Thursday, December 01, 2005

Minimum Wage ... Maximum Wage

I've been overly busy the last couple of days, but I had noticed what the Boy President has been saying about our so-called "border" with Mexico. It's foolishness, as is customary with Smirk. But it's foolishness that serves the purposes of his handlers.

Businesses have to buy a certain amount of people's labor in order to make, sell, and service their products, which may themselves be nothing but services anyway. To decrease their costs and increase their profits, they buy that labor as cheaply as they can. They will pay less for it if the labor market is a "buyer's market:" plentiful supply = low price. Clearly, the supply is made larger and the price is driven lower if there's a lot of people whose expectations, in terms of wages, benefits, and working conditions, are low. To the people who run many businesses, then, the tide of Mexicans crossing the border daily represents wealth. For many Americans, it represents either no jobs or no decent compensation. Which brings me back to Dear Leader, who is working heroically for his corporate friends and benefactors. Here he is, working:

The president has been urging Congress to act on a guest-worker program for more than a year. Under his plan, illegal immigrants would be allowed to get three-year work visas. They could extend that for an additional three years, but would then have to return to their home countries for a year to apply for a new work permit.

Bush's plan pairs a guest-worker program for foreigners with border security enforcement, an attempt to satisfy both his business supporters, who believe foreign workers help the economy, and other conservative backers who take a hard line on illegal immigration.

He said the program he's proposing would create a legal way to match foreign workers with American employers to fill jobs that Americans will not do.

''This program would help meet the demands of a growing economy, and it would allow honest workers to provide for their families while respecting the law,'' Bush said.

"Jobs that Americans will not do:" that's one of George the Slow's favorite memorized catchphrases. Others echo it for him:

... he is offering a guest-worker plan to provide a continuous flow of low-wage labor to job sites nationwide whenever an American doesn't step up to work for the going wage.

So what, exactly, determines what the "going" wage is? I suppose it's the wage that an employer must offer in order to attract suitable workers. But that wage depends on the social and economic context in which the offer is made. Flood the country with illegal aliens undocumented workers, and the "going wage" is going down -- fast. So we have a useful translation of this particular Bushism: "jobs that Americans will not do" means "jobs that American workers will not do for the compensation that it suits American corporate management to offer." In other words, jobs that Americans will not do for what Wal-mart prefers to pay them.

I have argued in the past, and will do so in the future, I expect, that minimum-wage laws are wrong in principle, because they are a warrantless government interference with the freedom of individuals to voluntarily enter into contracts with each other. The owner of a construction business, for example, can't force me to carry concrete blocks for two dollars an hour if I'm not willing to do so. But Bush, with his proposed "guest worker" program, plus his manifest disinterest in actually establishing control over our southern border, is effectively implementing a "maximum wage" law. By flooding the labor markets with low-wage, low-expectation, desperate foreign people, he makes certain that there'll be lots of jobs that "Americans won't do." Of course, there are cultural consequences associated with the Mexicanization of the American economy. But neither the Bushes, nor the people with whom they hang and chill, are lacking in social insulation from those consequences. Why, pool boys are cheaper than ever! Hoo-rah!


Robert Enders said...

Are you coming out against illegal immigration? Now you are starting to sound more like Mike Sylvester than I do!

Bartleby said...

Well, actually, I'm pretty much against immigration of both kinds (legal and otherwise). You see, I'm a big believer in diversity: diversity among countries, that is. Let Mexico be Mexico; let Canada be Canada; and let the U.S. be the U.S.

Not that there's anything wrong with Mexico. I'm sure Mexico is a fine place (I've never been there). I have spent a little time in Canada, and it's a fine place; I liked it very much. But we've already got a Canada, and we've already got a Mexico. We don't need another one of either.

Do I still sound more like Mike than you do?

Robert Enders said...

