Spotlight Exclusives

How Federalism can Help the Poor and Minorities

Ilya Somin, George Mason University Ilya Somin, George Mason University, posted on

When it comes to the poor and minorities, American federalism has a dubious reputation, arising from the history of state and local governments protecting slavery, enforcing racial segregation, and otherwise oppressing minority groups. There is an element of truth in that negative image. But federalism has also often given the poor, minorities, and immigrants, valuable opportunities to better their lot by “voting with their feet.” And policy reforms can make federalism an even better tool for promoting freedom and opportunity.

When Americans think of federalism and “states’ rights,” we often recall slavery and Jim Crow racial segregation—injustices inflicted by state governments that were ended only through massive federal intervention. This tragic history has led many to associate federalism with the oppression of minorities and the poor. There is no question that, historically, state and local governments perpetrated many grave injustices. But we too often lose sight of the ways in which decentralized federalism has often actually helped the poor and oppressed—and can still do so today.

Rethinking Federalism’s History

In the late nineteenth and early twentieth centuries, many millions of African-Americans fled the Jim Crow segregation of the South, in search of greater freedom and opportunity in the North and West. This “Great Migration” by no means ended racism. But it enabled many to escape poverty and oppression. Similarly, internal migration westwards was a boon for women and religious minorities, such as the Mormons. In part because of a desire to attract female migrants, western states such as Utah and Wyoming offered women the vote and provided for more equal rights earlier than those in the East did.

A unitary federal policy on race and gender during that period might well have resulted in more injustice, rather than less. Majority national opinion was hostile to gender equality, and the South was far more committed to preserving segregation and racial inequality than northern whites were to ending it. A national policy on race might well have been closer to that of the South than that of more liberal northern states.

More recently, gays and lesbians also benefited from federalism. Many of whom sought out urban jurisdictions and “blue” states, which embraced same-sex marriage and other pro-gay policies well before national public opinion was prepared to do so. Ultimately, the Supreme Court ruled that the federal Constitution forbids state laws banning same-sex marriage. But that probably would not have happened so quickly were it not for prior progress at the state level.

In all of these cases, the ability to “vote with your feet” in a federal system provided enormous benefit to unpopular and often poor minorities. Federalism did not do away with poverty and prejudice. But it did help mitigate their baneful effects.

 How Federalism can Help the Poor Today

Foot voting continues to be of great value to the poor and minorities today. In recent decades, working and lower middle-class workers have often been able to find job opportunities and cheaper housing in southern and southwestern states with less regulated housing and labor markets. In a reversal of historical patterns, African-Americans and some other minorities are now tending to migrate south more than north.

Unfortunately, there has been a substantial diminution in mobility for the working class poor. Among the main causes are restrictive zoning and licensing regulations, which artificially drive up the cost of housing and make it difficult for migrants to enter many occupations. A National Bureau of Economic Research study by economists Chang-Tai Hsieh and Enrico Moretti estimates that, if zoning regulations in hyper-restrictive cities such as New York and San Francisco were reduced to the level of the median American city, large numbers of workers would find better housing and job opportunities, and the nation’s GDP would increase by a whopping 9.5 percent. Both the minority poor and the white working class, whose plight played a key role in electing Donald Trump, would stand to benefit enormously.

Few other policy reforms could simultaneously uplift the working poor and boost the national economy to such an enormous degree. Economists and land-use scholars across the political spectrum have highlighted the importance of this issue. Sadly, voters and politicians have so far largely ignored it. We cannot realize the full benefits of political decentralization unless local governments are more constrained in adopting policies that impede mobility.

Federalism and Immigration

 In addition to benefiting native-born minorities and the poor, foot voting under federalism also often protects vulnerable immigrants. In recent years, “sanctuary cities” that refuse to cooperate with federal government efforts to deport undocumented immigrants have been a major focus of political controversy.

Sanctuary cities cannot, by themselves, prevent immigrants from being deported. But by refusing to cooperate with the federal government, they make deportation far more difficult. Federal agencies often lack the manpower and resources to target immigrants in areas where local authorities refuse cooperation. A recent federal district court ruling against President Trump’s executive order targeting sanctuary cities reaffirmed longstanding constitutional principles that prevent the federal government from forcing states and localities to assist in deportation efforts. These limitations also protect both immigrants and natives from a dangerous diversion of law enforcement resources away from combating violent and property crime; immigrants actually have much lower crime rates than natives.

Sanctuary cities help protect undocumented immigrants from deportation to lives of poverty and oppression. But they only partially mitigate that danger. The fear of deportation by federal officials still consigns millions of immigrants to life in “the shadows,” as President Obama famously put it, and prevents them from contributing to the economy as much as they otherwise could.

Federalism could enhance opportunities for immigrants even more effectively if Congress were to pass a bill recently submitted by Republican Senator Ron Johnson (Wisconsin) and Representative Ken Buck (Colorado). The Johnson-Buck proposal would give states the power to initiate work visas for up to 500,000 immigrant workers initially, and possibly more over time. Unlike current federal work visa programs, Johnson-Buck state visas would not be tied to a particular employer. Workers would be free to change jobs, if they wish. That would deter mistreatment of workers by employers and enable workers to seek out new positions where they would be more productive, and thereby contribute more to the economy

Visa recipients would, however, be required to work only in the state that authorized the visa, or others that entered a compact with it. That limitation has important downsides, but it could reduce political conflict over immigration by channeling new immigrant workers to areas most welcoming of them. Even if confined to one or a few states, immigrant workers would be far better off than if forced to choose between living in the US illegally or – still worse – a lifetime of poverty and oppression in their countries of origin.

Decentralized federalism is far from perfect. Some large-scale problems can only be addressed at the national or even international level. And some forms of state-based oppression and discrimination are best dealt with through relatively uniform federal legislation or constitutional rules. But when we empower people to vote with their feet, federalism can do much to improve the lot of the poorest and most vulnerable among us.

Ilya Somin is Professor of Law at George Mason University, an adjunct scholar at the Cato Institute, and author of Democracy and Political Ignorance: Why Smaller Government is Smarter.

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