Saturday, May 27, 2006

Use of bad statistics in support of a good cause does not magically transform deception into enlightenment.

Last week I questioned estimates that the Hagel-Martinez Senate immigration bill would invite between 103 million and 217 million people to legally immigrate to the U.S. over the next 20 years. I called such estimates a “cheap parlor trick,” suggesting Rush Limbaugh’s normally reliable “Barbara Streisand [BS] detector” must have suffered a temporary malfunction. It was the bad statistic I quarreled with, not the messenger. After all, the smallest of these estimates — 103 million — was only a million short of Mexico’s entire population in 2004.

The good cause was the Bingaman amendment, which reduced the annual number of three-year work visas from 325,000 to 200,000 and eliminated an ambiguous 10 percent to 20 percent adjustment in that number. In the original bill, if all 325,000 guest-worker visas were quickly used up by the fiscal year’s first quarter, the quota would have been raised by 20 percent for the following year. If they were not all used by the end of the year, the quota would have been cut 10 percent. One can easily imagine such a limit being ratcheted-up for a few years. But not indefinitely.

The Coryn-Kyl bill and the president’s 2002 plan had no numerical limits at all on guest workers. Prospective employers and employees have to wade through red tape and jump through hoops to get a temporary three-to-six-year work visa. The administrative hurdles were considered a sufficient curb on numbers.

The bad statistic came from Robert Rector of the Heritage Foundation, a scholar known for pioneering work on poverty. The statistical trick was to project that without the Bingaman amendment the yearly number of guest-workers would double every four to six years forever, without limit. If one just kept on adding 20 percent to the initial 325,000, the number would have reached reach 111.1 million guest workers yearly within 32 years. Adding 1.2 family members per guest worker (the so-called conservative assumption) would bring that up to 244.3 million guest workers and relatives in a single year — nearly a quarter of a billion.

The end result is no less absurd using Mr. Rector’s preferred 10 percent rate — the numbers then double in six years rather than four so it just takes longer to reach a quarter-billion. In either case, the assumed number of guest-workers and their relatives would continue to nearly double every four or six years — to half a billion million a year, then 1 billion, then 2 billion, and so on. If that is not absurd, what is?

The Congressional Budget Office (CBO), by contrast, estimated the original Senate guest-worker program might have added only 4.3 million people over the next 10 years — 430,000 a year, not tens of millions. Together with added family-based admissions and other provisions, that would have increased total legal immigration an estimated 7.8 million over 10 years, including legalization of some already here.

After the Bingaman amendment, the revised CBO estimate of additional legal immigration is 5.1 million — 510,000 a year. That is not a net increase because, as the CBO notes, “A portion of the guest-worker population would enter the United States illegally in the absence of the program.”

The Senate bill’s tighter controls on illegal immigration, together with new opportunities for temporary work visas, could easily leave total legal and illegal immigration unchanged, yet more manageable.

Estimating at least 103 million new immigrants was not just a cheap trick but also a neat trick, since most guest-workers are widely expected to come from Mexico. The CIA’s World Factbook estimates Mexico had 43.4 million people working or seeking work in 2005, making it the 13th-largest labor force in the world — larger than Germany’s (the U.S. labor force was 149.3 million). If every working or unemployed Mexican adult left the country and came to the United States, and each brought 1.2 relatives and overstayed their visas as Mr. Rector assumes, U.S. immigration would increase by 95.5 million. Long before Mexico’s economy disappeared, however, the growing scarcity of labor relative to capital would drive Mexico’s wages sky high.

Because of the Bingaman amendment, Mr. Rector reduced his 20-year estimate of “new legal immigrants” to 66 million. That also is mostly statistical illusion. It includes 19 million for “normal visas under current law,” clearly not the result of the new law. And it adds an implausibly gigantic 16 million for “recipients of amnesty” and their families, who are not “new immigrants” at all. They’re here.

The CBO, by contrast, projects the amended bill would add 5.5 million new and newly legalized immigrants over 10 years, offset to some extent by a substantial reduction in illegal immigration. Mr. Rector’s corresponding figure is 6 times larger — 41.5 million new legal immigrants over the same period. The CBO estimates are far more plausible.

There are bound to be serious defects in whatever immigration bill the Senate ends up with. That is why our system of checks and balances requires a compromise with the House. The result should also be carefully scrutinized by executive branch professionals before the president signs it as hastily as he signed the ill-designed Medicare drug subsidy and the economically destructive Sarbanes-Oxley bills.

Good legislation rarely results from bad statistics.

Alan Reynolds is a senior fellow with the Cato Institute and a nationally syndicated columnist.

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