Small Businesses Lament There Are Too Few Mexicans in U.S
wsj.com
wsj.com
Imagine a world where there is ZERO illegal immigration to the US. Teenagers actually might learn the value of hard work. They might go to college with a strong work ethic and marketable skills. We might just be able to dig ourselves out of this massive college debt crisis.
I worked on a farm from 12-17. Not an option for a non-Mexican for the last 15 years or so.
Also, I want mine and your teenagers to be studying and preparing for their futures. These are jobs with limited upside, for the most part.
Learning discipline and the value of hard work is infinitely more important than learning things that are easily Googlable in out-dated high school curriculums.
Agriculture is mentioned, of course, but it's seasonal. Two months out of the year? What jobs do you do for the other 10 months?
Source?
(Paying your employees less than minimum wage is going to make your tax records look funny.)
"Hey, you know that lazy generation of kids coming through college right now without any experience actually holding a job? What if, bear with me here, what if, instead of black people from all over the country who can work for less than minimum wage (because they're already breaking the law by working in whites only jobs in the first place), what if instead of black people taking those jobs, white youth actually held jobs and got experience working? Wouldn't that be nuts? Oh you probably think white people don't want those jobs, right? They don't. At least, not for less than minimum wage, because that's illegal and nobody wants to have that on their record. But white teenagers definitely want money. Everybody does. Imagine a world where there is ZERO black workers in whites only occupations. Teenagers actually might learn the value of hard work. They might go to college with a strong work ethic and marketable skills. We might just be able to dig ourselves out of this massive college debt crisis."
If it were illegal for blacks to work some jobs (as it once was in a not-too distant past in a not-so-far-away place) wouldn't the appropriate response be to make it legal for them to compete with whites for said jobs
I suggest China, Saudi Arabia, Israel, and Africa start first. As soon as China opens its borders to anyone who wants to go in and make lots of money there, and Saudi Arabia does so, and Israel does so, and Africa opens its borders to anyone who wants to go and tap into its natural resources, we should think about maybe doing the same here too.
As it stands, we already have a lot of illegal immigrants already, so let's let these other places take the lead first and we'll catch up with them later.
How many of your friends would be happy if their kids became an electrician, plumber, fire fighter, or police officer? These jobs can pay well but nobody wants to do them. You don't need an expensive college degree either, just vocational training. Thats much better than your starbucks barista with 60k student loan debt on her photography degree.
Not everyone needs to go to college. In fact I think it would be better if we killed the stigma against the trades and integrated vocational paths with public high schools. College is academia, and its only relevant if you're going into the sciences or some other highly technical skilled arena or the arts. Sorry but not all of your children are special and gifted.
To many kids going to college, getting expensive useless degrees, and then having little job prospects and a load of student debt. Not to mention the increased demand these people bring inflates college tuition for everyone else.
Doesn't that mean that they aren't paying high enough wages?
When I immigrated to a rural part of Canada it was shocking to see WalMart, McDonalds, Tim Hortons, etc. all had rubber stamp approval from the government to bring in foreign workers.
Canadians won't work for the wages they offer, so they just bring in a foreigner instead.
Meanwhile all those companies post multi-billion dollar profits.
The greed does not add up.
Whatever they're paid, it's probably not enough.
One could (and did) make the same argument you are making in favor of all sorts of bad laws - Jim Crow, Davis Bacon, etc. That suggests your argument is probably invalid.
Similarly the market should shift oil and iron from low value places (in the ground) to high value places (e.g. in a steel beam or gas station).
Fact of the matter is that every nation in the world has labor and passport controls. It would be exceptional and unusual for the US to abandon them unilaterally.
The Soviet Union lasted a long time without a free market. Yet nobody would say allowing sellers to choose their own prices is artificial because they've been dictated by the government for decades and that's the normal and natural state of things.
I am concerneded about the harmful effects of democracy that you bring up, but I prefer disenfranchisment as a solution. Preventing people from working is far more harmful than preventing them from voting.
The article is cheerleading illegal immigration because these construction companies and restaurants most likely got away with paying these people below-minimum-wage and were able to violate other labor laws with impunity simply because they were here illegally.
