Who is the Cheap Labor Lobby?
Who is the Cheap Labor Lobby?
Date: Tuesday, January 28, 2003 1:18 AM
H-1B and JOB DESTRUCTION NEWSLETTER
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Who is the Cheap Labor Lobby?
By Ellen Almer
FrontPageMagazine.com | January 24, 2003
Despite the endless blathering and squirming to the contrary on the
part of Wired Magazine, the Wall Street Journal, the Cato Institute and
other institutions that normally proclaim the truth of free-market
economics, the Law of Supply and Demand applies to labor as much as to
any other thing that is bought and sold. That is to say, if one
increases the supply of labor relative to demand, its price will fall.
That price is your salary, friend. And mass immigration is inexorably
driving it down.
Well, maybe not your salary personally, if you are lucky enough to work
in a sector of the economy that is sheltered, for some reason, from the
effects of immigrant labor, as lawyers are by the fact that few
immigrants have American law degrees. But it is the salary of your
neighbors, and it is being depressed by an influx of cheap labor.
There is just no way around this basic economic fact. If there is,
then free-market economics is a lie.
Yes, immigrant labor expands the economy as a whole by adding more
producing workers. But a big aggregate GNP isnt prosperity: just
compare Switzerland, which is tiny but rich, with India, which is huge
but poor. Per capita GNP, which produces per-capita income, is
prosperity, and immigration does nothing to increase that. True, it
might, if immigrants were on average more productive than native
Americans. But theyre not. Every measure by the Census Bureau and
others shows them as being massively poorer, less educated, and less
likely to attain middle-class status than native Americans.
America was founded on the concept well understood by Alexander
Hamilton and the other economic sophisticates among the founders of a
middle-class society, i.e. a society organized to minimize the number
of people who constitute cheap labor. Cheap labor was the proletariat
which drove Europes class-ridden and undemocratic politics, the
nightmare of revolution and reaction America was founded to escape.
Contrary to libertarian myth, Americas economy was never, ever,
based on a totally free market in labor. It was based on a labor
market constricted by limited immigration and a small population
relative to national resources, and a free market in everything else.
This was designed to produce high wages. We have always been an
explicitly high-wage nation relative to other societies, and this did
not happen by accident. (This is the key story in Pat Buchanans
book The Great Betrayal, and he is right about this, even if he is
wrong about other things.)
Labor is the one and only area in which no rational society should want
to construct a free market, because free markets make things cheap, and
high wages equal a high standard of living. Before anyone pounces, I
realize you have to define this a real, not nominal, wages and that
there are all sorts of technicalities to this issue. But the principle
is rock-solid. Labor is fundamentally different from all other
commodities because its well-being is an end in itself, not a means to
other ends. And before anyone pounces again, I am advocating controls
on the influx of foreign labor, not unions or limits on which jobs
Americans can hold.
We used to have a commitment to a middle-class, bourgeois society. We
have now lost that commitment at the moment when we are busy
congratulating ourselves on how supremely capitalist we have become.
We are importing a proletariat when we should be abolishing poverty.
Rather than making a profit through superior technology and management,
as American business has surpassed the entire world in doing for 200
years, an increasingly large sector of corporate America just wants to
take the lazy road of importing cheap labor to work for them. This is
not economic progress; it is retrogression. It is a formula for
becoming Brazil.
Some of cheap labors biggest lobbyists:
1. The high-tech industry. Microsoft Chairman Bill Gates, the
pre-eminent figure in the high tech industry, is a passionate and
vociferous supporter of cheap labor, primarily because overseas-trained
engineers from India, China and Pakistan are cheaper than American tech
workers.
2. The meat packing industry, especially pig and chicken
slaughtering. This industry, of course, has a long and storied past of
using cheap immigrant labor. Read Upton Sinclairs novel The Jungle
from 100 years ago.
3. Clothing manufacturers. Despite the efforts of the Ladies
Garment Workers Union to eliminate sweat shops some 60 years ago, they
are still alive and thriving in the states, employing mostly Asian
women who work in terrible conditions.
4. Unions. These supposed advocates of the American worker and
longtime opponents of importing immigrant labor are now part of the
cheap labor lobby because they primarily serve the interests of union
bosses, not workers. Bosses want more poor workers so they can have
more members. They dont want to see their members graduate to the
middle class, where people generally dont feel the need to belong to
a union.
5. The hotel and restaurant industry. Another big business
interest whose employees are primarily cheap labor from Latin America.
6. The ultra-wealthy both liberals and nominal conservatives.
They believe that only foreign workers are willing to work as their
nannies, landscapers, and housekeepers.
