Illegal immigration akin to Enron fraud |

Illegal immigration akin to Enron fraud

Illegal Immigration: Republicans want cheap workers, Democrats want poor voters.

America once faced a problem with systematic fraud in the financial markets which lead to scandals such as Enron. The premise is simple, by misreporting their performance, these companies gained an illegal and unfair advantage over competitors. By misreporting their numbers, their cost of borrowing money was far lower, and they didn’t have to work to actually make a “profit.” Ultimately, society ” that’s you ” paid $50 billion when this fraud was uncovered.

Illegal immigrant employment is fraud by another name ” and costs far more. Both the illegal immigrant, and the individuals employing them, attempt to gain an unfair advantage by creating an illegal advantage over competitors. Ultimately you pay, as more wealth is unfairly transferred to the illegal employer and more bills are given to you by the illegal immigrant. An extrapolation of the Rice University Huddle Study of 1996 to 2006 yields a net economic impact of minus $70 billion, nearly all of that borne by low-income households. Mexico alone receives nearly $20 Billion per year in remittances ” that’s cash leaving the U.S. economy. For those who question the net impact of illegal’s work ” after all they are working ” one might also ask whether Enron was a net positive, for was it not also working? The reality is that white collar fraud and illegal employment are not victimless crimes, and also further affect business and employment by creating illegal competition.

In the case of the illegal immigrant, he/she is here in America, working and enjoying the relatively good life, while a would-be legal immigrant is spending years in their home country filing paperwork, educating themselves, learning English, and earning money to show Uncle Sam that they can and will take care of themselves in America. Is it easy for someone in a third world country to raise the funds? No. However, adapting to America won’t be easy either, so this hard work in the home country effectively becomes part of the selection process.

Illegal immigration also unfairly competes against another part of the selection process: sponsoring. If the legal immigrant is sponsored (and many are), a relative in America with at least two years of full residency is working hard to show that they have approximately $12,000 for short term support costs, and the stability to cover any and all welfare given to the immigrant for a period of 10 years. Ten years? That’s right, Uncle Sam bills the sponsor for any unpaid hospital bills, welfare, public defender costs, and any “public aid” given to the immigrant for 10 years. Sponsoring offers a far more effective screening and assimilation process than government could ever provide. Think of immigration sponsoring as having a co-signer on a loan, and you are the bank.

The employer of illegal immigrants has a similar illegal advantage over his/her competitors in that the illegal immigrant has none of the above immigration costs and therefore can work for lower wages ” no sponsor, no co-signer. The employer of illegal immigrants has not had to work for his/her money by finding good workers to manage, being innovative on products or services, or worked hard to find good customers. Rather he/she has only had to violate the law to ensure personal profits, just like Enron. The employer of illegal immigrants is no different than a factory that fires all American workers and sends it work overseas. However, as construction and mowing a lawn can’t really be “offshored,” the only “solution” is to bring the low wage of a third world country here. At least the offshoring T-shirt factory doesn’t stick you with the inflated hospital bills of the workers.

So is there a solution that’s immediate and relatively painless? Sure. In the wake of Enron, the Sarbanes-Oxley act required all financial reports to be signed by the CEO or CFO of the company. If there was a fraud, the person signing the report was criminally liable. As white collar guys don’t like to be lead away in handcuffs, the companies cleaned themselves up.

It would be simple to make similar change in illegal immigrant employment. Currently, there exists a Federal Pilot system for checking social security numbers. We need only enforce the provision that if social security numbers aren’t cleared by an employer using the Federal Pilot system, the ICE team arrests the owner of the company. While an illegal immigrant might not be too put out by spending a few days in the clink and appearing before a judge, I’m willing to bet that more than a few owners might not like the social stigma and discomfort of shuffling around in chains. Of course, any owners that wouldn’t mind the stigma are probably unscrupulous in other ways, so people would soon rightly identify the employer of illegal immigrants as an unsound business partner.

Currently, this is unlikely to happen. In the last 12 months, ICE reports only 91 arrests in the “employer supervisor chain.”

Illegal immigration is not a human rights issue. It’s not victimless. It is simply fraud. The debate only exists because both parties really want class warfare: Republicans want cheap workers that will work for them, while Democrats want poor workers that will vote for them. While politicians exploit this, the workers of America pay the bill.

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