Immigration Nation: Northern Lights Edition

Hovsjo Estate, Sodertalje, Sweden
The “road to wherever” is paved with good intentions: Hovsjo Estate, Sweden.

As an adjunct to my recent blog post recounting the views of my expat brother, Nelson Nones, on immigration policy and its impact on national identity, here’s another interesting missive – this time from Sweden where my brother is currently working on a long-term consulting job.

What he writes is a cautionary tale on how not to deal with the tide of foreign nationals flooding in …

Background

I’m staying in Södertälje, a town of about 65,000 people located 22 miles southwest of Stockholm. Although Södertälje is today considered part of the greater Stockholm area, albeit on the fringe, it is an old factory town.

I’m here because Astra AB, which merged with Zeneca Group of the United Kingdom to form pharmaceuticals giant AstraZeneca, was founded here in 1919. Today AstraZeneca has two manufacturing sites in Södertälje, one of which is the largest tableting plant in the world.

One bit of trivia you’ll find out here: It’s the hometown of tennis star Björn Borg.

As most people know, Sweden is a very socialist market economy. The Swedes I know tell me that the only real difference between the Right (mainly represented by the “Moderate Party”) and Left (mainly represented by the “Swedish Social Democratic Party” which is Sweden’s largest political party) is their position on whether (Left) or not (Right) the government should run state-owned enterprises.

Sweden has a very generous public welfare system financed by the second-highest tax regime in the world, after Denmark. Personal income tax starts at 29%, but anyone earning over ~US$ 52,000 per year will pay between 49% and 60%.

Throw in the 25% value added tax (VAT) which is similar to sales tax in America, and you’ll get an idea of just how high the taxes are here.

Sweden is Europe’s fifth-largest country by area (not counting European Russia) but its population is only 9.5 million, so it is Europe’s third most sparsely populated country, after Norway and Finland (again, not counting European Russia and also excluding Iceland). Sweden is also relatively poorly endowed with natural resources.  For example, neighboring Norway has large North Sea oil reserves, but Sweden has none.

Recognizing this, the Swedish government aggressively pursued a policy of promoting large-scale industrial development after World War II, and this is one reason why Sweden has so many large industrial companies today. They include AstraZeneca, Volvo, Ericsson, Scania (also headquartered in Södertälje), Skanska, Saab and Alfa Laval.

To build these industries Sweden needed workers – lots of them. So it entered into a trade agreement with other Northern European countries back in 1952 which established a common labor market and free movement across borders. As a result, Sweden successfully attracted a large number of immigrants during the 1950s and 1960s from countries such as Finland, Germany, and even the Baltic States.

Another piece of important background information concerns greater Stockholm’s development since World War II. Unlike most big American cities, very few people in the Stockholm area (including Södertälje) live in single-family detached homes. Most of them live in apartments that were constructed in the 1960s and 1970s as part of Sweden’s Million Programme to build 1 million new dwellings in 10 years (for more information, see the Wikipedia article http://en.wikipedia.org/wiki/Million_Programme).

One of the main motivations of the Million Programme was to build affordable housing for the immigrant workers recruited to fuel Sweden’s industrial growth, and quite a few of those houses were built in Södertälje because it was already a well-established factory town.

To give an idea of how prevalent this sort of housing is, I had dinner recently with one of AstraZeneca’s senior executives and his family at their home, which is a flat in a small development on the outskirts of Södertälje consisting of two-story apartment blocks, four flats per block. It’s a beautiful home, but it still is … a flat.

How It Went Wrong

Partly because of its liberal immigration policy over the years, Sweden is also one of the world’s most accommodating countries for political refugees.  In recent years, many of them have come from the Middle East; specifically Christian Iraqis and Assyrians facing religious persecution, and also Muslims.

A very large number of these refugees settled in Södertälje. Today, approximately 40% of Södertälje’s population is foreign-born and, outside of Iraq, Södertälje is the largest enclave of Iraqis in the world.

