Downward Spiral

Ezra Klein, pimping for the cheap labor lobby, notes that not only is creating a big guest worker program seemingly popular, but "If you asked whether temporary workers should be allowed at prevailing wages, in counties with low unemployment rates (temporary workers aren't permitted in counties with unemployment at 7% or higher), and only after the job has been posted in the employer workplace, offered to any interested citizens, and posted for ten days in a wide circulation newspaper, you'd have an even heavier majority than you see now."

These are all great measures to mitigate the basic horribleness of the proposal, except that they're basically bullshit. Say unemployment is low in the county where I run my business. That means a tight labor market. That means valued employees asking for higher wages. Wages above the prevailing rate. And I need to give it to them. And that's how working people obtain prosperity in this country. Well, welcome to the United States of Guest Workerdom where if you ask for a raise, I just tell you "no" and if you quit I import a foreign worker to do your job at the old old (i.e., prevailing) rate. If my business does well, I'll expand my operation and hire more and more people, but no matter how tight the labor market gets I'll never to raise wages since I can always complain that nobody wants to do it at the prevailing rate.

Comments

Well, presumably if you quit, you quit to take a higher paying job.

It strikes me as very strange that, as the Post quotes a Chamber of Commerce lobbyist, "'The glue that is keeping this process going is the absolute agreement by all the disparate groups that the current system is absolutely dysfunctional'". It seems quite likely that it will be replaced with a new system that's equally dysfunctional, while also destroying family-based immigration.

Posted by Nicholas Beaudrot | June 4, 2007 3:26 PM

" It seems quite likely that it will be replaced with a new system that's equally dysfunctional, while also destroying family-based immigration."

I find myself aligned with the right-wing yahoos in wishing this bill would go down.

Posted by Petey | June 4, 2007 3:29 PM

I mean, seriously, isn't the guest worker provision alone bad enough that the whole bill should be torpedoed?

Is the politics of the Hispanic electorate such that Dems really can't afford to be against the bill? Or is it just a desire to get the issue off the table for defensive reasons? I confess to never being able to fully get my mind around the politics of immigration.

Posted by Petey | June 4, 2007 3:33 PM

.

The marriage of big business and multiculturalism is the worst thing ever to happen to the American worker.

Big business is using legal and illegal third-world immigration to drive down American wages.

And liberals can side with big business on this issue and use "multiculturalism" to appease their conscience.

http://bluedogdemocrats.us/

Please note the Patriot Pledge and join us at the Blue Dog Discussion Forum. Thanks.

.

Posted by Old-School Democrat | June 4, 2007 3:37 PM

the path to prosperity isn't "tight labor markets". should we restrict the movement of people from high unemployment areas of the US to low ones?

Posted by cyates | June 4, 2007 4:14 PM

If my business does well, I'll expand my operation and hire more and more people, but no matter how tight the labor market gets I'll never to raise wages since I can always complain that nobody wants to do it at the prevailing rate.

Naive question: presumably this business also won't have to raise prices, so who's worse off in this situation? Some people (the new immigrants) are obviously better off, and I assume Matthew's point is that overall this situation would be undesirable, but why?

Posted by vg | June 4, 2007 4:19 PM

I'm sure "pimping for the cheap labor lobby" is intended as a friendly jab. But in the past Ezra has made it quite clear that he really does think that people like agricultural workers should be low-paid, and that keeping their wages low should be a positive goal of immigration policy:

Speaking of realistic wages, it's a point I've made before, but Matt has more on the likely effect of closed borders: not better paying jobs, but fewer jobs. And while he focuses on services that demand will simply dry up for, I'm more concerned about industries where we're barely out-competing global competitors, like agriculture. As The New York Times wrote, if the migrants weren't coming over the border to pick strawberries, it would be the strawberries coming over the border instead. That would, to be sure, be better for Mexico, but it wouldn't be that good for the United States.

Got that? To stay competitive in the vital global strawberry market, we have to keep the pickers' wages low. No doubt he's against farmworkers' unions and applying labor law to strawberry pickers too. I mean, a minimum wage is nice and all, but not when competitiveness is at stake, right Ezra?

When this is the face of the hot young Democratic punditry, you can't really blame blue-collar workers for voting Republican.

Posted by lemuel pitkin | June 4, 2007 4:20 PM

I'd just like to point out that 'Big Business' Matt is kind of an asshole.

Posted by js | June 4, 2007 4:24 PM

I'm not crazy about the guest-worker provision myself, but that's only because I want them to stay and become good old Americans like every other generation of immigrants.

I know I'm in the distinct minority here, but I think it's a laudable goal to create policies that allow people to better their lives by coming to this country to work. Especially if they're not "guest workers" -- if they're expected to move here and assume the cost of living of native-born Americans -- then there's nothing unfair at all about having immigrant workers compete with native-born workers. If anything, the native-born should be at an advantage, because there are a lot of low-wage jobs where speaking fluent English is a plus. If they're all "guest workers" then it really is unfair -- men come without families, work in America for American wages, and pay to live in Mexico for half of the year, with their families living in Mexico year-round.

Posted by too many steves | June 4, 2007 4:25 PM

"I'd just like to point out that 'Big Business' Matt is kind of an asshole."

You seem to be badly misreading his post here...

