December 21, 2006
Illegal Immigration: A Rich American's Game
By Froma Harrop
Real Clear Politics
There's a popular game in America that goes, I'll cut your wages, but you don't cut mine. And the outsourcing of your factory job to China is a good thing, because it makes my paycheck go further at Wal-Mart. We hear this theme a lot in the debate over illegal immigration.
Consider the recent raids on Swift meat-processing plants. Federal agents arrested 1,187 illegal immigrants at facilities in six states. Mere hours later, economists warned that depriving the industry of illegal labor could raise hamburger prices.
Illegal immigration is usually presented as a win-win situation: Undocumented foreigners earn far more than they could back home. Consumers get a bargain.
Nowhere to be seen are America's working poor who get stomped on 13 different ways. They have to compete with illegal immigrants for jobs and housing. Low-skilled natives and legal immigrants also end up subsidizing the undocumented because they tend to live in the same communities, which must provide hospitals, police, schools and garbage pickup.
Who doesn't suffer from illegal immigration? For starters, the people who write about it. I speak of the journalism profession, which has the habit of covering the issue by anecdotes. Reporters thrive on sympathetic stories about illegal immigrants who work hard and go to church.
But, were a busload of illegals from Australia to turn up at their newspaper and offer reportage at 10 percent below the going rate, the writers would call the authorities so fast that your head would spin. And the publisher's argument that thanks to the cheap Australians, he's able to trim a few cents off the newsstand price would make no impression.
As it turns out, the meat-processing companies that employ so many illegal immigrants have been enjoying a nearly 50-percent discount on what was the going rate. In 1980, the average meat-processing job paid $19 an hour. The companies then moved their plants to rural areas, far from the Midwest cities and their unions. The industry's wages now average about $9 an hour.
The U.S. Chamber of Commerce likes to wail about the “labor shortage.” It says there aren't enough chambermaids, dishwashers, etc. to work for its members at lousy wages. Odd, but when there's a shortage of labor — or anything else — doesn't the price of it go up? The price of unskilled labor in the United States hasn't gone up. It's gone down. Because of immigration, American-born high-school dropouts experienced a 5-percent loss in wages during the '80s and '90s, according to a study by Harvard economist George Borjas.
For some reason, the job of keeping prices low has fallen entirely on the shoulders of the most vulnerable Americans. If we banged down CEO compensation and sliced lawyers' pay by a third, the same thing would happen. Everyone's prices would drop. The corporation could sell its products for less, and the cost of legal services would fall.
No vocation keeps a tighter lid on immigration than the medical profession. “If we let in 100,000 immigrant doctors,” Richard Freeman, another Harvard economist, recently told a group of journalists, “everyone in this room would benefit.” Except the American doctors.
Suggest a U.S. labor policy that depresses professional pay as a means of keeping prices in check, and you get laughed out of the room. But say that sitting on the wages of unskilled factory workers stems inflationary pressure — a frequently made argument — and the PhDs quietly nod in agreement.
And that's how the game is played. High pay for me. Low pay for you. The folks at the economic bottom are obviously not making the rules.