"History is philosophy teaching by example." (Lord Bolingbroke)

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Monday, May 15, 2006

Will The Legitimization of Illegals Solve the Cheap Labor Proglem?


Most of us are well aware of the problems created by the flood of illegal aliens crossing into the United States by the millions:

1) The monetary cost to the taxpayer of welfare programs,

2) The spread of disease,

3) The Balkinization (through the application of principles of unrestricted "democracy") of the country in areas where the illegals and their supporters are in the majority and refuse, like their Muslim friends, to "assimilate,"

4) The de facto dissolution of our borders and our status as a sovereign nation,

5) The danger from the alliances that are formed between Hezbollah and Hispanic gangs, and

6) The enlistment of hundreds of gang members in the military, where they receive training and urban warfare experience and steal military equipment that could be used later, when they rejoin their gangs (all but a small handful do so).

Thanks to the abject refusal of our postmodernist, anti-capitalist, government-run school system to include any instruction about economics in the curriculum (most of us even graduate from college without any such instruction), we have been seriously conned; we have been convinced of some very serious errors.

This article from the The Washington Times points out a number of truths that we definitely need to be aware of - but it includes an important error, too, and that involves the mantra of "cheap labor" to "help the growth of our economy" by "doing jobs Americans won't do."

These excuses for legitimization of millions of illegals are being used in a so-called "compromise" now being hammered out by our legislators.

Read it, and see if you can find the problem, the con-job. My guess is that even the author is unaware of it. I will point it out after the article (all emphases mine):
Reform bill to double immigration
By Charles Hurt
Published May 15, 2006

The immigration reform bill that the Senate takes up today would more than double the flow of legal immigration into the United States each year and dramatically lower the skill level of those immigrants. The number of extended family members that U.S. citizens or legal residents can bring into this country would double. More dramatically, the number of workers and their immediate families could increase sevenfold if there are enough U.S. employers looking for cheap foreign labor. Another provision would grant humanitarian visas to any woman or orphaned child anywhere in the world "at risk of harm" because of age or sex. The little-noticed provisions are part of legislation co-sponsored by Republican Sens. Chuck Hagel of Nebraska and Mel Martinez of Florida, which overcame some early stumbles and now has bipartisan support in the Senate. The bill also has been praised by President Bush, and he is expected to endorse it as a starting point for negotiations in his prime-time address to the nation tonight. All told, the Hagel-Martinez bill would increase the annual flow of legal immigrants into the U.S. to more than 2 million from roughly 1 million today, scholars and analysts say.

These proposed increases are in addition to the estimated 10 million to 12 million illegal aliens already in the U.S. whom the bill would put on a path to citizenship. These figures also do not take into account the hundreds of thousands of additional immigrants who would be admitted to the U.S. each year under the guest-worker program that is part of the bill. "If there is anyone left in the world, we would accept another 325,000 through the guest-worker program in the first year," said NumbersUSA's Rosemary Jenks, who supports stricter immigration laws.

The numbers have emerged only recently as opponents studied the hastily written 614-page bill in the five weeks since it was first proposed. It quickly stalled over Democratic refusal to allow consideration of any amendments to the bill, but debate resumes today after Senate leaders reached a compromise on the number of amendments.

"Immigration is already at historic levels," said Ms. Jenks. "This would double that at least." The figures have been provided by Ms. Jenks, the Heritage Foundation and several Senate lawyers who have studied the bill since it was proposed.

One of the most alarming aspects of the bill, they say, are the provisions that drastically alter not only how many but also which type of workers are ushered into the country.

Historically, the system that grants visas to workers has been slanted in favor of the highly educated and highly skilled.

Currently, a little less than 60 percent of the 140,000 work visas granted each year are reserved for professors, engineers, doctors and others with "extraordinary abilities." Fewer than 10 percent are set aside for unskilled laborers. The idea has always been to draw the best and the brightest to America.

Under the Senate proposal, those priorities would be flipped. The percentage of work visas that would go to the highly educated or highly skilled would be cut in half to about 30 percent. The percentage of work visas that go to unskilled laborers would more than triple. In hard numbers for those categories, the highest skilled workers would be granted 135,000 visas annually, while the unskilled would be granted 150,000 annually.

What's more, the Hagel-Martinez bill would make it considerably easier for unskilled workers to remain here permanently while keeping hurdles in place for skilled workers. It would still require highly skilled workers who are here on a temporary basis to find an employer to "petition" for their permanent residency but it would allow unskilled laborers to "self-petition," meaning their employer would not have to guarantee their employment as a condition of staying.

Slanting immigration law in favor of the unskilled and uneducated would be costly, said Robert Rector, a senior research fellow at the Heritage Foundation who has just completed a study on the impact of immigration and the new Senate bill. "College-educated immigrants are likely to be strong contributors to the government's finances, with their taxes exceeding the government's costs," wrote Mr. Rector, who will release his findings today at a press conference with Sen. Jeff Sessions, Alabama Republican. "By contrast, immigrants with low education levels are likely to be a fiscal drain on other taxpayers," he added. "This is important because half of all adult illegal immigrants in the U.S. have less than a high-school education. In addition, recent immigrants have high levels of out-of-wedlock childbearing, which increases welfare costs and poverty."

The flood of unskilled workers could cause other problems as well, opponents say. Because they would be allowed to "self-petition," their obtaining permanent residency here would bypass the Department of Labor, which currently monitors immigration to ensure that American workers are not displaced by foreign immigrant labor.

But the greatest cost to the U.S. may not be the unskilled workers who immigrate here in the future, but the ones who are already here illegally. Mr. Rector estimates that the Senate bill would grant citizenship to between 9 million and 10 million illegal aliens. If allowed to become citizens, those immigrants would be permitted to bring their entire extended family, including any elderly parents. "The long-term cost of government benefits to the parents of 10 million recipients of amnesty could be $30 billion per year or more," Mr. Rector said. "In the long run, the [Hagel-Martinez] bill, if enacted, would be the largest expansion of the welfare state in 35 years."