Posted by Petey | June 4, 2007 4:26 PM

"Got that? To stay competitive in the vital global strawberry market, we have to keep the pickers' wages low. No doubt he's against farmworkers' unions and applying labor law to strawberry pickers too. I mean, a minimum wage is nice and all, but not when competitiveness is at stake, right Ezra?"

That's sort of true. If we're not competetive, nobody in this country has jobs growing or picking strawberries. Maybe that's OK, if there are other jobs for them.

Posted by too many steves | June 4, 2007 4:30 PM

um matt? doesn't your argument apply to legal immigration and Z-visa holders as well? They will also be quite willing to do work at, or often below, the prevailing wage. And yet I do not recall any real enthusiasm on your part for diminishing mass immigration.

Posted by brendan | June 4, 2007 4:30 PM

Too many steves:

I agree with you, and I suspect Matt would as well. But the downward pressure on wages from a guest worker program is much greater than admitting the same number of immigrants with green cards. First, because the guest workers have fewer options in terms of seeking better-paid work (or education, etc.), and second because under Ezra's scheme, admission of guest workers would be specifically geared to tight labor markets, where wages would otherwise be rising.

The other issue is why you support immigration. I, and I believe Matt Y., support higher levels of legal immigration in part because we think that in general it will not put downward pressure on wages. Ezra supports higher levels of immigration in part because he thinks it will put downward pressure on wages. He is, quite literally, a cheap-labor Democrat. We all agree that guest-worker programs are more likely to depress wages than plain old immigration. That's why Ezra like them, and Matt Y. does not.

Posted by lemuel pitkin | June 4, 2007 4:34 PM

If we're not competetive, nobody in this country has jobs growing or picking strawberries. Maybe that's OK, if there are other jobs for them.

As a simple matter of logic, there must be better-paying jobs for current strawberry-pickers. Otherwise, you wouldn't need immigration to keep their wages down to "competitive" levels.

(There's also the issue that productivity-improving innovation is encouraged by tight labor markets, and retarded by tight ones. If American farmers didn't have cheap labor to pick their strawberries, they might well find more efficient ways of growing them. Some would also probably find ways to improve quality, to allow them to pay higher wages.)

Posted by lemuel pitkin | June 4, 2007 4:38 PM

too many steves -- I think that one of the biggest fallacies in our current political discourse (and that's saying a lot) is the idea that the picture you're painting of the immigrant American Dream is incompatible with a policy of securing the border and REDUCING the overall number of unskilled immigrants.

The crucial problem right now is that the government is essentially incapable of regulating the inflow of immigrants over the southern border. Correcting that problem does not mean that we need to buy into the notion that the people we DO allow into the country should be an underclass of temporary workers who are just cashing a few paychecks and going home, all to support the policy agenda of keeping wages down and destroying the ability of workers to organize.

I support reducing the level of immigration, but it should still be IMMIGRATION.

Posted by LaFollette Progressive | June 4, 2007 4:38 PM

Doesn't MY's kind of thinking apply to folks from the rustbelt, too? Or the influx of women in the workplace after WWII? Or goods from abroad? It seems this is protectionism for labor.

Posted by shecky | June 4, 2007 4:45 PM

Brendan and Schecky:

Note that Matt is objecting specifically to guest worker programs. If women, migrants from the rustbelt, etc., had been allowed to enter new jobs only with restrictive, temporary permits that denied them the rights of other workers, I'm sure he would have objected to that too. And rightly so.

Posted by lemuel pitkin | June 4, 2007 4:48 PM

(Also, shecky, women entered the workforce during WWII, and left it afterwards. And lots of workers do support restrictions on imports. If a free trade agreement raises per capita GDP but lowers real incomes for a majority of workers -- or even a minority -- why shouldn't we be against it?)

Posted by lemuel pitkin | June 4, 2007 4:50 PM

Lemuel, guest workers in this bill are not being denied the rights of other workers. They can join unions, (FLOC has already organized guest-workers in North Carolina into a union and signed a contract with growers), they're protected by all the same labor laws native workers are protected by, they can quit their jobs and move to a different employer if they're not satisfied. Given that, the question is why you want to deny hundreds of thousands of poor workers the chance at a massive increase (five- or ten-fold) in their daily wage. Because it will have a trivially small effect on the wages of native workers (there is no study that suggests that the arrival of two hundred thousand legal workers will put a meaningful dent in American wages)? That's a very peculiar definition of social justice.

Posted by K. Williams | June 4, 2007 4:59 PM

guest workers in this bill are not being denied the rights of other workers. They can join unions, (FLOC has already organized guest-workers in North Carolina into a union and signed a contract with growers), they're protected by all the same labor laws native workers are protected by, they can quit their jobs and move to a different employer if they're not satisfied

This was not my impression. Source or cite?

Posted by lemuel pitkin | June 4, 2007 5:15 PM

Is the politics of the Hispanic electorate such that Dems really can't afford to be against the bill? Or is it just a desire to get the issue off the table for defensive reasons? I confess to never being able to fully get my mind around the politics of immigration.

I'd say 'B'. I'm not aware of any Hispanic groups in favor of this bill, which is no surprise, since it does essentially nothing for them or any immigrant population. No, this bill is like the Medicare prescription drug monstrosity, the kind of cobbled-together shit that comes from the symbiosis of corporations and politicians.

