The New York Times recently published a feature piece entitled Alone and Exploited, Migrant Children Work Brutal Jobs Across the U.S. The article essentially amounts to a classic exposition of the black market in migrant labor and is all but a poster child for market-based visas.
Due to various legal rulings over the last two decades and especially permissive policies under the Biden administration, unaccompanied minors can enter the US and remain in the country for years at a time. By providing preferential treatment to minors, the government has created a bias towards child migrant labor. Indeed, the prospect of work is the principal cause of illegal entry, with the NYT noting that "in interviews with more than 60 caseworkers, most independently estimated that about two-thirds of all unaccompanied migrant children ended up working full time." The share could be even higher. In north Grand Rapids, according to the article, "93 percent of children have been released to adults who are not their parents." Thus, family reunification is not the primary motivator of child migration. Rather, even for minors, the whole point of entering the US illegally is to find work. Illegal immigration is a black market in migrant labor -- whether for minors or adults -- as we have always contended.
The article then goes on to detail all the ills of such a situation: debts incurred that must be repaid by these minors, long hours, dangerous work, exorbitant lodging fees, false identification expenses, and "sponsor" fees. In addition, many of these minors are hired by staffing agencies which launder their credentials to allow them to work. That is, the migrants are hired by an agency -- not by the ultimate employer -- with the agency providing 'assurances' to the employer that the migrant is both legal and of age. The agencies will, of course, take their cut of the migrants wages. A big cut. Think Pablo Escobar meets Robert Half.
Further, we can assume other issues. The first is wage theft by direct employers, most notably by staffing agencies. Wage theft occurs when promised wages are not paid in full. This is typical for migrant labor in the US and has historically been one of the major complaints of undocumented workers. In addition, large-scale sexual exploitation of underage female migrants is all but certain. As noted above, minor girls are being released in the US, in most cases, to the care and households of people who are not their parents and in many cases may be presumed to be part of labor smuggling groups. Female minors will be poorly positioned to resist advances and coercion from sponsors or other persons residing in the household.
How are we to make sense of this catastrophic situation?
As ever, we can bundle all these issues into a financial analysis to understand the dynamics of exploitation.
Right now, minimum wage labor can command around $15 / hour in the US. If a staffing agency is used, figure they take 40% of the gross or $6 / hour to front for undocumented, under-age labor. The sponsor may take another $2 / hour and an inherently higher cost of living in the US, another $2 / hour.
Thus, of the $15 / hour gross wage, the minor is left with perhaps $4-6 / hour, $5 / hour per our model. This becomes cash available for remittances.
All this is lousy from the US perspective, save that net US wages for undocumented minors are still double the wage available for unskilled adults in Guatemala. Therefore, undocumented minors have an economic incentive to endure their harsh reality in the US. The current system is perverse and degrading, but it is economically workable, which is why 250,000 unaccompanied minors have entered the US over the last two years.
The costs, however, are more than those counted in cash. Non-cash exploitation and trauma costs must also be factored in. As noted above, the risks would appear greatest for undocumented girls, particularly related to sexual harassment or coercion. The NYT's article alludes to the brutal reality:
It has been a little more than a year since Carolina left Guatemala, and she has started to make some friends. Mostly, though, she keeps to herself. Her teachers do not know many details about her journey to the border. When the topic came up at school recently, Carolina began sobbing and would not say why.
Do we not know why? Prior to the current system, when adult women from Mexico and Central America paid coyotes to guide them across the Sonoran desert to Arizona, stories of sexual assault were common. But so was the tendency of victims to internalize the trauma and bear the scars in silence for fear of social stigma and humiliation. The current system is potentially worse -- far worse -- as we are now speaking of minors literally living with 'sponsors' as all but indentured servants and enjoying virtually no legal protection. As many as 50,000 under-age girls may be at serious risk. The NYT's article does not tell us whether this is in fact happening, but the analytics suggest sexual exploitation is widespread.
The system works as it does because the US has, in effect, privatized (more precisely, waived) the value of the work permit, enabling sleazy intermediaries to capture its value. The right to work in the US is extremely valuable, as I often point out. Indeed, the value of the visa in principle could be as high as the predation cost shown above, $20,000 / year. If the US government does not claim that value, someone else in the supply chain -- cartels, guides, smugglers, sponsors, staffing agencies, or direct employers -- will tend to capture it. This is the fundamental economic reality of illegal immigration.
In a market-based system, the situation would be quite different. To begin with, such a system would eliminate minors. Market-based work visas would have an age minimum, probably 18. Therefore, minors would be screened out, just as they should be. Moreover, such a system would allow migrants to work for any participating company, whenever they want (subject to annual time limits). There is no indenturing effect. Migrants can come and go as they please and enjoy full US legal protections in the process. This improves the lot of the migrants because they have leverage with their employer -- they are not tied in debt bondage -- and they have legal protection from criminal behavior, including sexual assault.
The New York Times article -- I encourage you to read it -- frames the current system as some inexplicable social dysfunction, the result of evil sponsors and employers exploiting vulnerable children. It most certainly involves exploitation, but the US system is working exactly as US policy-makers have designed and implemented it as a practical matter. The article catalogs the classic adverse effects of prohibitions and resulting black markets. The system is not anomalous. It is operating exactly as black market theory predicts.
Ending the use of undocumented, minor labor is straight-forward. Central Americans do not send their children to work in the US because they are heartless. They send them because the adults are unable to enter the US to work. If we transition to a market-based, legalize-and-tax system, ending the employment of undocumented children is trivial. Ending the associated exploitation and the suffering, for both minors and adults, is inherent in the approach.
We are finally at a stage at which social conservatives are willing to take a look at a market-based approach. This is truly incredible and real open-mindedness from those pegged as narrow and prejudiced.
But where is the political left? Where are all those who claim to care about the undocumented? When will they stand up and say that a legalize-and-tax, market-based approach is worth a serious look? Or will they look away as long as they can claim to be 'nice' by letting unaccompanied minors into the US, and ignore the tragedies suffered by these exploited children?
