Immigration and the Jobs Americans Won’t Do
[Guest post by DRJ]
Is immigration the answer to the “Jobs Americans Won’t Do”?
I’ve lived in Texas most of my life and in West Texas for a majority of that time, which means I’ve lived with legal and illegal immigrants for 50+ years. I favor Patterico’s Deport the Criminals First policy as a reasonable response to deal with criminal illegal aliens. I support building a fence and related initiatives that enhance border control – primarily to protect America from foreign threats but also to control illegal entry and smuggling. However, I don’t believe it’s feasible to deport all illegal aliens and I don’t support that option.
Economies faced with labor shortages have two choices (or some combination of two choices): Attract more labor or use innovation as a labor substitute. Some experts insist America has a labor shortage, and that may be true in specific geographical or technical areas. However, one of America’s strengths has always been its ability to increase productivity by replacing labor through innovation and automation.
Large-scale illegal immigration that provides a ready source of low-wage workers adversely impacts innovation and automation. Why? If you have a surplus of willing low-wage workers, the market for innovation and automation is reduced because it’s not cost-effective to invent, develop and market a high-tech solution. If you believe as I do that innovation creates more wealth and jobs in the long run, an ever-increasing pool of low-wage workers adversely impacts long-term productivity, innovation, automation, and economic development.
For example, a classic low-wage, entry-level job is the person who takes orders at a fast-food restaurant. Years ago, these jobs were held by adult managers and mothers of school-age children (during the day) and by high school kids (in the afternoons and evenings). In my community, these jobs are now held almost exclusively by immigrants and high school drop-outs.
How could innovation replace some of these workers? One example is the use of fast-food kiosks where customers place their own orders at a kiosk and orders go directly to the kitchen. Similarly, automation responded when there weren’t enough gas station attendants to pump our gas or banks to conveniently handle our financial transactions.
There will always be a need for low-wage, entry-level labor but that doesn’t mean it’s good to have a large, ever-expanding pool of labor that stifles innovation and automation. In addition, automation would do far more than Public Service Announcements and generous student loans to motivate immigrants to take advantage of America’s educational and technical resources so they can improve their skills and obtain higher-skilled, higher paying jobs.
I’m sure there are studies, speeches, papers, and articles that support other views on this issue but I’ll start the ball rolling with a link to this Congressional testimony from William R. Hawkins, Senior Fellow, U.S. Business and Industry Council:
“The proper way to cut labor costs per unit of output is to increase productivity, a process that boosts workers incomes and company profits at the same time, and which is the only way to elevate the living standards of an entire society. The unregulated availability of cheap labor leads away from innovation. Technological progress is promoted by the pursuit of “labor saving” methods in markets where labor supplies are tight and expensive.
A research report from the Federal Reserve Bank of Philadelphia looked at whether the availability of cheap, unskilled workers with limited educations slowed the adoption of new technology. The paper entitled “Immigration, Skill Mix, and the Choice of Technique” by FRB economist Ethan Lewis, concluded, “Using detailed plant- level data from the 1988 and 1993 Surveys of Manufacturing Technology, we found in both 1988 and 1993, in markets with a higher relative availability of less skilled labor, comparable plants – even plants in the same narrow (4-digit SIC) industries – used systematically less automation. Moreover, between 1988 and 1993 plants in areas experiencing faster less-skilled relative labor supply growth adopted automation technology more slowly, both overall and relative to expectations, and even de-adoption was not uncommon.” De-adoption! There is no positive spin for a retreat from technological progress.“
As Hawkins points out, current immigration policies don’t end poverty. Instead they move poverty from Mexico to the US:
“In the words of economics columnist Robert J. Samuelson, “Since 1980 the number of Hispanics with incomes below the government’s poverty line (about $19,300 in 2004 for a family of four) has risen 162 percent. Over the same period, the number of non-Hispanic whites in poverty rose 3 percent and the number of blacks, 9.5 percent. What we have now — and would with guest workers — is a conscious policy of creating poverty in the United States while relieving it in Mexico. By and large, this is a bad bargain for the United States.
***
Society advances by alleviating poverty, not by importing more of it.”