Posted by sglover | June 4, 2007 5:32 PM

Lemuel pitkin:

Perhaps I am just being dense, but it seems the essential feature of guest workers is the same as that of other, legal, unskilled labor--to increase the supply of such labor and lower its price. No doubt the guest worker provisions are particularly onerous; nonetheless, with a new Z-visaed or legal immigrant, you still have a worker who is taking what is for him a pay RAISE that undercuts the prevailing wage. It looks to me that any argument that hangs on the ECONOMIC consequences of guest-workers must apply with equal force to the import of other kinds of unskilled labor.

Posted by brendan | June 4, 2007 5:33 PM

There are two distinct reasons to favor a tight labor market.

First, of course, is the fact that workers benefit directly through higher wages.

A secondary benefit, though, is that a tight labor market spurs innovation. When businesses can no longer throw cheap labor at a problem, they have to come up with more efficient ways of solving it. The Japanese have consistently refused to allow immigration; consequently, they are world leaders in robotics. In contrast, the ancient Greeks and Romans never developed an industrial revolution, largely because they had an unlimited supply of cheap labor (slaves). The American South was an industrial backwater until fairly recently for the same reason.

If we stopped allowing in cheap immigrants to pick crops, we wouldn't have $5 heads of lettuce. Instead, we'd eventually have automatic crop harvesting systems.

Posted by Josh G. | June 4, 2007 5:42 PM

They can join unions, (FLOC has already organized guest-workers in North Carolina into a union and signed a contract with growers), they're protected by all the same labor laws native workers are protected by, they can quit their jobs and move to a different employer if they're not satisfied.

I find this extremely difficult to believe. I don't doubt the example you cite, but I'm guessing that it's more the exception than the rule, and I strongly suspect that "guest" workers are going to be at an extreme disadvantage with respect to their employers. Which is pretty much why the business mafia is so hot to see this "reform" enacted.

I think the current system, fucked as it is -- and I say it's extremely fucked from personal experience -- is preferable to this sell-out to corporate interests. I've ranted about this before, but the Z visa "path to citizenship" is a cruel sham, and the "guest" worker travesty borrows from the worst aspects of European immigration law.

Posted by sglover | June 4, 2007 5:42 PM

Matt, it's suggested in comments here that guest-workers under the new system would be guaranteed prevailing wage rates, not anything under the minimum wage. That makes sense to me, and if it's right, it seems to catastrophically undercut your argument.

The reason a guest-worker program would lower wages more than legal immigration would only because of lower-than-legal wages. If the wages are legal, guest-worker program = legal immigration minus social services for the workers.

Posted by glasnost | June 4, 2007 5:43 PM

For a long time, I was sure Ezra Klein was just ignorant and clueless. I even apologized for failing to give him the benefit of the doubt. It's pretty clear at this point that he knows what the effect of this bill is going to be and he just doesn't care. His class's access to cheap, foreign labor is just too attractive to him for him to actually care about progressive values.

Posted by soullite | June 4, 2007 5:44 PM

I defer to Dani Rodrik on the matter.

Posted by DRR | June 4, 2007 5:44 PM

If strawberry farms can't automate sufficiently to obviate the need for lots of low-wage strawberry pickers, then we would be better off exporting the illegal strawberry pickers and importing our strawberries. We might pay a few cents more for strawberries in that case (or not), but we will save about $20k per strawberry picker in government benefits, since the average unskilled worker receives about $20k in benefits more than he pays in taxes every year, as Robert Rector has pointed out.

Posted by Fred | June 4, 2007 5:45 PM

If we stopped allowing in cheap immigrants to pick crops, we wouldn't have $5 heads of lettuce. Instead, we'd eventually have automatic crop harvesting systems.

Given the vast amounts of public subsidies that agriculture has always got in this country -- extension services, basic and applied research in land grant colleges, irrigation works, direct payments, and so forth -- I tend to doubt that the low-wage stoop labor Mexican is the only thing standing in the way of the automatic lettuce harvester. Something tells me there may be some technical hurdles, there.

Are the Japanese tending their rice farms with robots? It's news to me if they are.

Posted by sglover | June 4, 2007 5:51 PM

Maybe some of you Dems have already considered this, but I wonder if there isn't a disconnect between some union leaders and prols on the immigration bill. On the one hand, it seems obvious to anyone acquainted with the principles of supply and demand that more unskilled laborers equals lower wages; on the other hand, more unskilled laborers who are union members means more union dues, and more power for union leaders. Which leads me to a meta-question about this. Do establishment Dems want churn and discomfort in the working class for different reasons?

Perhaps the Dems like the idea of perpetually broke workers looking to them for minimum wage increases, targeted grants like the EITC and so forth. Perhaps fantasist Republicans think that, if the labor market is precarious enough, a larger percentage of Americans will attempt a leap into the ownership society by starting their own businesses, thus becoming reliable Republican voters.

Posted by Fred | June 4, 2007 5:55 PM

What Josh G. said. And also, I'm afraid, probably what Soullite said too. And:

it seems the essential feature of guest workers is the same as that of other, legal, unskilled labor--to increase the supply of such labor and lower its price. No doubt the guest worker provisions are particularly onerous

In my mind it's a cost-benefit thing. Guest workers have more of an impact on wages, and have much less of the non-economic benefits of other types of immigration. It's an empirical question, but there was some really good work on the impact of the Mariel boatlift among other things and it seems like the labor market impact of immigration is usually minimal. But guest worker programs, especially when they're targeted at particular industries and involve limits on labor rights, are maybe a different story.