The article with rife with claims that US-born workers don't want these jobs. Well, I live in an area with very low rates of illegal immigration, and magically, all these jobs are filled with native-born inhabitants working minimum wage or sometimes (especially in the case of construction, though there's booms and busts) quite a bit better. Construction was one of the first jobs for a lot of family and friends. I worked at a restaurant for six years, every person who worked there in that time was native-born and paid minimum wage.
I find this excuse highly suspect. I think it has a lot more to do with the reasons discussed above. And I have no sympathy for employers flagrantly exploiting workers.
Small business owners that hire illegal immigrants are able to out-compete business owners who chose to follow the law because they have access to a larger labor pool at lower prices. In most cases the small business owners will be paying in cash and off the books so they will be evading taxes to some extent as well. As these business expand and after above-the-board business owners see their profits erode and market share crumble a larger segment of the market is operating outside the law.
Long term having large segments of your economy routinely breaking tax and labor laws creates a breeding ground for organized crime. I could argue that all these businesses are organized crime but I'm talking about the break-your-knee type of organized crime.
Since the workers are illegal and don't have the protection of the law they are vulnerable to intimidation and it is fairly easy to find your business with a new "partner" when your labor stops showing up one day. What are you going to do? Go to the cops because the mafia won't let your illegal immigrants work for you?
At that point hiring above-the-board labor isn't an option at the prices you charge.
Source?
(Having the majority of your workers off the books tends to look funny.)
You may support some nativist policies since they are advantageous for the group you are part of, but why try to make it sound like it's some kind of universally just way to do things?
Allowing illegal immigration isn't the way to do it, however. The most important job of a state is to provide a level, predictable playing field.
It seems we're putting the cart before the horse however - allowing immigration first, and trying (unsuccessfully) to get rid of tribalism second. See https://en.wikipedia.org/wiki/Robert_D._Putnam#Diversity_and...
I don't have any good answers here. People can't even agree on what their goal is.
What a tragedy.
In the long term, this is necessary for wages to rise. When all restaurants have to compete for a diminishing labor pool, they'll have have to raise their prices to pay people decently.
This is a good thing.
I am not saying there are no ways to compete (e.g. give more equity, sell a startup dream) but that the inequalities are not only between the rich and poor gap, they are present in companies too.
If there is such a problem - and I agree with you that there is - then something should be done about the cause instead of the symptom. Which won't happen if the symptom is successfully suppressed.
So to me the question is, let their be the pain that is meant to be there (signal!) so that something can change, or try to avoid the long-overdue correction. What I see in the real world is different in what I learned in economics 101 in that the signal function of prices is suppressed instead of used as far as the labor market is concerned - but only in one direction ("wages are getting too high!").
I think trying to avoid pain at all cost is similar to when people have a condition that lets them feel no pain. It sounds great but actually leads to self-destruction. Let the prices (wages) rise! Yes it will lead to small businesses having to give up. Either they are not actually needed, or society as a whole undervalues (and underpays) the role of those businesses. Or a mix of the two. Time to find out?
If that sounds like I'm for restricting immigration, I'm actually for much more legal(!) immigration. The problem with illegal immigration is that people are forced to subsist in the shadows. I think this distorts the (low end but similarly for H1 jobs) labor market far more (towards slave conditions and low wages) than the same amount of legal immigration would do, which would give immigrants a perspective and a lot more choices while having to endure a lot less anxiety.
If the result is people renovating their houses left often or building smaller houses in general, then maybe it's a fair price to pay for more social cohesion?
By the same token, you could say "let's fire all curly haired people". Then we'll see wages rise for the remaining workers as demand meets supply and straight haired people get a good high wage. Sure, that'll happen, but that doesn't make it right or good.
As a humanist you may not like that. As an American, I believe that's right. Stop dragging the wage base down because it's "humanitarian" for immigrants. It's not. It's just enabling abusive labor practices.
Mexico's wages will rise just the same as China's as they industrialize.
I don't care the color of your skin, I expect you to follow the same rules everyone does to apply for citizenship.
That's how sovereignty works. Or are you advocating for removal of sovereignty for the economic benefit of citizens of other countries because "that's more moral"? Hardly.