American history also shows that an economy founded primarily on cheap labor doesn’t work:
“The United States needs to choose which path it wants to follow. America has historically been an economy short on labor. Until the frontier closed a century ago, there were never enough people to utilize all the land, resources, and business opportunities available. The emphasis was thus on boosting productivity, substituting capital for labor in both field and factory, to make the best use of the working population.
The one exception was the pre-Civil War South, which used slave labor. The slaveowners prospered on their plantations, but the South as a whole stagnated. To defend their reactionary system, their political leaders even tried to undermine the policies that promoted the much more productive development of Northern industry and Midwest agriculture. The Civil War was as much a contest of economic systems as soldiers, and the Confederacy lost that “audit” in decisive fashion.“
America needs immigrants and I favor policies that promote legal immigration, but America doesn’t benefit from a labor-based economy at the expense of innovation. Similarly, Mexico doesn’t benefit from an economic system whose primary export is its own people.
— DRJ
Nice post DRJ. Too bad the allegedly responsible GOP politicians can’t frame their message in this fashion. They are driving away Legal Hispanic voters in droves by tacitly encouraging the fearmongering that has become part of the debate.
voiceofreason (5f8697) — 10/15/2007 @ 4:41 pmI maintain that we don’t have jobs other people won’t do. We have jobs that other people won’t do AT WHAT THE BUSINESS WANTS TO PAY FOR THE JOB. There is that conflict of wages versus prices. If we wanted to pay a little more for the services, there would be plenty of people wanting to do the job.
MarineCorpsVet (6fb4f7) — 10/15/2007 @ 5:34 pmWhat we have now…is a conscious policy of creating poverty in the United States…
After creating this poverty, the politician’s “solution” is to take hundreds of billions from the productive members of society who didn’t break the law and give it to the lawbreakers. Isn’t an Ivy League education great!
Perfect Sense (b6ec8c) — 10/15/2007 @ 5:50 pmMarineCorpsVet,
I agree but it doesn’t really matter whether you define it as “Jobs Americans won’t do” or “Jobs Americans won’t do at that price.” As long as there are people available to do a specific job at a specific price, that’s the market price for the job.
The point of productivity is to take the least-skilled jobs and find ways to do them better, faster, and cheaper. In the short run, the best way to do that is by adding cheaper labor. In the long run, that’s not a good way at all.
DRJ (67ced6) — 10/15/2007 @ 5:55 pmWouldn’t most American’s benefit more if the highest paid workers became more efficient?
Doctors, lawyers, college professors, etc. effectively operate as unions that keep down competition and keep their wages up(and the prices they charge up).
I’ve kinda had it with “least-skilled” jobs getting automated anyway.
I spent an amused twenty minutes in a grocery store check-out line last night while the only employee(a teen-ager) struggled to figure out how to reboot the self-check out computer system.
alphie (99bc18) — 10/15/2007 @ 6:32 pm1. Economic arguments on immigration are weak because no one knows for sure, no one except economists understands economics, and there are plenty of hacks who are willing to say one thing or another.
2. If anyone wants to actually do something about this issue, publicly embarrass a political leader by asking them a real question and then uploading it to youtube.
3. Asking about innovation would be one way to do that, however, asking about other things that aren’t disputable would be better.
TLB (0c89cb) — 10/15/2007 @ 7:08 pm“Wouldn’t most American’s benefit more if the highest paid workers became more efficient?”
No, because they will always be numerically swamped by people in the bottom quartile. The top 25% of income tax revenue generators is a lot fewer bodies than the bottom 25%. A lot fewer. Besides alphie, that’s the police of making the rich-get-richer while the poor stay poor – clearly the policy Democrats favor most.
The machine-of-interest to this story is the cotton gin. If Americans won’t pick lettuce for less than, say, $10/hour, there will be a lot more incentive for a ‘lettuce harvester’. Construction you say? There are not-completely-prefab construction techniques that dramatically cut down on labor. They aren’t cost-competitive with the just using cheap labor and using the illegal bookkeeping that goes hand-in-hand with illegal aliens.
Al (b624ac) — 10/15/2007 @ 7:57 pmThat should be “The top 25% of income tax revenue is generated by a lot fewer bodies than the lowest 25%.” Meaning that first you sort ‘income earners’ with Bill Gates on one end, and the lowest paid actual worker on the other.
