Immigration and Protectionism in America

I haven't delved into political subjects in my blogs because (A) the American political system incorporates checks and balances which complement a huge population of diverse opinions so that progress occurs at the same slow rate it always has, and (B) I don't have any grand illusions that I will change anybody's mind. The national trend of toughening immigration laws has made headlines, but has never affected me until recently. Concerning my most important issue, I am prompted to speak out by the recent deportation of one friend plus another friend's boyfriend of five years.

"It's as if we expect border control agents to do what a century of communism could not: defeat the natural market forces of supply and demand ... and defeat the natural human desire for freedom and opportunity. You might as well as sit in your beach chair and tell the tide not to come in. As long as America remains a nation dedicated to the proposition that 'all men are created equal, endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness,' people from near and far will continue to seek entry into our country." – NYC mayor Michael Bloomberg

I would rather not supply our country's labor needs with illegal labor. I would prefer a policy of bringing in immigrants by the tens of thousands – legally, regulated, and documented. However, given key special interests in the two political parties, nothing has or will be done legislatively to facilitate this so we have gotten along for the last half century with our current system of using illegal labor.

There is, and has been for a long time, a demand for cheap labor in our country. There is a huge supply next door in Mexico. Economics will trump legislation seven days a week. Critics of immigration may say things like "they're taking our jobs" and other such nonsense. The US unemployment rate is 4.9% (January 2008). For those who didn't take economics classes, 4.9% unemployment can be interpreted as full employment. 0% unemployment is not attainable because there are always people temporarily in between jobs for various reasons. Full employment by definition can range from 2 – 7%, depending on the politics of the economist. The highest annual unemployment rate since the Great Depression was 9.7% in 1982 (keep in mind that double-digit unemployment is the norm in many countries). The US does not have an unemployment problem. Considering that many people have two jobs and there are an estimated 13 million aliens who don't figure into those stats, we have a labor shortage.

Critics may also argue that immigration drives down wages. This can be true, but it is exaggerated. A couple years ago, I heard a report on NPR about a study on the illegal labor industry. It focused on 'labor sites' common in Texas and California. In the Los Angeles area, labor sites are Home Depot parking lots. In every Home Depot parking lot out there, you can find a handful or dozen illegal aliens waiting to contract illegal labor. It's a bona fide labor market. Professional contractors, small business owners, or even homeowners who have just bought a bunch of stuff at Home Depot need help with the work. Where else are they going to find manual labor if they don't have sons (like my dad did)? The only labor site I saw in Houston was in the parking lot of an abandoned gas station. Anyway, the study included various findings but what I remember most was that the average wage for this labor was $8 / hour. $8 / hour is over 50% higher than the $5.15 minimum wage at the time of the study! Illegal workers are not competing with Americans on price, undercutting them and driving down quality of life. They are satisfying a need at the equilibrium price set by supply and demand. It just happens that demand for labor is so high that the equilibrium price is higher than the legally mandated price floor of $5.15 – and higher than any of the current proposed minimum wage hikes in Congress.

America has a long history of bringing in cheap labor, starting with indentured servitude as well as, unfortunately, slavery. In the 19th century, boatloads of Irish and German workers arrived at Ellis Island in New York every day. Often, they would be greeted with citizenship immediately – just because they made it here. Someone from Boss Tweed's political machine would give them a bowl of soup and tell them who to vote for. Or an Army recruiter may offer three square meals a day to enlist and fight in the Civil War to preserve the Union – 'give back to your new country!' Italy, Poland, Lithuania, and later Russia supplied much of our cheap laborers in the 20th century. This is how our country has always worked. A passage from 'The New Colossus' (1883) by Emma Lazarus:

"Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me.
I lift my lamp beside the golden door!"

Give us your poorest, sorriest, missingest-teeth motherfuckers you got! We want 'em! And they'll work their ass off for a better life. And their kids will bust their ass right into middle class. And those kids' kids will go to college and add to the competitiveness of our country. That is America. In fact, one current, American success story was Russian-born - Sergey Brin, cofounder of Google. I just don't understand how protectionism will help our country.

I can speculate a root cause of anti-immigration. I don't want to accuse anybody of being racist or ethno-centrist. Everyone, including me, has some racial biases. But I have to suspect that a big reason for this anti-immigration is that the current poor-as-shit country sending us labor is sending us brown people. Unfortunately for those who care about what the traditional American should look like, there are no more white countries sending us hundreds of thousands of poor people. Ireland is the economic envy of the EU. They are experiencing staggering immigration! The Soviet Union fell in 1991 and those countries' economies are beginning to develop opportunities. My friend Martynas explained to me that all the Eastern European immigration to the US was over and exemplified this with his own return to Lithuania. If we are to stay on track of being the most dynamic economy in the history of the world, we need to keep infusing the country with hungry, fresh blood. And it's going to come from non-white countries from now on.

"IRISH NEED NOT APPLY." This was a common sign in the 19th century. 'Traditional' Americans did not consider Irish to be white. This is particularly ridiculous. My skin, for example, simply does not tan. 'Traditional' Americans didn't think the Irish would ever assimilate. Many of the complaints about Mexican-American communities are the exact same as the 19th century complaints about the Irish and Italians. Those complaints proved wrong, as those communities have completely assimilated. A majority of white Americans claim some Irish heritage, or at least on St. Patrick's Day. Companies like Pizza Hut and Domino's have made pizza an American endeavor in the world. When I was a kid, nobody knew what a quesadilla was. Now they're on almost every menu in every town. And isn't the margarita basically an American cocktail by now? I realize I may sound corny and overly optimistic about our melting pot and great experiment. But fuck you! This is what I believe and history supports me. The average complexion of America is going to get a little tanner.

I realize that ethnocentrism / xenophobia is not the only reason people are opposed to immigration. Unlike the European countries across the Atlantic Ocean, we are land-locked with Mexico, so the sheer volume is unprecedented. Also, research shows that illegal populations put a drain on certain public resources – schools, hospitals, etc. The new immigration may need a mandate for English proficiency. Realities of terrorism require greater scrutiny than ever before of who is coming in. Regardless, all of these issues can be addressed and resolved. But we have to start with the understanding that, for the good of our country and economy, we need to constantly bring in hundreds of thousands of immigrants.

The US does not only need immigrants at the bottom of the economic totem pole. Last year, consulting firm McKinsey released a report detailing the reasons for a decline in initial public offerings on Wall Street. New York is facing tough competition from other cities with major stock exchanges. Some predict that NYC will lose its place as the world's leading financial center within a decade. McKinsey cited two main reasons for companies' decisions to list IPO's in other countries: the expensive financial reporting needed to comply with Sarbanes-Oxley (post-Enron legislation) and tough immigration policies which restrict companies from bringing in high-skilled professionals. Because we make it so hard to come into our country these days, financial services firms and great companies are going to cities like London, Dubai, and Hong Kong. If we don't make it easier to bring in Chinese, Indian, or other foreign professionals to comprise the strongest banks and financial services, the strongest banks and financial services will be in other countries. I don't care where the best talent is from; I want the biggest banks and best companies with the most money to be in America.

I find it ironic that many of the typical anti-immigration types are the same ones to feel so threatened by China. China has 1.3 billion people. India has 1.1 billion people. The US has 300 million people. If you really feel threatened economically, wouldn't you want to close that gap a little? If not, go sit in your beach chair.