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June 04, 2007

Will Guest Workers Harm American Workers?

I'm not certain Matt wants to base his arguments against a guest worker program solely on grounds of income. After all, the bottom fifth of this country never saw greater gains than in the immediate post-war period -- exactly the era when the Bracero guest worker program was in place.

Which is to say, as we already know, that immigrants generally -- and 200,000 person guest worker programs specifically -- have very small downward effects on on native wages -- if indeed they have effects at all. In large part, their jobs are complementary to, rather than competitive against, native worker's jobs. And they both create and keep wealth, jobs, and industry in the country. If the migrants weren't coming over the border to pick strawberries, it would be the strawberries coming over the border instead. The margins are low enough, and the product mobile enough, that it'll just get outsourced.

In that way, the importation of low-wage labor often isn't zero-sum; it sustains industries that would either leave the country or disappear in the absence of such labor. Indeed, Matt made this point eloquently in a post I came across while Googling the other day. "There aren't any jobs Americans won't do," he wrote, "but there are plenty of jobs that won't get done at the prices people are willing to pay...There's a cheap Chinese takeout place on my corner owned and staffed by immigrants who, I assume, don't get paid very much. There's no reason in principle why a native-born American couldn't learn to work a wok and become a short-order cook at a Chinese restaurant. In practice, though, that kind of thing doesn't happen. Cities without Chinese immigrants don't have Chinese restaurants." That was a smart point, one that he seems to have forgotten.

The question is how you figure out which industries those are. Agriculture is pretty clearly one of them. In California, fruit literally rots in the field because of labor shortages. Those jobs are, by law, advertised in newspapers and central job registries, and it's not as if they're being filled will all sorts of cheap labor when the ag workers in residence don't come through. They're just not being done. Meanwhile, I really don't know how much more the immigration bill can do to make sure these immigrants are basically non-competitive with native workers. Paid at prevailing or union wage? Check. Workman's comp? Check. Right of refusal to native workers? Check. Mandatory advertisement in large newspapers? Check. Massively stepped up enforcement? Check. And so on, and so forth.

Meanwhile, it's far better for native workers to be competing against legal immigrants who have some bargaining power and are covered by wage laws and labor standards. The immigration bill does that, both by legalizing 12 million illegal immigrants and by trying to fill labor shortages with legal, rather than illegal, workers. Matt opposes such a program for political and moral reasons. But saying it will depress wages or harm American workers as compared to the status quo? Well, that's much less clear. Generally speaking, Ted Kennedy doesn't back bills meant to harm American workers.

June 4, 2007 | Permalink

Comments

Ezra: If the migrants weren't coming over the border to pick strawberries, it would be the strawberries coming over the border instead. The margins are low enough, and the product mobile enough, that it'll just get outsourced.

This assumes that we allow such outsourcing in the first place. We don't have to; it's not a law of nature. We shouldn't be trading with Third World countries except in certain tightly delimited circumstances.

Posted by: Josh G. | Jun 4, 2007 5:49:00 PM

OMG, He is seriously NOT basing an argument on that fact that the post-war period saw gains despite a guest worker program. Seriously, I'm beginning to wonder if Ezra really understands what happens in countries that have the sole remaining ability to effectively contract out work after a world-wide, severely de3bilitating war. To put it bluntly, we had so many jobs at that time that it would have irresponsible not to import guest workers. We were in charge of the world and had the only capacity to rebuild it. These two time periods are so far from being analogous that it's hard to believe that was honestly offered up as an argument.

Posted by: soullite | Jun 4, 2007 5:51:35 PM

I agree Josh, some of people need to learn the difference between a social science and a natural one. to put it bluntly, natural laws can not be violated by the inherent laws of physics that govern an ordered universe. Social laws are governed by men, and men may enforce them or refuse to do so as they wish.

Posted by: soullite | Jun 4, 2007 5:52:58 PM

Josh G,

We shouldn't be trading with Third World countries except in certain tightly delimited circumstances.

Why not?

Posted by: JasonR | Jun 4, 2007 6:03:23 PM

Because trade with the Third World almost invariably hurts American workers. It also drives down the quality of goods (compare the quality of electronics manufactured in China, a Third World country, to those manufactured in advanced industrialized nations like Japan).

Posted by: Josh G. | Jun 4, 2007 6:12:38 PM

And, of course, buying food from the Third World can be downright hazardous, as the recent melamine cases demonstrate.