Posted by lemuel pitkin | June 4, 2007 6:02 PM

I know locally the price of a U.S. identity is $3k. I don't know exactly how it works but it does and I think that's going to keep on being the number one immigration track into the country despite what any law says.

Posted by Ed Marshall | June 4, 2007 6:04 PM

Now Ezra Klein is unarguably an idiot. He's seriously comparing the post-war expansionary period to today without noting the massive flaws in that analogy. He even smugly asserts that we "Don't have any other party to go to."

He's right, we can just stop voting. For most of us, it's gotten clear that Democrats just aren't worth voting for. They're fine if you're an ideological liberal, if you're completely dedicated to completely Laissez-faire economics, only care that rich blacks and wealth women can advance socially, and you're primary concern is with the well being of people you're not even elected to represent. It's not a good party if you think a Leader's first duty is to their people, that preserving and improving standards of living should be a priority, or that social mobility is a sign of a society that is interested in social and technological advancement. There is no party for those of us who think that way, so I say we just stop voting. Let the Republicans run the country into the ground, life is going to be shit for most Americans either way.

Posted by soullte | June 4, 2007 6:11 PM

So, a little research shows that the guest worker program does give workers more rights than past such programs, including protection of labor law. So I concede it's not as bad as it could be. However, the requirement that the worker not be unemployed for more than 60 days or face deportation is a big deal. These kind of requirements were a central feature of Jim Crow in the old South, and they really do reduce the worker's bargaining power by putting the coercive power of the state behind the threat of unemployment. They also, along with the two-year limit, rule out the kind of entrepreneurship that is a path to the middle class and especially common among immigrants.

So while K. Williams seems to be mostly right on the details, I still think workers brought in under a guest worker program are much more likely to depress wages than other immigrants, and there's really nothing to be said in favor of the program at all -- unless you see low wages as a good thing, of course.

Posted by lemuel pitkin | June 4, 2007 6:29 PM

Also, shecky, women entered the workforce during WWII, and left it afterwards.

That must be why women are so rarely seen in the workplace.

Posted by shecky | June 4, 2007 6:46 PM

The nativism in some of these comments is alarming. Does anyone have any actual evidence for the claim that unskilled immigration in general (not just situations where the immigrants have second-class legal status like a guest-worker program or the current legal black hole) depresses wages, other than vague gestures in the direction of the Great Law of Supply and Demand?

Posted by Jose Peterson | June 4, 2007 6:56 PM

Matt,

There is a huge flaw in your chain of logic:

There ARE substitutes to labor other than immigrants. You can produce goods with capital, and if the labor is demanding a raise they could just as easily get fired because a computer can do the same work for cheaper. No one is proposing to get rid of the computer because it has displaced unskilled labor.

Second, you are ignoring the massive gains that come from reduced prices with cheaper labor. That is economic gains that everyone gets.

Third, can't the government protect unskilled laborers who might be hurt by a guest worker program through programs like the EITC or unemployment insurance? That way the government doesn't mess with the efficient allocation of labor resources to the extent it would if it cut off the flow of immigrant labor.

Fourth, immigrants aren't skilled laborers, they are unskilled, and as a result will only effect the wages of unskilled labor.

Fifth, in many ways it is good thing to have increasing returns to skilled labor and much smaller returns to unskilled labor. It creates incentives for people to get skills which in turn increases economy wide productivity.

You can't ignore the massive cost your idea of protecting the wages of unskilled labor have in this regard.

Sixth, this isn't how shocks in immigrant labor have played out. I don't remember the paper, but there is a good deal of empirical work that has shown a sudden shock of unskilled labor can increase wages, not decrease them.

-Mr. Alec

Posted by Alec | June 4, 2007 7:29 PM

Jose. I'll be glad to answer your question when you can explain to me how Electromagnetic fields work without bringing up the Great Particle of Photons. In other words, your question precludes it's own answer. It's not being honestly asked.

Posted by soullite | June 4, 2007 7:30 PM

Alec, I don't think you understand the limits of robotics. Most jobs can't be one away with by bringing in 'capital', and as such there are no effective substitutes. A computer is less intelligent than a human, it simply processes knowledge more quickly. The field of robotics is not advanced enough to make functional worker drones, and they wouldn't likely be cost-effective. You can't ignore the fact that we'd suffer a massive social instability if we tried, and our government or culture could survive such a transition if it were to be attempted. e to build 100 new colleges, and to substantially decrease wages you'll have a point about prodding people to better themselves. That's not an economically viable option for most people who can't afford 12k a year to go to school, and there simply aren't enough slots to fill with most people. to put it bluntly, go join the republicans. You're clearly not a democrat if you hate working people as much as you so obvious do. Seriously, your entire post reads like a la-land rich-man's fantasy wherein everyone exists to serve those with the most money. most of us aren't willing to sacrifice our well being to make you fatter.

