Posted on 01/07/2004 10:51:13 AM PST by xsysmgr
Today the president announces his plan for a vast new guestworker system, which would grant amnesty to millions of illegals currently in the United States, as well as import millions of new workers from abroad. (The president will also call for an increase in permanent legal immigration beyond the current rate of one million a year.)
I make the argument against amnesty in the cover story for the upcoming print version of NR, but here I want to look at the basic assumption underlying the whole Bush plan: that there are jobs Americans simply won't do, so that the importation of foreigners is essential. Whether these foreign workers are illegal aliens, guestworkers, or permanent legal immigrants is a detail to be worked out by us, the argument goes, but our need for them is unchanged.
Even many opponents of the proposed Bush Amnesty assume this to be true, leading them to propose new and improved guestworker programs, with provisions for stricter controls against permanent settlement, greater incentives to return, tighter enforcement against unscrupulous employers, etc.
As well-meaning as such efforts may be, the basic assumption is false — there is simply no economic reason to import foreign workers.
If the supply of foreign workers were to dry up (say, through actually enforcing the immigration law, for starters), employers would respond to this new, tighter, labor market in two ways. One, they would offer higher wages, increased benefits, and improved working conditions, so as to recruit and retain people from the remaining pool of workers. At the same time, the same employers would look for ways to eliminate some of the jobs they now are having trouble filling. The result would be a new equilibrium, with blue-collar workers making somewhat better money, but each one of those workers being more productive.
Many people fear the first part of such a response, claiming that prices for fruits and vegetables would skyrocket, fueling inflation. But since all unskilled labor — from Americans and foreigners, in all industries — accounts for such a small part of our economy, perhaps four percent of GDP, we can tighten the labor market without any fear of sparking meaningful inflation. Agricultural economist Philip Martin has pointed out that labor accounts for only about ten percent of the retail price of a head of lettuce, for instance, so even doubling the wages of pickers would have little noticeable effect on consumers.
But it's the second part of the response to a tighter labor market that people just don't get. By holding down natural wage growth in labor-intensive industries, immigration serves as a subsidy for low-wage, low-productivity ways of doing business, retarding technological progress and productivity growth.
That this is so should not be a surprise. Julian Simon, in his 1981 classic, The Ultimate Resource, wrote about how scarcity leads to innovation:
It is important to recognize that discoveries of improved methods and of substitute products are not just luck. They happen in response to "scarcity" — an increase in cost. Even after a discovery is made, there is a good chance that it will not be put into operation until there is need for it due to rising cost. This point is important: Scarcity and technological advance are not two unrelated competitors in a race; rather, each influences the other.
As it is for copper or oil, this fact is true also for labor; as wages have risen over time, innovators have devised ways of substituting capital for labor, increasing productivity to the benefit of all. The converse, of course, is also true; the artificial superabundance of a resource will tend to remove much of the incentive for innovation.
Stagnating innovation caused by excessive immigration is perhaps most apparent in the most immigrant-dependent activity — the harvest of fresh fruit and vegetables. The period from 1960 to 1975 (roughly from the end of the "Bracero" program, which imported Mexican farmworkers, to the beginning of the mass illegal immigration we are still experiencing today) was a period of considerable agricultural mechanization. But a continuing increase in the acreage and number of crops harvested mechanically did not materialize as expected, in large part because the supply of workers remained artificially large due to the growing illegal immigration we were politically unwilling to stop.
An example of a productivity improvement that "will not be put into operation until there is need for it due to rising cost," as Simon said, is in raisin grapes]. The production of raisins in California's Central Valley is one of the most labor-intensive activities in North America. Conventional methods require bunches of grapes to be cut by hand, manually placed in a tray for drying, manually turned, manually collected.
But starting in the 1950s in Australia (where there was no large supply of foreign farm labor), farmers were compelled by circumstances to develop a laborsaving method called "dried-on-the-vine" (DOV) production. This involves growing the grapevines on trellises, then, when the grapes are ready, cutting the base of the vine instead of cutting each bunch of grapes individually. This new method radically reduces labor demand at harvest time and increases yield per acre by up to 200 percent. But this high-productivity, innovative method of production has spread very slowly in the United States because the mass availability of foreign workers has served as a disincentive to farmers to make the necessary capital investment.
But perhaps immigration's role in retarding economic modernization is confined to agriculture, which, after all, is very different from the rest of the economy. Nope. Manufacturing sees the same phenomenon of a scarcity of low-skilled labor yielding innovation while a surfeit yields stagnation. An example of the latter: A 1995 report on southern California's apparel industry, prepared by Southern California Edison, warned of the danger to the industry of reliance on low-cost foreign labor:
In southern California, apparel productivity gains have been made through slow-growth in wages. While a large, low-cost labor pool has been a boon to apparel production in the past, overreliance on relatively low-cost sources of labor may now cost the industry dearly. The fact is, southern California has fallen behind both domestic and international competitors, even some of its lowest-labor-cost competitors, in applying the array of production and communications technologies available to the industry (such as computer aided design and electronic data interchange)." (Emphasis in original)
Conversely, home builders, who are still less reliant on foreign workers than some other industries, have begun to modernize construction techniques. The higher cost of labor means that "In the long run, we'll see a move toward homes built in factories," as Gopal Ahluwalia, director of research at the National Association of Home Builders, told the Washington Post several years ago. But as immigrants increasingly move into this industry, we can expect such innovation to spread much more slowly than it would otherwise.
