a certain yearly or monthly amount) You would go in and buy a ticket stub at a cheaper price that would last about 2-weeks and each time you got lunch a machine would cut of a section of that ticket stub until you ran out, then you would purchase another reduced price ticket stub. You were still paying something, but it was cheaper than most other kids were paying. Of course if you lived in an affluent suburb where most kids weren’t using it, you would be derided, ridiculed, and made fun of by classmates (the junior versions of “Princeton”Kopits you might say) for being on the program. I’m not ashamed I was on that program for more than one year when I was growing up. I was thankful (and am still thankful) for the food I received that my parents (at least in part) were still paying for. This was basically while my Mom was working full time, and simultaneously being a full-time student before she got her University degree and became an RN (Registered Nurse). An RN, not an LPN, and there’s a difference.
Everyone has to eat. Including children born in poor or low-come families. Of course, some people born with a silver spoon up their ass have a hard time grasping that concept.
Well, I am flattered to be taking up some much mental space at Econbrowser. My comment in full, which you reference above:
Brownback appears to have made a statement about the strategy and position of Kansas: The State for People who Work.
The employment to population ratio there is 6 percentage points higher than the national average and the unemployment rate is among the very best. You see that as failure; I see that as success.
You’re claiming that the governor is cutting payments for SNAP and Medicaid. These are programs for People Who Do Not Work. I hardly see how cutting these programs would hurt the state’s competitiveness. Again, you see California’s comparative advantage as providing services to those not working. Let Kansas have its strategy; California can also have its own.
Whether due to Brownback or other factors, Kansas is doing very well. Six more people in every hundred are working there than in California. That’s a phenomenal gap.
So, that’s where we differ in ideology. For me, the purpose of government is first and foremost to provide prosperity and common services. You believe the principle role of government is to redistribute from the have’s to the have not’s. Those are enduring differences of values. You’re an egalitarian; I’m a classical liberal, first and foremost.
“The employment to population ratio there is 6 percentage points higher than the national average”.
So wrote your darling in the Kansas Chamber of Commerce. Her source? It could not be the BLS as they do not report these ratios on state basis. Way to go idiot – she lied to you and the dunce that you are – you fell for it. But do keep repeating right wing lies. It is what you do.
The purpose of government is first and foremost to provide prosperity and common services? Whatever happened the originalist version, the one dedicated to forming a more perfect union, establishing justice, insuring domestic tranquility, promoting the general welfare, and securing the blessings of liberty to those here now and in the future?
“Whatever happened the originalist version, the one dedicated to forming a more perfect union, establishing justice, insuring domestic tranquility, promoting the general welfare, and securing the blessings of liberty to those here now and in the future?”
Perfect union. Net relevant. The union has been perfected to the best of my knowledge.
Justice, tranquility and liberty all underpin prosperity. They are, by and large preconditions. And prosperity will create demand for justice and liberty, ie articulated individual property rights. This is Xi’s dilemma and why I believe China will become a democracy in the mid-2020s.
The general welfare can be understood as prosperity and public goods.
If you want to take me to task, put it up the White Paper, and let’s discuss it.
https://www.princetonpolicy.com/ppa-blog/2019/2/18/white-paper-feb-2019-version
As it stands, I think we have about another month or so to sign up the White House. Barring that, if you look down the various scenarios, the next opportunity for meaningful immigration reform, certainly with respect to migrant and undocumented labor, is ten years from now, in early 2029. In the best case version, the Menzie Counter runs until after 2030.
Sobering, at least for me.
No link to this White Paper? No thanks – none of us are reading your pointless blog. Oh – the toilet paper is white. I get it!
@ pgl
Don’t misunderstand me. I really am for everyone having a chance to express themselves and I like it when blog hosts allow strong disagreements and even a semi-“uncivilized” attack can add some “flavor” to the best of blogs. But….. do you ever get the feeling that when “Princeton”Kopits visits this blog that Professor Chinn knows exactly how Seinfeld felt when Newman came over to his apartment??
https://www.youtube.com/watch?v=o81wpv08Des
That was funny! OK Newman has a thing for chocolate!