Why Södertälje? Local opinions differ, but from what I can piece together it appears that:

  • Although Sweden’s industrial development policy proved very successful at first, employment in large industries is now in decline. As one example, AstraZeneca shut down its R&D center in Södertälje earlier this year in order to cut costs and consolidate R&D activities in the United Kingdom. (Previously, the Södertälje R&D center employed ~1,000 people.) Sweden’s automotive industries, especially Saab, have been hit hard by the global recession. It doesn’t help that Sweden is a very high-cost manufacturing locale today, so the country has lost many of the competitive advantages it possessed in prior years. As in America, industries have attempted to reduce high labor costs through automation, further reducing local employment.
  • Södertälje’s residential vacancy rate surged as job losses mounted and people moved away to find work elsewhere.
  • The Swedish government pays 100% of the housing cost for political refugees, who typically are unemployable because they lack the necessary language and/or job skills.
  • Södertälje is a convenient place to house these refugees, because vacant flats are readily available at (relatively) low cost, and because the town is on Stockholm’s urban fringe where the new arrivals are least likely to disrupt the area’s social fabric.

One of the Södertälje neighborhoods where the refugee population lives is Hovsjö (a tongue-twister pronounced something like “hoe-joo”). It was a Million Programme project put up between 1971 and 1975.

Unlike American ghetto neighborhoods, this one is on the far fringes of Södertälje, on top of a hill in the middle of a huge pine forest, and adjacent to a stunningly beautiful lake. It has 2,200 apartments, mostly in high-rise buildings, and is home to over 5,000 people.

You can view a documentary of Hovsjö at http://frankaschberg.com/sets/hovsjo/1296 and I can confirm from having driven up there once, just to see it, that the images paint an accurate picture.

Is this what comes to mind when one thinks of Sweden?  Most likely not!  With the help of Google Translate, shown below is a 2008 news article that says it all (you can find the original, in Swedish, here: http://lt.se/nyheter/1.47788-rasistdad-mot-nya-minoriteter-i-hovsjo).

New Racist Minorities in Hovsjö

“There are families who are prisoners in their own homes.”  Hovsjö Muslims, newly arrived refugees and people who stand out, are all becoming victims of harassment in Hovsjö. “I do not know why they harass me,” says Louris Kalo.

Hovsjö has become calmer for most people. But for a minority, it has become a living hell. Arriving refugees – especially Muslims – are particularly vulnerable.

“The problem must be taken seriously by politicians. There are families who are prisoners in their own homes, who take their children to kindergarten and then lock themselves inside out of fear,” says Hovsjö police chief Niclas Johansson.

One victim, who is neither Muslim nor Iraqi, is hairdresser Louris Kalo. She is Syrian but from Syria, not Turkey. “I do not know why they harass me, but the police and Securitas [the private security company] have been really kind to follow me home.”

For some reason, perhaps because she is a single woman and supports herself, she is met by taunts and she has repeatedly been forced to lock herself in her apartment after over 30 youths threw eggs at her salon and wrote bad words on the door. “Most of Hovsjö’s families are good and I do not want to move from here. But for the sake of the young people, I hope their parents do something about it before it is too late.”

Politicians know that in the past, Muslims were targeted by Christian immigrant groups. Now, however, even Iraqi Christians suffer hate crimes.

According to Mayor Anders Lago, the basic problem is that Södertälje is forced to accept too many applicants, creating segregated areas. “Södertälje has no agreement to accept any refugees at all. All those who come here do so because they have chosen to live here. But Sodertalje cannot shoulder this burden alone, so we want the government’s help to repeal the law that currently allows refugees to decide for themselves where they want to stay.”

Other news accounts point to a rising tide of violence between Christians and Muslims in Hovsjö, particularly between gangs of unemployed youths. All of the bad blood between Christians and Muslims is simply spreading over from the Middle East to bucolic Sweden.

[You can read more about Hovsjö’s litany of woe (in English) here: http://www.thelocal.se/tag/hovsj%F6.]

Hovsjö is not alone. There are at least two other areas that are nearly as bad in Södertälje, one of which is right up the hill from the house where I had my recent dinner (and I witnessed quite a bit of police activity then).

My dinner hosts, who are the stereotypically Swedish family and very nice people to boot, spent much of our evening together deploring the present situation in Södertälje.

I might add that, like most Swedes, they don’t mind paying high taxes, but they bitterly resent seeing their tax money given away to “hooligans,” as they would say.

The Moral of the Story

If you’re going to open the door to immigrants and refugees, then:

  • Don’t put the new arrivals on the dole.
  • Make sure they’re able to earn their own living after they arrive – not by offering “make work” jobs, but through the cumulative effects of fiscal and economic policies that stimulate domestic demand for workers having the skills, knowledge and abilities that the new arrivals possess.
  • Remove whatever incentives might cause the new arrivals to crowd into ghettoes (like the Mexican border zone in the U.S., or the dreary estates of Södertälje).  As an example of an alternative approach, America’s immigration policy in the 19th century was to give away rural (and widely dispersed) homesteads to immigrants.
  • Focus on attracting immigrants for economic or educational reasons, not on refugees for humanitarian reasons.  This may sound harsh, but it’s not as cruel as the social dysfunction (and even mayhem) that exists in places like Hovsjö. 

