The controversy surrounding immigration is not limited to Arizona, of course; many states have wrestled with the issue. But something about this is confusing: Almost all Americans are the descendents of immigrants, and the inscription on the base of the Statue of Liberty seems to give an explicit welcome message to immigrants. So why should anyone be concerned about the “problem” of immigration in the first place? What underlies the anxiety? I am not a psychiatrist, of course, but from reading both print and web discussions I think there are several reasons, each of which I believe is unfounded, though I will make a concession for one. In many cases, the anxiety and self-contradiction are due to conceptual confusion about rights and economics.

One of the concerns I see expressed frequently is that immigrants will come here and go on welfare. This argument has traction even among people who would otherwise be sympathetic to a libertarian open-borders position: It’s bad enough we have to subsidize people who don’t work, so why increase the number of people we subsidize?

This argument grants the idea that open borders would be fine as long as everyone were working. People who make this argument recognize that immigrants in the past came to the “land of opportunity” to make a better life for themselves. Proponents of immigration like to point to the Ellis Island experience, in which people came to America from the old world, found jobs, and by the third generation were solidly upper middle class. Here opponents of immigration will note that there was no welfare state to speak of, so the immigrants had to work to succeed. The fear now is that immigrants can skip that step. They will come to make a better life, sure, but that just means they will soak up our generous welfare benefits.

Is this argument to be taken seriously? On the one hand, there’s the counterargument that no one has the right to stop anyone from moving anywhere or prevent anyone from employing anyone. On this view, borders must be open regardless of whether some people come here for welfare. Proponents of this position are sometimes accused of taking libertarian purity too far. I am not sure what it means to be “too pure”—either one has principles or one doesn’t. In any case, if it turned out that immigration did put more pressure on the welfare system, that might help in the effort to roll it back.

On the other hand, though, there is no evidence that illegal immigrants are a net drain on the welfare rolls. First, illegal immigrants can’t just move here and file for welfare checks. Second, while they may get some benefits of the welfare state, they are a net gain for the economy. The majority of them do come here to get better jobs than they would have been able to get at home—in some cases they take jobs that native-born Americans won’t take. Keep this in mind as we examine the next bogeyman.

Taking Whose Jobs?

Another argument is that immigrants will take jobs away from “real Americans.” The first thing we notice about this argument is that it contradicts the previous one. Make up your mind: Are they coming to take your job or to go on welfare? But more substantially, competition is supposed to be good not bad. When one company competes with another, they are obliged to improve service or lower prices. It is the same thing with labor: If there are other people competing for your job, you’ll have to get better at it. (This would be true even if we had hermetically sealed borders. If you are that uncompetitive at your job, it will be outsourced.) Individual workers, like companies, have no right to be free from competition. Anticompetitive policies impoverish everybody. Lastly, this argument presupposes a fixed number of jobs, such that if one worker is replaced by another, he will never again be able to work at all. In a free market, where resources are scarce and demand is open-ended, there is always work to be done and thus no shortage of jobs. Protectionism is just as bad for workers as it is for companies.

Some fear that since many immigrants are coming from Mexico and the rest of Latin America, increased immigration will lead to increases in the drug trade. This argument is predicated on several mistakes. First, immigrants cannot move their climate with them. I don’t think you can grow coca plants in Wisconsin. If it’s not a matter of moving the crops, then the concern must be that there will be more places to send drugs. But that’s an argument for allowing immigration and normalizing immigrants’ status as Americans with kids in school and jobs in the community. How many of your neighbors and coworkers are drug dealers? Of course, if there were no prohibition, this would be a non-issue. But again we see a contradictory set of fears. Those who think drugs should be illegal, and are worried that increased immigration will increase the drug trade, are undermining their own position. Assimilated, productive, middle-class immigrants won’t be nearly as likely to be drug mules or abettors of illegal activity.

More broadly, some fear that increased immigration will produce more crime. (In one sense this is tautologically true: Increased illegal immigration by definition is increased “crime.”) There’s no way to predict whether immigrants from Guatemala are more or less likely than immigrants from Italy or Ireland to commit crimes, but burglary, robbery, and assault are already illegal. So we have a system in place to respond to crimes regardless of the ethnicity of the criminal. Some argue that this creates added burdens on the penal system, but that’s not a reason to curtail immigration. Of course, the penal system would be considerably relieved of its burden if it were rid of victimless crimes, and in any event violent immigrant offenders could be deported rather than sentenced to American prisons.

No Irish Need Apply

I am afraid that one additional fear about increased immigration is a generic dislike of those of darker complexion. (I hasten to add that I understand that not all anti-immigrant sentiment is so motivated, but it’s myopic to deny that any of it is.) This concern requires some historical perspective. There was a time in the history of American immigration when the Irish were, for all intents and purposes, nonwhite. They were openly discriminated against. Later, when the Irish had been here for a couple of generations, the Italians, Poles, and Jews became the new aliens. Now we think nothing of seeing a Jewish-American or Italian-American CEO or Supreme Court justice, or an Irish-American president.