Finally, as for comments, you seem to prefer pgl to me. You want my comments? Get rid of him.
Censor your critiques? So Trumpian of you!
Now if you learn to cite reliable sources instead of self serving lobbyists – then maybe someone will take your babble seriously.
SK: it’s ok with me if you’d like to begin posting as noneconomist jr. or alsonotaneconomist. That way, you could take on a Brownbackian aura and proclaim, “Look out economics, here comes Kopits!” That could also serve as a real live experiment and inject some adrenalin into the heart of your posts.
Am I Brownbackian? Here’s what I wrote:
“I think sizing tax changes is always going to be a challenge; it is certainly possible the administration there under-estimated the revenue impact of tax changes, even though a decline of $372 million was budgeted. They may have to re-visit this issue.
“Creating “ten of thousands of jobs” in a state with a labor force of 1.5 million and unemployment of 4.8% is no mean feat. One percent of the labor force is about 15,000 jobs, and labor force is declining by 0.5% per year. Maybe you could push the unemployment rate down another percent or so. But the employment to population ratio in Kansas is already much higher than its comp group: 64.5 percent vs 59.7% in MO or 56.4% in California. So that’s a net of about another 15,000 or so jobs max that the economy there can take, if I believe what I see. That would bring unemployment a year hence to about 3.3%…”
The Kansas unemployment rate is currently 3.4%.
So here is my original comment, dated July 2, 2014 at 4:31 pm
‘In 2012, Kansas lawmakers passed a large and rather unusual income tax cut. It was expected to reduce state tax revenue by more than 10 percent, and Gov. Sam Brownback said it would create “tens of thousands of jobs.”’
This 10% number is not evident in any budget I could find. Tax revenues for FY 14 are projected down -6%, total revenues are projected down -4.3%. There is no 10% figure in the FY 13 or 14 budgets that I saw. And FY 13 was up on FY 12 on both the revenue and expense side. I think sizing tax changes is always going to be a challenge; it is certainly possible the administration there under-estimated the revenue impact of tax changes, even though a decline of $372 million was budgeted. They may have to re-visit this issue.
Creating “ten of thousands of jobs” in a state with a labor force of 1.5 million and unemployment of 4.8% is no mean feat. One percent of the labor force is about 15,000 jobs, and labor force is declining by 0.5% per year. Maybe you could push the unemployment rate down another percent or so. But the employment to population ratio in Kansas is already much higher than its comp group: 64.5 percent vs 59.7% in MO or 56.4% in California. So that’s a net of about another 15,000 or so jobs max that the economy there can take, if I believe what I see. That would bring unemployment a year hence to about 3.3% (allowing for a shrinking labor force), which would make Kansas tied for second in the unemployment rate with Vermont. Put a fork in it: Kansas is done for employment gains at that point, and frankly may be just about at full employment right now. The “ten of thousands of jobs” is hyperbole, at least on a net basis.
The current unemployment rate is 3.4%, per the BLS employment is 11,216 higher than in June 2014. That’s pretty good analysis from where I stand.
https://data.bls.gov/timeseries/LASST200000000000005?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true
Princeton Stephen and Stephen Moore – two peas in the same pod!
Checking with FRED – Kansas employment has risen by 2.9% over the past 5 years. Before the two Stephens tout this as incredible, U.S. employment has risen by 9.4% over the same period. Of course the two Stephens have some magic decoder rings that will demonstrate 2.9% is greater than 9.4%!
Princeton Stephen backed then cited this as his economic authority?
http://www.kansascommerce.com/233/Industries
The Chamber of Commerce? Seriously? OK – let’s rely on what Wilbur Ross tells us about the national economy and just do away with the BEA and the BLS.
Good to know that Princeton Stephen has been a complete sucker for over 5 years!
I’ve been looking at what BLS provides in terms of state employment data:
https://data.bls.gov/pdq/SurveyOutputServlet
Labor force, employment, and unemployment so one can calculate an unemployment rate. But there is no information on employment to population so when Princeton Steven claims he knows it was higher in Kansas than the national average – he either has mystical powers or he is flat out lying. Yea – his Commerce person made such a claim citing the BLS. Maybe she has mystical powers or maybe she is lying.
