Aletho News

The Minimum Wage and Immigration

By Ron Unz | February 9, 2013

Earlier this week Washington Post Columnist Matt Miller published an excellent piece making the case for a large increase in the federal minimum wage, including arguments drawn from a wide range of prominent business and political figures, as well as mention of  my own recent New America article on that issue.

Given the importance of the topic, it is hardly unexpected that the column attracted some 600 comments.  But far more surprising was the overwhelmingly negative response of those readers.  Given that the Post is a centrist-liberal newspaper and Miller a centrist-liberal columnist, one suspects that the vast majority of the commenters were similarly of the centrist-liberal orientation.  But I suspect that most of their hostile remarks would have been indistinguishable from what would have greeted a similar suggestion posted on National Review or FoxNews or the Koch-funded Americans for Prosperity; and therein lies a tale.

Although the ideological spectrum of American political discourse is casually rendered along a Left-to-Right spectrum, the range of views obviously has high dimensionality; and projecting an idea-space of ten or fifteen independent degrees of freedom onto a single axis is surely absurd, with even the two most prominent dimensions of “social issues” and “economic issues” failing to capture the underlying reality.

Thus in 2008 we saw many of America’s most influential Republican pundits urging Sen. John McCain to select Sen. Joe Lieberman as his vice presidential selection to assuage and reassure distrustful conservatives.  This came despite Lieberman having one of the most liberal Senate voting records on hot-button social and economic issues such as abortion, gay rights, gun control, affirmative action, immigration, taxes, regulations, and almost everything else, while even having served as candidate Al Gore’s loyal vice presidential Democratic pick just a few years earlier.  But in 2008, Lieberman’s enthusiastic support for the continued Iraq Occupation and Bush’s “Great War on Terror” had momentarily eclipsed all other issues among much of the conservative elite.

Similarly, over the last couple of decades, the economic well-being of America’s working- or middle-classes seems to have been relegated to an afterthought, not merely among Republicans and conservatives, but also among their Democratic and liberal opponents as well.  The shocking truth that the average American family is probably poorer today in real terms than they were fifty years ago has been almost entirely ignored by both parties, and therefore ignored by the media as well, presumably under the theory that what people don’t know won’t really hurt them.

Meanwhile, the loud battles over Gay Marriage and Gun Control, whose outcome would directly impact an utterly negligible fraction of our total population, generates front-page headline after front-page headline, perhaps because these issues excite the people who write those headlines or those who fund our campaigns.  As a leading Democratic political consultant in California once joked to me during the late 1990s, no wealthy liberals he knew had any interest in funding a minimum wage increase or any similar meat-and-potato economic issue of the traditional Left; instead, the ideal initiative for fundraising purposes would promise to “Save the Gay Whales from Second-Hand Smoke.”

The near-total intellectual hegemony established by neoliberal economics during the last generation is further demonstrated by the skeptical response to Miller’s minimum wage column by Slate financial columnist and progressive pundit Matt Yglesias (refuted here).  The latter seems to see Federal Reserve monetary policy as the solution to all our economic problems, worrying that the inflationary impact from increasing wages at the lower end of the spectrum would interfere with attempts to keep interest rates low, thereby derailing the desperately-awaited recovery.  Given that five years of exceptionally low interest rates seem to have benefited Wall Street a great deal but Main Street little or nothing, it’s far from clear whether another five years of the same policy would do much different.

In any event, a rise in the minimum wage to $10 or even $12 per hour would simply produce a one-time jump in prices, perhaps in the range of a couple of percent, rather than the sort of continuing inflationary spiral which might unnerve the Fed.  Lower wage-earners would gain vastly more than they lost, the affluent wouldn’t even notice the difference, while hundreds of billions of dollars in additional disposable income for those who spend every dollar might finally jumpstart the economy, being an enormous stimulus package funded entirely by the private sector.

In fact, the AFL-CIO has suggested that a Republican Party which strongly supported a higher minimum wage might warrant a strong second look from the vast number of ordinary American workers who had refused to even consider the plutocratic candidacy of a Mitt Romney.

As it happens, I was recently invited by The Aspen Institute to speak at their DC headquarters on a March 6th panel addressing a minimum wage increase, and perhaps some of these important points will come out during the discussion.

This same bipartisan elite consensus on the harmful effects of raising workers’ wages by law also manifests itself in a wide range of other issues. Leading Democrats and Republicans are now lining up in favor of a new amnesty program for America’s 11 million or so illegal immigrants, planning to combine this legislation with expanded quotas for skilled immigrants and also some sort of guestworker program for the lesser skilled.

It is surely an odd thing for a country’s political leaders to propose substantial increases in new immigration at a time of such high unemployment and so much economic misery among the middle- and working-classes.  Obviously part of the explanation is that our elites are doing very well financially, with the DC area having become America’s wealthiest region. But the political cross-currents are quite intriguing.

Throughout most times and places, business interests have always tended to favor high immigration levels, for the obvious reason that a greater supply of available workers drives down wages and increases profits.  So the responsiveness of Republican officials to their business donor class is hardly surprising, nor is the position of business-funded thinktanks and pundits.

But for exactly the same reason, worker advocates have traditionally been doubtful or hostile to immigration, even if they might often be friendly towards existing immigrants or had themselves originally come from such a background.  It is hardly surprising that America’s leading anti-immigrationist figure throughout most of the 1960s and 1970s was famed labor leader Cesar Chavez.

Given such realities, the eagerness with which the Democratic side of the aisle have embraced a softening of immigration policy without any commensurate protections against job loss or wage decline is surely a sign they too have been captured by the business elites, just as was their widespread support for financial bailouts at the top of the economy and their disinterest in minimum wage increases at the bottom.  As some Internet pundits have noted, President Obama actually traveled to Las Vegas, Nevada to announce his immigration proposal, selecting the highest-unemployment state to roll out a proposal hardly likely to alleviate that problem, but certainly one which would benefit the mega-wealthy employers of the low-wage service workers who staff the local casino-and-hotel economy.  In our current political system, only the views—and dollars—of the latter much matter.

Given the obvious connection between more immigrants competing for jobs and a relentless downward pressure on wages, I would suggest that the easiest way for both Democrats and Republicans to demonstrate that they are not wholly owned subsidiaries of our business class would be to explicitly link the two issues by attaching a large rise in the federal minimum wage to any proposed immigration reform.  After all, the primary force which originally drew those 11 million illegals to America was the attractive availability of so many millions of low-wage jobs in our country, and unless this suction force at the bottom of the economy is eliminated, more border crossers will eventually come to take their places once the current ones are legalized.

As I have argued at length elsewhere, immigration and the minimum wage are deeply intertwined policy issues, and should naturally be addressed together.  Raising our minimum wage to $12 per hour as part of the proposed amnesty legislation would probably do more to solve future immigration problems than would any sort of electronic fence or national ID card.

February 26, 2014 - Posted by aletho | Economics, Timeless or most popular | Minimum wage, Obama, Ron Unz, United States