Today, seeing waves of immigrants from Latin America, South and East Asia, and the Middle East, perhaps some people are concerned about America becoming less white. I can’t say that I feel the need to take this concern too seriously. It seems hypocritical to think that your ancestral homeland has made a great contribution to the American melting pot, but that no new homelands should be able to add to the mix. Nevertheless, for those who are concerned about their neighbors being culturally different, again the solution is to have a completely open stance on immigration. Earlier generations of “foreigners” who emigrated freely were relatively quick to assimilate to the prevailing cultural norms, even while simultaneously changing those norms. The best way to keep new immigrant subcultures alien, mysterious, and possibly hostile is to marginalize them and drive them underground. They can’t assimilate if they can’t get jobs and send their kids to school. Ultimately, “assimilation” is a two-way street: As new groups settle in, elements of the new cultures become part of the ever-changing norm. If you asked a fourth-grader to name four “regular American foods,” you will surely hear “pizza,” and probably “tacos.”

The one point I will concede to the anti-immigration contingent is the worry about voting. Will large numbers of (presumably legal) immigrants vote to make changes antithetical to the American ideal? Well, they might vote for reductions in the welfare state. It turns out that assimilated and upwardly mobile immigrant groups don’t support expanded welfare programs any more than indigenous groups do. If they voted to roll welfare programs back, that wouldn’t be a bad thing. More worrying, will they vote in such a way as to chill speech by, for instance, pressing for bans on cartoons depicting Mohammed? I would be concerned if trends like that started to emerge. Fundamental constitutional principles are not supposed to be subject to majoritarian whim, but I realize they sometimes are. So rather than think of solutions to the problem, it might be better to think of ways to avoid it in the first place. The best way to do that is to help the immigrants to become Americans. That means allowing them to seek work and find ways to contribute to the economy; it means allowing them the freedom to assimilate into, even while subtly changing, American culture—the very same freedom your grandparents had.

For the most part, the strident voices of the anti-immigration crowd have drowned out and intimidated those who do not believe that illegal immigration is a threat to the nation. There are, however, some people willing to stand up for the right of people to move across international borders freely. One of them is Philippe Legrain, whose book Immigrants: Your Country Needs Them was reviewed in the May 2007 issue of The Freeman. Another is Kevin Johnson, a law professor at the University of California – Davis. His book Opening the Floodgates makes an impassioned case for an open-borders policy.

Although the book has some serious flaws, it makes a worthwhile contribution to the debate over this key issue.

Johnson writes, “To the extent that the idea of open borders is even mentioned in public discussions, it is immediately brushed off as hopelessly impractical and not worthy of in-depth analysis and consideration as a possible policy option.” He wants to change that by showing the numerous, frequently tragic consequences of our current, highly restrictive immigration policy and emphasizing the benefits of scrapping it in favor of openness.

The most visible harm resulting from the status quo is that many people die every year in the effort to move to the United States. It’s strange that Americans who used to be appalled when East German border guards killed people trying to leave are mostly indifferent when Haitians drown or Mexicans die of heat and dehydration trying to leave those countries. Johnson shows that the death toll from our immigration laws is very high, but largely ignored.

Another harm is that illegal immigrants are outside the protection of the legal system. Unscrupulous employers can and do cheat them. Sometimes the immigrants are hardly more than slaves. Anti-immigrationists retort that those unfortunate people have only themselves to blame for having had the temerity to disobey our laws. Johnson finds this morally chilling. It is.

Johnson aptly compares our efforts to stop immigration to Prohibition. The latter didn’t prevent people from drinking alcoholic beverages but instead led to unsafe products sold by criminal syndicates, violence, and a gigantic waste of resources. Our prohibition of immigration has similar consequences. The parallels are strong and Americans ought to ponder them.

What about the impact immigrants have on our culture? Writers like Samuel Huntington wring their hands over the “damage” that dark-skinned and non-English-speaking immigrants (legal and illegal) inflict on “America’s” culture. Johnson says: Relax. Similar attacks were made in the past against the Irish, Italians, Chinese, and other groups. But more to the point, there is no reason to believe that any harm comes to us when different peoples settle here. Besides, he says, recent immigrants seem to be “assimilating” just fine.

I think Johnson would have made a stronger case if he had, apropos of that last point, challenged the notion that “assimilation” is really important. What does it matter if a group lives in the United States and chooses to keep to itself, speaking some language other than English, adhering to traditional customs, and ignoring American political institutions? The Amish are a very much unassimilated people, but there is no reason to complain about them. Live and let live—as long as an individual abides by that rule, there is no moral ground for interfering with him.

That point is something of a quibble, but there are more serious problems with the book.

First, Johnson’s grasp of economics is weak. For example, he takes seriously the notion of “the multiplier effect,” long ago shredded for its errors. And he repeatedly extols labor unions as if they have the power to transform low-paid jobs into “decently” paid jobs. The impact of unions is greatly exaggerated, and they have little or no impact at the bottom of the labor scale.

More important, Johnson thinks it would be good policy to allow free immigration, but then attempt through taxation to “even things out.” If we had open borders, he says that “business” would gain but low-paid workers would lose because of added competition in the labor market. Therefore he advocates taxation to compel the supposed winners to pay the supposed losers.