Of course Princeton Stephen could have bothered to check her sources. But did he? Of course not. Yes – the most incompetent policy analyst EVER!
Steven Kopits You made your comment in June 2014. If you will look at the historical PHL FED coincident index, you will see that Kansas’ economic prospects in June 2014 were mediocre at best while California’s were (literally) looking very green. So it probably would have been wise to first check the coincident index before going too far out on a limb in singing the praises of Brownback.
You also mischaracterized SNAP and Medicaid. While those programs do serve the unemployed, they also serve the working poor and elderly retirees. Those programs are about low income, not low ambition. In fact, according to the Census data Kansas has a higher percentage of its non-Medicare age population not covered by health insurance than California. And Kansas has a higher percentage of those under 65 with a disability. So it sounds to me like maybe Kansas could use a little more Medicaid assistance. And since SNAP is primarily (but not exclusively) for children, I hope you’re not suggesting that poor little Oliver Twist should have to beg for more gruel only after getting a job. Kansas is full of old folks who are too enfeebled to flee the state, so Kansas probably has less need of SNAP, although the high disability rate in Kansas might argue for a more robust SNAP program.
The unemployment rate in California might be higher than Kansas, but since Jun 2014 wages have grown much faster in California than in Kansas. Does that mean the unemployed are simply lazier in California (because of a higher unemployment rate), or does it mean that the labor force in California is better at searching out jobs with a higher value of marginal product (because of a faster rising wage rate)? If you know anything at all about labor economics, then you must know that it’s bad policy to encourage the unemployed to accept the first job that comes along. You might find it morally uplifting, but it’s godawful public and economic policy. You’re committing the same kind of overreaching to conclusions that caused so many problems with the NYC minimum wage debate.
But I think your biggest crime here is practicing econometrics without a license. As many of us have pointed out ad nauseum, you simply cannot compare state unemployment levels and consider your job as an analyst as done. No one should practice econometrics without understanding the concept of fixed effects, but I’m afraid that’s what you’ve done here.
State by state differences in things like employment to population ratios may be affected by lots of things. I would suspect that more retired people are in Cali than in Kansas as well as more kids going to college. So even if Kansas had a higher employment to population ratio than Cali – that could be demographics. Now had Princeton Steven found some historical series on the employment to population ratio for the 25-54 years old, that might have been nice. But he didn’t because he can’t. Then again having a meaningful and reliable data series never stopped his blovating in the past so why would it now?
https://www.kff.org/other/state-indicator/distribution-by-age/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
Kansas has 15% population 65+; California 14%. US average is 16%.
Such a narrow statistic. Kids in schools? Choice of occupation which affects retirement date. C’mon Bruce – are you a one trick pony?
Next call is Menzie’s.
Steven Kopits I read your proposal. Your intent is certainly more humane than President Trump’s, but it also raises a lot of issues that really need to be thought through. I also think your assumption that the GOP is looking for a rational immigration policy is simply naïve. What unifies today’s GOP base is not streamlining immigration, but shutting it down entirely. But I’ll offer a few substantive comments:
(1) You need to show some additional support for some of the quantitative claims. If the document you posted was just intended as an executive summary, then fine. But somewhere in a formal policy proposal there should be some econometric estimates of various elasticities.
(2) One of your charts refers to a section of the graph identified as “Deadweight.” I’m not sure what you meant, but it surely isn’t “deadweight” in the economic sense of a Harberger triangle or anything like that.
(3) The proposal to make the visas only temporary greatly reduces the value of the visa because it creates a lot of uncertainty over the working life. It also means the worker must have access to wealth before being able to buy a visa and then save out of current income in order to renew the visa. And all of this saving must be done without any guarantee that there will in fact be a job waiting for the immigrant worker. The Mexican worker is put in the position of having to turn down a certain job in Mexico (BTW, over the last 25 years the unemployment rate in Mexico has been less than the unemployment rate in the US) for the possibility of a job in the US.