As people say, “The road to h*ll is paved with good intentions.”  I’m interested in hearing your thoughts and reaction to what Nelson is reporting from “bucolic Sweden.”  Could it be that the grass is not actually greener …?

A view of the 2012 U.S. Presidential election results from halfway around the world …

Latinos with American FlagMy brother, Nelson Nones, has lived and worked outside the United States for years.  He wrote me the other day with his “take” on the 2012 Presidential Election results. 

I thought his observations are interesting and thought-provoking … and offer a somewhat different perspective from what we’ve been hearing in the local media.  Here’s some of what Nelson shared with me.

On the 2012 the economic messages of the political parties:

It looks like capturing as many “WASP” votes as possible is not enough to push a Republican Presidential candidate over the top anymore.  On matters of foreign trade (labeling China a “currency manipulator” on Day 1) and immigration policy (preach self-deportation and round ‘em up), the Republican Party seems to be falling into the perilous traps of protectionism and isolationism.

The Democratic Party fell into similar traps years ago because of their affinity with labor unions and anti-war activists, and they could win national elections only rarely for many years as a result. 

Now it’s the Republicans’ turn.  Hopefully, and unlike the Democrats years ago, the Republican Party will learn its lesson well enough – and early enough – to avoid the slippery slope towards irrelevance.

I think the ability to attract immigrants from many races and cultures is one of America’s competitive advantages over rising powers like China, which is a palpably racist, Han-supremacist society that does not tolerate the integration of foreigners (I know; I’ve lived there). The U.S. political party that demonstrates leadership winning the economic race against China is the party that will dominate in the coming years.

By rights, Hispanics and other immigrants ought to be Republicans, not Democrats. They tend to be more traditional, more religious and hold stronger “family values” than many whites these days.  The majority are naturally hard-working and self-supporting, so even if they’re poorer than most people, they aren’t “47 percenters.” Another Republican majority will never emerge without them.

Not only that, in time the Republicans will lose strongholds like Texas and Florida which have substantial Hispanic populations – and they will never have a prayer in states like California and New Mexico.

On immigration policy and its impact on voting behavior:

I think the idea that Republicans should oppose immigration reform because it will welcome “millions of new Democrat voters” is incredibly short-sighted thinking.  It is also fundamentally flawed because it presumes that all those new citizens will vote Democrat.

From what I’ve read, Governor Romney (who lost) got 25% of the Latino vote, while President George W. Bush (who won) got 35% in both 2000 and 2004. However, if Republican lawmakers continue to obstinately oppose immigration reform, or if the Republican brand continues to be linked to harsh enforcement of existing laws (whether or not such linkage is fair), it’s a very safe bet that Republicans will never capture more than 25% of the Latino vote for a long time to come.

Let’s not forget that distinct racial and ethnic groups always reward the hand that enfranchises them — often for generations.

The history of Southern blacks proves this point. At first the blacks were Republicans, because Lincoln (a Republican) freed the slaves. But they were also disenfranchised by Southern whites, who were Democrats because Lincoln and Republicans had won the Civil War.

When the northern Democrats put civil rights on their agenda, everyone switched sides:  The Republicans successfully courted Southern whites (and now can bank on winning most of the South), while blacks overwhelmingly shifted their allegiance to the Democrats (and Romney apparently got way less than 10% of the black vote).

Hispanics or Latinos constitute over 16% of America’s population now; this demographic group is about 30% larger than the black population, but in recent times is roughly five times more likely than blacks to vote Republican.

Bottom line: the number of potential Republican votes cast by Hispanics and Latinos is seven times larger than the number of potential Republican votes cast by blacks.

To retain a strong presence on the national political scene, the Republican Party must focus on doing what it takes to hold the Hispanic/Latino bloc of votes, and then enlarge it. Pushing an agenda that Hispanics and Latinos perceive as disenfranchisement cannot possibly work.

Actions … consequences:

This isn’t just about attracting votes. It’s about exploiting one of America’s biggest competitive advantages to stay ahead of China in the economic race. There is no reason why Republicans can’t, or shouldn’t, transform their brand and take leadership of the economic race.