But surely immigration is needed fill jobs in the service industry? After all, without immigrants, who will pump our gas? Oh, wait — we never imported immigrants for that and so now we pump our own gas, aided by technology that lets us pay at the pump — thus we have fewer attendants but more gas stations and get in and out faster than we used to when we trusted our car to the man who wore the Texaco star.
Other innovations suggest how, despite the protestations of employers, a tight low-skilled labor market can spur modernization even in the service sector: Automated switches have replaced most telephone operators, continuous-batch washing machines reduce labor demand for hotels, buffet-style restaurants need much less staff that full-service ones. As unlikely as it might seem, many VA hospitals are now using mobile robots to ferry medicines from their pharmacies to various nurse's stations, eliminating the need for a worker to perform that task. And devices like automatic vacuum cleaners, lawn mowers, and pool cleaners are increasingly available to consumers. Keeping down low-skilled labor costs through the president's vast new guestworker plan would stifle this ongoing modernization process.
The idea that a modern society like ours requires the ministrations of foreign workers, because there is no other way to do get these jobs done, smacks of the apocryphal quote from a 19th-century patent commissioner: "Everything that can be invented has been invented."
— NRO Contributor Mark Krikorian is executive director of the Center for Immigration Studies and a visiting fellow at the Nixon Center.
Actually, The socialist moron is someone like you, that would let the money be taken from you at the point of the governments gun, and feel wrong for taking it back......Both of those items, come from your paycheck, and if you are ever in a postiion to get that money back, even figuring the accrual of savings acount interest over time, you are still losing money.
I have never met one, have you?
When I had my own business I cleaned the toilet and emptied the trash myself.
Which may explain why you refer to your business in the past tense. Some people think the best and most profitable use of their time is cleaning toilets. For them, it is probably correct.
Some jobs are superfluous, they aren't needed.
Thankfully, in a free society, YOU don't get to make those judgments for others. Free people decide those things for themselves.
"Some people think that America will fall apart if we don't have servants to clean our houses and tend flower gardens. "
I have never met one, have you?
Yeah, Phil Donohue. When he was attempting his comeback on MSNBC I watched him screaming, "But who's going to pick the lettuce?, Lettuce will cost five dollars a head"
"When I had my own business I cleaned the toilet and emptied the trash myself. "
Which may explain why you refer to your business in the past tense.
No. I retired.
Some people think the best and most profitable use of their time is cleaning toilets. For them, it is probably correct.
No, I used to have a contractor do that. Unfortunately the subcontractors were all illegals and since I am a law-abiding citizen I ended the contract. Notice that when illegal activity is tolerated businesses who break the law have the advantage over law-abiding ones.
Thankfully, in a free society, YOU don't get to make those judgments for others. Free people decide those things for themselves.
In order to keep a free society, we need people who respect the freedom of others and don't break the law for personal gain. We also need people who will elect leaders who respect the wealth of others.
But if we allow virtually open borders this country will end up like California. And then later it will end up like Mexico.
I say bring em on! I would rather be surrounded by God fearing people who understand the meaning of hard work and sacrifice than a bunch of pansy-ass agnostic whiners who are too good for hard work anymore.
If these hard-working souls are so good for the country, why is California on the rocks? Why are land owners along the border fleeing?
He posts here? Any others?
"When I had my own business I cleaned the toilet and emptied the trash myself. "
No, I used to have a contractor do that.
Which of these two statements is correct? You made them both on the same subject.
In order to keep a free society, we need people who respect the freedom of others and don't break the law for personal gain.
True, but irrelevant to any point I have made.
Back to immigration: Bottom line is that something needs to be done about all the millions of illegals that are already here! Realistically speaking something has got to be done and this is a step in the right direction and also lots better than what the Dumbocrats want to do.
Which of these two statements is correct?
They both are. Read my posts again. Let me know if you still don't understand.
Some people may make money by taking advantage of immigrant labor. But in the long run it will change our country for the worse if we are not careful who we allow into the country. If we allow unlimited immigration, expect America to come down with a fatal case of the liberals. If you do the math, there is no other conclusion. How do you propose to prevent it?
None of this is relevant to anything I posted.
The people here are bad enough already.
I don't know if the people coming here anymore are interested in freedom or just a free ride. But if they are interested in freedom, I'll trade all the complacent slobs here for them one for one.
I don't know if the people coming here anymore are interested in freedom or just a free ride.
I remember seeing a study (don't ask me for the source) that addressed that exact issue. It was longitudinal survey of immigrants that showed that over time they are becoming more and more motivated to come to America, not for personal or economic freedom, but for entitlements.
Maybe your dismissal of Americans as "complacent slobs" is based purely on your local perceptions. The people I know aren't like that. I wouldn't say most FReepers are complacent.
It's sad that I have to inject that to keep from being misrepresented. One could only speculate whether you did that on purpose.
I wouldn't say most FReepers are complacent.
So what? Neither did I.
But Juan is probably using far more public services than his taxes cover. Immigration per se is fine, but when combined with a welfare state it's a problem.
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