Posted by: Josh G. | Jun 4, 2007 6:13:16 PM

Speaking about strawberries, "liberals" might want to read this:

theatlantic.com/doc/199511/guest-workers

Perhaps it would be better to import strawberries after all.

As for rotting crops, I have about a dozen posts dealing with outright cheap labor propaganda being apparently "planted" in sympathetic papers. See this for more:

vdare.com/sailer/061008_pearanoia.htm

Another thing Ezra doesn't know is that farm mechanization is disfavored by our laws. Without all that cheap labor, growers would be forced to abide by the market and either move offshore or automate, with the latter leading to more innovation and better jobs.

As for the Senate bill, it will massively increase legal immigration and lead to even more illegal immigration, leading to even more of an Ezra-style "benefit" as low-wage jobs get even lower-wage.

Click my name's link to read yet another thing Ezra doesn't know. Does he know he appears to be endorsing a group that has at least one member which is led by someone linked to the MexicanGovernment, and that has another member that has allegedly collaborated with that government?

Posted by: Even more stuff Ezra doesn't know | Jun 4, 2007 6:27:01 PM

Because trade with the Third World almost invariably hurts American workers. It also drives down the quality of goods (compare the quality of electronics manufactured in China, a Third World country, to those manufactured in advanced industrialized nations like Japan).

I think you'd have a hard time producing evidence to substantiate this claim. In any case, I think the case for or against international trade must take into account its effect on other countries too, not just the U.S.

Posted by: JasonR | Jun 4, 2007 6:30:04 PM

it's far better for native workers to be competing against legal immigrants who have some bargaining power and are covered by wage laws and labor standards..

Why should the native workers have to compete against immigrants, legal or illegal in the first place.


I have not seen any studies, but my guess is that a ready supply of immigrant labor (even if the immigrants are legal) will depress wages in any area.

Posted by: gregor | Jun 4, 2007 6:34:54 PM

Look, there's a labor problem here, and there's an immigration problem; it would behoove all of us, especially progressives who care considerably about labor and the rights of workers, to separate these discussions. The problem with the guest worker program as an immigration problem isn't about wages; it's about the ludicrousness of two year visits, followed by one year at home, followed by two years, etc, until they can never come back. It's not rational, it makes no business sense, and it would probably break down in practice, since Homeland Security still (STILL) has no workable tracking system for the visas its currently administering. These are immigration problems, and they should be addressed - better than they are - in the immigration bill.

There's a separate discussion here about what importing low wage workers means for native workers, for our economy, and for wages. This isn't necessarily my biggest issue (the fields I work in don't have these problems), but it strikes me we need to make sure workers - especially low wage ones - have appropriate protections from employers regarding exploitation before we confidently assume guest worker programs won't cause downward pressure on wages, and simply push native workers out of certain fields. This is a labor law, and workers rights problem. And it should be addressed in that context.

And all of this is a reminder that this immigration bill, as constructed, is terrible - because its trying to solve the labor problem by immigration law. What we should be solving is the immigration problem with immigration law, or the labor problem with labor law.

Posted by: weboy | Jun 4, 2007 6:41:40 PM

Regarding my comments above about mechanization, see this NYT article: tinyurl.com/zm8he

My series of pro-grower articles starts here: tinyurl.com/2sz6wc Follow the link at the end of the post to the previous post, etc.

Growers on Capitol Hill: tinyurl.com/2p5wx2 , tinyurl.com/2moo2o

Posted by: Even more stuff Ezra doesn't know | Jun 4, 2007 6:46:52 PM

Nice appeal to the Liberal Lion of Authoriy at the end there.

That said, I can't get terribly enthused about a guest worker program that seems to be a sop to construction and agri-business to keep them on board.

Posted by: AJ | Jun 4, 2007 7:18:42 PM

I once went to a Chinese restaurant in Duluth, MN that had elderly Caucasian ladies as waitresses and a bearded short order cook as the chef. It represents my only experience with MSG overload. The exception that made your rule.

Posted by: Ernie Fazio | Jun 4, 2007 8:35:53 PM

Hey Ezra! The Bracero guest worker program was in place at a time when labor had a better bargaining position (more people in unions) and that program was confined tightly to agriculture.

That you bring that up tells me one thing. That you just like big numbers of immigrants - regardless of the facts.

You are totally blind to the negative impact that immigrants (legal and illegal) have had on the economy and quality of life over the last 35 years. With immigration, California has seen developing-country population growth (>2%/yr, which has been a big strain on the infrastructure, along with all the ills that overcrowding bring.