Posted by soullite | June 4, 2007 7:43 PM

I didn't say that you couldn't talk about supply and demand at all, I just said that you have to come up with more concrete evidence than a vague gesture in its direction. The physics of electromagnetism is the result of rigorous experimentation. Analogously, if someone can show me rigorous empirical evidence that either (a) working-class wages are higher in low-immigration countries than in high-immigration countries, or (b) working-class wages have historically been higher in the U.S. during low-immigration periods than in high-immigration periods, then I will believe it. (Notwithstanding which, if these differences do exist but are still much smaller than the differences in living standards between the Latin American poor and immigrants here, I will still maintain that the most moral and humane policy is to favor open immigration).

Posted by Jose Peterson | June 4, 2007 7:43 PM

Jose Peterson, why is the burden of proof on us and not on you? Why do you think business supports guest worker programs if not to reduce their wage costs?

Posted by James B. Shearer | June 4, 2007 7:59 PM

James, the burden is on you because the benefits of a guest-worker program to the workers themselves are huge, and the benefits to the US economy as a whole are clear as well. So if you want to argue that this is a proposal that should be killed, you need to offer up some real evidence that the costs (presumably to unskilled native workers) will be so big that they outweigh all the benefits the proposal will bring.

Lemuel writes "there's really nothing to be said in favor of the program at all," but this is clearly false. At the very least, a guest-worker program will make the guest workers tens of billions of dollars richer than they would otherwise be. More than that, Giovanni Peri's work shows that immigration actually increases the wages of most American workers, by making them more productive and increasing demand for their services. Against that, you have (perhaps) a small decline in the wages of unskilled native workers (who make up a small fraction of the American workforce). I'm mystified by the idea that any progressive would think the latter outweighs the former.

The fact that business supports this issue is not a reason to oppose it, any more than Ron Paul's opposition to the Iraq War is a reason to support him. Sometimes even the devil ends up on the right side of an issue.

Posted by K. Williams | June 4, 2007 8:09 PM

um matt? doesn't your argument apply to legal immigration and Z-visa holders as well? They will also be quite willing to do work at, or often below, the prevailing wage.

Not to mention newly minted 22-year old new entries into the workforce, not to mention robots. Matt, google "lump of labor" and then get back to us, ok?

Posted by Jasper | June 4, 2007 8:11 PM

I don't remember the paper, but there is a good deal of empirical work that has shown a sudden shock of unskilled labor can increase wages, not decrease them.

Right you are. This is, as I recall, what occurred in Israel after the fall of the USSR. The huge influx of immigrants -- the equivalent of America taking in, say, 40 million new immigrants in five years -- created a volcanic jolt to the Israeli economy, and economic growth (and demand for labor) soared.

This, by the way, isn't an argument for America's taking in 40 million newcomers. It's merely an argument against the daft proposition that allowing the people who would otherwise work illegally to work legally is going to have a negative effect on wages. Allowing in 500k-1 million illegals each year as we do now barely effects wages. Giving 200,000 of them work permits almost certainly won't make much difference either way.

Posted by Jasper | June 4, 2007 8:19 PM

"in many ways it is good thing to have increasing returns to skilled labor and much smaller returns to unskilled labor. It creates incentives for people to get skills which in turn increases economy wide productivity."

Alec, some people aren't capable of getting advanced skills. Due to our immigration policy over the last two decades, we now have a Mexican American underclass to go along with our black underclass. 41% of fourth generation Mexican Americans have less than a high school education. They haven't demonstrated the academic chops needed to pick up advanced skills. Depressing their wages by importing new waves of poor, uneducated Mexicans won't give them an incentive to start taking University of Phoenix MBA classes online. It might give them an incentive to join a gang and try their hand at crime though.

Posted by Fred | June 4, 2007 8:21 PM

jose, the burden is on you to show why a rule isn't operative in a specific case. Once something is more or less proven as a scientific or social principle, the burden shifts to those claiming it's not applicable in some contexts. Anti-evolutionists have to show why humans could not have evolved after evolution has been observed in bacteria and insects. Ecocentrists have to prove the earth is at the center of the universe. Someone who says that tactual comfort is unimportant to newborn humans would have to say why they don't think that to be the case despite the overwhelming evidence of it's importance to other primates. Supply and Demand is one of the few laws of an admittedly unnatural science that has gained the same level of acceptance. So the burden is on you as to why supply and demand seems to dictate value of most everything else, but not unskilled labor.

Posted by soullite | June 4, 2007 8:25 PM

Fred, people like alec don't really care. They know they're spewing bullshit, but it's the only thing that lets them sleep at night. Like Jasper's refusal to understand that 12k a year is too much for most Americans to afford, and that there are a severely limited number of college seats available to every graduating class. They refuse to belief in reality because reality makes them assholes who got by based on mommy and daddies money and the wealth of the county they went to school in, rather than their lifestyles being the result of wise decisions and hard work.

Posted by soullite | June 4, 2007 8:29 PM

"This is, as I recall, what occurred in Israel after the fall of the USSR. The huge influx of immigrants -- the equivalent of America taking in, say, 40 million new immigrants in five years -- created a volcanic jolt to the Israeli economy, and economic growth (and demand for labor) soared."

These were highly educated, high-IQ immigrants on average -- lots of computer scientists, physicists, etc. The sort of folks that have prompted Google and Intel to set up shop in Israel, and are partly responsible for Israel ranking third behind the U.S. and Canada in Nasdaq-listed companies.

