Electronic Immigrants


St. Louis. -- Both the opponents and proponents of open immigration have missed an obvious fact: The American borders are wide open and cannot be closed to hordes of modern-day immigrants.

The half-million or so aliens who annually steal across the country's southern borders in the dark of night are a mere trickle of the flow of undocumented immigrants who make their way into the American economy. Literally millions of other undocumented immigrants enter each day with impunity from immigration laws. A few enter in the dark of night, but most come across in broad daylight, slipping past the guards, uncounted, in the blink of an eye. Most are welcomed with outstretched American checkbooks. Few rouse any concern, mainly because even if they could be stopped, no one would want to stop them.

How do they come in? They do it in the new-fashioned way -- electronically, along rapidly expanding communication networks that extend to the far corners of the globe. Many come by way of phone calls; others, by faxes. The largest portion probably enter the U.S. market via personal computers. No one knows for sure how many "electronic immigrants" there are, but the count must be at least 5 million each day.

Partisans to the immigration debate of 1993 are still mired in the mind set of bygone centuries during which a person actually had to move body and soul into another country to work there. Little do they know that times have changed drastically.

Brainpower, the crucial factor of modern production, can now go practically any place in the world, at any time, and at low cost. When American employers hire workers in Ireland or Barbados to do computer work that is sent to them electronically, those workers enter, de facto, the American labor force. Similarly, a German engineer who calls contacts in the United States to solve a problem or to plot strategy for a new computer chip or factory has slipped by America's border guards. These workers may not have a corporeal presence in the economy, but their brains certainly do. They mix and mingle with American resources for productive ends, just as surely as they would have had they updated their passports, acquired green cards and flown in.

The electronic immigrant has many of the same effects on the American economy as do the "physical immigrants" (those who come by foot). Frequently, they accept lower pay than their American counterparts, and they draw on and redirect American resources. The big difference between the two groups of undocumented immigrants -- the electronic and the physical -- is that the former enter when they are wanted, draw on the American economy only so long as they contribute more than they earn, and can make no claims on American taxpayers. Physical immigrants are far more problematic, because current laws give them, in effect, keys to the country's public treasuries.

Our political leaders in Washington are still encumbered with an outdated view of how human resources move about the world. They seem wedded to the belief that people's economic value is a matter of corporeal presence, that it can neither move in nor slip away unless workers physically get up and move.

Admirably, President Clinton and Secretary of Labor Robert Reich have recognized the importance of capital -- even human capital -- to the global economy and the country's future prosperity. Regrettably, they have deduced that higher taxes can be levied on people because they cannot easily move physically across borders. Messrs. Clinton and Reich appear unaware of the hordes of electronic immigrants who are already here. They do not acknowledge that higher tax rates and more onerous mandates will cause foreign immigrants to be even more attractive to American employers, reducing job opportunities in this economy and inducing Americans to employ their brainpower elsewhere in the world by means of modern electronics.

Granted, when Americans use their brainpower elsewhere, they will earn an income that can then be taxed. At the same time, their electronic migration will mean less brainpower will be driving the American economy.

As never before, brains -- not brawn -- makes an economy go round. Policy makers must recognize that the American economy will continue to drag so long as policies fail to consider the ease with which people can migrate electronically. Like it or not, our future prosperity depends on the number of brain workers the country can attract and keep.

Richard McKenzie, a fellow at the Center for the Study of American Business at Washington University, teaches in the Graduate School of Management at the University of California, Irvine.

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