If optimism could rule the day, there is in fact a very straightforward solution. Eli Heckscher and Bertil Ohlin, two economists from Stockholm, developed a model of free trade in the 1930s and subsequently lent their names to it. One of the conclusions resulting from the Heckscher-Ohlin model is the factor-price equalization theorem, which suggests that free trade by itself is enough to allow for the convergence of wages between two countries[1]. The rationale assumes that the unimpeded movement of goods is equivalent to a similarly free movement in the factors of production, including labor. Once wages are equalized across countries, there would no longer be an incentive for immigrants to cross borders in search of higher earning potentials. As aesthetically simple as this theorem is, it is also the part of the model over which there is the least agreement.
The lack of consensus is certainly nothing new in economics, but a more realistic approach to the model predicts that immigration would spike for a period immediately following the opening up of trade before slowly tapering down. A study specific to NAFTA and its impact on Mexican immigration to the United States reaches the same conclusion and add that the “migration hump” is likely to last between 10 and 15 years[2]. If this is indeed the case, the developed nations are left to struggle through the pressures of immigration without the relief of an immediate cure.
The European Union provides a fair sample of possible responses. Of the countries that opted for leniency, Spain and Italy are among the foremost. They favor amnesties and grant them liberally[3]. In 2005, Spain announced that illegal immigrants may stay if they had worked at least six months, hardly a grueling standard. On the other end of the gamut, France has become decidedly cold toward immigrants. Last year, 500 illegal immigrants from Africa were evicted out of an abandoned dormitory in a Parisian university.
While closing one’s border – or erecting a behemoth of a fence, as some Republican stalwarts have suggested – may seem tempting for nations besieged by immigrants, it is hardly realistic or politically viable. Ideally, such countries would refrain from acting unilaterally and condescend to negotiate with the immigrants’ source countries. A financial fee has been suggested in exchange for entrance into the country of choice. This may sound superficial and even heartless, but given how much illegal immigrants are willing to pay for a passage into the golden land, a nominal fee for a temporary visa effectively legalizes a practice previously in the purview of the black market. The proceeds from these visas can then be used to subsidize healthcare costs for immigrants. Finally, the immigrant does not have to stay permanently in order to reap the gains from immigration, so destination countries could focus on developing better short-term work programs.
Before policy decisions can even be considered, the first thing that developed nations must realize is that immigration is not a zero-sum game. Demonizing it simply to wrangle an advantage at the polls is shortsighted in the extreme and liable to exacerbate the strains immigration places on all those involved. A recommended program: meditate, clear the mind, recognize that it is possible for immigration to be mutually beneficial and start over.
[1] Horiba, Y. (2000). “U.S. Interregional Migration and Trade”. Preliminary Draft, Tulane University.
[2] Robertson, R. (2005). “Has NAFTA Increased Labor Market Integration between the United States and Mexico?”. World Bank Economic Review 2005, 19, 425-448.
[3] “Migration Migraine”. The Economist (September) 2006.
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