About Those “Illegals”

The Economic Policy Institute recently released a comprehensive report on immigration and the economy. The report was massive, and it included reams of information on both legal immigrants and the undocumented persons often labeled “Illegal.”

In one section of the report, researchers addressed a common accusation–that undocumented workers are a burden on government, and a net cost to taxpayers.

Unauthorized immigrants are a net positive for public budgets because they contribute more to the system than they take out. Unauthorized immigrants generally cannot receive benefits from government programs, except in some cases, such as when unauthorized immigrant children receive public education, and in some states that allow unauthorized immigrants to attend state colleges at in-state tuition rates. Nevertheless, most of these unauthorized immigrants will still pay taxes. The vast majority pay sales taxes in states with sales taxes, and property taxes through properties that they own or rent. Additionally, most unauthorized immigrant workers also pay payroll and income taxes. The Social Security Administration estimates that 75 percent of unauthorized immigrants are actually on formal payrolls, either using fraudulent Social Security numbers or Social Security numbers of the deceased. Unauthorized immigrants pay into Social Security via automatic payroll deductions, but they can never claim Social Security benefits. In 2005, it was estimated that unauthorized immigrants paid about $7 billion per year in Social Security taxes that they will never be able to reclaim.

Unauthorized immigrants are also unlikely to receive any income credits available through the tax code, or to receive a tax refund if they overpaid in their regular payroll withholdings. The Tax Policy Center estimates that 78 percent of American households that earned less than $33,000 owed no federal income taxes in 2011.19 Many low-income taxpayers only paid marginal amounts if they did owe. Because of their low income levels, most unauthorized immigrants would likely fall into either of these categories. A significant portion of unauthorized immigrants file taxes using Individual Taxpayer Identification Numbers (ITINs); however, many unauthorized immigrants don’t file because they fear deportation. If they don’t file, they are never refunded money that was automatically withheld from their paychecks.

The research also addressed another common belief: that unauthorized immigrants use (abuse?) public support programs like welfare, unemployment insurance, and food stamps. The data suggests otherwise.

While it is possible that an unauthorized immigrant could benefit from a U.S. citizen or legal permanent resident family member receiving income support through a federal or state program, unauthorized immigrants themselves by and large are ineligible for such programs because of their immigration status.

In response to the repeated demands of our contemporary Nativists that we just deport the 11.7 million unauthorized immigrants, the report noted:

Aside from the astronomical costs it would impose and the fact that it’s likely to be a logistical impossibility, it would actually hurt, not help, the economy and the jobs situation…while unauthorized immigrant workers add to the supply of labor, they also consume goods and services, thereby generating economic activity and creating jobs. One way to think of this is to remember that the labor force is growing all the time due to both immigration and native-born population growth, and that’s okay, because the economy expands too. We all understand this intuitively; that’s why we don’t worry when a new graduate enters the labor force. We know those new graduates buy food and cars and clothes and pay rent. By the same token, unauthorized immigrants are not just workers, they are also consumers. We could remove them, which would indeed reduce the number of workers, but it would also reduce the jobs created by the economic activity they generate. So the right choice is to bring the unauthorized immigrants who are already here out of the shadows so they can help the country realize its economic potential.

Finally, the report also addressed the influx of unaccompanied children from Central America:

Tens of thousands of migrant children (or minors) from Mexico and Central America arrive at the Southwest border every year without a parent or guardian, but more recently, they have been arriving in increasing numbers from the Northern Triangle of Central America: El Salvador, Guatemala, and Honduras… some of the principal reasons for their arrival are violence and criminality in their home countries (El Salvador, Guatemala, and Honduras have some of the highest homicide rates in the world), including being forced to join criminal gangs under threat of violence or death; false rumors that children will receive some sort of legal status if they show up on the border and turn themselves in to immigration authorities; and the desire to reunite with family members living in the United States.

(What the dry language of a research report fails to note is that these are children–frightened, alone and desperate for safety, and that the vitriol with which they are being met is shameful, and should be a national embarrassment.)

Those of us who have a forlorn attachment to hard evidence and documented facts can continue to hope that eventually, reality will inform policy.

Eventually.