(4) There is no retirement provision since workers would not be eligible for Social Security. And presumably there is no provision for disability payments even though the kind of work these immigrants would be expected to perform would be physically demanding. This creates a problem not just for the worker, but for Mexico as well since it would be Mexico that would eventually have to provide for old age security. Shifting the problem to Mexico isn’t good policy.
(5) The restrictions you identified would inhibit “chain migration”, which would be very bad. Chain migration brings stability. Do you really want a few million unattached young immigrant males roaming around the southwest? Just think about that for a moment.
(6) This would set a dangerous precedent for American workers. There is no obvious reason that the government could not set up a similar work permit scheme that would apply to all workers, not just foreign workers wanting a market based visa. In fact, we’ve already started to move in that direction with states requiring potential workers to buy state issued IDs. Have you filled out an I-9 Form lately? Universal market based work permits may not be all that far down the road, so I’d be skeptical of any policy that would give further encouragement to that idea.
(7) There is a close historical precedent for the kind of thing you’re recommending, and with your being from a country that borders the Danube River I’m surprised that you didn’t recognize the similarity. As an economic model, what you are proposing is identical to the kinds of river tolls that petty counts and barons used to establish along Europe’s waterways during the Middle Ages before royal power shut down those petty fiefdoms. It’s exactly the same thing. Traders navigating the waters had to choose between an expensive and risky overland route (comparable to risking illegal immigration) or paying a fee to the local lord. This sort of thing hurt economic (and political) growth in central Europe. Economically it’s just a scheme to skim some of the “consumer surplus” as rent. The only difference is that you’re only allowing one toll booth rather than many toll booths. The economic logic of your proposal does not argue for a market based visa program; it argues for free movement of labor across boundaries, much as we find in the EU.
I have other issues as well, but for the moment I’ll just leave it at that.
“…Deadweight.” I’m not sure what you meant, but it surely isn’t “deadweight” in the economic sense of a Harberger triangle or anything like that…
You know, I struggled with this concept. In a demand-constrained setting, a deadweight loss has a clear meaning. But what about a supply-constrained setting?
A couple of examples: If a migrant dies coming across the desert, but would have willingly paid the US $7,000 for free entry, then I have treated that as a deadweight cost, ie, value is lost that no one recovers. Or similarly, the arrest of an illegal migrant is also a deadweight cost, that is, it is bad for the migrant, but also bad for the US. In a market-based system, that cost is monetized and is captured by the US government in large part.
This contrasts to what I have called predation costs. A predation cost goes to a third party at the expense of a migrant. For example, the coyote fee to get across the border is a predation cost. The US can claim this value by providing unlimited entry against a fee, that is, intercepting the coyote’s fee. In this case, however, the US’s gain is the coyote’s loss. Similarly, a market-based system would materially end wage theft, with the wages now being captured by the migrant (and indirectly, the US government). This is again a zero sum game. The gain of one party is the loss of the other.
Conceptually, deadweight losses are the best, in the sense that they are ‘free’ money to the US government or the migrant as the case might be. There is no welfare loss at all. By contrast, predation costs are situation dependent. Thus, if the US preempts the coyote fee, that is good for the US and increases US GDP. On the other hand, if it ends wage theft within the US, that is good for the migrant and the US government, but bad for the employer and is thus presumably neutral in terms of US GDP.
So, I am not dogmatic about vocabulary here. If someone has better terminology, I am happy to consider it.
“The proposal to make the visas only temporary greatly reduces the value of the visa because it creates a lot of uncertainty over the working life.”
The visas are indefinite, not temporary. You can stay fifty years on a work visa if you like.
In the beginning, we would only issue visas of less than one year, because we’d probably have to tweet the terms moving forward. Also, if we screw up, then the program can be liquidated in a year. That should be helpful in addressing conservative concerns. But that visa can be renewed for ever at the market price. Just like you can always fill the tank of your car at the market price.
tweak
“There is no retirement provision since workers would not be eligible for Social Security.”
It’s a guest worker program. If you want to apply for permanent residency, apply for that. This is something different.
