John mentions guest worker programs in a comment to my last post. He cites Dani Rodrik’s support for the idea. I also have been following the discussion Dr. Rodrik’s blog, as well as on George Borjas’s blog (Borjas has a very different point of view on the matter). Rodrik emphasizes that a guest worker program spreads around the wealth, by rotating in fresh workers eager to close that wage gap. Thus many more people enjoy the benefits of American wages. Part of the motivation here for Rodrik, I think, is that he is concerned about distributional effects in addition to aggregrate gains. Borjas counters that a guest worker program is not workable, in particular that some guest workers will inevitably become permanent workers. Rodriks thinks the argument is still good, though, even if some or all the workers don’t go home.

Rodrik: here, here, here, and finally sums it up here.

Borjas: here, here.