EDIT: In reply to your edit, I have no idea why you'd bring up "removal of sovereignty". I don't see anyone here even hinting at that.
To take a modern example, will Maharashtra's proposed law against Biharis driving autos be moral if it has popular support? (Background: Marathi nationalists have - this year - proposed Jim Crow type laws against non Marathis driving taxis/auto rickshaws.)
Whatever the law, some people will always be breaking it. Should we wait for murders to stop happening before we reform the laws regarding it? We'd still have crucifixions and stonings! That doesn't mean one supports murders, just that it's not a justification for inaction.
Mexico is already industrialized. Also, the same nationalist position that opposes immigration also supports erecting trade barriers that prevent goods manufactured abroad from being competitive.
Edit: you industrialize with domestic demand. That's not a sham. That's economic stability.
Plus, some of the Americans who take over Mexican jobs may not have them for long. If businesses can no longer obtain low cost labor within the country, then where possible, producers will relocate south of the border, or elsewhere, or increase mechanization efforts to decrease their costs. And where not possible, they may be priced out of the international market as the production cost of their goods shoots up.
See Walmart vs local economies.
Imagine being a roofing company trying to compete against King of Texas roofing Co and their low wages?
$25bn to Mexico alone, that's 2% of their GDP
http://www.bloomberg.com/politics/articles/2016-04-05/trump-...
http://www.worldbank.org/en/topic/migrationremittancesdiaspo...
You haven't even attempted to estimate the value of any of these things. You've just cherry picked one number. Your conclusion may or may not be accurate, but without trying to analyze both the costs and benefits, your way of arguing doesn't contribute much.
> Cheaper buildings and labor for US companies, which improves their competitiveness against international competition, increased agricultural exports, cheaper services for American citizens.
Illegal immigrants pay no tax, no welfare contributions, are not protected under employment laws, work long hours with no holidays. Slavery increases your international competitiveness and provides cheaper domestic services too.
Our forefathers fought bloody battles against the excessive worker exploitation. Let's not slip back into the dark days. Although I do question the benefit of minimum wage.
Coincidence? This is how Mexico is going to pay for it!
- Some people have built their business model on top of cheap labor. You take away the cheap labor, then the business model does not work anymore.
- Some other businesses, rely on cheap products and services. If you make those products more expensive, their business model doesn't work either.
People would say then, "that's a good thing, because now supply and demand, wages go up, prices go up, etc...". Well, not so fast.
Local producers are not alone in the world. Instead of paying more, you will just start importing from cheaper countries. Does that help the local economy? probably not.
You can work really hard smacking rocks together. It provides no value to the world at large, and thus, you cannot get paid to do it.
It is of course more or less by design that several factors go into the price so that different feedback loops can affect different factors in an intertwined way. For example high demand for specific skills is supposed to lead to higher wages which in turn is supposed to encourage more people to acquire those skills which then finally satisfies the demand.
And in theory this is all fine but in reality it is not as easy as in the economics text book. Some of those feedback loops are slow and take years to react, some of the factors are constraint in one way or another and just can no go where one would like them to be.
And the article is not talking about smacking rocks, it is talking about building houses and producing food, things fundamentally more valuable than building websites. And if you are doing work that is valuable and physically demanding, then you should be able to demand compensation for your hard work and not have to accept whatever you are offered but that of course fails if people undercut each in order to get the job.
I am not sure that it is even possible to [easily] decouple price factors like value and scarcity without ruining the entire system, but one has to admit that at least in practice and at least in some situations mixing value and scarcity leads to undesirable results.
If there are more than enough homes already why would building an extra home be more valuable than building a website? If there is enough food why would producing more food be more valuable than building a website?
If a hundred workers picking vegetables can be automated by a machine programmed by a developer is these workers' labor more valuable than the developer's labor?
The best indicator we have for the value of one's labor is the free market. There is an exceptionally high scarcity of people smacking rocks together; if I founded a rock-smacking startup I might not be able to find an investor to bankroll my endeavors.