“The restrictions you identified would inhibit “chain migration”, which would be very bad. Chain migration brings stability. Do you really want a few million unattached young immigrant males roaming around the southwest? Just think about that for a moment.”
We have plenty of unattached Mexican males right now here in our neck of New Jersey. In my world, they can hop of the next flight out of Philly back to Guadalajara. Come and go whenever they like. Much better than the current system, and that’s the competition.
“This would set a dangerous precedent for American workers. There is no obvious reason that the government could not set up a similar work permit scheme that would apply to all workers, not just foreign workers wanting a market based visa.”
I think that’s a pretty long slippery slope. But yes, there are outfits similar to ours working on H-1Bs for China and things like that. Personally, I think that is way premature, and that’s why our proposal is limited only to Mexico and the Northern Triangle countries. If you add China or India, then you can draw unlimited numbers of both H1 and H2 class migrants to the US. Right now, let’s try to show that we can just get one small corner of the world under control. Let’s close the southwest border and end undocumented migrant labor. Let’s see if we can make progress on that.
If we do, then we can see how the American public might feel about extending the program. But we have a lot to prove first.
“As an economic model, what you are proposing is identical to the kinds of river tolls that petty counts and barons used to establish along Europe’s waterways during the Middle Ages before royal power shut down those petty fiefdoms.”
The analog for the robber barrons is the drug cartels. It is the exact analog.
“You need to show some additional support for some of the quantitative claims.”
Specify, please.
“…the worker must have access to wealth before being able to buy a visa and then save out of current income in order to renew the visa…”
Yes, you are describing a commercial relationship.
But guy, Central Americans have to pay $11,000 – $17,000 for passage to the US. You think paying $1800 for a 90 day visa is bad in comparison to that?
Here’s a fantastic video from my friend Jay Root. If you want to understand what’s going on at the micro level in illegal immigration, there is no better primer than this.
https://www.youtube.com/watch?v=GLwNdIynrtk
@ “Princeton”Kopits
You’re like the dude who has just been full body-slammed onto hard concrete, has blood streaming off the side of his head that is starting to coagulate in the summer heat, and after being knocked out totally unconscious for about 25 minutes, looks up at the sky in a semi-dazed state and says, “OK, anytime you’re ready, I’ll let you throw the first punch”.
The Menzie Standard:
“the dude who has just been full body-slammed onto hard concrete, has blood streaming off the side of his head that is starting to coagulate in the summer heat”
Lord – Menzie did not write this. Neither did I. Princeton Stephen the ultimate cry baby.
But Menzie’s ok with it, isn’t he?
Possible audio vulgarities ahead:
https://www.youtube.com/watch?v=Xff3oWymE4c
The market based visa idea won’t stop or slow illegal immigration to the U.S.. It would accelerate it.
Foreigners don’t come to the U.S. only for jobs. Many leave their, what this blog often cites, s*#hole countries for the prospect of a better life. I suppose that’s why there are “anchor babies” or why women give up their children for adoption.
Immigrants from Central American countries, for example, would be indifferent leaving for Mexico or the U.S. when both countries become equal. Now, they prefer the U.S..
However, after a few hundred million poor people, from around the world, barge into the U.S. when borders are open to anyone, they’ll be indifferent living in Mexico or the U.S..
And, there doesn’t seem to be much concern about environmental damage, including depleting water in Western States, along with the ability to take care of existing poor citizens.
@PeakIgnorance
It’s your Russian mobsters’ lapdog President who used that term to describe those countries, not Menzie. If you can’t pay attention to what your personal pin-up heartthrob donald trump is saying, WTF can you focus on??
“Immigrants from Central American countries, for example, would be indifferent leaving for Mexico or the U.S. when both countries become equal. Now, they prefer the U.S.”
Not if the visa price is set in the market. If we allow the size of the market at 8 million undocumented Hispanic residents plus 250-450k incremental guest workers, then all of those folks — except theoretically the last one — will have a consumer surplus. So it will be worthwhile to be here.