Posted by: Quiddity | Jun 4, 2007 8:50:09 PM

"There's a cheap Chinese takeout place on my corner owned and staffed by immigrants who, I assume, don't get paid very much. There's no reason in principle why a native-born American couldn't learn to work a wok and become a short-order cook at a Chinese restaurant. In practice, though, that kind of thing doesn't happen. Cities without Chinese immigrants don't have Chinese restaurants." That was a smart point, one that he seems to have forgotten.

That's actually a terrible point, and betrays a fundamental misunderstanding of the economics of immigration.

First, there are virtually no cities without Chinese immigrants (there may be very small towns without Chinese immigrants, but certainly not cities). That's a wildly dubious statement that can't credibly justify any point.

Second, just because the Chinese food industry in America is unique to Chinese immigrants does not mean that there wouln't be any Chinese take-out restaurants if there weren't any Chinese immigrants. To the contrary, it simply demonstrates that Chinese immigrants can more easily acquire the knowledge required to run a Chinese take-out restaurant (i.e., how to cook Chinese food) than native-born Americans. With so many Chinese take-out restaurants in America already, the cost required for native-born Americans to learn how to cook Chinese food is too high relative to the potential profits in a saturated market. However, if a large number of Chinese immigrants suddenly left, the demand for Chinese take-out would remain the same, and the potential profits of running a Chinese take-out restaurant would eventually exceed the costs of learning to cook Chinese food. So even if there were cities without Chinese immigrants, there would still be Chinese restaurants.

Third, this example (like the examples of every other self-proclaimed "commentator" on immigration) ignores foreign specialization. Chinese restaurants are not easy to run; at the very least, they require someone to know how to cook Chinese food, which in turn requires a basic knowledge of the Chinese language. Chinese immigrants who run Chinese restaurants are not doing a job that most low-wage American workers could do. You're confusing low-paying jobs with easy jobs. Jobs at Chinese restaurants are low-paying only because the market is saturated with Chinese restaurants.

Any immigration lawyer can tell you that what businesses value most about immigrants is their specialized skills, not their willingness to accept low wages. Just look at the history of the H-1B visa.

Economics absolutely supports increased immigration, but this is bad economics.

Posted by: BH | Jun 4, 2007 9:33:29 PM

If you give business high-skilled labor you reduce their incentive to invest in the American education system. This in turn will prevent America and it's economy from being as effective as it could be and will make America dependent on an outside source for these workers.

Tell me, in economics what is it called when the government gives someone something and because of that gift, it prevents both that someone from becoming independent and it prevents the economy from reaching it's full potential?

Posted by: soullite | Jun 4, 2007 9:54:23 PM

The point with the Bracero program is exactly what you've all said it is: It didn't matter. There simply isn't a credible demonstration of widescale wage depression stemming from immigrant labor. The best estimates from Borjas -- an anti-immigration authority himself -- is a 7 percent drag for unskilled workers, even as immigrant create a net economic gain. You want to help unskilled workers raise their wages by seven percent, the first place to look isn't the border.

Also, the mechanization stuff is a fair point. There is a real concern that an addiction to cheap labor will refocus agricultural companies on labor intensive, rather than machine intensive, production. I'm not exactly sure why that's bad, but it's a real effect.

Posted by: Ezra | Jun 4, 2007 9:55:01 PM

A critical point critics of Ezra's post seem to still be overlooking is that guest workers are better for native low-wage workers than illegals. Make it easier for them to come in legally, with labor protections, and without the danger of being arrested, and you make illegal entry less attractive. That's better for low-wage workers, since illegals get paid less and are less able to stand up to employers.

The idea that the Senate bill will increase illegal immigration is pure silliness.

And all of this is a reminder that this immigration bill, as constructed, is terrible - because its trying to solve the labor problem by immigration law.

You seem determined to find some reason to oppose this bill, weboy. What difference does it make if labor protections are covered in an immigration bill or in some other bill? The legal result is the same.

I can't get terribly enthused about a guest worker program that seems to be a sop to construction and agri-business to keep them on board.

As long as it works.

Quiddity, if any place makes Ezra's point, it's California, with among the highest wages in the country.

