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The Borscht Belt Theory of Immigration

The U.S. immigration system is a farce—and such small portions!

by
Michael Lind
February 16, 2022
Guillermo Arias/AFP via Getty Images
Guillermo Arias/AFP via Getty Images

In order to deal with the bad optics of tent cities on the Rio Grande, the Biden administration has for months now been chartering planes on secretive flights from the Southwestern border to states and cities around the country. Often these flights land after midnight, in violation of local curfews, and illegal immigrants and asylum claimants are turned over to local charities—many of them dependent on federal tax dollars—or family members, without the knowledge of state and local officials.

Having paid thousands in some cases to Mexican cartels, and then having been ferried across the United States at taxpayer expense, many illegal immigrants are then allowed by the Biden administration to simply vanish. The Department of Homeland Security recently told Congress that of the 104,171 noncitizens released into the interior of the United States and given a notice to report (NTR), nearly half—47,705, to be precise—failed to check in with the government and their whereabouts remain unknown.

Once the Biden administration has allowed them to vanish into the illegal underground economy, the chances that illegal immigrants will ever be apprehended or deported, as the law requires, are virtually nil, especially now that the administration has announced it will limit deportation cases to potential national security threats and those who commit major crimes. (Welcome to America, minor criminals of the world!)

Illegal immigrants in the United States are often able to obtain individual taxpayer identification numbers (ITINs), or in some cases invented, borrowed, purchased, or stolen Social Security numbers, permitting them to work fraudulently in violation of federal, state, and local labor laws. In states like California, they are able in many cases to apply for welfare programs a few weeks or months after being carried across the border by billion-dollar crime syndicates. In a 1982 case, Plyler v. Doe, the Supreme Court held that public schools had to educate the children of illegal immigrants at taxpayer expense, increasing the incentive for foreign nationals to violate U.S. immigration and employment laws.

As surreal as it sounds, President Biden’s Transportation Security Administration recently admitted that illegal immigrants are being allowed to board airplanes using a “Warrant for Arrest of Alien” or a “Warrant of Removal/Deportation” as an acceptable form of personal identification.

The Internal Revenue Service and Social Security Administration have been complicit in large-scale, illegal labor smuggling into the United States for decades. I discovered this in 2017 when I received the following message from the IRS (emphasis added):

Important message about your tax account
Employment related Identity Theft Notice
We believe another person used your social security number (SSN) to obtain employment. We are sending this notice to make sure you are aware of this incident so you can take appropriate steps to protect yourself from any potential effects of identity theft. We’ll not provide you specific details regarding the identity of the individual who used your SSN for employment purposes.
There is currently no known impact to your tax account as a result of this potential misuse. We placed a marker on your tax account to identify that you may have been a victim of identity theft.

The IRS then helpfully told me it was my responsibility, not theirs, to check with credit bureaus to see if my stolen Social Security number was being used for purposes of fraud. To date, my credit rating has been unaffected, leading me to believe that the other “Michael Lind” with my Social Security number is likely to be a low-wage illegal immigrant who may have bought my stolen name, birth date, and number from some other organized crime front or was given my identity by his employer.

Illegal immigrants who work on farms or factories lack the wherewithal to hack government, business, and bank computers. So do most low-wage employers. Presumably, the theft of my identity was originally undertaken by organized crime in the United States or abroad, possibly linked with state-sponsored hacking operations carried out by official or government-backed entities in China, Russia, or other countries.

As someone who pays taxes to support our federal government, I was curious about this statement from the IRS: “We’ll not provide you specific details regarding the identity of the individual who used your SSN for employment purposes.” Why not? Assuming that my stolen identity is being used by a worker, the Social Security administration knows the location and name and all the financial details of the employer where the suspected fraud is taking place.

I looked into the matter, and it turns out that I am one of millions of U.S. citizens whose identity is apparently being used by illegal immigrant workers. For decades it has been the policy of the Social Security Administration, under liberal and conservative presidents alike (including Trump), not to share this information with the IRS or Immigration and Customs Enforcement, much less with the victim of identity theft. Doing so would be inconvenient for employers who violate the law against hiring illegal immigrants, to say nothing of the dishonest, cheating foreign nationals themselves.

