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The Minimum Wage and Illegal Immigration
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Although our school textbooks claim we live in a democracy or a representative republic, a more accurate formulation might label our polity a “mediocracy.” Our views and votes as well as those of our elected representatives are largely shaped by the ambient waves of media emanations that wash over us during so many of our waking moments. The media tells us what is real and what is nonsensical.

So if the best way to change the world is by reshaping its media coverage, I am pleased that our campaign to raise the minimum wage for American workers to a much more reasonable figure of $12 per hour is beginning to make some significant headway.

Even just a few years ago, most respectable thinkers, even those on the progressive Left, were quite doubtful about the benefits of a minimum wage hike, let alone a large one. When leading liberal economists Paul Krugman and Joseph Stiglitz endorsed President Obama’s $9.00 per hour minimum wage proposal of twelve months ago, their public declaration was hailed as a dramatic breakthrough by longtime minimum wage advocates. A couple of years earlier, Krugman had been willing to oppose sharp cuts in the minimum wage or its abolition, but little more than that, while his late 1990s views on the subject were not all that different from those of most present-day Republicans, a fact now eagerly emphasized by his current opponents.

Indeed, many prominent liberals used to regard a minimum wage hike as ignorant populist nonsense, but today the tide is flowing in exactly the opposite direction. Last week, the front-page headlines on the SF Chronicle described the surprising shift of conservative sentiment toward the pro-minimum wage direction, citing my own views and those of Phyllis Schlafly. No sooner had the story run than Bill O’Reilly—one of the biggest conservative voices in America—gave his blessing to the proposed Democratic minimum wage hike, making that statement on his own top-rated FoxNews television show.

So during the past twelve months, public reversals on the minimum wage question have encompassed such names as Joseph Stiglitz, Paul Krugman, Phyllis Schlafly, and Bill O’Reilly. How’s that for ideological bipartisanship?

Although the O’Reilly Declaration was considered absolutely stunning in mainstream media circles, I strongly suspect that its origins lay in an article that ran a few days earlier in The Daily Caller, one of the most widely read and influential mainstream conservative publications in America. Prominent media figures such as O’Reilly tend to rely upon their research staffs to help formulate and guide their policy positions, and The Caller is high up on the reading lists of those latter individuals. When Neil Munro, The Caller’s White House Correspondent, penned a piece provocatively entitled “$12 an Hour is Conservative Rocket Fuel, Says Ron Unz,” they surely took notice. Indeed, the article constituted a 2,500 word nuclear strike against the entrenched Republican Establishment on that issue, and O’Reilly may merely be the first of many prominent conservatives swayed by that powerful piece of expository journalism, aimed with pitch-perfect effectiveness at its strongly conservative audience.

With President Obama and the Democratic Party having declared their plans to make raising the minimum wage one of their central political themes for the 2014 campaign, liberal media outlets hardly need to convince their troops to support the cause, though rounding up 75 prominent economists, including seven Nobel Laureates, helps give it an academic stamp-of-approval. But in such liberal and mainstream media circles, there exists quite a bit of curiosity regarding my own $12 per hour campaign in California, given that my figure is comfortably higher than that proposed by either state or national Democrats. Slate, oldest of all Internet webzines and these days owned by the Washington Post, filled that void with a very thoughtful discussion of the 2011 origins of my minimum wage effort. Slate and The Caller together bracket much of the ideological spectrum in the world of Washington politics, and to the extent that they both seem strongly sympathetic to a big minimum wage hike, the likelihood of it actually happening, even on the federal level, is greatly increased.

 

 

One additional benefit of the Caller and Slate pieces was they each explored the origins of my own involvement in the minimum wage issue and correctly found it in the contentious national debate over American immigration policy, a topic in which I have been deeply involved for nearly a quarter century. I had previously paid relatively little attention to economic issues, and although the general economic case for a $12 minimum wage now seems very strong to me, that was not what originally drew me to the issue.