Posted by: Sanpete | Jun 4, 2007 10:14:04 PM

Ezra compared a post-war expansion to the current economic situation. There is no way to justify such a comparison without ignoring America's unique position in the world at that time. The rest of the wold was in ruin, and we more or less controlled everything everywhere. The world need employment more than it does now, and the US needed workers more than it does now. It's impossible to assume this is an intellectually honest argument.
A fish swims just fine in the water, but on land it'll die real quick. What could be done 60 years ago in a period of unrivaled economic expansion when the Us made up more than 1/2 of the worlds economy can not be done in a period where these circumstances have changed drastically. Failing to control for these factors haven't proven that immigration has no impact on wages, it's too much more likely that the endless demand for labor in that period mitigated or nullified any such impact. To put it bluntly, supply and demand is more or less accepted science. Ezra has to state a reasoning for why he thinks it does not apply here. He may as well be arguing that the world's flat, that the sun revolves around it, and that it's only 6k years old.

Posted by: soullite | Jun 4, 2007 10:25:03 PM

"If you give business high-skilled labor you reduce their incentive to invest in the American education system. This in turn will prevent America and it's economy from being as effective as it could be and will make America dependent on an outside source for these workers."

Businesses don't fund the American education system; the state and federal governments do.

Also, allowing businesses to hire skilled immigrants reduces their cost of production, which reduces the price of goods. There's a word for that in economics: efficiency.

Posted by: BH | Jun 4, 2007 10:26:37 PM

compare the quality of electronics manufactured in China, a Third World country, to those manufactured in advanced industrialized nations like Japan

I quite like my iPod, actually, and I'm not sure there's a Japanese-made alternative that one could say is objectively superior to it. The difference is that China produces a LOT of electronics, and that includes a lot of cheap crap... which, I might add, Japan used to be famous for as well when they were the electronics manufacturing hub of the world.

Posted by: Constantine | Jun 4, 2007 10:28:08 PM

> "There aren't any jobs Americans won't do," he wrote,
> "but there are plenty of jobs that won't get done at
> the prices people are willing to pay...There's a cheap
> Chinese takeout place on my corner owned and staffed
> by immigrants who, I assume, don't get paid very much.
> There's no reason in principle why a native-born
> American couldn't learn to work a wok and become a
> short-order cook at a Chinese restaurant. In practice,
> though, that kind of thing doesn't happen.

Is it really so easy to forget the example of meatpacking? Meatpacking used to be a heavily unionized trade with salaries in the $15-$25/hr range and some reasonable amount of heath and safety regulation (given the nature of the business). Then laws and prosecutors were purchased by the big meatpacking entities to get the eye of government turned away, illegal immigrants were brought in to bust the unions - and now meatpacking is a $5/hr job where employees are discarded when RSI (or just plain brutal injury) wears them out at age 30. This was progress? This is what we can expect when the floodgates are opened wider?

Man With No Name

Posted by: Man With No Name | Jun 4, 2007 10:28:33 PM

BH completely ignores non-economic factors, such as what I'll call the "AncientChineseSecret" rule: some people won't buy Chinese food when it's cooked by non-Chinese. It also ignores the NetworkEffect of immigrants. BTW, here's how some ChineseRestaurants have saved money: tinyurl.com/27vnbo Yum, yum, yum, yum, yum, look what "liberals" support.

As for Ezra Klein's confusion over why throwing cheap labor at a problem could be bad, last I checked this was not Russia in the 19th Century... hold on... no, I double checked, this is not Russia in the 19th Century.

BTW: Based on the Blogad bearing a quote from Ezra Klein, isn't it safe to assume he endorse cirnow.org? Does it bother him that one member group is headed by someone linked to the MexicanGovernment? What about the other member group that funds extremists? What about the other member group that has allegedly collaborated with the MexicanGovernment? Is any of that a concern?

Posted by: All about Ezra's Blogad | Jun 4, 2007 10:46:08 PM

Man With No Name,

According to this piece, which cites data from the Bureau of Labor Statistics, the average hourly wage for meatpackers in 2006 was $11.47.

So your claim of $5/hr is only off by, er, more than 100%. Well done. I'm sure a similarly high regard for truth and accuracy pervades all your political polemics.

Posted by: JasonR | Jun 4, 2007 11:12:13 PM

JasonR,

While Man With No Name's absolute numbers may have been somewhat inaccurate, the same article you mentioned says that meatpacking wages have dropped 34% since 1976. That's a pretty significant decline, especially considering general manufacturing wages declined only 7% over the same period.

Posted by: Narc | Jun 4, 2007 11:57:07 PM

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