The best example I can think of to prove this point is President Richard Nixon’s rapprochement with China. Nixon, the diehard Commie fighter and leader of a political party that utterly detested China, took leadership and received credit for what is arguably one of the biggest transformational events of the 20th century.

Not coincidentally, the Chinese admire Nixon and mention his legacy to me all the time. Why? Because ordinary Chinese believe he (and not his counterpart, Chou En Lai) enfranchised them by opening the door to reform in their country.

On language:

Are some Americans obsessing too much over the issue of English as the national language?  Here’s my take on this: 

I have personally delivered services on location in the following countries over the past five years: Australia, Brunei, China, Egypt, Germany, Hong Kong, India, Japan, Malaysia, the Netherlands, Philippines, Poland, Singapore, South Korea, Sweden, Thailand, the United Kingdom and the United States.

English, my native tongue of course, is the common national language in just six of these countries: Australia, Hong Kong, India, Singapore, the United Kingdom and the United States.  I am somewhat fluent in Thai and struggle to communicate in Bahasa, (Mandarin) Chinese and German.  Arabic, Dutch, Japanese, Korean, Polish (utterly incomprehensible), Swedish and Tagalog?  No way.

Yet I’ve delivered my services and my clients are evidently happy, because they’ve paid their bills. How could I do this? Because they all use English, including the Chinese.  (The Japanese are worst at it, by the way, but routinely employ translators, headsets and microphones to overcome the language barrier).

You might counter that I deal with educated professionals and couldn’t pull this off with working-class people. Not so.  Most of my clients are manufacturers, so I deal with factory workers as well as managers and professionals.

Also, in the course of all my travels, I have to engage with plenty of local taxi drivers and McDonald’s clerks. Naturally not all of them know English, and when they do, their English skills are usually pretty dodgy, but nevertheless we are able to communicate well enough to get the job done.

So it seems that the world has also learned to speak English. This being the case, wouldn’t most of the new people arriving in the U.S. as a result of immigration reform continue to use English, as they now do when necessary in their native countries?

Having said this, even if the new arrivals abandon their current habits and insist on using their native languages, as a person with conservative political viewpoints, I would steadfastly oppose any attempt to make English mandatory.

Moreover, any attempt to do so would be clearly unconstitutional, because Article I of the U.S. Constitution declares, “Congress shall make no law … abridging the freedom of speech” (the Constitution does not state “English speech”).

Simply put, all Americans, whether immigrants or not, have the absolute right to use any language they wish, whether or not their choice is rational. Conservatives ought to be passionate about protecting this right, not undermining it.

Of course it’s conceivable that English evolves to become America’s sole de facto language if the country does everything in its (legal) power to keep foreigners out. But protecting a single national language by targeting and blocking Latino immigration (thus preventing the spread of Spanish) isn’t conservativism in the classic liberal sense; it’s isolationism.  And you can’t convince me that America would be better off pursuing an isolationist course in today’s world.

Are there some countries that try to keep their languages and cultures “pure”?  Sure … but usually with laughable results.

France, currently mired in recession and hardly a bastion of American-style conservativism, comes to mind.

Back in 2003, according to the Associated Press, the French government mandated the use of courriel instead of e-mail as the term for electronic mail: 

“The Culture Ministry has announced a ban on the use of ‘e-mail’ in all government ministries, documents, publications or websites, the latest step to stem an incursion of English words into the French lexicon,” the AP reported.

All the French people I know acknowledge that this policy is utterly ridiculous. And they continue to use the term “e-mail.”

Like France, Thailand has linguistic and cultural sensitivities as well. Just last month, The Nation, an English-language Bangkok newspaper, reported:  

“The debate surrounding the Royal Institute’s plan to change the spelling of 176 words ‘borrowed’ from the English language should focus the public’s attention on the use of Thai language in today’s fast-changing world. The Royal Institute revealed its aim to change the written form of 176 words borrowed from English, such as ‘computer,’ ‘nightclub’ and ‘kilometre,’ by adding tone marks. The Institute reasoned that the additions would be a guide to correct pronunciation.”

Yet all the Thais I know think this plan is a total waste of public time and money – and if you don’t believe me, just ask my wife!

What to do?

It’s clear to me that the 2012 Presidential Election results weren’t a one-off event, but rather the result of inexorable demographic change.

Now, the Republican Party could circle the wagons and collectively moan about the erosion of cultural values, like using one language.  But this way forward carries great risk: ceding permanent political power to the Left, whose agenda is certain to deal our fragile economy even more devastating blows.

