Wednesday, February 16, 2005

Immigrants depress wages or: capitalism is hard

Michele Malkin is complaining about immigrants depressing wages in Arkansas. Here is my (edited and improved) answer (rant):

So is this better or worse than outsourcing the jobs?

BTW who guaranteed the tool maker a job at a given wage?

And don't you feel sorry for all the unemployed buggy whip makers?

What is needed is to Europeanize the economy. Protect our jobs. Until there are none. It is working well for the Euros it can work here. French and German unemployment is running greater than 10% ours is close to 5%. Obviously we are doing something wrong by not protecting American jobs the way the Euros protect theirs.

Two choices: Raise the immigrant wages by either employing them in America or outsourcing the jobs to Mexico.

There is no way to stay in business if what you supply is not the best for the price. And even then that may not be enough if the market decides it can get greater quality at a lower price elsewhere. Remember the attack of the Japanese cars? Capitalism is relentless.

Are you a capitalist or not? You might like to read a bit I did on the subject:

Profit.

Closing the borders provides zero help for the problem.

The best thing to do is to learn to compete. It will make us stronger. Think of what it would be worth to us to make better products at lower costs with $20 an hour labor than the Chinese can do with $1 an hour labor. Is it going to be easy? Who said capitalism was easy? It is hard. Socialism is easy. Are you an easy socialist or a hard capitalist?

BTW do you remember when America had to compete with cheap Japanese offshore labor? Heck at one time we had to compete with cheap Chinese labor (railroad workers), cheap Irish labor (during the Irish immigration wave), cheap Eastern European labor (early 1900s) etc.

4 comments:

Dave Schuler said...

I don't actually believe that we have an immigration problem in this country. But I do think that there's a problem with Mexican immigration (particularly illegal Mexican immigration). And social and economic policies on both sides of the border are abetting the situation. The reason I think it's a problem is that illegal (and unreported) workers enable employers to offload costs onto taxpayers.

My solution isn't closing the border. I think that the Bush Administration should be putting a lot more pressure on the Mexican government to change its policies. These changes include removing restrictions on investment in the Mexican economy by foreigners (particularly land ownership). Increased opportunities in Mexico will do more to slow illegal immigration from there more than closing the border. Actually, I've heard arguments that the militarization of the Mexican border after 1986 increased illegal immigration.

It's also important to recall that the situation won't last forever. The Mexican population (like Europe's) is greying faster than ours is.

Anonymous said...

After reading your post, Michele's post, and the underlying WSJ article, the only problem seems to be with Americans recognizing the economic shift occuring and the best strategies to adjust to the shift.

The WSJ article mentions a welder who is looking to replace a lost job. The welder is seeking the traditional solution -- another welding job at the same pay. What the welder should be doing is starting his own welding company and using his years of experience to hire out the same "low paid" workers he complains about. He's holding lemons and doesn't have the good sense to make lemon aid and sell it.

Ditto for the $7/hour wife working at Head Start. There's a shortage of quality child care in the NW region of Arkansas. By running her own child care business, she could easily triple her earnings. She's holding lemons and doesn't have the vision to make lemon aid and sell it.

Rather than print sensational "Woe is me" stories or "Lock the borders" stories, America would be better served by stories about how to cope with the Third Wave.

John David Galt said...

Globalization does indeed open the labor market up to competition -- which is good for the world's poor, but hurts America's remaining spoiled union members (Waah!) -- but that's really a separate issue from illegal immigration.

The reason illegal immigrants get those low paying jobs is not that no Americans are willing to do them. The reason is that the combination of America's labor laws (the minimum wage and OSHA, primarily) and immigration laws means that those who want to hire cheap labor must hire only illegals in order to get away with breaking those labor laws. Either legalize the immigrants or repeal those labor laws, and those bosses will no longer find it necessary to refuse to hire Americans. It's an incentive trap.

Personally, I have no problem with Mexicans who sneak in in order to better themselves through hard work. I just wish the jobs they take were also open to the poorest Americans.

Johnny Canuck said...

Now that's a post I can relate to. You really got me thinking, I enjoy reading this blog.

I don't know how others feel, but I'm definitely looking into immigration to Canada as an option. The good ól US of A aint what it used to be.