Can Juan Doe keep prices low?
After last Friday's stock-market fiasco, some call for more-lenient immigration laws to fight inflation.
MEXICO CITY — Meet Enrique de la Cruz, would-be US inflation fighter.
Actually Mr. de la Cruz cuts hair in Mexico City. But before long he hopes to be working in Dallas, alongside a friend who left a year ago to lay wood floors.
De la Cruz (not his real name) believes he can earn much more in Dallas than he does in a three-chair barber shop here. He might even be able to fulfill his dream of sending his children to a private university.
But he also would earn less than a skilled American woodworker, and would add two hands to a construction market where most hands are already occupied. In a small way his presence in Dallas would act as a damper on wages. And de la Cruz would have become an example of one kind of immigrant Federal Reserve Chairman Alan Greenspan says the US needs to keep inflation down.
"My friend says if I went up there I could make $800 every two weeks, dollars," he emphasizes. "For me that's a fortune."
The perpetual US debate over immigration is taking a new turn. An extremely tight labor market is prompting some economists, business leaders, and policymakers to call for measures to allow the immigrant turnstiles to click a little faster.
When the US stock market plummeted Friday over a higher-than-expected monthly inflation report, the nerve-rattling jolt conjured up some of Mr.Greenspan's earlier comments. In Boston last March, he said: "Unless we increase immigration quotas, we run the risk that growing demand will end our prosperity."
The Fed chief made similar comments before the US Senate. Now some Republican leaders in Congress are calling for higher immigration quotas, specifically for skilled workers in the drum-tight, high-tech sector. And in a historic shift in its traditional stance on immigration, the AFL-CIO is advocating an amnesty for the estimated 6 million undocumented workers in the US.
A little farther off on the horizon are proposals to revamp policy governing the legal immigration of 1 million foreigners a year, to favor the arrival of more of the skilled workers the US economy needs. "Something like 90 percent of all future jobs will require more than a high school education, so we shouldn't continue to import more workers without the necessary skills," says Rep. Lamar Smith (R) of Texas, chairman of the House immigration subcommittee. "It doesn't make sense for them if they're going to find it hard to provide for their families, and it doesn't make sense for the US economy."
About a third of the 1 million legal immigrants the US receives annually lack a high school diploma. Most of the 400,000 illegal immigrants entering the US each year fall in the same category.
Congressman Smith, who last week filed legislation to increase the number of temporary visas the US grants for mostly high-tech workers, is also lobbying for an immigration policy favoring educated workers. Smith says the need for temporary visas is a "warning that we need a legal immigration system that better serves America's interests."
In Mexico, which sends more immigrants to the US than any other country, reports of a prosperous US economy, with a 4 percent unemployment rate and stiff wage pressures, receive wide coverage. Mexicans already working in the US call home to family and friends with job offers - as happened in de la Cruz's case.
"Even your national bank president says the US needs more workers like me," says de la Cruz to an American acquaintance. Resisting the temptation to enter the US illegally, de la Cruz says, "I can't understand why they [in Mexico City's US consulate] are so reluctant to grant me a visa when all I hear is how they need more workers."
Mexican political analyst Jorge Castaeda says Mexico and other emigrant countries should now push for broader and more favorable visa conditions for their emigrating citizens - in light of signs that the US is opening up to more immigrant workers.
Yet despite the hot US economy, many US economists and policymakers say no one should expect to see an opening of US immigration floodgates or more lenience toward illegal (undocumented) immigration any time soon.
"Right now there is some pressure for more unskilled workers, but I'd be shocked if it persists too long," says Daniel Hamermesh, a labor economist at the University of Texas in Austin. "That's not a permanent feature of the US economy."
Mr. Hamermesh, who helped author a recent study on the labor-market impact of immigration, says the real pressure in the US economy is for more skilled workers.
His words echo the findings of a battery of immigration studies Mr. Smith cites to underpin his call for immigration reform. "[Current] US immigration policy serves primarily to increase the number of residents who lack even a high school degree," concluded a study by the Hudson Institute in Indianapolis. A report by Rand Corp.'s Center for Research on Immigration Policy recommended that "policies be modified ... to place greater emphasis on the education levels of new immigrants."
One problem for US workers is that the arrival of unskilled laborers can mean lower wages for them. (That's the traditional reason labor organizations like the AFL-CIO have opposed more-lenient immigration laws.)
But if the US wants to avoid an inflation eruption, "there are only three options," says political analyst Mr. Castaeda. It can "cool the economy, ... put back the retirement age ... or import low-cost labor."
(c) Copyright 2000. The Christian Science Publishing Society