Israel didn't get the same sort of economic boost from its earlier wave of less-educated, lower-IQ Jewish immigrants from the Arab World.

Deliberately obfuscating and conflating the economic effects of highly-skilled and low-skilled immigration is a common tactic of dishonest open borders advocates like the editors of the WSJ.

Posted by Fred | June 4, 2007 8:30 PM

James Shearer: Sorry, I may not have been clear enough in my original post. I agree that guest-worker programs, because of the lack of bargaining rights for the workers, reduce wage costs, and I oppose them. But many posters (e.g. brendan at 5:33, Josh G at 5:42) were suggesting that the *more* pro-immigration alternative to the current bill - i.e. amnesty for the current immigrants plus higher legal immigration in the future, with the new immigrants having the same labor rights as the rest of us (actually what I really favor is considerably stronger labor rights for both immigrants and the rest of us than we have now, but the point here is that one group shouldn't have more labor rights than the other) - is also harmful to existing workers. My response would basically be along the lines of K. Williams at 8:09, though of course substituting "high immigration" for "guest-worker programs".

Posted by Jose Peterson | June 4, 2007 8:31 PM

Right, the way you personally attain prosperity is not by getting 4.2% annual raises from your current employer but by getting a 30% raise offer from another employer that your current employer must match or lose you.

Posted by Steve Sailer | June 4, 2007 8:38 PM

soullite: I'm not claiming that the law of supply and demand "isn't operative" in this case, like the anti-evolution crowd. I don't deny that, if the rest of the supply and the rest of the demand remain exactly unchanged, then the increased supply of labor would decrease the price for labor. But the US economy is a complicated beast, and the rest of the supply and demand aren't static. Native-born unskilled workers can become skilled through education and retraining (which, I admit, we're not doing such a great job of here); the increased income of the Mexicans means they buy more stuff here than they would at home, creating further demand for labor, etc. I really don't know whether all these complicated economic processes offset the wage depression caused by the increased supply, but I do think the situation is complicated enough that it merits looking for empirical evidence rather than just assuming that the general rule overrides any other considerations. So far, the only empirical evidence provided is K. Williams' reference to the work of Giovanni Peri, which suggests that your assumptions are not right. I'll freely admit that the reason I'm not providing empirical evidence is that I don't know of any. I *don't know* whether immigration does, on balance, decrease wages, but I do know that it benefits a lot of poor Latin Americans who are worse off than all but the most desperate Americans, so on balance I'm going to support it. You're claiming that you *do know* that it significantly harms American workers, so it's reasonable to ask for concrete evidence to back up this claim.

Posted by Jose Peterson | June 4, 2007 8:58 PM

Jose, the problem with that is that you're not really advocating a 'guest worker' program. You're advocating a more liberalized immigration policy, and that's something else entirely. Liberalizing immigration over-all wouldn't have the same negative effect as a guest worker program, because temporary foreign workers are not the same as permanent workers. This is also why jasper's little tirade about 22-year old entrants into the job market are the same as foreign guest workers. It displays a fundamental misunderstanding of how the economy works, and the difference between transitional problems and structural ones. Fred is right that theres a difference between unskilled workers and skilled ones, but the difference between permanent workers who actually permanently expand the economy and guest workers who send large amounts of money outside of the economy while never staying in the country long enough to earn real raises are start new businesses.

Another big problem with your argument is that this isn't really a rhetorical debate. I could make up magic proposals that would probably be perfect, but nobody is proposing passing them into law. We do have a very real bill here with very real problems, and it's supporters are acting like many war-supporters did in 2003. They're acting like this is a choose-your-own-proposal, wherein they make up all these wonderful proposals that might make sense, but it's not what's being proposed here. I'd love to see massive fines for employers, but an extremely hands off approach to immigrants couples with a liberalized immigration policy and an elimination of the guild system in 'professional' jobs and an acceptance of college degrees from foreign nations. But that's not what this bill would do. We have a bill that enshrines a near-slave caste into law, that mandates a federal registry of employment and creates biometric ID cards for all citizens that are required for employment, while doing nothing to real to penalize employers and clamp down on supply.

Posted by soullite | June 4, 2007 9:02 PM

Posted by Nate | June 4, 2007 9:02 PM

erm, demand. not supply. I don't really see this as a supply problem.

Posted by soullite | June 4, 2007 9:03 PM

Taiwanese companies have been offshoring to poorer countries like China, Vietnam and Indonesia in droves in recent years. One owner of a nuts and fasteners companies told me that he would be bankrupt or offshored if not for guest workers.

He employs six guest workers from Thailand who does the least desirable factory floor work. But in addition to those men he has also hired 30 Taiwanese who are in charge of lighter manufacturing work and administrative tasks. That's a guest to native worker ratio of one to five. I'm in Taiwan, so I have used a Taiwanese example, but something similar probably applies to many places of employment in the US. The strawberry pickers are Mexicans, but some of the boxers might be US citizens. Any position higher than that in the company will most likely be occupied by US citizens.

So what would you prefer, buying goods from abroad or keeping production in the US, with a proportion of the jobs intact and greater ability to exert quality control over the production process (quite important as the recent spate of horrifying food stories from China shows).

Posted by Battlepanda | June 4, 2007 9:16 PM

Mr. Alec provides the usual pro-globalization mantra, right on schedule. (The same arguments get trotted out for both immigration and globalization: patently dishonest talking points designed to sound liberal, but crafted in the interests of the wealthiest 0.1 percent.)