7. The U.S. Chamber of Commerce, led by Grover Norquist,
formerly a vocal spokesman for many conservative issues. This group has
led the charge in convincing Congress to expand the awful H-1B visa
program. They argue that more H-1B visas granted to foreign workers
will alleviate a mythical shortage of skilled technology workers. The
H-1B visa program allots 115,000 foreign worker visas annually, but the
Chamber of Commerce said that isnt nearly enough.
8. The governors of certain rural, Midwestern states (such as
Iowa) whose populations are shrinking, prompting a cry for an influx of
new residents. Of course, these governors do not consider attracting
native Americans by offering a growing economy a better solution.
Cheap labor is not real capitalism, it is corporatism, for cheap labor
is subsidized by the government, which ends up paying the health and
welfare costs of these workers. All taxpayers bear the cost.
Lets get clear about one thing: there are no jobs that Americans
wont do. There are jobs that Americans wont do at the wage being
offered. If you offered me enough money, I would bus tables or clean
bathrooms. When I was younger and without work experience, I would have
done so gladly. If employers cant fill these jobs, this is their own
fault for not offering enough. They have no intrinsic right to be able
to fill positions at the price they feel like paying, any more than you
or I have the right to buy a car or a TV at the price we feel like
paying. I will concede there is a shortage of labor in this country
when the cheap labor lobby concedes there is a shortage of Lear Jets,
which I would dearly like to own.
Whos fighting the cheap labor lobby? For one thing, the 235,000
members of the Institute of Electrical and Electronics Engineers
Inc.-USA and the American Engineering Association. Last summer they
chastised Congress for facilitating the cheap labor lobby when there
were so many unemployed American engineers with training in high-demand
skills such as C++ and Java. According to the IEEE-USA, the
unemployment rate for electrical and electronics engineers was up to
4.8 percent by last summer, compared to 4.1 percent for the first
quarter of the year. In addition, the jobless rate for computer
scientists was 5.3 percent, up from 4.8 percent in the first quarter.
Among older engineers, who can easily be scrapped for new foreign
workers, the rates are much worse.
At the time, LeEarl Bryant, president of the IEEE-USA, told the Boston
Globe:
"It is time for Congress to take a closer look at the problem of
engineering unemployment and eliminate the government subsidies and
incentives that encourage corporate management to treat US engineers as
a disposable labor commodity rather than an essential investment in our
nation's future.
It is not simply laid off workers who see the problem. Norman Matloff,
a computer science professor at the University of California at Davis,
has studied hiring at high-tech firms. Using hard data, he has
concluded that companies overwhelmingly hire cheap foreign labor over
American engineers applying for the same jobs. He debunked the myth of
a desperate software labor shortage when he appeared before Congress
several years ago.
One of the cheap labor lobbyists most devious tactics is supporting
immigrants rights groups. This is a practice favored by Bill Gates, who
contributes large amounts to open borders and immigrants rights groups.
One irony is that many of the immigrants who are harmful additions to
the American economy would actually be beneficial back home, where the
level of economic development is much lower. The Indian government
isnt that happy about seeing its best and brightest end up in
Silicon Valley. We should sympathize entirely with their desire to
have them back home where they can do some good.
But in Iowa last year, that states residents risked the retribution
of the left by speaking out against a plan by Gov. Tom Vilsack, a
Democrat and cheap-labor lobbyist. His New Iowans proposal to bring
immigrants there to fill jobs caused a swift and strong backlash, with
many Iowans complaining that immigrants would take their jobs and drive
wages down. Indeed, liberals and the cheap-labor lobby quickly
attacked, citing Iowas overwhelmingly white population and accusing
its citizens of racism and fear-mongering. However, once his
constituents voiced their opposition, Vilsack quietly reversed his
position on mass immigration to the state, emphasizing instead the part
of the plan that encourages former Iowa residents to return to the
state.
Ironically, cheap labor will ultimately be the undoing of American
unions, one of cheap labors newest devotees. In the hotel and
restaurant industry, a new set of workers has collectively negotiated
lower wages and worse working conditions for its rank and file members,
an inevitable consequence of a shift in the supply-demand balance with
respect to labor that unionization cannot abolish. The same pressure,
more or less intense in some industries, in some regions, and at
different points in the economic cycle, is inexorably at work against
the rest of the labor force.
And that includes you.
Note: My thanks to Diana Hull, of the group Californians for Population
Stabilization, which has done extensive research on the detrimental
effects of immigration on that state. Also, thanks to David Simcox,
chair of the Policy Board of the Center for Immigration Studies, who
wrote an excellent article on the subject of labor and the role of
unions in The Social Contract.
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