Al (b624ac) — 10/15/2007 @ 7:59 pmProductivity…
Another Drew (8018ee) — 10/15/2007 @ 9:19 pmWith the end of the Bracero Program in the 60’s, CA tomato growers screamed that they wouldn’t be able to stay in business having to pay a decent wage to the dregs that the Employment Dept. was sending them.
The whiz-kids at UC-Davis came up with an automatic tomato harvester that didn’t turn everything into catsup.
Problem solved.
I’ve kinda had it with “least-skilled” jobs getting automated anyway.
The vast ignorance expressed in that one sentence is breathtaking…and further proof of why I hope Patterico never bans you, Staunch Brayer.
I’ll say it again: your writing is its own punishment.
Paul (d71395) — 10/15/2007 @ 9:38 pmMy first response to automation would be: as in the Home Depot self checkout line?
I hope not.
But I do give then credit for trying, and they will iron out the kinks.
The idea of a lettuce picker machine is fine, until you see how a human lettuce picker cuts and nearly instantaneously pre-processes each head with a knife based on his/her visual inspection.
Poultry processing relies on the same visual inspection system where physical properties and anomalies are reacted to by the human.
Those same industries are also highly automated. Labor intense portions of the process pass the product on to automation.
Strawberries are big up here and so far there is not a lot of progress in automation due to the tenderness of the ripe fruit. Odd crops like cilantro and nearly all your farmers market crops are highly labor intensive as the limited amount of acreage doesn’t really allow for expensive machinery.
Higher wages are part of what drives automation, but those higer wage demands need to be balanced against moving large parts of California’s agriculture industry to Mexico etc since one response to higher wages is clearly move it “offshore” or outsource it where it can be done cheaper. Outsourcing sounds callous, but if American agribusiness doesn’t do it someone else will fill the void… of course we can do tarriffs and other isolationist economy things, but I think those are a loser in todays world.
On the manufacturing side, I’d make note that China combines automation with scads of cheap labor and their economy is clearly showing the results of power of the automation/cheap labor mix. Dubai does the same in construction; high mechanization mixed with cheap labor.
In construction, there is a high demand for cheap labor. As in agriculture, the construction industry automates and mechanizes whenever economics dictate.
People often misread economics of cheap labor vs. the need to automate.
Please take my word for it that the strawberry farmer would like nothing more than to get rid of 300 laborers for no other reason than managing that many people is a giant pain in the ass. Layers and layers of supervision, support and administration. Agribusiness isn’t a cash business and most of the growers withhold taxes, child support, carry workers comp etc and if they could get rid of that bunch of fun with a machine they would.
Back to construction, I’ve seen the industry mechanize significantly even as the need for labor remains high.
No one wants to manage and pay 15 guys digging ditch with picks, iron bars and shovels when a mini excavator and one laborer can do the same job faster. But labor is needed to pothole for utilities, to dig next to foundations, to clean trenches, layout the pipe, install pipe, shade the trench on and on through every trade.
My experience in Southern California is that good hand labor commands a premium, because not many Americans know how to do it properly anymore. Beating at the ground with a shovel gets nowhere; using a pick around a gas main takes some degree of finesse.
No one knows how to split rock, hog out holes. Simple sweeping has started to eluded us completely, as even the $10hr hispanic gardener has mechanized to the point of using the leaf blower to blast dust all over the neighbors vintage Mercedes collection.
Tasks like staging and nailing roofing tiles and drywall, painting trim, masking windows, etc all have points where automation/mechanization must end and hand labor begins. Sure the guys use screw guns, pneumatic nail guns, forklifts etc… but why are those machines being operated by hispanics? In my view because the American worker wasn’t able or willing to compete on price and/or productivity at the entry level to work his/her way up the work experience ladder to that job. They wanted to start at that job of operator which does carry a very reasonable rate of pay… but that pay rate is for someone who can keep the crew fed with materials and productive. Construction is very much a meritocracy. Get the job done right and don’t make anyone wait for you.
Hispanics are willing to start at the entry level and work up to higher paying jobs… so the forklift operator once was the guy staging and nailing the drywall, so he knows how to load the job quickly and efficiently. He is also likely to be able to jump in and nail, stage, fix a problem etc. when the need for the forklift is done, or in pipeline work to jump off the excavator and work with the crew to solve a pipe laying problem.