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Blowin’ In the Wind

Copenhagen will become the world’s first carbon-neutral capital by 2025. That means that Copenhagen will offset any greenhouse gas emissions through measures such as tree plantings and renewable energy production.

According to Newsweek,

Though considerably less charming than it was in its medieval incarnation, the humble windmill is enjoying a 21st-century renaissance. Last year, wind power capacity increased on every ­continent, according to industry association Global Wind Energy Council. In 2011 Port Rock, Missouri, with a population of 1,300 people, became the first American town to be powered by urban wind turbines, and other smaller urban installations have followed. Now, developers and home owners from Hamburg to New York have started adding rooftop wind turbines.

There was a slogan back in the Sixties: “The Whole World is Watching.” It meant something quite different back then, but today it seems an appropriate slogan for the changes being made by cities like Copenhagen as they embrace, rather than resist, the inevitable.

Copenhagen’s Mayor is proud of his city’s move into the 21st Century, and he is equally proud of the budgetary savings that accompany that move.  Doing right by the environment, it turns out, also saves money. (Here in Indianapolis, IPL has belatedly recognized that connection and decided to stop using coal to power its Harding Street plant.)

As long as we’re recycling, let’s revisit (and revise the meaning of) not just “the whole world is watching” but also “blowin’ in the wind.”

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The Devil in the Details…..

Charter schools have become the flavor of the day for education reformers, and they clearly have some virtues. Unlike voucher programs that divert public school resources to private and parochial schools, charters are public schools, although operating under more flexible guidelines than their more traditional counterparts.

Philosophically, I have no quarrel with charter schools. (I have big problems with vouchers.) But I do have real issues with the very American tendency to prescribe one-size-fits-all solutions to complicated problems, and too many people have decided that charters are that quick and easy solution.

Charters were initially designed to be experimental–to try new approaches, to innovate in the classroom–and to offer parents a wider array of choices of educational philosophy. So far, so good. But as charters have proliferated without much in the way of accountability or evaluation, some of the reasons we need to tread with caution have emerged.  When Indianapolis’ Project School was closed for failure to perform, for example, parents who had chosen the school and were invested in its approach were furious and their children were uprooted. Ball State University, which had chartered some 20 schools, abruptly closed seven of them, with equally disruptive results.

And then there’s this…

While public schools must provide due process to students when making decisions about suspensions or expulsions, most states exempt charter schools from school district discipline policies. This lack of protection may have enabled some charter schools to suspend and expel students at much higher rates than their public counterparts. In San Diego, Green and his coauthors report, the city’s 37 charter schools have a suspension rate twice that of the public schools, while in Newark, the suspension rate in charter schools is 10 percent, compared to 3 percent for the city’s public schools….

It’s not just discipline, though; charter schools may be exempt from constitutional protections in areas like search and seizure and the exercise of religion. It’s obviously one thing for a Catholic school to require religion classes, but does the same logic apply to a charter school like Arizona’s Heritage Academy, which last month was criticized by Americans United for the Separation of Church and State for requiring 12th graders to read books claiming that God inspired the drafting of the Constitution.

So often, it isn’t what we choose to do. It’s how we choose to do it.

Charter schools–properly conceived, prudently financed and carefully monitored–can be part of the solution to our education woes. But they are not–and cannot be– a substitute for the hard work of fixing our public school systems.

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Foreclosing America

One of the great benefits of teaching college is what you learn from your students. Sometimes the lessons are new, sometimes they appear as new ways of understanding information you already have.

Recently, I served on the doctoral committee of a student who was writing her dissertation on the “Lived Experience of Foreclosure.” Her research connected a number of insights, and highlighted a number of policy issues, in a way that illuminated the interdependence of economic stability and self-worth in American culture in a way I hadn’t previously appreciated.

There weren’t many people who were willing to share their experiences with her, and the reasons for that reluctance could be inferred from the painful insights of those who did respond. In America, after all, homeownership is a cultural marker, tangible evidence of solid and responsible citizenship. Home is more than a roof over ones head or a place to live; it’s a time-honored symbol of the American Dream—and its cultural symbolism makes foreclosure an American nightmare.