In the case of suspected identity theft, the Social Security Administration has long had a policy of sending a “no-match” letter to the employer. In the spring of 2021, however, Biden’s Social Security Administration announced that it would no longer send no-match letters. According to the National Law Review, “Immigration advocates and many employers welcomed the announcement.” Of course they did. Employers of illegal immigrants and “immigration advocates”—meaning nonprofit bureaucrats and PR professionals funded by libertarian and leftist foundations, donors, and cheap-labor businesses—treat every method of enforcement of U.S. immigration laws, from policing the border to raiding worksites to deporting violators, as tyranny reminiscent of the Gestapo.

Only in 2020 did the Supreme Court rule that victims of identity theft can sue illegal immigrants and their employers in state court. The four liberal justices on the Supreme Court disagreed with the conservative majority, arguing that prosecutions of immigration-related identity theft on behalf of victims is the monopoly of the federal government—which, as we have seen, under presidents of both parties has chosen not to prosecute immigration-related identity fraud except in rare circumstances.

The connivance of our federal government with cheating employers and law-breaking foreign nationals gets even better—or worse, depending on your perspective. Assuming that my doppelgänger is not paid in cash, and has Social Security taxes deducted from his check by his law-breaking employer every two weeks, what happens to the (probably modest) Social Security taxes paid by the other “Michael Lind” with my Social Security number?

It turns out that for decades the Social Security Administration has been dumping Social Security taxes into a special account for suspected fraudulent payments, to be used to boost the dwindling Social Security trust fund. This is what it means when you read happy-talk articles in the mainstream media declaring that “undocumented immigrants”—by which they mean law-breaking foreign nationals with forged or stolen documentation—are “paying into Social Security.” The Social Security Administration actually profits from illegal immigrant identity theft, while the unauthorized and exploited foreign workers get nothing. Meanwhile, millions of victims of federally abetted identity theft like yours truly are told by our government YOYO (you’re on your own).

The claim that illegal immigrants benefit the economy by paying Social Security taxes under false names and numbers, sales taxes, and other incidental taxes was eloquently rejected by Barbara Jordan, the former civil rights leader and U.S. representative from Texas who chaired President Bill Clinton’s commission on immigration reform: “There are people who argue that some illegal aliens contribute to our community because they may work, pay taxes, send their children to our schools, and in all respects except one, obey the law. Let me be clear: that is not enough.” Jordan also told Congress: “Simply put, if we cannot demagnetize our economy for illegal aliens who come here to seek jobs, we cannot control illegal immigration. If we cannot control illegal immigration, we cannot sustain our national interest in legal immigration. Those who come here illegally, and those who hire them, will destroy the credibility of our immigration policies and their implementation.”

In a 2015 interview, presidential candidate and self-described democratic socialist Sen. Bernie Sanders responded harshly to Ezra Klein’s suggestion that the United States consider an open-borders immigration policy: “Open borders? No, that’s a Koch brother proposal ... That’s a right-wing proposal, which says essentially there is no United States … It would make everybody in America poorer—you’re doing away with the concept of a nation-state, and I don’t think there’s any country in the world that believes in that.”

Was Sanders wrong? Consider the massive corruption and refusal to enforce numerous laws involved with worker smuggling at every level of American society, including the mayors and city councils of “sanctuary cities,” the IRS and Social Security Administration, and, under Biden, the Transportation Security Administration and ICE itself. Also consider the increasing violence and armed capability of the Mexican cartels that smuggle in roughly half of America’s illegal immigrants and claimed refugees, many of whom are no longer originating in Mexico or El Salvador but from locations much farther from America’s borders. Is it then natural to ask if prohibition is working? Should limits on immigration be removed? Should the United States adopt an open-borders labor policy?