Alternatively, the Republican Party could take a pragmatic approach to enlarge its diverse coalition of citizens who hold common views of political freedom, limited government, the rule of law and economic freedom.  I think that taking leadership on immigration reform is one way to do this.

Happily, it would also strengthen our economy by leveraging one of America’s most potent competitive advantages against China, today’s rising economic superpower and the most significant threat to U.S. economic hegemony.

As if on cue, I found this Wall Street Journal article on Yahoo! News today: http://finance.yahoo.com/news/heartland-draws-hispanics-help-revive-040400742.html and it reinforces my points on why America should be leveraging its appeal to new arrivals through immigration reform.

The WSJ article also illustrates the challenges of fear and mistrust that need to be overcome. That’s where political leadership comes in – and if the Republican Party were to start exerting the right kind of leadership, I’d bet it could win many hearts (and future votes).

And now your take:

What are your thoughts?  Do you think my brother is on target with his observations … or would you offer a different point of view?  Please share your comments — let’s get some discussion going!

The Consequences of Alabama’s New Immigration Law: Welcome to Economics 101

Alabama's tough new immigration law (2011)Since the passing of Alabama’s tough new immigration law several months ago, two major things have happened:

1. Many immigrant workers have left the workforce.

2. Employers – especially agricultural operations – have found it nearly impossible to replace the lost workers.

In retrospect, neither development seems particularly surprising. Many immigrant workers, whether they’re here in the United States legally or not, fear the heavy hand of government and will opt to find a more inviting environment than the one in Alabama today. For now at least, that environment is better in nearly all of the other 49 states.

And while the jobs no longer being done by immigrants may now be sought by American citizens – after all, the ~9.9% unemployment rate in Alabama is higher than the overall U.S. rate – the appetite for doing many of these jobs dissipates quickly when people are confronted by the reality of what is required to perform them.

Alicia Caldwell, an Associated Press reporter, spoke last week with some Alabama farmers to find out what has happened since Americans were hired to replace immigrant workers.

“Most show up late, work slower than seasoned farm hands and are ready to call it a day after lunch or by mid-afternoon. Some quit after a single day,” Caldwell reported in her AP article published last week.

As a result, farmers are opting to leave crops in the field rather than harvesting them.

What we have here is a classic Economics 101 lesson. If workers aren’t willing to do the jobs at a labor cost that will enable the products to be sold at a competitive price, the crops won’t be brought to market.

If agricultural operations in the whole world faced the same situation as Alabama farmers, it’s possible that a new labor/price equilibrium could be established. But not only is Alabama competing against other states where immigrant labor continues to be used, it’s also competing against other countries that produce the same crops.

The result? No one is winning. Not the farmers … not the immigrant workers … nor the unemployed Americans who have decided that ramaining unemployed is preferable to working a difficult or unpleasant job.

The Alabama state government is attempting to support the transition away from immigrant workers. A program started recently seeks to pair Alabamians interested in jobs with the state’s farming operations that need replacement labor.

So far, the results of this effort haven’t been encouraging, with only ~260 people registering interest in temporary agricultural jobs.

Out in the field, reporter Caldwell has found ample anecdotal evidence that underscores the disconnect between the “theory” versus “practical reality” of unemployed Americans taking advantage of these new job opportunities:

Tomato farmer Wayne Smith said he has never been able to keep a staff of American workers in his 25 years of farming.

“People in Alabama are not going to do this,” said Smith, who grows about 75 acres of tomatoes in the northeast part of the state. “They’d work one day and then just wouldn’t show up again.”

At this farm, field workers get $2 for every 25-pound box of tomatoes they fill. Skilled pickers can make anywhere from $200 to $300 a day, he said. Unskilled workers make much less.

A crew of four Hispanics can earn about $150 each by picking 250-300 boxes of tomatoes in a day, said Jerry Spencer of Grow Alabama, which purchases and sells locally owned produce. A crew of 25 Americans recently picked 200 boxes – giving them each $24 for the day.

Years ago, an old Russian emigré professor of Slavic history and literature at Vanderbilt University advised us students, “As you grow older and wiser, you’ll come to realize that the great issues of the day can’t be debated in black and white. Because the two sides aren’t black and white; they’re really shades of gray.”

Those words could well be applied to the immigration debate and its socioeconomic consequences. Certainly, one “black and white” issue that should be banished from the discussion is the notion that if all of the jobs done by illegal immigrants were to become available to Americans, our unemployment problem would be magically solved.