Thursday, April 17, 2008

Curing a Schizophrenic Immigration (Non) Policy

Don't you think it's a wee bit schizophrenic to offer millions of (low-paying) jobs to undocumented immigrants while at the same time erecting fences to keep them out?

This is the very definition of schizophrenia. As I have noted here before on numerous occasions, the problem is not poor people seeking work, it's the people who are hiring them.
You want to seriously stop the flow of undocumented workers into the U.S.? The solution is straightforward:

Charge every employer, formal or informal, a $10,000 fine per day, per undocumented employee. If the employer can't pay, then liquidate their business (or home) and sell it at auction the following month.

This may sound harsh (especially if you're the employer), but I guarantee the number of jobs being offered to undocumented workers would quickly plummet, and you wouldn't need some idiotic fence which is doomed to fail regardless of how many billions of dollars you throw at it.
So why won't we penalize the employers for offering the jobs? Because they're making huge profits off the undocumented workers, that's why. In the field I know well, construction/building, here are the facts. Other fields will differ, but the general conditions will apply.

In 1977, 31 years ago, I earned $7.50/hour as a young carpenter with about 3 years experience. Even at official inflation, that is equivalent to $26.50 today. (Figuring "real inflation" would put it well above $30/hour). More experienced carpenters/"lead men" earned $10-12/hour, or about $35/hour in today's dollars.

The legitimate contractor/builder paid FICA (Social Security) of 7%, unemployment insurance and Temporary Disability Insurance (5% or so) plus Workers Compensation (being a dangerous trade, the rate was about 25-30% of wages). So the equivalent cost today of that $7.50/hour would be $26.50 X 40% ($10.40) for direct overhead = $37/hour--for an apprentice carpenter and about $47/hour for an experienced carpenter.

I did not live like a bond trader on $7.50/hour in 1977, and $26.50/hour today is a decent wage but not a great one, as construction is cyclical and lay-offs/bad weather etc. reduce the days worked.

So what do you guess small builders/developers paid undocumented workers during the housing boom? Try $12 to $15/hour cash (no taxes or insurance paid), or about a third of a legitimate wage. Did you notice a 2/3 drop in the labor cost of those McMansions? Gee, I guess not. Then what happened to all that money that used to go to legitimate skilled labor and the taxes and insurance to provide some minimal security to them?

It went into the pocket of the builders/developers. Now the big national builders hired legal workers and paid market wages--they had no choice. (If they got around labor laws and all the liabilities, it's news to me).

So here we have a totally schizophrenic nation, happily exploiting anyone who can make it across the border but at the same time bemoaning their arrival. If that isn't insane, I don't know what is.

I know the usual excuse is that "we can't find any Americans to do the work." Well, did you offer a legal worker (of any color, creed, ethnicity, gender, etc.) a living wage comparable to what was standard 30 years ago? We hear the same thing in the H-1B visas /high-tech hiring "debate"--"we can't find enough qualified Americans." Again, the question is: what wage did you offer? Something similar to what was standard 10 or 20 years ago (adjusted for inflation), or did you offer 2/3 or 1/2 of a legitimate wage?

There are "experts" available to gin up phony "we really really looked for legal American workers but couldn't find a single one, boo-hoo" applications, and that alone should raise the suspicion in our minds that the "crisis" is not in available workers but in profiteering: if the employer can find someone to work for half or 2/3 of the standard wage, then that's a huge incentive to hire undocumented workers/cry for more H1-B visas for young people from abroad who will willingly accept low wages in order to build a legal toehold here.

And if we really don't have enough qualified software, slaughterhouse, farm, etc. labor already living here legally, then clearly we need some new systems/policies:

1. a system which provides huge, immediately painful financial disincentives to hiring undocumented workers

2. a system which offers some incentives to paying living wages to citizens/legal residents
3. a national clearinghouse of all available positions which seeks to place unemployed legal residents in jobs somewhere in the country

4. an immigration policy which processes needed workers and arranges for their legal arrival (and departure, if necessary) quickly and efficiently--which is certainly not the system we have now.

As longtime readers know, my stepmom is Mexican-American--born here in California, as American as anyone else. Though she is not an undocumented resident, our conversations have certainly alerted me to the insane hardships our schizophrenic (non) policies create--dividing families, etc.

The current insanity actually encourages undocumented workers to stay here because they fear not being able to get back in, or having the $2,000+ to hire a "coyote" to "escort" them back across.

Amidst all the fantastic insanity of essentially encouraging U.S. employers to hire undocumented workers on the one hand and then decrying their presence on the other, here is a rather lush irony: as the U.S. slides into a deep, prolonged recession, the undocumented workers are leaving on their own accord because the jobs are drying up:

Crossings By Migrants Slow as Job Picture Dims:
Francisco Lopez, a 43-year-old illegal immigrant and the parent of two U.S.-born children, earned about $50,000 a year transporting construction material, but the work dried up and he now drives a taxi to make ends meet. "To live in America these days is to suffer," said Mr. Lopez, who lives in the Chicago area. "I'm not recommending to my friends back home that they come here. I'm thinking of leaving myself."

Dawn McLaren, a research economist at W.P. Carey School of Business at Arizona State University who studies immigration, says that arrests of illegal crossers tend to fall a year before an economic downturn and begin to climb ahead of an economic boom. "I use the number of apprehensions at the border as a leading economic indicator," says Ms. McLaren.

I for one am tired of a schizophrenic non-policy which winks at employers paying 1/3 - 1/2 the legitimate wage and overhead costs (and please don't tell us you'll go out of business if you had to pay real wages--your legitimate competitors manage to do so) and then wags its finger angrily at the destitute person who accepts the job. If employers offered a living wage, they might be surprised to find willing workers after all. And if you truly can't find anyone to do the work for a legitimate wage, then you should start lobbying for a practical, efficient immigration policy which actually recognizes the reality of your needs as a legitimate employer.

We as a society have to "get real" and stop turning a blind eye to who's profiting from employing millions of undocumented workers. As the saying goes, "follow the money/profits."

If we're going to turn a blind eye to the employer who hired the undocumented worker, then let's be logical and turn a blind eye to both equally. Or equally logically, let's turn our wrath and anger on the employers as well as the undocumented workers. They're two sides of the same crazed coin.

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