THE WAY I SEE IT by Don Polson Red Bluff Daily News 9/06/2016
Labor—more migrants, lower wages
As Labor Day was yesterday, it bears asking how immigration and business start-ups factor into America’s economic freedom. The most basic of economic freedoms to ever affect any individual is the freedom to offer one’s skills, talents and qualifications on the open market, in exchange for a wage or salary sufficient to one’s needs. Inadequate income may be remedied by exercising the freedom to make oneself more valuable with training, schooling or longer hours.
“Labor,” except for the under-appreciated “labor of love,” is the foundation of America’s economy. It may be using one’s hands and feet at another’s direction, or the mental application of knowledge and expertise. It may also consist of the entrepreneurial acumen to conceive of a product or service, research its viability, gather financial resources, compete against other vendors, enlist family help, and hire employees. Government generally hinders most of that.
The resulting “business owner” may not even reap a salary exceeding that of his employees for a while, but he certainly works and hopes that that will change for the better. Even professionals with advanced degrees must either find an employer willing to pay a commensurate salary or parlay their expertise into a marketable service as a self-employed professional, perhaps by partnering with skilled associates to broaden the range of services.
Headlines tell the tale; impacts on America’s economic freedom require analysis and explanation. “Immigration cuts salaries of Americans $2,470 a year” (Paul Bedard, 3/8, Washington Examiner); “More businesses are closing than starting.” (J.D. Harrison, 9/17/2014); “A Lost Generation of American Entrepreneurs” (Michael S. Malone, 6/01, Forbes).
“The nation’s unending appetite for new and low-wage immigrant workers, now about 1 million a year, is slashing the incomes of native-born Americans by $2,470 while boosting corporate profits. The U.S. is literally importing poverty,” said the new report from the group Negative Population Growth Inc. The president of ISR Research, Ed Rubenstein, bolstered that by explaining that American workers have had to accept lower wages just to compete with cheap imported labor.
It must be accepted that legal immigration, guest workers and “green card” holders (legal permanent residents) are neither inherently malignant nor endlessly beneficial to America’s—and our citizens’—economy. Not so for illegal aliens, who are always detrimental to communities, neighborhoods, crime, public services, and the “rule of law.” Incomes and economic freedom for job-seeking citizens also take big hits.
Lower income consumers benefit from low prices resulting from foreign labor and illegal workers. How much better if they found good-paying jobs that allowed them to look for bargains among slightly higher priced goods? For corporations to value bottom line profitability is a commendable aspect of their economic freedom. However, they ill serve this nation by lobbying for excessive imported labor while Americans languish in joblessness.
It must be noted that millions of graduates from public schools have been poorly educated and ill prepared for the reasonable needs of employers: job seekers that can read, write, calculate and follow instructions. Can you really blame employers for going to labor sources abroad that place a higher premium on knowledge and responsibility than is found in many American school systems?
Insufficiently qualified domestic labor, high taxes and regulations hurt the competitiveness of American businesses; they’ll move to friendly states or offshore if it lets them survive. Many businesses and colleges must provide remedial schooling or training to bring either workers or students up to minimum standards for basic job demands or class work.
An ideal scenario (unlikely because it would be ideal) is an economy growing at twice our current rate or greater, in which students leave school with mental skills and work habits ready for employment at readily available jobs with growing companies in the manufacturing, technical, natural resource or skilled and professional services sectors.
If careful analysis by companies and economic experts determines that qualified immigrants would not only benefit that business sector, but also allow for greater economic growth and native employment—foreign workers can be imported for as long as the shortage remains. America’s economy is far from ideal, but the importation of labor, even illegal immigrants, unnecessarily continues. That has produced the now-quantifiable reduction of wages, opportunities and, yes, economic freedom.
Bedard: “[Ed Rubenstein] found that while in past decades adding immigrant workers helped to increase wages and GDP, the flood that followed the 1986 immigration reform reversed that trend. The reason, he said, is that too much of the workforce is now immigrant labor, rising from 10 percent in 1996 to nearly 17 percent today.”
“Using a noted Harvard economist’s wage formula, Rubenstein said that U.S. wages of native-borns in 2014 were reduced by an average of 5.8 percent…a loss of $2,470 per full-time native worker”—money, and the freedom it brings, not available to native workers. “Immigrants are usually poorer...and on welfare programs that amount to $9,100 per immigrant...
“Immigration’s biggest winners are the wealthy, it’s biggest losers are found disproportionately among the nation’ poor and middle-class…placing greater economic strain on those citizens who can afford it least. Congress must revisit this policy, to reduce this injustice.”Next week: Fewer startups, more failures—declining American entrepreneurism.