Immigration and Income Inequality

Are mayors' open-door policies for illegal immigrants hurting their efforts to raise wages?
June 2016
New York City Mayor de Blasio is taking a welcoming stance toward illegal immigrants. (AP)
Alex Marshall
By Alex Marshall  |  Columnist
Senior Fellow at The Regional Plan Association in New York City

As a man of the left who sees fighting inequality as his central political mission, is it surprising that New York Mayor Bill de Blasio has made welcoming illegal immigrants in his city a top priority?

An estimated half-million undocumented immigrants in New York City, and 11 million across the country, work at generally low-wage jobs with few rights. Giving them some protection from deportation, along with quasi-legal status, will help them build lives in the U.S., even doing such things as “joining the PTA,” as one de Blasio aide put it to me.

The city’s municipal identification card, IDNYC, is the most visible demonstration of this commitment. Bring in a utility bill or some other proof of residence, and immigrants will receive a photo ID similar to a driver’s license. Any New York City resident can get one -- I’ve got mine -- and the card has several perks, such as free admission to museums. But its main purpose is to give some measure of legitimacy to those who haven’t had it. Los Angeles; New Haven, Conn.; San Francisco; and Washington, D.C., are among cities that have similar programs.

IDNYC is by no means de Blasio’s only foray into immigration policy. He also issued an executive order forbidding city officials from asking anyone’s immigration status unless a major crime has been committed. And he signed two laws that reduce the city’s cooperation with federal immigration authorities. He even kicked U.S. Immigration and Customs Enforcement agents off of Rikers Island, the city’s principal jail.

De Blasio is also working with other cities facing the difficult problem of what to do with illegal immigrants. He founded Cities for Action, a coalition of mayors and other top officials from more than 100 cities and counties. The group supports immigration reform laws and policies such as President Obama’s executive order shielding some 4 million undocumented immigrants from deportation (which at this writing is before the Supreme Court). The campaign includes cities like Anchorage, Alaska; Boise, Idaho; Charlotte; Dallas; Knoxville, Tenn.; Tallahassee, Fla; and many more.

Whatever the merits of Cities for Action’s campaign, it is a stark example of the contradictions and conflicts among local, state and federal immigration policies. The federal government is now spending more than $20 billion a year on immigration law enforcement, much of it for guards, guns, walls and fences across the Southwestern desert. In 2014, the budget for U.S. Customs and Border Protection alone was $12.4 billion. Yet once immigrants dodge the Border Patrol, cities like New York are handing them ID cards and saying, “Please join the PTA.”

This is not what was supposed to happen after Congress passed the Immigration Reform and Control Act of 1986. Following years of pressure by organized labor, this legislation made the hiring of illegal immigrants illegal in itself for the first time. Its enforcement was supposed to dry up the flow of illegal immigrants seeking work across the border.

Instead, after stops and starts, enforcement of the provision has gone from weak to weaker. By law, employers must complete a federal I-9 form verifying a new employee is a legal resident. But fraud, in the form of employees handing in fake Social Security numbers and other ruses, is rampant. So is employers paying wages in cash under the table; the risks of being caught are minimal.

The result is all around us: Undocumented residents still work in cities and towns across the country. It’s quite likely that your new home will be built, your food prepared and delivered, your children diapered, and your bushes trimmed by illegal labor.

While this keeps prices down, the evidence is increasingly conclusive that it also pushes down the wages of legal working Americans and, just as important, reduces their political power.

Another man of the left, economist and columnist Paul Krugman, says liberals need to recognize this. “The New Deal made America a vastly better place, yet it probably wouldn’t have been possible without the immigration restrictions that went into effect after World War I,” Krugman wrote in The New York Times in 2014.

In an inchoate and often contradictory way, all of this has become a factor in the current presidential race. Both Donald Trump and Bernie Sanders have voiced surprisingly similar positions -- that the current immigration system is unfair to American workers.

So with all of this in mind, the question becomes: Is de Blasio working for or against his priority of reducing inequality? Bitta Mostofi, assistant commissioner of the city’s Office of Immigrant Affairs, says that the pressing problem of how to integrate a half-million undocumented residents, many of whom have been in the city for years, essentially crowds out other considerations for the immediate future.

As Congress and the president seek a way forward, there is no easy path for cities and states. The illegal immigrants who are already here cannot be ignored.

Personally, I believe states and cities should press the federal government to shift the billions now being spent on fences and border guards into making sure employers no longer hire illegal immigrants. There is a good federal program already in place, E-Verify, which allows employers to go online to check quickly and securely the legal status of their prospective workers. But compliance is mostly voluntary.

If the hiring of undocumented workers were greatly reduced, political support for giving those already here some sort of legal status would increase. If we don’t do this, then mayoral policies of welcoming illegal immigrants will drive down the wages and political power of legally working Americans and increase the inequality de Blasio says he’s fighting.