Research on the effects of the mortgage default epidemic that accompanied the Great Recession has confirmed foreclosure’s more “macro level” consequences: foreclosures are a threat to neighborhood stability and community well-being; they affect predominantly the low-income and minority populations most likely to be hard-hit by economic downturns; they create an environment conducive to criminal activity and lead to disinvestment.

Those consequences are bad enough, but it is the experience of real people caught up in an economic downturn not of their making—and the lessons that can be drawn from those experiences—that can help us shape policies to minimize a repeat of the recent epidemic.

Foreclosure, it turns out, is not just a legal process triggered by an inability to pay. It is equally the consequence of a profound disconnect between the borrower and lender. That disconnect is a function of dramatic changes in banking since the days when mortgage loans were the product of face to face agreements between an officer of the bank on the corner and a long-term, well-known customer.

The purchase of local banks by ever-bigger, national ones was driven by the bankers’ belief that bigger would be better, that consolidation would permit efficiencies that would ultimately benefit both their bottom lines and their consumers. Divorcing banks from their customers was an unanticipated consequence.

That initial disconnect was exacerbated by the practice of “flipping” mortgage loans. In some cases, the borrower was barely out the door when a letter arrived informing him that his loan had been sold and would henceforth be serviced by Bank B, with whom the borrower usually had no previous relationship.

It is no longer uncommon for a mortgage to be sold several times during its term. Among the consequences of flipping is the obvious one; when the bank extending the loan doesn’t intend to keep it, there is less incentive to ensure that the borrower can repay. The growth and prevalence of inadequate and unethical underwriting standards—a scandal widely discussed in the wake of the Great Recession—is largely attributable to flipping.

This distance between the borrower and the eventual owner of the mortgage emerged over and over in the conversations with the foreclosed homeowners. In one case, the delinquent homeowner found a buyer, but couldn’t reach anyone who had the authority to approve the short sale.

Consequential as it has been, the foreclosure epidemic illustrates a problem that is far larger and more pervasive than current banking practices: America’s growing power imbalance.

Free markets require willing buyers and willing sellers, each in possession of the relevant information, and each able to walk away from a transaction if they deem it too one-sided. People who enter into such agreements are expected to live up to their terms—an expectation that most of us agree is just. Increasingly, however, the transactions to which we are party are not the result of negotiation and unforced decision-making. Instead, they are “take it or leave it” arrangements in which one party has all the power and possesses most or all of the relevant information.

In an economic world characterized by such imbalances of power, it may be time to rethink policies that operate to penalize the powerless and reward the predatory.

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About Those “Liberal” Professors

One of my graduate students pointed me to an interesting article in the Chronicle of Higher Education, highlighting a study into the persistent accusation that “liberal” professors are guilty of politically indoctrinating their students.

Dodson’s analysis of the data shows that students who get engaged academically are likely to increase their time talking about political issues and becoming engaged in civic life.

With regard to political views, academic engagement promoted moderation. “[T]he results indicate — in contrast to the concerns of many conservative commentators — that academic involvement generally moderates attitudes,” Dodson writes. “While conservative students do become more liberal as a result of academic involvement, liberals become more conservative as a result of their academic involvement. Indeed it appears that a critical engagement with a diverse set of ideas — a hallmark of the college experience — challenges students to re-evaluate the strength of their political convictions.”

The data on student activities demonstrate the opposite impact: The more involved that liberal students get, the more liberal they become, while the more involved conservative students get, the more conservative they become.”This finding suggests that students seek out and engage with familiar social environments — a choice that leads to the strengthening of their political beliefs.”

This research is consistent with a study I saw a few years ago: when people who were moderately inclined to believe X were placed in a discussion group with others who all believed X, they emerged from the experience much more invested in X. People who participated in more diverse discussions–who were placed in groups representing a range of positions on X–developed more nuanced (and less dogmatic) opinions about X.

It all comes back to what academics call motivated reasoning… the willingness of people invested in a particular worldview to choose the news and select the information environments that reinforce their pre-existing beliefs.

A good teacher provides students with a wide range of relevant information, at least some  of which will inevitably challenge their worldviews. As I tell my students, it’s my job to confuse you. I’ll know I’ve succeeded if, after taking my class, students use two phrases more frequently: “it depends,” and “it’s more complicated than that.”

Because, really–it is more complicated than that.

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