Indeed, as Slate’s David Weigel correctly notes, I “buried the lede” in my original 2011 article, devoting almost 9000 words to a detailed analysis of the political and economic implications of our immigration policy before using the last 3000 words to propose a $12 minimum wage as the surprising solution to the dilemma. Fortunately, a number of other intellectuals and journalists, notably economist James Galbraith and the late Alexander Cockburn, extracted that crucial nugget from my longer work and begin promoting it within left-liberal policy circles, whence the ideas eventually attracted some Democratic interest in Congress. Later, New America Foundation co-founder Michael Lind solicited me to write a narrowly focused minimum wage paper, published as part of his economic policy project, which received much wider attention and soon brought me into contact with Ralph Nader’s efforts in DC.

But the immigration aspects of my proposal were hardly forgotten, and indeed last March I published a Salon piece whose original title was the descriptive “No Immigration Amnesty Without a Minimum Wage Hike.” A few months afterward, progressive T.A. Frank, a Los Angeles based champion of the working-poor, published a lengthy article in The New Republic endorsing my suggestion, and remarkably enough, conservative financial expert Andrew Stuttaford quickly took to National Review to do the same.

ORDER IT NOW

In late October, I debated Prof. Vivek Wadha, a leading free market advocate on the subject of whether to allow totally “Open Borders” in labor, and I was very pleasantly surprised when he repeatedly emphasized my $12 minimum wage proposal as a very necessary component to any loosening of immigration restrictions.

No sooner had I launched my initiative effort, than economist Bruce Bartlett highlighted the immigration aspects of my initiative proposal for the New York Times and reminded readers that several years earlier former Democratic presidential nominee Michael Dukakis had similarly proposed a large hike in the minimum wage as the logical solution to our immigration problems.

The reason a much higher minimum wage would drastically reduce illegal immigration is obvious and simple to state. The overwhelming majority of illegal immigrants come to America for jobs and just as business lobbyists endlessly claim, they are hired “because they take the jobs that Americans just won’t do.” But the reason Americans won’t do those jobs is because the wages are too low. Raise the wages to a more liveable figure of $12 per hour or higher and millions of Americans would eagerly fill the positions, allowing employers to comply with immigration requirements and avoid risking government penalties.

Given the tremendous emotionality of the immigration issue among many conservatives, I strongly suspect that this immigration argument has been a major driving force behind the new minimum wage positions now taken by Schlafly and O’Reilly, and would be the crucial lever that eventually persuades substantial numbers of other hardcore conservative Republicans to take the same position, perhaps under pressure from their vociferous rightwing base.

What conservative Republicans support, some knee-jerk liberal Democrats reflexively oppose, and former South Bay union leader Amy Dean penned a piece for Al Jazeera harshly critical of my immigration views and therefore skeptical of my minimum wage proposal. Still, considering that as early as 1994 I was a top featured speaker at Juan Jose Guttierez’s historic 70,000-strong Los Angeles rally against Prop. 187, the largest political protest in California history to that date, I’m just not sure that my “anti-immigrant” credentials are nearly as strong as Ms. Dean believes them to be.

 

Meanwhile, our own campaign moves forward, attracting considerable national media coverage, perhaps because of the man-bites-dog aspects of a conservative Republican supporting a higher minimum wage figure than that advocated by the liberal Democrats in Congress. Just a few days ago I was interviewed for a segment on NPR’s Weekend Edition following an earlier appearance on MSNBC. A lengthy Associated Press feature, mostly prepared in late December, was also released around the same time, running in dozens or hundreds of media outlets around the country. Utah’s leading newspaper ran a major story on the effort, and I’ve been interviewed on a number of national and local radio shows.

Ironically enough, with the notable exception of the San Francisco Chronicle, California’s major newspapers and political columnists have mostly ignored the entire campaign, perhaps because none of our state’s prominent political consultants had been retained to run it. But that tendency to ignore anything not closely tied to generating lucrative fees and commissions for our huge political-industrial complex may be starting to change, with Timm Herdt, a respected Sacramento Bureau Chief, recently publishing a fine column on the campaign, a column that appeared in newspapers up and down the state.

So onwards and upwards and perhaps in less than ten months every couple in California holding full-time jobs will be set to have a minimum household income of $50,000 per year.