I meant that in the sense of [basic] human needs, if there is already enough food and housing, then there is of course not much value in producing even more. And I certainly did not want to advocate paying people high wages to pick oranges just for the sake of it.
But this touches my exact point, we use the price as a scarcity signal to steer production and it is certainly a good thing for products so that we are not overproducing things. But I am less convinced for the price of work. While it is good in the longer term to push people into the direction of jobs with unsatisfied demand, it seems bad in the shorter term because it leads to the devaluation of work in case of a high supply of work.
If a hundred workers picking vegetables can be automated by a machine programmed by a developer is these workers' labor more valuable than the developer's labor?
The value for consumers remains unchanged, the effort required to produce this value decreases drastically. In my book the developer should not get paid 100 times the salary of a worker just because he managed to produce the same value as 100 workers, he should get paid the same as one worker because they did the same amount of work, at least in a first approximation just looking at working hours. The benefit of the automation should go to the consumers reducing the price by a factor of 100.
You my argue that in this situation there is no incentive to innovate and that this is a bad thing and I agree with that, the benefit for you is indeed pretty slim, you only get to enjoy the lower vegetable prices. Therefore in reality the the thing should probably be not that black and white to incentivize innovation, but I don't think you should get 100, 50 or even 10 times the wage of a worker.
And just in case, I am none of the downvoters, I don't downvote things I disagree with.
And I am not a US citizen or living in the USA, so I have no stakes in what happens to illegal immigrants in the USA and in turn also no well-founded opinion. On the one hand there is the law and if you violate it, you have to deal with the consequences, so there is certainly a point for expelling illegal immigrants.
On the other hand you probably should also take the lives of the immigrants into account. Can you justify the consequences? Ripping families apart, sending people back into unsafe futures or countries? And what about the economic consequences?
Maybe the USA could pardon all current illegal immigrants while then being more aggressive towards new ones? I really don't know what I would suggest, that is not a topic I ever really thought about.
Are you proposing a $100,000 per year minimum wage across all professions?
Unfortunately I can not provide a superior and convincing alternative allocation strategy for scarce resources than doing it via the price, but it still leaves me unsatisfied. Scarce resource should be allocated so that they can produce the most value, however we define that in the end and there will admittedly probably not be a single correct definition but varying points of view, but giving scarce resources to whomever is able and willing to pay the most, is certainly not optimal.
In general I am for a good minimum wage, what is the point of working full-time and still not being able to support once life? But I also understand that simply raising the minimum wages is likely to just shift prices around and in the end we are right where we started just with an additional zero on all prices.
If I knew the solution, I would run for president, but I don't and so I can only point at things in the current system that are in my opinion not working as well as I would like them to.
I guess walls do work.
This WSJ article, like so many others, is part of that ignorance in that it isn't about low skill or low pay workers. It is about filling jobs, regardless of pay rate, that US citizens are not willing to fill. A prime example is software developers.
In the US software developers make 2x to 3x the national average pay rate for full time labor. Despite the high pay rate and comfortable work environment there is a massive demand for skills that is not being filled domestically. From 1995-2005 there was a massive off-shoring to find low cost software developers. Since 2010 the off-shoring is entirely about finding competent employees to fill labor shortages opposed to reducing expenses. Americans are not willing to step up and take these available software development jobs at a level of competence demanded by employers regardless of pay rate.
A popular bitch-fest on reddit is that software developers are paid too low and if they were paid more this problem would be magically solved. First of all there is absolutely no evidence to suggest such. Secondly, software developers are already paid well and still there are massive shortages with high attrition. These problems are not related to pay rates, but are deeper rooted issues more related to outdated skills, low confidence, missing initiative, and poor education. These deeper problems are a hard pill to swallow considering they require some amount of time and investment and still result in an substandard result.
I've been in that call with a recruiter trying to fill a job in flyover state. I felt sorry for him because he really had an impossible task. He had gone through surrounding towns and states slowly widening that circle until he was now trying to find talent on the coasts. His client needed a developer with SC clearance but was offering low pay, stale benefits, and no relocation. No wonder he was having problems filling the job.
If you want skilled developers with modern skills be prepared to pay for it.