Wow. My personal thoughts are that if you don't like a country, you should be free to leave. Of course, that means that you need a place to go to. Historically, they ("they" includes your ancestors, my ancestors, and the Beatles) have come here, fleeing persecution, tyranny, and seeking jobs at Wal-Mart. When the whole world is against you, go to America. (And if America is against you too, go to South America.) Would you still accept refugees fleeing oppressive governments? (There was of course a time when some of those governments were within our own country.) I have never been to Mexico either, but if picking tomatoes and working at Wal-Mart seems like a viable alternative to living there, then Mexico must be a not very pleasant place to live.

Some are allowed in by enlisted in the military, others sneak in by sprinting accross busy highway or try to float here in an inner tube. The only thing that you and I did was continue to breathe on our own after the umbilical cord was cut.

Grace said...

minimum-wage laws are wrong in principle, because they are a warrantless government interference with the freedom of individuals to voluntarily enter into contracts with each other

The tricky parts are the best-sounding ones: freedom, individual, voluntarily. These in reality translate into necessity; uneven match-ups between an individual versus a larger or more powerful entity; and the "coercive" nature of the need for food, clothing, and shelter.

I'm curious: Do other advanced nations have minimum wage laws? And how are they calculated?

Bartleby said...

Grace: I did a little sniffing around online, but I didn't come up with any worldwide tabulation of who does and who doesn't have minimum wage laws. Most of the literature I saw had to do with the effects of such laws on employment and poverty levels in various particular places (mostly in Southeast Asia and West Africa). It's hard for me to imagine that any Western European countries don't have rather powerful minimum-wage laws. On these shores, the Bureau of Labor Statistics shows data from 2002 indicating that just under 3% of hourly-paid Americans earn the federal minimum wage or less; mysteriously enough, about 0.8% were being paid exactly the federal minimum, while nearly three times that many reported less. (BLS explained that in a footnote in terms of unspecified exemptions from minimum wage in unspecified cases, plus rounding error ... hmmmmm.) Of the almost 3%, about half are said to be under age 25, and half of those are between ages 16 and 19. This suggests to me that the federal minimum wage is pretty much a non-factor in U.S. employment, since it doesn't come into play for more than a very-small fraction of adults.

In lieu of doing any real research, I'm left with the impression that probably more countries have minimum-wage laws than do not, but maybe not overhwelmingly more.

As far as the freedom-vs-compulsion question is concerned, I don't want to leave the impression that I think our Great Captains of Commerce have anyone's best interest (other than their own) at heart, or can be trusted as far as they could be thrown. But I don't see the gummint as a white knight who'll rescue us from their clutches. Just as with Bush's policy of flooding the lower tiers of the labor market with Mexicans, our corporate titans are highly adept at steering the regulatory process to meet their own objectives, and effectively stifling competition from small businesses that are not as well situated to prosper in a highly-regulated environment. I live in a part of the country (northeast Indiana) with a fair number of second-tier auto-industry suppliers, and a lot of the smaller cities around the area have been looking like Mexican border towns for a good while now. My wife's a nurse, and worked for some years in an urgent-care clinic that did a lot of pre-employment drug screening for such businesses. She reports that she learned to say "pee in the cup" in Spanish very quickly, through extremely-extensive practice.

Bartleby said...

Mr. Enders: I'm not sure exactly what you're saying here. Should I feel guilty for having been born in my native country, rather than having to sprint across the busy inner-tube-crowded river or whatever? I decline to cooperate. Is a person's freedom to leave his own country somehow denied him if we Americans decline to let him in? Most of the rest of the world (very sensibly) declines to accept immigrants that they don't need. Try immigrating to Japan; you'll see what I mean. It isn't the 19th century any more; we're not hurting for sturdy pioneers to settle the endless western frontiers, since they're not there any more. And a counrty isn't just a shape on a map and a set of laws; much more fundamentally, it's commonality of culture and language and customs.