 
• Category: Economics • Tags: Immigration, Minimum Wage 
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  1. I think you’re all wet on this issue, but that is a mighty impressive list of neocons, liberals and MSM airheads backing you up. Let’s increase unemployment and immigration while raising taxes on what’s left of the middle class, while we kill off the rest of the economy, destroy the health care system and desperately try to get another war going. If Michael Lind and Bill O’Reilly agree, it’s got to be good; they nailed it on the Iraq war, after all. We can all get rich taking in each other’s laundry and trimming each other’s lawns, and get paid in bitcoins. MSNBC, NPR, The New Republic, and The New York Times all agree! Wonderful! What could go wrong?

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  2. A suggestion: raise the minimum wage, close the borders, and stop pandering to the unions, the education industry, and the social work industry by legally barring young people from the job market, by means of labor laws and mandatory school attendance. (School attendance is mandatory until 18 now, in some places.) That way the jobs and the higher wages would raise the total household income of families who already live here. Many of those families could use it. It would be a huge load off the parents’ minds, too, and not just because of the money. It could enable more of those young people to go to college and actually benefit from it–perhaps after a few years of illuminating real-world experience. Perhaps they could save some money while staying at home as responsible adults no longer a burden to their parents. (If they were a burden, the parents could throw them out and know they wouldn’t wind up on the street. That possibility would prevent some from becoming a burden.)

    In any case, more young people would have a chance to learn responsibility before they get too old to do so. Many of those who would quit school at sixteen would be no worse off than if they stayed in and got diplomas because no-one is allowed to fail. Those who are able could get a GED and move on when they’re ready. Those who are not would have learned to make a living.

    Another incidental benefit: young people on their own could make a legal living, instead of being driven to prostitution and other crime because they had no choice.

    I was an illegal. I was born in the U.S. and so were my parents. I was illegal because I worked nights on big machines at seventeen, which was against the labor laws. The cops used to annoy me for it, too. Before that, I had had to wait until I turned sixteen to start a similar job, afternoons after school. The hours were legal, but not the machine work, not before 16. Working in factories in my mid teens didn’t prevent me from getting graduate fellowships later on. On the contrary, knowing I could make a living without a college diploma gave me a lot more options.

    Smart economics begins at home.

    Anecdote: Chipotle, a fast-food chain, got caught hiring illegals a few years ago (at least in my area). They stopped. From what I’ve seen, they had no trouble filing those spots with young people who were glad to have those jobs, and did them better than the illegals did. Fast-food isn’t a career, but it’s a start. Plenty of people have done well with no better start.

    BTW: Congratulations on launching the Unz Review!

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  3. In order for this to work, we will need to remove the minimum wage exceptions. Nice summary here: http://www.cga.ct.gov/2003/olrdata/lab/rpt/2003-R-0390.htm. Notice that the excepted jobs are the very jobs that illegals are working in. These are the jobs that could provide an entry into the labor force – for young people, for students in the summer, for people with low skill levels, and others at the bottom of the ladder – if they weren’t filled at below-market rates by illegal aliens.

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  4. Wages in the underground economy become more attractive for employers with increases in the legal minimum wage, especially when unemployment is high. As more work off the books for less, the amount of work for pay that is adequate to live grows more scarce.

    Ever more draconian laws against undocumented workers have the unintended consequence of making them willing to work for even less, worsening their own circumstances while making their low cost more attractive to employers, also often hard-hit by increasing costs themselves.

    Attempts to fully police who can work and who can’t, lead to a surveillance state in which everyone must apply to the government for permission to work, with invasive controls and punishments, as well as the inevitable mistakes due to bureaucratic error and imperfect databases, which can never be resolved completely by any system. The best error rates will still lead to millions who are eligible to work being barred from actually being able to do so. They then either starve, or work off the books for those same marginal sub-legal minimum wages.

    The minimum wage Ron wants to see – and with which I agree, because it is clear than in an entrenched period of labor overabundance, greed will not allow even a living wage unless compelled, resulting in clear human misery – cannot have other than unintended consequences of even more official unemployment and a worsening of labor circumstances, including those to do with working conditions.

    There is one solution – divorce immigration enforcement from enforcement of labor law and standards. Currently, enforcement of labor laws protecting workers is so weak as to have become almost nil. Employees forced to make less than even the current minimum wage cannot complain about their circumstances as they immediately fall into the hands of law enforcement themselves, making their personal circumstances even more dire.

