Because Evidently Smart People Have Gotten Really Stupid About the Subject
Imagine you arrive at work one morning to find a group of people standing around your desk or workstation. You notice similar groups standing around the desks of your colleagues. Everyone is perplexed. Finally your boss arrives and explains, “These are your potential replacements.” She points to one, “See Miguel here? He’s actually a harder worker than you are and is willing to work for half of what I pay you. Sure his English isn’t the best, but Rosetta Stone Spanish is half-price on Amazon right now, Eso es mucho, ¿eh Miguel?” Miguel nods vigorously.
“The only thing holding me back from hiring him is immigration reform,” she says, “But since both parties are committed, I guess it’s only a matter of time…” She walks away, then says over her shoulder, “Oh, and until it’s passed you might want to remember Miguel and his amigos when you come to my office for your next evaluation.”
We like to believe we are indispensable in our jobs, that the company cannot run without us. The truth is that unless you work for yourself your company CAN run without you, and in many cases may do so better. The only reason you have a job is that the company you work for gains more from your labor than the cost of employing you. So if it pays you $20 an hour, it expects to make at least that back through your labor. If it doesn’t you won’t have a job for long because the company will go out of business. Say it makes a 25% return on your employment, netting the firm $5 an hour after paying you your wage. Would it pass up an opportunity to pay less for your position, say turning that 25% return into a 100% return by paying $12.50 an hour?
This is an oversimplification of course. Many employees don’t make their firms any money at all. If you are in infrastructure, whether a middle manager or an IT developer, you are only employed until your company figures out how to get rid of your position. Somewhere within your company someone is trying to figure out how to do away with your job in the name of “streamlining” or “efficiency.” It’s no different to what you do at home when you look at your bills and try to figure out how to make your money go farther. Your position is an expense, and right now it’s necessary, but it won’t be forever of course. And in the meantime your firm will do whatever it can to maximize profits while minimizing costs, and your salary or wage is a cost that it will work very hard to minimize.
The Labor Market is no different than any market. The price of anything on the market is determined by its supply and demand. If the supply is plentiful, it’s price will be relatively cheap. As it becomes rarer, the price rises. For those of us who have grown up in free(ish) market economies we take this fact for granted for everything from gasoline to gold. But for some reason when it comes to jobs we get stupid about it.
In a free market whenever there’s a shortage of something, whether it’s pork bellies or Playstations, the price skyrockets. For the past 15 years high tech firms have been complaining about labor shortages in the STEM fields, and call for increased numbers of H-1B and J visas to fill the supposed shortage. If this were true we would expect that the salaries for such jobs would be sky-high.
The Chronicle for Higher Education investigated the STEM field labor shortage claims and concluded the STEM labor shortage is a myth. Salaries in these fields have been stagnant and in many cases, in decline. So why do so many people believe the myth? “The claims about STEM shortages come from employers, along with their lobbyists and trade associations, claims Michael Teitelbaum, who a fellow in science policy at Harvard University and a senior advisor at the Alfred P. Sloan Foundation.”
There is no labor shortage, just a shortage of labor willing to work for the wages set by companies. Companies want to pay their employees less, and the only way to do that in a free(ish) market economy is to boost the potential supply of its workforce. Why wouldn’t it support immigration reform if it meant more aspirants for your job? This potential pool of applicants allows it to find a cheaper replacement for you or at the very least keeps you from asking for a raise.
Why Unions Support Immigration Reform
Today’s unions aren’t your
father’s grandfather’s unions. Back in the day unions raised wages and working conditions for their members because they controlled the supply of labor either directly, by determining whether their members worked, or indirectly by making crossing a picket line dangerous to one’s health. They also fiercely resisted immigration, viewing immigrants as increasing the labor supply and driving down wages for their members.