That’s where he really loses me. Increasing freedom to migrate should not be offset by decreasing freedom elsewhere.

Between 1840 and 1920, over 60 million people emigrated to North and South America, mostly from Europe . More than 40 million of them came to the United States . They came to escape political oppression, religious persecution, and economic stagnation due to the heavy hand of government on commerce, trade, and industry in the Old World.

During most of this time neither passports nor visas were required. In 1942 the German free-market economist Gustav Stolper referred to this earlier period as the era of the three freedoms: the free movement of men, money, and goods. At a cost as little as the price of a steerage ticket on a ship, anyone could make his way to the shores of America to have a second chance in life—and who, at some time, has not wanted a second chance?

Those immigrants often clustered in port communities made up of people from the same part of the old country. This provided a private safety net that enabled the new arrivals to become acclimated to their new home. Countrymen who had arrived earlier often helped the newcomers obtain shelter, find a first job, start to learn the language, and adjust to a different culture.

Of course, there were opponents of free immigration even during these relatively laissez-faire days of the nineteenth century. They argued that immigrants were arriving in too large a number and that they would never assimilate. It was said that many of the Germans who arrived in the 1860s and 1870s only wanted to speak German, listen to military-band music on Sunday afternoons in the park, and seemed to drink a lot of beer. Then it was said that the Poles and Italians who arrived in large number in the 1880s and 1890s could never be “real” Americans—they were all drunkards and “Pope worshipers,” just like those Irish who had arrived even earlier! Then it was the turn of the Eastern European Jews, who came to America in large number in the 1890s and the first decade of the twentieth century—they were accused of being countryside penny-pinching peddlers, as well as being the “Christ killers.”

Well, all these people came, and many more from many other lands. We are their lucky descendants. They crossed oceans, gave up all they knew in the old country, so they and we, their children, grandchildren, and great-grandchildren, could be freer and more prosperous than if they had never left their homes. They helped make our unique melting pot of many cultures, languages, religions, and ethnicities a combination that produced something new and special— America.

The nineteenth-century period of free immigration was a momentous epoch in the history of mankind. It is too little understood or appreciated in the new era of legal restrictions on the movement of people.

In his new book, Immigrants: Your Country Needs Them, Philippe Legrain tries to explain the benefits that may be expected from permitting a wider door to global migration. He reminds us of the cost that is borne today by those trying to have their second chance. Hundreds of would-be new arrivals to the United States and the European Union never get that chance because they die in the desert or in the waters off southern Europe as they attempt to get through the border patrols determined to keep them out. A vast black market in human beings feeds corruption, abuse, and violence as the poor and the oppressed try to make it to nations with greater freedom and economic opportunity.

But Legrain’s main point is not to tug on our heartstrings by pointing to the tragedy and suffering of modern illegal immigrants—though he wishes us not to forget this human cost. Instead, he wants us to appreciate the economic and social benefits from taking advantage of what new people can offer to the developed and more prosperous nations of the world.

First, he explains that America and Europe can gain from the arrival of low-skilled workers. In fact, our native populations have become so well educated and wealthy by global standards that most of our fellow citizens are unwilling to do many jobs that need doing for an economy to run smoothly. Who will clean our office buildings, be the nannies for our children, serve as orderlies in our hospitals, mow our lawns, be waiters in our restaurants, or do hundreds of other low-paying but essential tasks? Each earlier wave of immigrants to the United States filled these jobs as the first step to a new life in America . If immigrants can’t get on the bottom rung, many tasks may not get done or will cost far more, for they will be done by people who could be profitably employed at more productive jobs.

Legrain understands why there is a greater openness to higher-skilled immigrants who are considered more likely to financially pull their weight and significantly add to the productivity of the workforce. But he argues that it is economically absurd for governments to try to micromanage the selection of new entrants to the workforce. In this case some bureaucrats and politicians, such as in Australia, decide what sectors of the market are or should be expanding and then screen for immigrants who would fit those sectors. Central planning works no better in picking people than in guiding the manufacture of hats and shoes. The market is its own natural attractor for potential immigrants and works far better than the stiff and usually misguided and politically motivated hand of the government.

He also points out that immigrants do not “steal” jobs that otherwise would go to Americans. If there were a fixed number of jobs to be filled, then how would native-born Americans find employment when they reached working age? The fact is there are always more wants that can be satisfied if we have more resources available to do the work—and this includes the two hands and mind that come with each new member of a society. Flexible markets and competitive prices and wages are always able to accommodate greater supplies of useful things, including labor, that can improve the human condition. Furthermore, this “stealing our jobs” view suffers from the “lump of labor” fallacy, namely, that all labor is perfectly interchangeable. Labor skills are just as diverse as resources, raw materials, and specifically designed capital equipment. They complement each other in the market to expand the ability to meet consumer demands. Thus new immigrant workers most often enhance the productivity and demand for other workers in the market, increasing the opportunities of almost everyone in society.

