Nuevo Slavery?

I caught a video clip of Ted Hayes (a very interesting black activist and homeless advocate from Los Angeles) on Fox talking about his support for the Minute Men in their efforts to secure the border. At least part of his support is based on the notion that illegal immigration is bad for the black community, because (as he puts it) employers who hire illegal immigrants are trying to reinstitute slavery.

I don’t quite understand why Ted Hayes believes re-establishing slavery with (primarily) Hispanics is bad for the black community particularly (and I only caught the highly-edited clip, so there may well have been some more context), but never mind that — I’d certainly agree that re-establishing slavery would be an evil thing, if that’s really what’s going on. But is it? If there is any element of compulsion in this, then I’d agree with the analog to slavery. I have no doubt that there are at least some occurrences of such hiring with a compulsion element — we’ve all read the “sweatshop” stories, wherein a group of workers is kept virtually captive through intimidation, withheld documentation, etc. Of course such behavior by the “employer” is despicable, and I think making an analogy to slavery in such cases is completely defensible. However, surely it is true that the vast majority of hiring of illegal immigrants is not of this nature. The jobs famously taken by illegal immigrants are in agriculture, construction, hotels, restaurants, etc. — and in these cases, compulsion is rarely found. Instead there is a “market match” between an employer who is willing to pay $X/hour, and an employee who is willing — perhaps even eager — to work for $X/hour. That’s the free market at work, not compulsion — and a comparison to slavery in that case is completely unfair.

What this antagonism toward immigration is really about is jobs and wages. I deliberately left out the word “illegal” because this antagonism would still be there even if we simply made all the immigrants legal. What Ted Hayes would really like to see is enforced restrictions on illegal immigration (and I don’t mean to be picking on Ted Hayes here — he and I agree on many issues, and he’s on the same side as the majority of Americans on this issue).

California’s magnificently fertile valleys, with their horizon-to-horizon farms, make a great setting for an illuminating example of the illogic of this argument against immigration (ignore, for the moment, whether the immigration is “illegal” or not). Thousands upon thousands of farms are there, needing tens or hundreds of thousands of farm workers. Let’s assume for a moment (though this is likely incorrect) that there are enough Americans and legal immigrants to take those jobs at minimum wage. Let’s further assume (though I believe this is simply not possible) that our borders are somehow made impermeable, and despite the fact that just across the Mexican border are millions of people longing for a job at a fraction of our minimum wage — and that we have thousands of employers who would love to pay those lower wages (more on that in a moment) — despite all that, not a single illegal immigrant makes it into the U.S. What do you suppose would happen then? This is exactly the point where most Americans seem to enter intellectual la-la land — they seem to fervently believe that such a situation is static, sustainable, and good. And this is despite the abundant examples, both in history and in current times, of just how awful such a situation is. Strip away all the emotional elements and here’s what you’re left with: such a situation is nothing more than a protected industry, with artificially supported prices. The first thing that will happen is that foreign suppliers will see an opportunity. For example, a Costa Rican company might see an opportunity to grow (say) cabbages and export them to America. That Costa Rican grower can use local labor, employ the same advanced techniques that American agricultural companies use. He might even have better productivity because of Costa Rica’s longer growing seasons and greater sunlight. Costa Rican cabbages will flood the market, and American cabbage producers will scream “Unfair! We can’t compete!” — and Congress, sure as shootin', will put a “protective tariff” in place. This is exactly what’s happening right now with sugar in the U.S. — and it’s the reason we pay double or more the price for sugar that the rest of the world pays.

Repeat after me: the inevitable result of anti-competitive laws (such as artificially restricting the free flow of labor) is protected industries, higher prices, and a decline of America’s worldwide competitiveness. Skeptical? Take a good, long, hard look at Europe — they are far “advanced” down this path, and they are paying a very dear price for this.

Since I’ve already departed company with most Americans on the topic above, I might as well go whole hog and rail on about a related topic: minimum wages. This concept ranks right up there with the top ten all-time most un-American ideas. I can hear the gasps and shock now — how could I possibly be against guaranteeing that everyone get a “fair” wage for their work?

How would you feel about a legislated “minimum price” for (say) televisions? Let’s say there was such a thing — a minimum price for televisions of $300. If a discount store wanted to sell you one for $250, they would be forbidden to do so. Or if a manufacturer came up with a breakthrough and wanted to sell televisions for $100 — but they couldn’t. Would you be happy about this? I think not. And what do you suppose would happen? Most likely, if the price differential were large enough, you’d see a “black market” develop for smuggled, illegal televisions — exactly as has developed for highly taxed products (wherein the tax is effectively a minimum price) such as cigarettes.

Most Americans instinctively are against minimum prices for products. They recognize that we’re all better off if the market can work freely and efficiently — and most especially, competitively. We all want to be able to buy that $100 television, even though we might actually buy a higher priced, more feature rich television instead.

But even though labor is really just one more “product” in the market, many Americans have a different instinct when it comes to it. For some reason, we’re collectively (but not me!) happy to put a minimum price on labor — for a minimum price is exactly what a minimum wage really is.

What are the effects of a minimum wage? Well, in the fields of California’s valleys you see one effect: a “black market” in labor, with employers willing to take the risk of hiring illegal immigrants at below the minimum price. In doing so, they keep their products competitive with the rest of the world’s producers, and the increase their profits — both are very compelling market forces, and very American (though it’s popular to bash this in the liberal community and in the lapdog lamestream media). Another effect is to withhold jobs from Americans — those same employers who hire illegal immigrants on the black market are not going to hire Americans who demand minimum wage — and even if there are Americans who would work for below minimum wages, the employer is not likely to take the much higher risk of doing so. So, opportunities for Americans are removed.

But to me the most insidious effect of a minimum wage occurs at the entry level, where undoubtedly market matches could be made — were it not for the minimum wage law preventing it. I have myself experienced this, a few years ago when I was running my own small business. I’ll tell my own story, but while I’m doing this, try to imagine how many times it is multiplied across the country. I had a small computer business in Chula Vista, California, operating out of about 800 square feet of commercial space. One day I had a knock on my door (an unusual event!), and a teenage girl asked if she could talk with me for a moment. I invited her inside, and she glanced all around as she walked through my shop. When we sat down, she told me she could see how much my shop needed to be cleaned up, and to be kept clean. She launched into a little speech about how much more attractive customers would find my business if it was kept sparkling clean. And she offered to do it, for $2 per hour, under the table. Anybody who knows Chula Vista will likely immediately leap to the conclusion that the young woman was an illegal Hispanic immigrant — but she was not. She was a (very) white, blonde, third-generation Californian. And she wanted to work, didn’t have any particular skills, but knew that most businesses weren’t going to pay minimum wage for a cleanup person. So here she was, trying to get work, and she was offering to do that work at a price I was willing to pay. A perfect “market match” — but I said “no", and the reason was to stay legal. The minimum wage law lost that young lady a job. How un-American is that?

So repeat after me: the minimum wage law is un-American, anti-competitive, and should be repealed.