Did you see it? Here it is, from the first paragraph: "...if there are enough U.S. employers looking for cheap foreign labor."

Cheap? Not gonna happen, at least not if the illegals are legitimized.

And why is that? "That" is because of the minimum wage law, which rides roughshod over the market. Here is a quote from Walter Williams' April 25th article from Capitalism Magazine that explains the problem in some detail:

"Workers earning the minimum wage or less tend to be young, single workers between the ages of 16 and 25. . . Sixty-three percent of minimum wage workers receive raises within on year of employment, and only 15 percent still earn the minimum wage after three years. . . only 5.3 percent of minimum wage earners are from households below the official poverty line. . . over 82 percent of minimum wage earners do not have dependents.

". . .Employers must pay for legally required worker benefits that include Social Security, Merdicare, unemployment insurance, workers' compensation, health and disability insurance benefits, and whatever paid leave benefits they offer, such as vacations, holidays, and sick leave. It's tempting to think of higher minimum wages as an anti-poverty weapon, but such an idea doesn't pass the smell test.

"Poor people are not poor because of low wages. . . they're poor because of low productivity, and wages are connected to productivity. The effect of minimum wages is that of causing unemployment among low-skilled workers. If an employer must pay $5.15 an hour, plus mandated fringes that might bring the employment cost of a worker to $7 an hour, does it pay him to hire a person who [has] skills that permit him to produce only $4 worth of value per hour? Most employers would view hiring such a person as a losing economic proposition."

OK, now the point is this: The reason that illegals are "cheap" is precisely because they are illegal - the employer can produce his product or service and charge less to the consumer because the illegal is not "in the system." The employer can pay the illegal at market rates for performing work that doesn't require education, previous experience, or high skill levels. He doesn't have to pay minimum wage for such unskilled labor, or any of the "fringe" costs. He can pay the worker what the work is worth, and the worker has an opportunity for gainful employment that he can't otherwise find because of his lack of qualifications. The wages paid to illegals aren't so much "cheap" as they are "fair."

Trust me, if American employers want "cheap" labor, they won't find it when these illegals are legitimized. As soon as that happens, the newly legitimized workers will be "in the system," and the employers will have to pay minimum wage and fringe benefits, just as they do now to Americans who are "in the system." Then the new workers will find that employers can't afford to pay them, just as they can't afford to pay Americans now.

It isn't that there are no Americans willing to do the work, it's that the system doesn't permit the employment of people for wages that are connected to their ability to produce.

W. Edwards Deming, the Yale physicist who developed "quality management," the system that revitalized Japanese industry after WWII, at the request of General MacArthur when he was military governor of Japan after WWII, established the "85-15 Rule."

The "85-15 Rule" states: "85% of what goes wrong is with the system, and only 15% with the individual person or thing."

We don't need illegals or their legitimization in order to have workers whose wages are connected to their ability to produce.

We need to change the SYSTEM. The "system" has been corrupted and thrown off-balance by government intervention into the economy. Begin the change by repealing the Minimum Wage Law.

Too bad Dr. Deming is dead. Too bad the school system deprives us of the education necessary to recognize the problem. Too bad we are so ignorant about economics. Too bad people like Ludwig von Mises, Milton Friedman, Thomas Sowell, and Walter Williams aren't household words. Too bad the control freaks in government don't get the hell out of our way.


  • At Tue May 16, 10:50:00 AM PDT, Blogger Jason_Pappas said…

    Good analysis. I’ve seen some of our liberty-minded friends on the right fail to understand this point about wage levels and the reason illegals are hired. Of course, I think economics, in the limited utilitarian sense, should come second to the important issues of security and preserving our cultural values. The real issue, above and beyond security, is the need to control immigration to levels consistent with the assimilation rate if we are to preserve the traditions of our society. It is neither controlled nor limited to an appropriate rate.

    Anecdotally, I’ve already seen the effects of immigration changes that disadvantage professional and skilled labor. We have one employee who we’ve sponsored for a Green Card. Our lawyers told us that changes in the last year mean that if anyone applies for the job with the exact same degree and experience—even if that degree is from a bogus school, grades are poor, and the candidate is an ignorant lazy fool—our employee will be denied a Green Card. The fact that our self-interest pushes us to higher the most capably person is trumped by the bureaucrats lazy method of looking at paper credentials. And we are going to stay competitive how?

  • At Wed May 17, 07:50:00 AM PDT, Blogger Cubed © said…

    Economics is very useful, but it serves as the vehicle for cultural value system; in a lecture series in Argentina in 1958, Ludwig von Mises pointed out how it was impossible for freedom to exist in the absence of a free market.

    It is only in a free market where we have the freedom to think, to make decisions, to speak and communicate, to own and dispose of property, to form relationships with people and institutions of our choosing, to move about freely - in short, it is through economics that we practice every right that is ours by nature.

    Economics serves an integrative function for all the values that are dear to us - through free-market economics, we see the application of the theoretical aspects of our philosophy. It is through a proper economic system that we practice what we preach.

    Economics applies to more than money, it applies to every human interaction, monetary or non-monetary. When we vote, we are making in an economic decision; when we decide who is the first to be treated in an emergency situation, we are involved in an economic decision; when the passengers on the Titanic found they didn't have enough lifeboats, they made an economic decision; and when we fail to secure our borders, we are making an economic decision to abandon the principles upon which this country was founded.

    Economics is philosophy in practice. Lord Bolingbroke said it was history, but history is just the report on the effect of economics.


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