If you are in technology you can only continue to ignore that you work with a large number of immigrants and offshore teams for so long. Eventually, you will have to keep up with current skills, move to a low income market, or be content with being replaced by an immigrant who has more initiative.
> If you want skilled developers with modern skills be prepared to pay for it.
There is no evidence that increased rates have solved this problem as demand continues to outpace availability.
Even I, an American expat, is an immigrant worker. I'm well compensated for my work. And that's how it should be. But there are employers m that abuse h1b, E, and L visa schemes and they prefer the system just he way it is. Abusing immigrant workers and undermining domestic wages.
Do you think none of the US citizens who became nurse anesthetists, physicians, or lawyers were capable of becoming programmers? I suspect many of them could have, but realized that better working conditions and wages were available in other fields.
This doesn't really many much to do with immigration - the 1.2 million immigrants the US takes in every year are, like people born here, generally free to pursue their profession or trade in response to their own personal interests and market signals. Interestingly, among 300 million US citizens and 1.2 million new arrivals every year, software employers continue to experience a shortage.
I'm glad you feel well compensated, but the real test is whether someone who is free to pursue other fields chooses to pursue this one.
I see the restrictions of these visas as inherently anti-market. I actually see them as anti-freedom. If you can't compete for the labor of free people, people who are free to choose their field, then you don't deserve workers. Setting up a coercive visa program that allows immigrants into the country only if they agree to work as software developers seems like a magnificently bad way to solve this problem.
I'm also very confident that in the absence of this crutch, employers would absolutely find a way to improve wages and working conditions, to the point where people with choice (a group that includes all immigrants who came here freely) might be more interested in it again.
If you create a large scale program that staffs this field with people who have no choice in the job they work, I assure you, eventually the only people who work it will be the ones who have no other choice.
For dallas, here are the numbers:
http://www.bls.gov/oes/current/oes_nat.htm#00-0000
Nurse Practitioner: $101,260 Software Developer: $97,930 Dentist: $177,130 Lawyer: $132,380 Physicians and Surgeons: $202,450
I understand there are some big differences here, and you could reasonably argue that software developers don't deserve such high wages (they often have graduate degrees but aren't strictly required to, for example). But this does show you the kind of options available in the US to those motivated, confident, educated people with initiative you described in an earlier post.
Personally, I think that if employers are having trouble getting people with choice to work as software developers, that's the market's answer. There are a lot of different perspectives on this - I personally don't have a problem with immigration, but I have a huge problem with coercing immigrants to work as software developers as a condition of living in the US.
That's the real appeal of these corporate controlled immigration programs - create a pool of engineers who aren't allowed to go into higher paying fields. Free people are allowed to go to law school, open a sandwich shop, sell real estate, whatever they like. In response to market signals.
You know free markets, freedom, personal choice. Corporations hate that stuff. So they've invented this fake story of a "shortage", as if this shortage isn't a rational response among free people to the pay and working conditions that are below what they can earn in other fields. And their solution is to use a coercive visa program to create a pool of workers who don't have this freedom.
In my opinion this is the root of the problem. Schools are not preparing students with many of the practical skills of software development. These students enter the market with skills businesses claim to want, but often don't match with the reality of the position, platform, or technology. Businesses could solve this problem themselves by training their work force, but they don't. Instead it is entirely on the employee to get the skills (on their own time) the current employer demands. As a result many developers burn out and those who achieve this mastery of learning on their own time leave to get higher paying jobs elsewhere. Why wouldn't they since they have invested in themselves more so than the employer has, and such there is no loyalty earned. The end result is a talent gap. A large pool of barely qualified people that have trouble moving between employers and on the other side a couple of talented folks who can do whatever they want.
Do you honestly believe this? There's an easy test against it: post a hard-to-fill job at $50K salary, increase it by $3K per day posted. Within a couple months you will start to see desirable applicants.
Absolutely. Most of the time I have interviewed for a job in the past I am the guy picked out of 20-25 applicants. Its not because I am a rock star or something special. It is because most of these people are horribly under qualified. People want to get paid more, but are often not willing to invest the effort to make higher wages a reality.
The common solution (band-aid) for this problem... frameworks.