Legrain also challenges the often-expressed fear that current waves of immigrants are threatening the cultural and national identity of the country. He points out that there is no homogeneous American culture. Each new group has both assimilated and added a new element to the cultural mix. Even when most immigrant waves came from Europe in the nineteenth century, they represented a wide variety of languages, religions, cultural heritages, and ethnic backgrounds. They and their descendants have made America different from what it had been. Each generation makes its society distinct from what its grandparents would have taken for “normal” and “American.” We should not be afraid of such changes, for future generations will look back on a vast number of them as improvements.

Furthermore Legrain contends that like virtually all earlier waves of immigrants, those coming to America today will slowly but surely end up integrating into the society. The first generation has difficulty with the language, but their children are bilingual, and the grandchildren often do not speak (or do not speak well) their grandparents’ original language. The immigrant still feels a strong tie to the old country, where he still has relatives, friends, and all his childhood memories. The immigrant’s children may visit the old country and have a hyphenated sense of identity—Polish-American, or Italian-American, or Irish-American, or, today, Dominican-American. But the grandchildren have far less or no such identity. They are just “American.”

Finally, Legrain looks at the evidence and shows that the impression that immigrants—especially illegal immigrants—place an excessive burden on the services of the welfare state, and therefore on the American taxpayer, is not borne out by the facts. Even if it were otherwise, legalizing the illegal immigrants would end their underground existence, making them eligible to be fully plundered as taxpayers like the rest of us.

The immigration issue will not go away. Indeed, it will continue to challenge the thinking of Americans and the policies of the government here and in other parts of the world. With all the fears expressed about the dangers from greater immigration, it is important that someone has articulated the benefits that a country might expect from having more-open borders. Philippe Legrain does an excellent job in explaining those potential gains, and his book offers important insights into this ongoing debate.

This question from a former student named Blake addresses the interaction of two hot political issues: “I remember in class that raising minimum wage is a bad thing to do. My question to you is, since illegal immigrants don’t get paid minimum wage most of the time, does that aid in bringing down wages and creating a positive outcome for the economy?”

My answer was an uneasy yes and no. Any positive or negative outcomes are not for “the economy” as such, only for people. And the people in the economy are all of us, including the illegal immigrants. Illegal immigration may reduce the overall harm done by increases in the minimum wage, but better all around would be legal immigration and no minimum wage. Let’s sort the issues out to see why.

First, Blake is correct that “raising minimum wage is a bad thing to do” because it does most harm to the least-advantaged among us. The benefits of a higher minimum wage are much easier to perceive than the harms. The benefits go to all workers who keep their jobs when the minimum is raised (without losing enough hours’ work to decrease their incomes). They get a pay raise. These are the benefits that minimum-wage advocates focus on.

The harm done by the minimum wage is harder to perceive. The key to understanding it is the insight that nobody will pay an employee more than that employee’s value to the business, at least not for long. If you are the employer and you believe that a low-skilled young person contributes about $6 of value to your company every hour, you’ll be willing to pay that person up to $6 an hour. If an increase in the minimum wage then forces you to raise his pay to $7 an hour, you’ll lose a dollar an hour if you keep him on. You’ll have to lay him off.

Minimum-wage laws that force wages above the rates that would be freely negotiated in the market throw people out of work. This is a fundamental conclusion of economic reasoning, supported by the vast majority of scholarly studies of the minimum wage.

What kinds of workers, exactly, get thrown out of work? Suppose you employ a number of low-skilled young people at $5.15 an hour at your fast-food restaurant along with your higher-skilled managers. Some of these minimum-wage workers are more skilled, more responsible, or more experienced than others. Now suppose the minimum wage is raised to $7.25 an hour (as is being discussed in Congress as of this writing). Suppose you calculate that the higher wage rates you now must pay will make it unprofitable for you to keep your restaurant open during the same hours at the same prices. You’ll have to either raise prices or shut down at the least-busy times of day, or some combination of the two. Whatever course you take, you’ll reduce the number of hours’ work for your employees. If you raise prices, you won’t have as many customers, so you’ll need fewer workers to serve them. If you reduce your hours of operation, you won’t need your workers for as long.

Whose hours will you cut back? Those of the more-skilled, more-responsible, more-experienced workers? Probably not. You will cut back on the hours of, or perhaps lay off altogether, the least-skilled, least-responsible, least-experienced workers. Those who will have the hardest time getting another job, those who most urgently need the experience of an entry-level job, are the ones who get laid off.

Who else is harmed by the minimum wage? In our example, your managers and other more-skilled workers are also harmed by having their hours cut back. Unlike the least-skilled workers who have nowhere else to go when they lose their entry-level jobs, the more-skilled workers can find work elsewhere. But when they do, it will be at jobs that don’t pay quite so well or otherwise are not as attractive to them—or else they would have chosen to work there instead of at your restaurant in the first place. Thus these workers are hurt even if they keep the same number of work hours.

While some workers lose their jobs (or enough hours of work to reduce their total incomes), other workers get paid more. We can’t know which effect is greater without unknowable details about the lives and values of the different workers. But clearly the law harms the most disadvantaged—the very workers that minimum-wage advocates claim to want to help. This is the overlooked human tragedy of the minimum wage.