You are correct, however, that we are converting a supply-constrained black market into a demand-constraint ordinary market. Under a market-based system, if you want to come to the US, it only makes sense if you have a job waiting for you. No different than you choosing to move the California. You either move because you have obtained a job or because you have traveled speculatively in the hopes of obtaining a job. The Mexican is now in the same situation, with the difference that he also has to pay the US government $20 / day. Working in the US becomes a much more mundane exercise, really a lot more like moving between states, plus a background check and a daily fee.
That’s as revolutionary a concept as it is mundane. We’re not disengaging from Mexico, we’re finding a safe and fair way to interact easily.
Steven Kopits, there will be jobs for those hundreds of millions of illegal immigrants and their children.
They’ll work under-the-table or demand jobs, if not allowed to work. Many cities and their politicians won’t even speak English.
Their children will be U.S. citizens, and when they save enough money, their relatives will barge in and live with them.
You and your plan will be in the middle of a stampede.
Wow – when you take on the Stupidest Man Alive (Princeton Stephen) you actually write some good stuff. Princeton Stephen has often opined that people fleeing the death squads of Central America are coming here only for higher wages. Yes he is that damn stupid. At least you are not that much of an idiot!
Explain your logic to me.
We’re issuing enough visas to cover the people already here. So that doesn’t change a thing.
After that, we’re letting in about 250-450k people on work visas, which is exactly consistent with the Goodlatte legislation from last year.
We’re setting the number of visas to the minimum number which closes the US southwest border, again, that should be around the Goodlatte number.
So what is your logic that everyone is coming in?
It is true, however, that border control has completely broken down, and we’ll see that 100,000 apprehensions this month that Moses derided as impossible. So the border is in meltdown mode, and not only that, but in a way that favors bringing children into the country. As the child of an illegal immigrant can cost upwards of $15,000 / year in taxpayer money, it is the single most fiscally detrimental way to bring people in. Would not happen in a market-based system.
Steven Kopits, a limited number of visas with an open or unsecure border will encourage massive illegal immigration.
If 50 million people want to go to the Super Bowl game, but there are only 50,000 tickets, what’s to stop those from going to the game when there are no gates or security?
And, wouldn’t you be foolish paying $1,000 for a ticket when you can get in free?
Who says the border is unsecure? There are 100 agents to every crosser. 26,000 agents, 150 crossers per day in a legalized system.
If the market sets the price, then as long as a US visa has a positive value, the visas will be sold at a market-clearing price, even if that is $1.
The more pertinent question is whether a visa would be renewed. If I paid $7000 for a visa and the ten guys working next to me had not, then maybe I wouldn’t want to renew the visa, and would meld into the black market economy.
It is for this very reason that the number of visas materially have to cover the market. Again, let the market set the price, and if the visas trade for $1, so be it. And again, you can force this after a time. Residents of Mexico and the Northern Triangle countries are going to line up to get backgrounded checked and then look for work in the US. If they have visas, and resident illegals do not, the incumbents will face increasing pressure from their employers.
Most employers do not want to hire illegals, for tax, other regulatory and legal liability reasons. A plant manager for Tyson Foods has no personal or professional upside in hiring illegals. He’ll do it to keep the plant going, but he’s not going to be happy about it. If he can hire as many legal employees as he wants at a market price, he’ll tend to do that. So will most employers, certainly the bigger ones.
If I’m a Mexican, I can try an illegal entry out-numbered 100 to 1 by Border Patrol, assuming I get by the cartels, and at a cost of $4,000. And then I don’t have valid US papers and am going to struggle to find work. Or I could plonk down $1800, be officially certified and come and go as I please. As long as there are enough visas to cover the market, and the price is set by the market, the market will clear, and most everyone will remain within market parameters. It is, after all, possible to jump the fence to get into Walt Disney World. But it’s tricky to do and will certainly get you banned if your caught. The vast majority of people just pay a handsome sum to come in officially. That’s the history of the legalization of black markets. So it will be with the US southern border.
If there’s a 10% chance of getting in the country, a very high percentage, e.g. 99%, wouldn’t make the attempt.
If there’s a 100% chance of getting in, then billions of people will consider going to the U.S..
Again, have no idea what you’re talking about.