"Third, can't the government protect unskilled laborers who might be hurt by a guest worker program through programs like the EITC or unemployment insurance? That way the government doesn't mess with the efficient allocation of labor resources to the extent it would if it cut off the flow of immigrant labor."

It could, but it won't. Again, this same argument is brought out in favor of globalization: "don't stop trade, compensate the losers instead." But somehow compensating the losers never actually happens. It won't happen here either, and is not even being discussed in Congress.

The structural flaws of the U.S. Constitution (e.g. the Senate, multiple veto chokepoints, etc.) make social democracy on the Nordic model impossible here. Therefore, protectionism and immigration restrictions are the only way left to boost the wages of the working class.

Fifth, in many ways it is good thing to have increasing returns to skilled labor and much smaller returns to unskilled labor. It creates incentives for people to get skills which in turn increases economy wide productivity.

There are a number of problems with this. First of all, who's going to finance the acquiring of those skills? College is expensive, and, unlike most other First World nations, we don't provide a universal college entitlement. Many Americans simply cannot afford to go to college.

Then there's the plain fact that some people are just not smart enough. Think about how stupid someone with an IQ of 100 is - and then consider that half of Americans are even dumber than that. It's easy to forget when you hang around with other people like yourself, but these guys are out there, and they are our countrymen too. We owe them a decent standard of living. An honest day's work for an honest day's pay. Furthermore, if the Democratic Party doesn't look out for these people, then they will vote for the fascist Republicans over cultural wedge issues and institute aggressive wars and torture into U.S. foreign policy. Therefore, we must provide decent lives for them not only for their own sake, but for the common good of the entire nation.

Posted by Josh G. | June 4, 2007 9:21 PM

Battle, then he should be bankrupt. If he can't make a profit while paying a living wage to his own people his business is not strong enough to survive. My question is why you care more about businesses than people?

Don't like dishonest, false choices? Then stop offering them to others and stop expecting us not to spit them right back in your face. Tiawan is barely even a democracy. If this man's business has been in place for an real amount of time, he was an ally of the former autocratic regime there and he probably doesn't deserve any sympathy. Do I know that for a fact? Nope. I don't even know you're not making the guy up.

the bottom line is that it would cost too much to shift production in agriculture to another country. We have more arable land than any other industrialized nation on the earth. We are the third most populous nation on the planet. We are the largest economy on the planet. Stop acting like we're Taiwan, the situations aren't even kind of comparable. Illegal immigrants work in agriculture and service sector jobs that mostly can't be exported. that you don't know this means you're talking out of your ass.

Posted by soullite | June 4, 2007 9:26 PM

Josh, that's mostly right. How much of the Democratic party's erosion among the working class is the result of race baiting and gay baiting at this point? It's far more likely that intial gains made by republicans on those social issues only worked 20 years ago. The fact that this shift was mostly permanent is because Democrats simply stopped making any real argument about social mobility and class. If you don't look out for the American people, if you allow their lives to turn to shit and their wages to stagnate, they will look for someone who has answers and they will look for someone to blame. That's not their fault, they aren't leaders. Most people can't be leaders. It's the Democrat parties fault for letting it get this far, for buddying up to third way and the DLC.

Posted by soullite | June 4, 2007 9:32 PM

I suspect, soullite, that you and I may not be disagreeing as much as I thought. For the record, if I were in Congress, I would definitely vote No on this bill, both for the second-class status it affords to guest workers and, yes, its depressing effect on wages. (If you look back at my original post, it's clear that I wasn't asking about the proposed guest-worker program). So I'm guilty as charged with helping to divert the discussion away from its initial narrower scope. (Though a lot of the previous commenters were doing the same by talking down immigration in general). But I don't think my expressing this position is a "purely rhetorical" move. First of all, this is a comments thread on a blog where subtle disagreements with one's own side in a debate are obviously common, not some twelve-second face-time on CNN where we have to convince Joe Swing Voter to support the right one of Only Two Sides. More broadly, I have been disturbed in recent months by what I perceive in an increase in populist nativism around the liberal blogosphere, which I saw exemplified in previous comments to this thread supporting the general view that immigration is bad for the American worker. I don't think this is a "purely rhetorical" concern. My position seemed to me to be the mainstream Democratic (and even Bush's in some moods!) position prior to the recent bill. And while I'll admit I was perhaps unhelpfully unclear as to which side I was on in the debate, many of the previous commenters are likewise unclear about whether they take your position or that of Steve Sailer and Lou Dobbs. I think it hinders the likelihood of a better immigration policy to let such sentiments go unchallenged.
(With that, I suspect that this debate is likely to turn into an extremely tedious Kos-like one about Democrats uniting behind the right frame and such things, so I'm going to call it an evening. I appreciated your points, though.)

Posted by Jose Peterson | June 4, 2007 9:49 PM

"The structural flaws of the U.S. Constitution (e.g. the Senate, multiple veto chokepoints, etc.) make social democracy on the Nordic model impossible here."

Our demographics and continuing unskilled immigration make it impossible as well. They also may make it impossible for us to continue our decidedly non-Nordic benefit programs.

Posted by Fred | June 4, 2007 10:03 PM

An amendment to my last comment: I wasn't just talking about the obvious trolls in criticizing nativist views.