Smuggling human beings—mostly low-wage conventional workers, but also trafficked prostitutes—into the United States is a massive and lucrative criminal enterprise, just as smuggling alcohol across the Mexican and Canadian borders was in the 1920s. A century ago, Mexican tequileros smuggled bootleg liquor by mule across the Southwest border. Today, so-called “coyotes” working for the major Mexican criminal cartels like the Zetas and the Gulf Cartel are engaged in the industrial-scale smuggling of people—increasingly from Asia, Africa, the Middle East, and even Europe, not just from the Americas—into Texas and other border states. In the 1920s, many Americans who wanted a drink could find one at a speakeasy or elsewhere. Similarly, in the 2020s, practically any employer who wants to hire illegal immigrants can do so—confident that the chances of an arrest or an ICE raid of the workplace are near zero under the Biden administration.

The civilian accomplices of the transnational labor-smuggling mafias are much more brazen than the official enablers of alcohol smuggling were during Prohibition. Many progressive cities have declared themselves “sanctuary cities,” forbidding their own police departments from collaborating with immigration authorities. Some cities and states issue drivers licenses and provide welfare payments to illegal immigrants and their stateless children. New York City will now allow foreign nationals who have been in the city for at least 30 days (formerly known as “tourists”) to vote in its elections, though it claims that no illegal immigrants with forged IDs will be allowed to vote. Sure they won’t.

A Hollywood studio executive or politician’s son who snorts cocaine and spends a fortune on escorts is a high-end nuisance; a working-class neighborhood transformed by crack houses and bordellos is a social disaster.

Many commodities and services are harmful to individuals and society at large but remain legal. Alcohol abuse was bad before Prohibition and it remains bad today. After the decadelong experiment with national Prohibition, however, Americans decided that it made no sense to add the damage done by the Mafia to the damage done by alcoholism. Similarly, the logic of legalizing relatively harmless drugs like marijuana, along with pornography, does not depend on the claim that these are “victimless crimes,” or somehow beneficial. The damage to the consumers may be real. But if the activity is legalized—and regulated and taxed—then at least organized crime is not making fortunes from providing it, and vast numbers of Americans are no longer technically criminals because they partake in it. Dangerous practices can be regulated by custom, even if they are legal. Consuming alcohol is legal in the United States, but there are social as well as legal sanctions for alcohol abuse. Such a combination of social sanctions with legality to minimize the damage of a harmful substance or practice only works, however, when the demand for a good or service is limited. In the case of highly addictive drugs like opioids, the case for outright prohibition remains strong even at the cost of enriching criminals and creating widespread noncompliance.

Moreover, outright legal prohibition of this or that vice is not a failure if the law is sometimes violated, as long as enforcement raises the costs of consumption. It may be unfair, but society suffers less from the vices of the affluent few, whose money cushions the impact of their behavior, than from the same vices in the working-class majority. A Hollywood studio executive or politician’s son who snorts cocaine and spends a fortune on escorts is a high-end nuisance compiling material for a future autobiography; a working-class neighborhood transformed by crack houses and bordellos is a social disaster. In the same way, an au pair who overstays her visa and is paid well by a rich family is not a threat to the low-wage American workforce comparable to a never-ending stream of poorly paid foreign workers—legal, illegal, or guest workers (formerly known as indentured servants)—whose availability allows amoral employers to worsen working conditions in construction, gardening, meat-packing, janitorial services, hotel cleaning, and other fields for citizen-workers.

But do low-wage immigrants—regardless of whether they are legal or illegal—actually suppress wages and/or take away jobs? This brings us to what I think of as the borscht belt theory of immigration. The best-known joke identified with the borscht belt—the region of hotels and resorts in the Catskill Mountains that once served a heavily Jewish immigrant clientele—involves a typical patron who complains that “The food in this place is really terrible, and the portions are so small!”

The borscht belt theory of immigration goes like this: “Immigrants do not suppress wages—and without more immigrants, wages will go up and everything will be more expensive!” A related version on the political left is this: “High levels of poverty in the United States are a national disgrace—and also, the United States is not importing enough poor people!” Both statements cannot be true. It cannot be the case that immigrant competition does not suppress wages in a particular occupation, and at the same time also true that employers in the absence of immigration would be forced to raise wages to attract workers and pass the costs along to consumers.

