Wednesday, June 06, 2007

Is Immigration Anti-Capitalism?

Why is it that our capitalist country believes so strongly in free markets until the product is cheap labor? If the need for more corn to produce ethanol drives the price of milk up, we expect that more farmers will plant corn as a response and prices will drop. But when the problem is a shortage of labor, the response is to bring in cheap, foreign labor. Why don't we let market pressures solve the problem?

I heard a California farmer complain that he couldn't find farm labors willing to harvest his crops. He said he didn't think he could find people willing to do the back breaking work at even $20 an hour. So what's the answer? He wants foreign laborers to come in and do the work (and I bet they'll be paid a LOT less than $20 an hour).

Why isn't the answer "Let the markets work it out"? It seems to me that there are people who will do that hard work if they are compensated well enough. $30 and hour? $40 an hour? Benefits? You can get workers if you pay enough. Of course, the higher labor costs may mean that the produce will be so expensive that consumers will not buy it, but then the farmer has another choice. Grow something that is not so labor intensive. Or go into some other business.

We don't have a problem with people with valuable skills being paid high salaries, so why should we penalize people without specialized education or unique talents from being paid whatever the market requires? I person who has the ability and motivation to do hard work that others won't do should be paid appropriately. We sympathize with the professional athlete who demands a high salary partly because their professional careers are short and subject to an abrupt end if they are injured. How is that any different from anyone who does hard physical labor?

When I was young, a neighbor had a small roofing business. I occasionally did odd jobs for him during the summer and I know the roofers who worked for him were happy to have a good paying job. Now we hear that only cheap foreign labor will do these jobs and many other construction jobs. Baloney! Give a person good pay and benefits and people will be lining up for the jobs.

Our problem is that we want prosperity and low prices and don't mind getting these on the backs of low paid workers.

Robert Reich, who for several years during the Clinton administration was Secretary of Labor, was on NPR this morning. I usually find him to have reasoned and well stated opinions. This morning he took issue with at least part of the proposed immigration bill. He did not like the idea of letting more educated immigrants into the country. If I remember correctly, he had two main arguments. As an example, he pointed out that the salaries of U.S. information technology works have been stagnant the past few years (partly due to globalization), so bringing in skilled people from overseas will just suppress wages even more. He then tackled the complaint that even today there aren't enough information technology workers in the U.S. to fill the jobs that are available. His argument, if we bring in new workers from overseas, that will remove the incentive for U.S. companies to recruit and train new U.S. workers. I'm not going to defend or attack his position, but don't these same basic arguments support the case that we shouldn't bring in low cost foreign labor to undercut low skill U.S. workers?

What really puzzled me about Reich's comments is that I believe he is in favor of bringing in low cost foreign labor.

I still believe that if we are going to bring in foreign labor, employers should be forced to pay them more than what they would pay a U.S. citizen. Twenty-five percent sounds good. If you have a job that pays minimum wage to a U.S. worker, a non-citizen would be paid minimum wage plus 25%. If you are hiring an information worker, you can pay a U.S. citizen $100,000 or a foreign worker $125,000. Market pressure would reward U.S. workers and help insure that there are truly no U.S. workers who are qualified and willing to do the work.

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