Knocking down the Mexican border, whether "legally" or "illegally," isn't going to make Mexico like the U.S. It's going to do -- in fact, it's doing -- the opposite.

Cathay said...

I was born, raised, live and work in “Mexifornia.” I currently live in a city that is 78% Latino (mostly illegal) and highly agricultural (which explains the high illegal population). I see on a daily basis that our present illegal alien undocumented worker tide is importing poverty. They come because the average illegal worker can make about $60 a day in the U.S. compared to about $5 a day in Mexico and we invite them with lax law enforcement and menial jobs . Even Mexican President Vicente Fox, who campaigns for erasure of the southern border, encourages Mexicans to seek work in the US rather than solve the problems in Mexico (I’ve traveled extensively in Mexico and much of it is “not a very pleasant place to live”). He even created an “Office for Mexicans Abroad” that provides survival kits for Mexicans who seek to enter the U.S. illegally. What the “*%@#?”

It’s not that unemployed Americans are too lazy to pick strawberries, make beds, wash dishes, or bus tables (because millions actually do), it’s that Americans will not work (and be treated) like slaves. The real difference is that Americans want to be paid a liveable wage and treated fairly. How many of us could survive if every day, the sidewalks outside our workplaces were lined with people willing to do our jobs for two-thirds or half the pay because in the world they came from, the world where much of their money is sent, half of our pay amounted to riches?

Most Americans want something done about illegal immigration but are afraid to speak out because they don't want to be labeled as racist, or anti-immigrant --that's the weapon the other side uses against us-- so we must take care to distinguish between being anti-immigrant and anti-immigration. In the past we had a real social contract with immigrants. They assimilated. They came here, learned the language, got a better life, and over time became very strong, patriotic Americans. What it is NOT is a racial issue. Pure and simply the issue is about the almighty dollar, but too many unskilled, uneducated, non-English speaking people living in too much poverty will not advance our nation.

Cathay said...

"Knocking down the Mexican border, whether "legally" or "illegally," isn't going to make Mexico like the U.S. It's going to do -- in fact, it's doing -- the opposite."

Last Spring, my neighbor got three bids to paint the trim on his house. One was about $500 less than the others. The only condition was that he pay in cash. Every Californian knows they can pay under the table for cheap illegal labor. You pay cash. There are no checks. There is no tax record.

What surprised me was that this “bargain” didn't come from an illegal worker. It came from an established businessperson with good references. When my neighbor asked him why, he vented: "If I'm going to stay in business, I have to do what the illegals do. They never pay taxes, on profits or on their employees' pay. Right there, I'm at a 20% disadvantage. They'll come in here with about six guys with paintbrushes who work for peanuts, do a fair job, and then they're gone." These “competitors” have driven every American out of gardening and landscaping, he added, and are doing it to house-painting, roofing and car repair. He concluded in frustration, "What am I supposed to do?"

Bartleby said...

Thanks, Cathay, for sharing your on-the-scene experience. It seems to me that the useful distinction has to do with the amount of immigration, rather than the legal-illegal dichotomy. As you suggest, if the number if immigrants is small, then they tend to assimilate. In large numbers, they simply form a separate community -- or even state. This leads to two things: ease and cheapness of hiring pool boys, and social-cultural dislocation. And I still think that a big reason for our troubles is that we're ruled by a "leadership" class that has a lively interest in affordable pool boys, but is extremely well-insulated from the social and cultural quality-of-life issues that we middle-class folk get to experience, shall we say, a little more closely. As in, in our faces.

Thanks again. Don't be a stranger, now!

TheCompleteGeek said...

To pick a nit: you want to be careful when implying that Japan's immigration policy is "very sensible." Significant parts of it are driven by not-so-sensible racism. If you've got some time to do the research, check out the burakumin and the state of Korean immigration to Japan. For a cinematic exploration of how this plays out with second generation immigrants who are still required to be Korean citizens, you might enjoy Go. Cheers.