Today’s unions are pale shadows of their former selves, representing only a sliver of the non-government workforce. Because they can no longer control the supply of labor in most industries, it only makes sense for them to focus on the low paying service industries where they can still exercise some control. These industries happen to employ the most illegal immigrants, so starting a decade or so ago, the unions gave up their resistance to immigration and embraced it. Now unions like the SEIU see each illegal immigrant from Honduras or Mexico as a dues paying member. Since the minimum wage provides a floor to wages, the unions no longer have to worry about decreasing labor supply to boost wages; they’ll just push for a higher minimum wage, and that’s exactly what the unions have done. The primary weapon of unions is no longer a picket line, but the cash desperately needed by politicians to win elections.
By expanding their rank and file with immigrants, the unions then have the cash to provide to politicians who can then raise the minimum wage to boost the salaries of its members. From the perspective of the rank and file, the union leadership and the politicians who receive their cash, everybody wins. The only losers are the middle class consumers who pay more for goods and services provided by unionized companies as well as pay the higher taxes required to support the large cheap labor pool, and the constituents of the politicians who are in the pockets of the unions.
Why Liberals Support Immigration Reform
Let’s face it, these immigrants aren’t coming from places where Ayn Rand and Adam Smith are cultural icons. They are coming from collectivist societies where Che Guevara is more than an image on a t-shirt, used to living under strong states, albeit ones with failed policies bad enough to drive them to risk everything to cross our border. The teeming masses awaken the natural impulse within liberals to help, and that help in the liberal’s mind can only come through a strong, all-encompassing State. Liberals also don’t like borders, viewing nationalism as a scourge that will eventually disappear along with such barbarities as the Plague and GMO food. Modern liberals are by nature trans-nationalists, and nothing is more trans-national than a bunch of brown people who have suffered under the neo-colonial policies of the Western Powers flooding into the USA. Each Mexican or Honduran represents a chicken of past colonial aggression coming home to the United States to roost.
Additionally, hard core Leftists believe the Marxist interpretation of Capitalism that inequality deepens as wealth follows its natural tendency to accumulate with the upper class, and that it’s the job of the State to confiscate that wealth and redistribute it to the lower classes. Marx himself viewed this as an untenable state of affairs that would eventually lead to communism and the concept of wealth would disappear and vegan unicorns would frolic in a low-carbon world. Until that time the State would tax the bejeezus out of the wealthy and hand it over to the poor in welfare payments. More poor immigrants require more taxes from the wealthy, helping make that Communist Paradise one-step closer to reality.
Of course all liberals aren’t steeped in liberation ideology and the politics of identity. To Democrats each immigrant is a potential Democratic voter. Immigrants traditionally vote Democrat at least for a generation or two until they assimilate. Pew Research finds 31% of illegal immigrants self-identify with the Democratic Party vs. 4% for the Republican Party. Converting those illegal immigrants into voters has the potential to make the Democratic Party the majority party in the US and consign the Republican Party to History’s wastebasket. Given the potential payoff Democrats would be stupid not to support immigration reform, and for all its faults the Democratic Party has never been known for its stupidity.
The Stupid Party of American Politics
And why is the GOP establishment keen on immigration reform? Because the Republican Party is the Stupid Party in American politics. The GOP’s Big Business/Big Government wing is determined to push through reform in order to provide its corporate base with the cheap labor it demands even if it means the party’s suicide. While the libertarian/populist/small government wing of the party fights back in primaries, showing its power in Eric Cantor’s primary loss, the GOP establishment believes that it must pass immigration reform to continue receiving support from its corporate patrons and to counter the Democrats charge of racism. It pins its hopes on the social conservatism of the Hispanic community, that the community will see what swell, non-racist guys the party is and will switch party affiliation. This has about as much chance of happening as Joe Biden winning the presidency in 2016.
So there you have it. Hopefully this article adds some clarity to the issue. Where your opinion falls should reflect whether you compete with immigrants for your job or not. If you don’t, then you should favor their arrival. But if you do, you should think twice about supporting immigration reform you racist.
In 2003 after being forced to train his own replacement on an H-1B visa, Scott Kirwin made the cover of Wired Magazine and founded the IT Professionals Association of America and worked for 3 years to counter the myth of the high-tech labor shortage. In 2006 he threw up his hands and quit, having received little support from IT professionals and lots of badly written though amusing threats from Indian workers.