Thursday, June 13, 2013

Gang of 8 Bill Will Further Erode Social Equality

S. 744 ensures less-educated Americans stay in poverty

The immigration bill, which will be debated in the U.S. Senate over the next couple of weeks, assures the continuation of poverty for the American underclass for the foreseeable future.

In his Backgrounder, “The First Quarter of 2013 Employment Picture,” Steven Camarota, Director of Research at the Center for Immigration Studies, finds that the broad unemployment rate for Americans without a high school degree has reached 30 percent and is close to 20 percent for citizens with only a high school education. There are now 55.4 million working-age Americans who are not working. The Schumer-Rubio bill, S.744, would significantly worsen the prospects of this sizable portion of the population by more than doubling legal immigration.

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Mark Krikorian states, “Ronald Reagan seemed to understand the moral issue better than today’s Democrats when he said, ‘We’re all equal in the eyes of God, but as Americans that’s not enough. We must be equal in the eyes of each other.’ Where is the moral concern for the American worker, the people at the bottom?”

Increasing the number of workers in any sector lowers their wages. Conversely, a tighter labor market forces employers to raise wages and provide better benefits. The Economic Policy Institute has found that real hourly wages for men without a high school degree were 22 percent lower in 2007 than in 1979. The Rubio-Schumer bill would further depress these wages.

In addition to the huge increase in legal immigration, the bill weakens immigration law enforcement, creating an incentive for future would-be illegal immigrants to ignore U.S. law and enter the country. This ensures that there will be yet more amnesties in the future, keeping less-educated Americans in a never-ending cycle of poverty. They will rely on charity and government transfers, in a time of record deficits, with no hope of ever leading a life with dignity or hope.

The above is a press release from from Center for Immigration Studies. 1522 K St. NW, Suite 820,  Washington, DC 20005, (202) 466-8185 fax: (202) 466-8076.  Email: Contact: Marguerite Telford, 202-466-8185,  The Center for Immigration Studies is an independent research institution which examines the impact of immigration on the United States.  The Center for Immigration Studies is not affiliated with any other organization

Economics vs. 'Need'

Thomas Sowell

One of the most common arguments for allowing more immigration is that there is a "need" for foreign workers to do "jobs that Americans won't do," especially in agriculture.

One of my most vivid memories of the late Armen Alchian, an internationally renowned economist at UCLA, involved a lunch at which one of the younger members of the economics department got up to go get some more coffee. Being a considerate sort, the young man asked, "Does anyone else need more coffee?"

"Need?" Alchian said loudly, in a cutting tone that clearly conveyed his dismay and disgust at hearing an economist using such a word.

A recent editorial on immigration in the Wall Street Journal brought back the memory of Alchian's response, when I read the editorial's statement about "the needs of an industry in which labor shortages can run as high as 20 percent" -- namely agriculture.

Although "need" is a word often used in politics and in the media, from an economic standpoint there is no such thing as an objective and quantifiable "need."

You might think that we all obviously need food to live. But however urgent it may be to have some food, nevertheless beyond some point food becomes not only unnecessary but even counterproductive and dangerous. Widespread obesity among Americans shows that many have already gone too far with food.

This is not just a matter of semantics, but of economics. In the real world, employers compete for workers, just as they compete for customers for their output. And workers go where there is more demand for them, as expressed by what employers offer to pay.

Farmers may wish for more farm workers, just as any of us may wish for anything we would like to have. But that is wholly different from thinking that some third party should define what we desire as a "need," much less expect government policy to meet that "need."

In a market economy, when farmers are seeking more farm workers, the most obvious way to get them is to raise the wage rate until they attract enough people away from alternative occupations -- or from unemployment.

With the higher labor costs that this would entail, the number of workers that farmers "need" would undoubtedly be less than what it would have been if there were more workers available at lower wage rates, such as immigrants from Mexico.

It is no doubt more convenient and profitable to the farmers to import workers at lower pay than to pay American workers more. But bringing in more immigrants is not without costs to other Americans, including both financial costs in a welfare state and social costs, of which increased crime rates are just one.

Some advocates of increased immigration have raised the specter of higher food prices without foreign farm workers. But the price that farmers receive for their produce is usually a fraction of what the consumers pay at the supermarket. And what the farmers pay the farm workers is a fraction of what the farmer gets for the produce.

In other words, even if labor costs doubled, the rise in prices at the supermarket might be barely noticeable.

What are called "jobs that Americans will not do" are in fact jobs at which not enough Americans will work at the current wage rate that some employers are offering. This is not an uncommon situation. That is why labor "shortages" lead to higher wage rates. A "shortage" is no more quantifiable than a "need," when you ignore prices, which are crucial in a market economy. To discuss "need" and "shortage" while ignoring prices -- in this case, wages -- is especially remarkable in a usually market-savvy publication like the Wall Street Journal.

Often shortages have been predicted in various occupations -- and yet never materialized. Why? Because the pay in those occupations rose, causing more people to go into those occupations and causing employers to reduce how many people they "need" at the higher pay rates.

Virtually every kind of "work that Americans will not do" is in fact work that Americans have done for generations. In many cases, most of the people doing that work today are Americans. And there are certainly many unemployed Americans available today, without bringing in more foreign workers to meet farmers' "needs."


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