David Jackson reports in USA Today that President Bush is making a visit to Arizona to tout his proposal for a guest worker program. I get as far as the fourth paragraph before getting bent out of shape:
The president said measures must be taken to protect the border from immigrants who come over with impunity; but he said there also needs to be an organized system to accommodate workers who are doing jobs Americans refuse to perform.
There are no jobs that Americans refuse to perform. There may be jobs that Americans refuse to perform at the prevailing wage rates. This simply means that the wage rates should rise and the number of jobs should fall, until the number of jobs matches the number of people authorized to work in the country who are willing to perform them. If it turns out that with these higher prevailing wage rates, the employer can no longer operate at a profit, then the employer should cease operations--or relocate to a place where labor and other costs are sufficiently cheap as to allow a profitable business. The "organized system" that accommodates this is simply a free market and enforcement of the most basic immigration laws.
When I was first learning economics, we always spoke of capital, not labor, as the mobile factor of production. Maybe something has changed. In the current environment, I would expect to see capital going south across the border with Mexico, drawn by the high returns available due to the large amount of low-wage labor. But that's not what we are seeing. We are seeing the labor cross the border--at considerable personal cost--to take the low-wage jobs and then send remittances back to Mexico. (Even in agriculture, where the land is obviously not mobile, I would be surprised if much of the agriculture in the Southwestern U.S. couldn't also be produced in Mexico. But there is nothing in the argument that requires the unskilled labor to work in agriculture or any particular industry.)
How bad must the environment for business and investment be in Mexico for the capital to stay here and the labor to cross the border?