What about consumers (who are rarely considered in public commentary on the minimum wage)? Consumers who would like to eat at your restaurant during off-hours are harmed because now you are closed at those times. If you stay open the same hours but charge higher prices, consumers are hurt by the added expense. The output of your laid-off workers is denied them, and the output of the higher-skilled workers and managers driven into other work elsewhere is not worth as much to consumers as the lost output of your restaurant would have been—that’s why the wages paid in those alternative jobs are lower than at your restaurant.

Here is the clear harm done to “the economy”—the people in society—taken as a whole: Because of the legal minimum wage (or its increase) valuable productive resources are forced into idleness. In our example, lower-skilled workers, better-skilled managers, the restaurant, and its equipment are all idled (or, in the case of your managers, diverted to less-valuable production), even though workers, owners, and customers all would prefer that those resources be at work in your restaurant. Productive effort and mutually beneficial exchanges that would have occurred don’t occur. Society overall is poorer as a result.

Illegal Immigration’s Effects

How might illegal immigration reduce this harm?

Some immigrants, here illegally to begin with, are also willing to work for illegally low wages. When they do, they help produce goods and services that would otherwise go unproduced, or be produced only at greater cost. Their willingness to work for below-minimum wages thus reduces costs and increases output for consumers. This is probably what Blake had in mind when he referred to illegal immigration “bringing down wages and creating a positive outcome for the economy.” In our example, after the legal minimum wage is raised, you might be able to find illegal immigrants willing to work for less than the minimum. If so, you will be able to keep your prices down and/or stay open later in the evening. Your store, equipment, and workers would stay in productive use; consumers would benefit.

But not everything about this scenario is positive even if illegal immigration does keep actual wages and costs down closer to an appropriate, market-determined level. In certain cases it would be better still for “the economy”—for the people in the economy—to have certain illegal immigrants paid higher wages than they would receive while immigration is illegal.

Some illegal immigrants who would earn higher wages in a free labor market find themselves trapped in jobs that pay below minimum wage. Why? Because they are afraid that if they leave those jobs for others that pay more, they might be reported and thrown out of the country. This hurts consumers: it would be better to have those immigrants working at the higher-paying jobs instead, because the output of those jobs is more valuable to consumers. Let us imagine, for example, a talented carpenter who can find little work in his own country—let’s call him Juan. Suppose Juan sneaks across the border, or gets himself smuggled into the United States, to work as a manual laborer at a landscaping company for below minimum wage. Though it is not much to us, that wage is much higher than he can earn in his home country.

Now suppose that a local carpenter needs an assistant whom he would pay $15–20 an hour. Juan’s greatest value in the economy would then be to work as the carpenter’s assistant. This is clear because the local carpenter’s willingness to pay him $15 or more an hour shows that people in the community value at that amount the carpentry Juan might do each hour. For Juan’s manual labor, by contrast, people are willing to pay only $6 or $7 an hour. Juan is worth more in the economy as a carpenter.

Nevertheless, when immigration is illegal Juan might well choose to do the less-valuable work because he is afraid of being deported. Perhaps the man who smuggled him in has an agreement with the head of the landscaping company and Juan worries that if he moves to a better job the smuggler might report him. Or he might worry that working as a carpenter’s assistant would put him at risk of being turned in by other carpenters who would resent his competition. Or the state might require a license for carpenter’s assistants, for which only legal immigrants may apply.

For these kinds of reasons illegal immigrants often hold jobs in which their work is less valuable than elsewhere. All such cases represent a clear loss to society because even though the illegal immigrants’ willingness to work for below minimum wage keeps wages and costs down in the markets for lower-skilled labor, their talents are sadly wasted. They would be better used providing services that people in the community value more.

Reducing Production

Just as minimum-wage laws reduce society’s overall wealth by decreasing the production of valuable goods and services, so also do laws hindering immigration. Both interfere with the labor market’s essential function of directing human talent—what the late, great economist Julian Simon called “the ultimate resource”—to their most valued uses.

In answer to Blake, then, yes, it may be that illegal immigration helps to reduce the damage done by minimum-wage laws and minimum-wage increases. But no, it is incorrect to think that illegal immigration as such is beneficial for the economy. It is better than no immigration at all, but compared to free immigration, it is worse.

The problem with illegal immigration is not that it’s immigration, but that it’s illegal. The proper immigration policy for a free and prosperous nation is open borders—free immigration for all people who will live and work peacefully. Liberty, including liberty to move peacefully about the planet, cannot justly be infringed. It is a basic human right, and it promotes economic well-being.

But here’s the irony. The proposal would reduce the number of jobs available to people here legally and give illegal immigrants an advantage in the competition for jobs. Dukakis and Mitchell reach a mistaken conclusion by confusing demand and supply, and showing a misunderstanding of how the minimum wage is enforced. That Dukakis, a former presidential candidate and a political science professor at Northeastern University , made such a mistake in economic reasoning is understandable. That Mitchell, a professor of management and public policy at UCLA, did so is less understandable: both his B.A. (Columbia) and his Ph.D. (MIT) are in economics.

When the minimum wage rises, what happens? Some jobs that were worth hiring someone to do are no longer worth filling. The jobs lost are the most marginal ones, the ones that had low value and that paid little. That’s why the vast majority of studies of the minimum wage have found that increases, all other things equal, reduce the number of low-skilled jobs offered and filled.