There is a 100% chance you can get into Disney World if you buy a ticket. But there aren’t billions of people going in every day. Why not? Because it’s a price-rationed system.
That’s all we’re doing, converting a volume rationed system into a price-rationed system. This is not deep, guy.
Steven Kopits, I responded to your article, which states:
“Migrants would have no incentive to come over the border illegally. The southwest border of the US would be secured without a wall.”
You’d give them an incentive without a wall or barriers to stop them from entering illegally.
Why do migrants come over the border illegally? Because they cannot get in legally.
Now let’s assume we set a fixed price, say, $2000, for an annual visa, much as we might set a fixed tax of say, 10% of marijuana. $2000 / year = $1 / work hour. Let’s suppose that Mexicans need $6.50 / hour to come to the US, which actually looks about right to me. So add the $1 / hour, and Mexicans would come to work for $7.50 or better. Prevailing wage is $10 / hour, so the population of Mexicans would expand until 1) wages fall to $7.50, or 2) Mexican unemployment reaches 25% at $10 / hour (ie, net $7.50 / hour) or some combination. So if we use a liberal (low fixed fee) legalize and tax structure, then employment will expand greatly and Mexican wages in the US will fall to the Relocation Wage + the Visa cost through either lower pay or higher unemployment. That’s the solution conservatives don’t want.
Now imagine we set the visa fee to $5 / hour. Wage is $10, Relocation Wage is $6.50, so Mexicans won’t buy visas and the black market will continue more or less undisturbed. So that doesn’t work either.
Now, let’s set the visa at $3.50 / hour. Relocation wage is $6.50, unskilled US wage is $10. This should essentially deliver an equilibrium condition. There will be largely as many visas as people looking for them at that price. And that’s what we’re targeting. We’re using Border Patrol as our pricing tool. If people are still coming illegally over the border, then we have to expand the number of visas to close the border again. The presumption however, is that this would occur if the visa price slides above $3.50 / hour — which is not out of the question. So we’ll see it in visa price formation.
If we need some additional visas, well, ok. Each million workers is worth $7 bn in government revenue and $50 – $100 bn in enabled US GDP. So it’s not a tragedy. But the numbers could go the other way, too. Maybe people are just so reluctant to blow their eligibility that they refuse to come over the border even if there were jobs available. For example, there are perhaps 100,000 unfilled trucker jobs in the US, but Fedex doesn’t hire drivers without licenses. So maybe the border is closed tighter than it ought to be. So both could happen.
From the perspective of the US public, the key issues are safety, safety and safety, followed by order, transparency, proper compensation, no long tail obligations, limited negative impact on US workers and maybe a few other items. If there were 5% more Hispanics in New Jersey, could I tell? No. Do I care? Not particularly, as long as they are operating in a safe — and did I mention safe? — transparent, fair, ordered and law-abiding way without being a burden on taxpayers.
You do the optimization iteratively, and after three years or so, you should get some sense of the market. This is essentially indistinguishable for airline seat capacity and pricing systems. Same thing, you could use the same software.
Sitting atop all this would be the immigration version of the FOMC, again doing exactly what the FOMC does. Instead of inflation and interest rates, it’s visa prices and visa volumes (mostly volumes). (Keep in mind we’re turning 50,000 visas a day.) Because we’re using a conservative objective function (close the southwest border), it’s in essence a ‘dirty float’ in exchange rate terms, but there’s nothing novel about this. There’s some art to it, but the numbers don’t have to be that precise. Both employers and migrants have an ability to adjust, for example, with utilization (work six days instead of five, or four instead of five).
The repeal of prohibitions shows, as long as a liberalized market is reasonably well ordered, the public is accepting. I think it will all go just as did repeal of alcohol prohibition and the legalization of gambling. I remember when legalization of gambling was on the table and everyone was very anxious about it, but nobody cares today. I expect something essentially similar with the legalization of migrant labor. Really, it’s not that big a deal.
Steven Kopits, that’s the craziest idea I’ve ever heard.
You have no idea, who will purchase visas. Are they members of drug cartels, criminal gangs, parents creating anchor babies, those who will stay in the country regardless of renewing visas, people in poor health, who want access to the best health care, unskilled adults with a 9th grade education, etc..
