Will tighter restrictions on seasonal workers create a shortage of nannies and resort workers? The US has tightened up on the number of visa’s it hands out, and now the folks over at the Economist are worried that this could create a shortage of foreign workers. This strikes some folks as a potential calamity, although we’re not so sure. If the government’s restrictions are creating a shortage, you’d expect this to boost the price of seasonal labor, luring more American teenagers and college kids back into the market.
But will a shortage result from the lack of seasonal work visas? We’re not so sure. With the economy plummeting toward a recession–if not already knee-deep in one–we’d expect the demand for resort workers and nannies to decline. What’s more, the supply of foreign workers eager to fill jobs in the US might also be declining due to the decline of the dollar relative to most foreign currencies.
In short, there might not be any shortage of foreign nannies. And even if there is, it’s possible the dollar rather than immigration policy might be to blame. This should be easy to test but we notice a reluctance on the part of economists to actually test things about immigration rather than just applaud it.
Where have all the nannies gone? [Economist]

If generals are always fighting the last war, politicians and pundits are constantly debating the last political crisis.
Earlier this year we had what passes for a national debate about immigration policy. As you may recall, that debated ended in a stalemate and preserved the mutually unsatisfactory status quo. (We regard the immense frustration of the political class at our current situation as a point in its favor.) A central talking point of those who advocate more open borders and legalization of illegal aliens was the concept of “jobs Americans won’t do.” This always struck us as largely economically ignorant nonsense—anyone who has watched the Discovery’s Channel’s “Dirty Jobs” know that Americans will do some pretty tough, disgusting and crazy work if the pay is good enough—but with a little fudging we could kind of understand the point: getting some things done would be far more expensive if we didn’t import disenfranchised laborers from the third-world to do them. Construction was one of these things, and the flow of cheap labor is one of the things that kept the home construction boom going. Illegal immigration was the subprime loan of the labor side of the equation.
But now that the housing boom has deflated and the credit market is in the midst of a retrenchment, those “jobs Americans won’t do for illegal alien wages” are vanishing. But the people who were imported to do those jobs are not. In yesterday’s City Section of the New York Times, we learned that many of those immigrant workers are now virtually homeless, congregating most days hoping to land a $10 per hour day laborer gig. But those are few and far between, with the supply of men looking to do them far outstripping the demand. Most days, the best these guys can hope for is a warm meal from a charitable Colombian immigrant who spends his evening feeding them.
One difference between subprime loans and subprime labor is that unlike the loans, the financial institutions, home buyers and home builders who together helped create the demand for illegal immigrant labor don’t find themselves now burdened by that legacy. These guys are out of work but no-one other than themselves and the general public pays the price. The profits from their labor were privatized but the costs of their unemployment will be shared by the broader public in the form of urban blight, higher crime and welfare.
In a sense, this is classic credit boom and bust economics. Loose credit terms urged by the Federal Reserve leads to malinvestment in low skilled laborers. But unlike buying the wrong equipment, importing too many of the wrong kind of workers doesn’t create long term burdens for the companies that employed them. The initial investment was cheap to non-existent, and once the demand is gone the workers can just be fired. So the incentives to over-invest in imported labor during a credit driven boom are even more extreme than most other kinds of malinvestment that occur during booms, because the firms don’t pay the downside costs. But, as this article makes clear, getting them off the books just puts them on the streets.
The Chicken And Rice Man [New York Times]

The Government Thinks You Aren’t Having Enough Babies

William P. Kucewicz, editor of and former Former Wall Street Journal editorial board member, argues for the immigration liberalization being pushed by President George Bush in NationalReviewOnline today. The problem is that Americans aren’t having enough babies to replace our aging population and prop up the governments burgeoning entitlement programs, according to Kucewicz. The solution? The government needs to import more people.

While it’s too late to change the boomers’ baby-making habits, policymakers can do the next best thing: that is, import as adults via liberalized immigration policies the children who were never born. Working-aged immigrants would do just as nicely as native-born Americans in terms of maintaining a viable ratio of workers to retirees.

This makes sense because, as everyone knows, governments are very good at second-guessing the independent decisions of millions of independent actors. And it’s totally not surprising that a “conservative” magazine thinks that government totally knows how many Americans there should be. No really.