Surely Dukakis, a public-policy wonk for the whole of his adult life, and Mitchell, a trained economist, must know that. So how do Dukakis and Mitchell contend with that fact? First, they admit it—kind of. They write, “If we raise the minimum wage, it’s possible some low-end jobs may be lost.” Notice the redundancy in “it’s possible” and “may.” A good editor, and I’m sure the New York Times has many, would have caught this and said: “ ‘It’s possible’ means the same thing as ‘may’ and so you should drop one.” Why didn’t an editor do this? My guess is that the editor, like Dukakis and Mitchell, wanted to create the idea that the job loss would be small. By hedging twice, the authors leave that impression in many readers’ minds.

But still, there’s job loss, and even they, in their “just maybe” way, admit it. So how do they get to the conclusion that a higher minimum wage would help Americans? They write that if the government increased the minimum wage, “more Americans would also be willing to work in such [previously low-paying] jobs.” That’s true. When the minimum wage goes up, jobs that wouldn’t have been attractive to some people will be attractive to them. But the objection to the minimum wage has never been about whether more people would be willing to work at a higher wage than would be willing to work at a lower wage. The problem is that being willing to work at a job isn’t enough: someone has to be willing to offer you that job. If simple willingness to work were enough to get you a job, then a classic “Seinfeld” episode wouldn’t have been funny. In that episode George Costanza is out of work and wants a job. He sits around with Jerry Seinfeld trying to decide what kind of job he should get. George comes up with the idea of being a sports commentator and lays out how much fun that would be. The audience laughs because they realize that George’s simple willingness to work is not enough: another necessary condition is that someone think he’s good enough to be worth the high pay that sports commentators get. I bet even Dukakis and Mitchell, if they saw that episode, would laugh. Which is why they should laugh at their own proposal—if not for its tragic consequences.

But wait a minute, Dukakis and Mitchell might say: there’s still a thin spot of light at the end of our constructed tunnel. They argue that raising the minimum wage and increasing its enforcement will push illegal immigrants out of jobs and make these jobs available for Americans. It is true that if the minimum wage caused the number of illegal immigrants working to fall more than the total number of jobs fell, there would be more minimum-wage jobs for Americans. But is this likely? No, and in thinking it likely, they show a misunderstanding of how the minimum wage is enforced.

Their model of enforcement, it seems, is of diligent federal workers going into workplaces and checking records on wages paid. But employers willing to break the law on wages are likely to be willing to break the law on record-keeping. In 2005 the U.S. Department of Labor’s Wage and Hour Division put 969,776 hours into enforcement of all parts of the federal wage regulations. This would translate into only 500 full-time workers nationwide. And not all of these were involved in enforcing the minimum wage: some were enforcing overtime regulations, child-labor regulations, and more. So even quadrupling the number of enforcers would not make a major dent when the number of low-wage employers would likely be in the hundreds of thousands.

The main enforcement of the minimum wage is initiated by employees, not by the government. An employee who thinks he was paid less than the minimum can contact the federal government or the state labor board and show his pay records. Then the government collects back wages and a fine from the employer. In 2005 the Labor Department reported 30,375 complaints registered about employer violations of wage and hours laws. The vast majority of these complaints were likely by employees. That’s why the minimum wage is so effective. But employers aren’t typically stupid. They know this risk, which is why even employers who have no ethical qualms about breaking the law hesitate to hire people at less than the minimum wage.

They Won’t Complain

But there’s one type of employee that the employer is not so afraid of hiring and paying less than the minimum: an illegal immigrant. Illegal immigrants are nervous about going to the government to report that they were paid less than the minimum. Employers, knowing this, are more willing to hire them. So while reducing the overall number of jobs, an increase in the minimum wage will actually open up more jobs for illegal immigrants, making it even harder for unskilled legal residents to find work.

How can not being able to sic the government on an employer be an advantage? However much someone might plead with an employer to offer him a job at below minimum wage, if the employer knows the employee can sue for back wages, he probably won’t offer the job. But not being able to sue because the job candidate is here illegally makes his promise not to sue credible, which also means he doesn’t even need to make such a promise. The illegal immigrant gets the job.

Another hospital or emergency room closing? What else is new?

Earlier in August, Elastar Community Hospital in East Los Angeles closed its emergency room and edged closer to closing the entire hospital after filing for Chapter 11 bankruptcy protection in 2003. As the Los Angeles Times also reported in late August, “Six emergency rooms have closed in the last 14 months. Hospital and healthcare officials predict a further 10 percent to 15 percent reduction in the county’s emergency room capacity, with three large ERs at private hospitals thought to be at risk of closure.

“All this is taking place as the number of Californians without health insurance continues to surge,” according to the newspaper. “Since 1988, the number of emergency rooms in the county has dwindled from 97 to 79. Trauma centers have fallen from 16 to 13. Though some remaining hospitals have expanded their services to make up for those closures, the Los Angeles County population has grown by more than 1 million and the portion of uninsured residents has climbed from 20 percent to 27 percent during that period.”