You want to legalize and tax criminal behavior, including increasing marijuana use, while U.S. citizens, particularly poor citizens, pay the price and suffer.
What’s needed is a secure border and quotas of the kind of immigrants, who will benefit the country, particularly poor American citizens. We need to stop illegal and unwanted immigration that benefit immigrants at the expense of poor American citizens.
Your immigration idea would create a situation similar to California’s super bloom:
“The wildflower super bloom is so popular, they’re being overrun and trampled by visitors. Faced with traffic jams, crushed flowers and overflowing public toilets, authorities earlier this month temporarily closed access to Walker Canyon in Lake Elsinore to the swarms of tourists who flocked there.”
“You have no idea, who will purchase visas. Are they members of drug cartels, criminal gangs, parents creating anchor babies, those who will stay in the country regardless of renewing visas, people in poor health, who want access to the best health care, unskilled adults with a 9th grade education, etc..”
Background checks are the same as they are today. To the broader point, for those people coming in illegally, those people we have absolutely no idea about — you’re right. That goes away. So instead of 8 million people without background checks who already reside here and another 400,000 or so coming across this year, we get probably 1 million undocumented residents and virtually no crossers without background check. And you think that’s inferior?
All this is covered on p. 7 of the White Paper
“Eligibility for a visa today is earned through proof of identity—a passport, birth certificate or similar document—and a background check, primarily associated with US criminal databases. The Plan would not change background checks substantively.”
https://www.princetonpolicy.com/ppa-blog/2019/2/18/white-paper-feb-2019-version
You might try reading it. It’s really not difficult to understand.
“You want to legalize and tax criminal behavior, including increasing marijuana use, while U.S. citizens, particularly poor citizens, pay the price and suffer.”
I am not crazy about legalizing marijuana, but I think the cost-benefit on it is sound. You couldn’t close the southwest border without it.
“What’s needed is a secure border and quotas of the kind of immigrants, who will benefit the country, particularly poor American citizens. We need to stop illegal and unwanted immigration that benefit immigrants at the expense of poor American citizens.”
I think that’s great, except the US to the best of my knowledge has never, never beaten a black market with supply suppression. As we speak, border control has completely collapsed. My count for southwest border apprehensions is running at 104,000 for March based on the weekly data I have seen. The vast majority of these people will be released into the US. And I think it’s going to get substantially worse over the next two months. Oh, and by the way, half of these people are children, the single biggest financial burden on taxpayers.
So sure, let’s get border control. But considering we haven’t gotten it in 50 years, you really think it’s going to happen now? Good luck with that. I prefer the acknowledge underlying realities and create an ordered market. That’s possible. What you’re asking, there is zero evidence that the US political or enforcement regime will deliver that. Now, we can achieve that with demand suppression. So sure, why don’t you call for shutting down US meat and poultry processing, dairy and fruits and vegetables farming. And construction. Yeah, why not? But I don’t think you’re going to carry the day with most conservatives.
You have the same problem many conservatives have. You are confusing yourself with the country. The majority — the vast majority — of the country is not with you. So you can sit around and bitch and moan. In my case, I prefer to work on legislation that meets the needs of a broader range of stakeholders and which can find support on both left and right.
http://i2.cdn.turner.com/cnn/2017/images/03/17/rel4g.-.immigration.pdf
https://news.gallup.com/poll/246455/solid-majority-opposes-new-construction-border-wall.aspx
“The market based visa idea won’t stop or slow illegal immigration to the U.S.. It would accelerate it.”
i think this summarizes quite well how the trumpsters would view your policy, steven.
You know, Baffs, I have talked to many conservatives — as well as liberals and just regular people. No one has rejected the notion. Not one. If Breitbart and the Washington Examiner are willing to talk about it, you know it has legs on the right.
Are you listening to these people? Market based visas does not have a damn thing to do with mothers taking their children away from the death squads of Central America. Even PeakStupidity gets this simple point. But not Princeton Stephen – STUPIDEST MAN ALIVE!