Saturday, April 08, 2006

Immigrants Boost Wages-but whose?

In a recent MSNBC .com article, Martin Wolk attempts to argue that immigration actually boosts wages here in the United States. Like most of these efforts, his fails to explain the key issues involved while handwaving away the concisely stated argument of the other side. And as usual, a lot of people will believe it, because they don't know the details.

Immigrants do indeed boost wages-or, more properly, earnings- for some Americans, at the overall expense of others. As is usual in these cases, immigration policy is being driven by a variant of the Garrett Hardin tragedy of the commons, where policies detrimental to the overall group but beneficial to an influential, determined subgroup are implenented because the small subgroup benefits a great deal, while the society at large suffers less on an individual basis-though perhaps, in sum, a great deal more-are enacted. (There's a phrase for this, but I have forgotten it.)

Who benefits, and who suffers, among Americans when immigration is allowed to run wild? Employers-specifically, the employers who can and do hire illegals-benefit. Employees tend to suffer. Employees directly displaced tend to suffer the most, but because of the cascade effect, in the long run almost all hourly and salaried employees suffer. The only exceptions are those with occupations directly serving immigrants or their employers, and management employees with specialized skills, such as foreign language skills and an ability to manage a workforce that is often very "differently abled" than the people they replaced.

One way in which American employees suffer which is rarely mentioned is the effect the availability of unskilled, uneducated, and often plain-not-very-bright immigrant workers have on the allocation of capital within the country. An employer-investor is going to allocate his limited resources where they will give him what he percieves to be his best rate of return, and availability of immigrant labor makes it attractive to invest in the kind of businesses where he knows he can use that resource-namely, stinky low-wage retail and service businesses, fast-food chain franchises, big box stores, lawn mowing services, and the like. Not good-job providing businesses like manufacturing or skilled services.

Another issue is how the social cost of immigration-unskilled, poor, uneducated, immigration-is going to be accounted for. How do you compensate the parents of a small child who dies because emergency rooms are vanishing in immigrant-laden areas? How do you even address the issue of longtime residents of working-class areas (and middle class subdivisions in some places) whose house is now unsaleable because it is now solidly in the barrio, who don't feel safe now walking the streets where they grew up? What do you say to a worker who applies for a job she is qualified for and finds out her application was thrown in the trash by a company whose name she has known all her life, whose local office is now staffed entirely by people who speak a foreign language and want no truck with "outsiders"?

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