The Times reporter used terms such as “doomsday,” “meltdown,” and “healthcare Chernobyl” to describe the situation, as emergency-room patients increasingly must wait 16 hours or more for treatment, or four days or more to get a bed in a hospital.

As is often the case, California is on the cutting edge of most every troubling trend, and Los Angeles County, the nation’s most populous county, often leads the state over the brink. Those of us who live here can only shake our heads and wonder why local officials and residents don’t understand the obvious root causes of the crisis du jour, and why residents of other states don’t catch on before the crisis comes to them.

All of the recent crises have the same cause: government meddling in the market.

I learned the reasons for the health-care crisis after visiting an emergency room following a gall-bladder attack. I was prepared to show my insurance card and provide personal information so the hospital would know that I was going to be able to pay for the medical services I would receive. But the nurse recoiled in horror as I presented the card. “Put that away,” she said. “We’re not allowed to look at payment information before treating you.”

The law is simple: No one may be turned away from a hospital, unless the hospital does not offer the specific services needed. Everyone must be served for free. As a result, California’s poor and uninsured often rely on emergency rooms as their mainstay for health care. They go for immunizations, check-ups, sniffles, anything. No payment required. This is a function of federal law, but the high uninsured, immigrant population in Los Angeles, combined with other state laws has made this Ground Zero for the health-care crisis.

As the Los Angeles Times’ Jason Felch reports, the crisis “has been blamed on old people and more people; nursing shortages and earthquake retrofits; the uninsured, the indigents and the illegal immigrants.”

All of the above-mentioned factors deserve some blame, of course. The aging Anglo population needs an increasing amount of health care. There are severe nursing shortages. A law pushed forward by nurses’ organizations and signed into law by former Governor Gray Davis mandates that the ratio of patients to nurses can be no higher than eight to one. It’s one of those remarkable socialist-style laws that pretends to fix a problem by mandate, but only exacerbates the problem. There aren’t enough nurses to meet those mandates, so now belligerent nurses unions are staging walkouts when hospitals, which cannot afford to meet the new mandate, fall short of the law. That’s contributing to the ER closures, which means an even higher patient-to-nurse ratio.

Costly Retrofitting

Earthquake retrofitting is another government-mandated problem. The spokeswoman for Elastar Community Hospital told the New York Times that following a recent law mandating additional earthquake retrofitting, the hospital faced a $16 million expense, which pushed the company over the brink. Many of the hospitals that have closed blame that law.

Los Angeles County has one of the nation’s largest populations of indigents and illegal immigrants, who rely almost exclusively on emergency rooms when they need any sort of health care. A Los Angeles Times editorial in early September of last year argued that the federal government should “cover the costs of providing emergency medical care to illegal immigrants.”

That’s one line of attack: Solve the problem by calling on the federal government to send billions of dollars California’s way. Californians were hoping to handle it in their own way, also, by pushing forward propositions last November to address the issue. One statewide initiative, Proposition 67, called for a 3 percent tax on telephone bills to create $150 million that would have been diverted to emergency-room and health-care–related expenses. It was supported by the medical associations, but soundly defeated by voters.

Another initiative, Proposition 72, called for mandating all California employers with 50 or more employees to provide health insurance to employees and to pay 80 percent of the premiums. Medical associations supported it because they saw it as a means to reduce the number of uninsured Californians, who have become a costly burden on hospitals. But the Chamber of Commerce called it a $5.7 billion tax on employers. Voters narrowly rejected the proposition. Placing a costly new mandate on employers would have most likely increased the number of uninsureds, as companies left the state or stayed under the 50-employee threshold. It could also have depressed wages in some markets. Employers would have faced higher costs—and costs keep going up in mandate-happy California—and that would have given them an incentive to covertly pass on costs to employees. Sure, they couldn’t have directly passed the higher premiums on to their workers, but they could have tightened up on wage increases and cut back on other benefits.

There is no fix short of dealing with the market reality. The August Los Angeles Times article traces the emergency-room problem and its proposed solutions for the past 15 years. The crisis in 1988, it reported, was solved following a state tobacco tax. In 1995, crisis was averted when President Clinton provided $1 billion in federal emergency aid to Los Angeles County, then two years later another crisis was averted with $1.2 billion more in federal aid. In 2002, crisis was averted when county voters passed Measure B, which provided dramatic increases in property taxes.

In September, Los Angeles County officials blamed the Bush administration for refusing to come through with another massive federal bailout—one of its few instances of fiscal responsibility. And, according to published reports, county hospitals have been refusing transfers of the uninsured from private hospitals, further straining private hospitals and forcing some of them to close their doors amidst enormous losses.

Clearly, throwing more federal money at the problem won’t solve it. The federal government already is enormously in debt, and the problems faced by Los Angeles County increasingly are being faced elsewhere. Why make taxpayers pay yet again for the failures of government? Increasing taxes always is a bad idea, and it can’t possibly provide enough money to keep pace with the massive losses, if the numbers outlined above are any indication.