Don’t let anyone fool you that many of these guys are under the table… they have fake SS# and fake alien ID and taxes are withheld and pay rates I’ve seen lately in construction are competitive $10-12hr entry working up to foremen/operators getting $25-up DOE and ability… new barrier to entry for American workers is that in order to communicate with your fellow workers, a working knowledge of and ability to speak Spanish is preferable (and for safety/productivity reasons required)
Point being we don’t raise our kids to pick strawberries or dig ditch under a house. Surely not day in and day out. Our “village” raises kids to be too proud to work at those jobs, too educated. Those jobs are looked down on. Experience in tough work is hard fought and hard won, not something you take a class to learn or get in a few months with a certificate. It takes toughness and desire. Sacrifice.
SteveG (4e16fc) — 10/15/2007 @ 9:54 pmWe don’t raise kids here in my part of the world to do much if any hand labor of consequence that would prepare them for five days a week of bust ass ditch digging.
Perhaps you enjoy navigating through an automated phone system before you can ask a human a simple question, Paul?
In many cases, the reason companies are saving money with automation is their customers have become unpaid employees.
I think we may see companies that have well-trained humans in place of automated systems staging a comeback.
alphie (99bc18) — 10/15/2007 @ 10:14 pmAlphie,
I love to talk to a real person when I call customer service, and I’d love it even more if that person spoke English as their primary language.
DRJ (67ced6) — 10/15/2007 @ 10:21 pmPerhaps you enjoy navigating through an automated phone system before you can ask a human a simple question, Paul?
Staunch Brayer, you defend a far-reaching blanket statement with a specific example. Dealing with that example: have you ever been on the other side of the fence, wasting time answering questions that people are too lazy to look up themselves in their owner’s manual? (I’ll pass on the fish-in-a-barrel cheap shot at you here.)
SteveG concentrated on agriculture and construction in talking about automation. Let me give you an example of a product whose current supply would not be unthinkable without automation: books.
Think about it. 500 years ago, througout most of history up to that time, nearly no one had the luxury of a personal library. Nor could many people read. It’s only been in the last 250 years that the idea of plentiful supplies of books and educating entire population of nations to read took root.
Think some more about the products you use every day. That computer you are using to read my words. That cell phone you use to call people. That insulated cup holding your $5 Starbucks latte. Your car as you drive to that lonely moonbathed grassy hill to bray silhouetted against the night sky.
The point is that we all use quality products every day made available cheaply and in plentiful supply because of automation; many do so without realizing how much that automation benefits their lives.
Paul (d71395) — 10/16/2007 @ 4:24 amWhoops…
“current supply would
notbe unthinkable”So that line should read:
“Let me give you an example of a product whose current supply would be unthinkable without automation”
Paul (d71395) — 10/16/2007 @ 4:27 amI’ve kinda had it with “least-skilled” jobs getting automated anyway.
rhodeymark (e86321) — 10/16/2007 @ 4:54 amWhich reminds me, someone once made a hilarious left-wing blog commenter app. No matter what you punched in you got some Bushitler babble out that was somewhat keyword relevant.
Field construction is all about mechanization.
Prefabricated material for construction are more automated.
Mechanization has revolutionized the garden maintenance business in Southern California.
SteveG (4e16fc) — 10/16/2007 @ 2:01 pmSquadrons of gardners descend on even mid to lower middle class neighborhoods using blowers, weed eaters, hedge trimmers, mowers etc.
They do it fast, cheap and for cash.
A guy that charges $15 per person cash can make a good living.
Here’s how.
Buy a cheap truck.
Buy motorized tools ripped off by meth addicts from the swapmeets
Get some houses on a route.
Get two to three helpers and cram them into the front seat with you, or have a guy lay prone in the back under a tarp so the CHP can’t see him.
Charge $15 per hour per man, but pay them $8-10
That is $30 an hour, but then work at least 10-12 hours a day 6 days a week and aim for 72 hours a week.
That is $2160 a week cash and three to four illegal aliens making an under the table living off of mechanization.
Double dip by renting a closet to the three helpers for $150 a month each. Rent a room to your four cousins for the same amount.
Buy another house and achieve positive cash flow using the multiplier method of rental property management
There are thousands of these guys and employer crackdowns in the Landscape Maintenance businesses will actually grow the problem in this case as employees who are using fake SS# but who are at least paying into the system will retreat into an underground economy that is already set up for them.