Posted by Jose Peterson | June 4, 2007 10:06 PM

It could, but it won't. Again, this same argument is brought out in favor of globalization: "don't stop trade, compensate the losers instead." But somehow compensating the losers never actually happens. It won't happen here either, and is not even being discussed in Congress..

Maybe, but neither do your proposed "solutions": trade and immigration barriers. We've absorbed something like 25 million immigrants since the last time immigration law was reformed, and America's volume of trade continues to expand. Moreover, the Nordic model isn't the only one on offer -- there's also the Anglospheric examples of Britain, Ireland, Canada and Australia: all states that enjoy extremely robust levels of growth, international trade, and immigration, and all states that provide a robust (if less comprehensive than the Nordics) safety net. And at any rate, as the presidencies of FDR and LBJ (and indeed George W. Bush) demonstrate, strengthening the safety net in the United States is hardly rendered impossible by the constitution. It just happens more slowly. On balance, I think the "political feasibility" test favors "compensating the losers" over protecting domestic producers or slashing immigration. In fact, to some degree we already do "compensate losers." To the extent that both immigration and trade stimulate economic growth, and this growth enables us to better finance social programs, inevitably some Americans who will benefit from globalization are indeed the afrorementioned "losers."

Posted by Jasper | June 4, 2007 10:30 PM

No, I don't suspect our views are very far apart either. I do get what you're saying about nativism, most people have bias's and prejudices, and few of them really think about where their opinions are coming from. I find these "unity" type discussions very annoying. Unity is something you achieve through concessions and hard work, it's not something you give as a sacrifice. Too many democrats fail to see that nowadays.

Posted by soullite | June 4, 2007 10:36 PM

.

The marriage of big business and multiculturalism is the worst thing ever to happen to the American worker.

Big business is using legal and illegal third-world immigration to drive down American wages.

And liberals can side with big business on this issue and use "multiculturalism" to appease their conscience.

http://bluedogdemocrats.us/

Please note the Patriot Pledge and join us at the Blue Dog Discussion Forum. Thanks.

.

Posted by Old-School Democrat | June 5, 2007 9:10 AM

Oh, Mr. Chen is very much real and I find your blanket insult of all Taiwanese who did business in a previous generation simply because they had to do so under a dictator frankly baffling. If the nuts weren't made in Taiwan, partially made with foreign labor, they would be made in China. And I know which is worse for Taiwan. And how is the fact that Taiwan is a young democracy at all relevant?

Posted by battlepanda | June 5, 2007 11:59 AM

I suppose the US (or Taiwan) could always enact confiscatory tariffs and force all the businesses to remain onshore. Of course, those businesses would then lose much of their ability to export to other countries, which would not likely be in the interests of the US, or Taiwan, or American workers, or Taiwanese workers.

There is an alternative to the guest worker program, but that alternative is green cards, not locking up the border.

Posted by JP | June 5, 2007 12:30 PM

If strawberry farms can't automate sufficiently to obviate the need for lots of low-wage strawberry pickers

Ever picked strawberries, Fred? You can't just use the machinery that pulls potatoes from the ground or knocks lemons from the trees to pick soft fruit, especially in a marketplace that doesn't like bruised or blemished produce. That's why U-Pick is attractive: growers get to charge higher than commercial wholesale prices, while not having to pay pickers.

This isn't to say that the US is surprisingly un-automated in some segments of the economy: the grocery-baggers and parking attendents have been replaced elsewhere by self-pack and ticket machines/CCTV.

And do you have the stats on fourth-generation nativism, perchance? Because your one bloody stat is getting a bit dull.

Posted by pseudonymous in nc | June 5, 2007 4:14 PM

If anyone's still following this, actually I found that George Borjas has a paper on his website suggesting that the claims about lowering wages that I was skeptical of are, in fact, correct: http://ksghome.harvard.edu/~GBorjas/Papers/Canada.pdf . Borjas makes a good case, I think, for having immigration balanced out among skill levels rather than the current concentration of them at the bottom level.

Posted by Jose Peterson | June 7, 2007 5:31 PM

"Say unemployment is low in the county where I run my business. That means a tight labor market. That means valued employees asking for higher wages. Wages above the prevailing rate. And I need to give it to them. And that's how working people obtain prosperity in this country."

Yglesias might "need to give it to them" but real business owners will frequently go out of business, retire early because staying in business at their current location wouldn't produce enough profit to make it worth the effort, go to work for someone else, or move their business elsewhere. Surely Yglesias must realize that businesses can and do move all the time.

Further, regarding the argument increased immigration must lead to lower wages, it should be noted that this is only true if one ignores the demand curve. The idea that if the supply of labor goes up, the price of that labor, the wage, must go down is erroneous. Remember that that supply and demand curve has two curves and that both of them can move. Why the assumption that the demand curve cannot move? It moves all the time, just as does the supply curve. Both investment and increased demand for goods and services from the persons who constitute the increase in the labor supply exert an upward pressure on wages by moving the demand curve. This is what has been happening in China as the supply of non-agricultural labor has skyrocketed as young people have left the farms for better paying industrial jobs. Meanwhile, wages have also skyrocketed despite the dramatic increase in supply.

Posted by Marco Pignone | June 13, 2007 10:17 PM