The Market and Self-Responsibility

The obvious answer is the marketplace. Individuals, regardless of their immigration status or their income level, must be responsible for their own medical care. If they can’t pay for emergency services, they can be held liable for the costs after the fact, financing them if necessary. Charities and churches, of course, would be able to help those without medical insurance or the means to pay for their own health care. Hospitals and medical organizations have always offered help to the indigent also. But the suffocating number of rules, mandates, and edicts must be peeled back, layer by layer, so that private hospitals can compete the way any other business competes.

To some analysts this sounds cruel. As columnist Michael Kinsley argued in September, “The more that market forces are built into healthcare, the more people will not have access to the healthcare they need. The more you protect people from that, the harder it is to create market incentives.”

But the opposite is true. The more the market is allowed to work, the more prices are allowed to reflect the actual cost of the service, the more available those services will be to those who need them. In Los Angeles County, the government increasingly has control of the emergency-room and hospital business. The results are clear: ERs and entire hospitals are closing. Lines for care are enormously long, as hospitals need not require payment for services. Because prices are, in essence, zero, there is far more demand than supply, and those with life-threatening illnesses are most vulnerable to the ensuing shortages.

There are unseen costs as well. How many of these hospitals are investing sufficiently in the latest equipment, given that the return on such investment is nil? Offer a new life-saving service and that service will be swamped by people who want it, but who have no intention of paying for it. Actually, the incentive is to offer nothing more than the basic medical services. This is how things operated in socialist countries, renowned for their horrible health-care practices. I remember one news report about health care in the Soviet Union. At a time when open-heart surgery was common in the United States, Russians with easily fixed heart problems such as clogged arteries were being sent home from Russian hospitals to die. But wasn’t health care “free” and a “right” in the Soviet Union? Isn’t it time to look at the reality rather than clinging to the fantasy that government can mandate every good and wonderful thing?

While the media have been reporting on the ER-closure problem, a second story has been brewing in the background. It’s the continuing crisis at the King/Drew Medical Center in South Central Los Angeles. This county-owned hospital has been under state and federal scrutiny for its poor medical care, and the latest federal inspection from the summer shows ongoing problems.

“Just two months after being reprimanded for rampant medication errors, Martin Luther King Jr./Drew Medical Center failed to give vital antibiotics and breathing treatments as directed to nine patients, a federal inspection has found,” reported the Los Angeles Times. The federal investigation depicted a poorly run hospital that “failed even to get basic facts right, such as patients’ weight and height.” Beds were covered in filth; guards used Taser guns on psychiatric patients; food served to patients wasn’t refrigerated properly; and so on. Another Times report from August explained that “Los Angeles County health officials closed the doors of Martin Luther King Jr./Drew Medical Center to ambulances for more than 60 hours . . . after large numbers of emergency room nurses called in sick or simply didn’t show up for their weekend shifts.”

Now, how can this Third-World-style medical system get much worse? Yet pundits such as Kinsley are afraid that market forces will make health care services unavailable to those who need them.

Many of the ERs and hospitals that are closing in Los Angeles County are private, and they are the ones that provide the best care. That’s true, even though private hospitals operate in a market controlled by government rules and subsidies. King/Drew, like the government-run veterans’ hospitals, is an example of the horrors that take place in full-fledged government-run hospitals.

Unfortunately, Kinsley’s view is typical. As Los Angeles County’s health-care system spirals toward an unending state of filth, shortages, lines, and other hallmarks of government-run systems, county supervisors, state officials, and even the medical profession push for more of the same things that made the system a disaster in the first place. The answer, we’re repeatedly told, is to create a complete socialized health-care system, in which insurance is unnecessary because everyone could be treated for “free” at any hospital and any medical facility.

Yet that very element—the “free” nature of health care—is what has destroyed what was once a premier medical system.

County officials told the Los Angeles Times that even the passage of the new tax in November wouldn’t have fixed the problem. The problem, experts said, is the uninsured. That is correct, but it is the only thing correct in most analyses. As one Los Angeles County supervisor foolishly explained: “It’s going to take a consensus in America that healthcare is a right, not a privilege.”

So here we go down the socialized-medical-care trail. It already is a “right” at emergency rooms, which is why no one can get the care they need any more. This is something America’s founders understood. The government is supposed to secure our “negative” rights only, protecting life, liberty, and property. Now, the government wants to offer “positive” rights—the “right” to something such as health care. But my right to health care means that someone else must be forced to provide it for me. It’s a freedom issue and a practical one. Because of the availability of profits, health-care providers are eager to provide quality care to me at a competitive price. Make health care a right and remove the profit incentive, and health-care providers will be leaving the market in record numbers, which is what is happening in Los Angeles County. The result is that these “free” services decline in quality—then availability.

The destruction of the medical market will mean that we will increasingly have to rely on government services of the sort provided at King/Drew, which thus endangers the lives of each of us and our loved ones. Or we must rely on the black market, and seek out the few facilities that completely opt out of the government-controlled and -subsidized medical market. That’s becoming a more reasonable option, which is why governments increasingly penalize those doctors who refuse to submit to their control.

This downward spiral is taking place for a simple reason: Officials, activists, and voters care so much about health care that they insist that it be available to everyone for free, in defiance of the market logic that had previously built the best health-care system in the world.

The lack of understanding of market principles endangers us all. Los Angeles County should offer an example to the rest of the nation of what not to do.