When the intellectual apologists for cheap-labor immigration policies in journalism, the academy, and libertarian and progressive think tanks claim that there are entire categories of jobs that American citizens and legal immigrants already here refuse to do, they really mean that workers refuse to do those jobs in bad conditions for low wages. Scholars have documented many industries and occupations in which employers have used low-wage legal or illegal immigrants or guest workers to break unions and keep wages low, from janitorial services to meat-packing. In tight labor markets, like the one caused by the tech bubble in the late 1990s, the recovery just before the COVID-19 pandemic, and the present period of supply disruptions, employers find that they have to raise wages and lower requirements to attract employees. That’s good for workers, even if it’s painful for employers and some consumers.

Now and then, business lobbyists say the quiet part out loud. “Welcoming immigrants would cool off inflation, U.S. Chamber of Commerce CEO says,” read a Jan. 11 headline in CNN Business. The story quoted Suzanne Clark, the Chamber CEO, calling for the federal government to double the number of legal immigrants: “If we can alleviate the worker shortage, it might be the fastest thing to do to impact inflation.”

And how exactly would doubling legal immigration reduce inflation? The leader of the Chamber of Commerce did not explain, so I will: By enabling American businesses to hire workers for unattractive jobs without having to raise wages. More immigrants means a looser labor market; a looser labor market means a reduction in the ability of workers to demand wage increases, whose cost employers might pass along to consumers in the form of higher prices. (Some employers are able to raise wages without increasing prices by sharing more of their profits with their workers, something which they prefer not to do; others may compensate for higher labor costs with mechanization or automation.)

Not only the Chamber of Commerce but particular lobbies for industries from agribusiness to low-end service sectors to Silicon Valley are constantly demanding increased numerical levels of immigration—not because they are deeply devoted to humanitarian causes, but because lower wages mean more money in their pockets. In boom times and slumps alike, organized American business always wants to import more legal immigrants and more indentured-servant nonimmigrant guest workers, even as it lobbies against enforcement of federal laws against employing illegal immigrants, tax fraud, and identity theft.

Seldom do employer lobbies admit that so-called “immigration reform” is all about profits. In a recent memo summarizing a poll carried out by Fwd.US and America’s Voice, two organizations that lobby for higher immigration levels, three Democratic polling firms—Global Strategy Group, Garin-Hart-Young, and LD Insights—recommended leading with heart-warming tales about reunited families and other happy talk, rather than with economic arguments: “In general, it is better to focus on all of the aforementioned sympathetic details of those affected than to make economic arguments, including arguments about wages and demand for labor. As we have seen in the past, talking about jobs Americans won’t do is not a helpful frame, and other economic arguments are less effective than what is recommended above.”

This, then, is why the parallel between the prohibition of alcohol and the prohibition of smuggled workers breaks down. Unlike the desire of consumers for alcohol, the desire of American employers in many low-wage sectors of the economy to pay workers as little as possible and to keep wages from rising by importing foreign labor is insatiable. Low-wage employers therefore must not be given the opportunity to hire, except under strict limits, from the global labor pool—in spite of the high cost in transnational criminality and widespread disregard for the law that immigration restrictions and enforcement can engender. As Barbara Jordan observed a generation ago: “The commission finds no national interest in continuing to import lesser-skilled and unskilled workers to compete in the most vulnerable parts of our labor force.”

Prohibiting labor smuggling has plenty of bad side effects, from enriching transnational crime syndicates to encouraging a culture of ignoring laws among employers, nonprofits, and even government agencies. But replacing prohibition with an open borders labor policy would be far worse for low-wage American workers of all races, native and foreign-born alike.

Michael Lind is a Professor of Practice at the Lyndon B. Johnson School of Public Affairs, a columnist for Tablet, and a fellow at New America. He has a master’s degree from Yale and has taught at Harvard. His most recent book is The New Class War: Saving Democracy from the Managerial Elite.

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