    The labor department’s enforcement of employment standards and minimum wage laws must apply to every employee, regardless of documented status. It must become a crime to pay less than this amount, without labor inspectors even looking at anyone’s legal status – only the amounts being paid.

    This lessens the attraction by employers for a desperate people with no legal protection who can be so exploited.

    This does not mean a suspension of immigration law enforcement, it simply means that the labor laws will be equally applied, with immigration enforcement a matter for a separate agency developing its own leads.

    We don’t need a police state, because every draconian requirement aimed at immigrants, will be forced upon a formerly free citizenry as well.

    (Practically speaking, I observed just these paradoxical effects in Miami, Florida’s landscape businesses, where those employing legal immigrants at legal wages, would grow ever less competitive and lose business to those employing the undocumented, as the undocumented were able to be paid less and less with each round of sanctions against them. The law of unintended consequences grows with each complicated layer of government control, requiring ever more government control to try to fix the last round of failure.)

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  5. Bravo, Unz! One may now hope that the days of one of Ricardo’s two major fallacies are numbered. With some luck and hard work (such as your website’s article from yesterday), Ricardo’s second fallacy – that of the optimal efficiency of unreconstructed “free-trade” – may also eventually vanish into the dustbin of history. Again.

    For those interested in recent broadsides against Ricardo’s free-trade doctrine, see:
    Ralph E. Gomory, William J. Baumol – “Global Trade and Conflicting National Interests,” and
    Ian Fletcher – “Free Trade Doesn’t Work: What Should Replace It and Why” (cited in yesterday’s article on unz.com).

    A conservatism sans Ricardo (and without the bulk of the nonsense spilt by the rest of the British classical economists – except maybe Smith – and their “Austrian” successors) would be a fairly workable conservatism. The same goes for a “liberalism” that lays off the “minority rights” lunacy, and focuses on getting people to work. An FDR-type of “liberalism.” That might actually be worth thinking about.

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  6. Anonymous says:     Show CommentNext New Comment

    Higher minimum wage != lower illegal immigration

    1. Many illegal immigrants are paid in cash and tips. E.g. car washes in LA that pay carwasheros solely in tips. Contractors that treat illegal workers as subcontractors and pay them below minimum wage. So raising the minimum has zero effect on reducing the underground cash economy market for illegal labor.

    2. Many illegal immigrants are not working. Even prior to the 2007 collapse, Pew surveys showed that up to 1/3 were unemployed. A large household, of mixed legal/illegal status might have 1 or 2 of its members employed, and the rest subsisting on taxpayer provided WIC,SNAP, EBT, section 8 etc. etc. Such “slacker” illegals will continue to stream in regardless of the minimum wage.

    3. There is ZERO EFFECTIVE ENFORCEMENT of current immigration law. There will be no enforcement in the future barring some cataclysm (riots, EBT cards running out) and an executive branch subsequently willing to go Eisenhower on illegal immigration. Consider this recent story about a 400-strong protest against a new ICE facility in Santa Maria CA.

    http://www.keyt.com/news/ice-facility-causing-uproar-in-latino-community/-/17671600/24063792/-/13g9qwsz/-/index.html

    “Mayor Alice Patino says she recognizes the fear among the undocumented community, but says ICE officials aren’t interested in doing sweeps around the city.

    “They’re looking for criminals who are already out in the streets,” says Patino. “In fact, one ICE agent said to one of our staff members we don’t need to go our there looking for the average person who is working.””

    Effective enforcement would _require_ street sweeps — does anybody believe such enforcement would happen even after amnesty and with a higher minimum wage? Illegal aliens will continue to stream into the US as the proponents of S744 admit.

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  7. ” There is ZERO EFFECTIVE ENFORCEMENT of current immigration law. There will be no enforcement in the future barring some cataclysm (riots, EBT cards running out) and an executive branch subsequently willing to go Eisenhower on illegal immigration. Consider this recent story about a 400-strong protest against a new ICE facility in Santa Maria CA.”

    The Obama administration has deported several times the number the Bush administration did in all eight years. In addition hundreds of thousands are held in prison. There are billions of dollars being spent on the border, with technology originally developed for the foreign wars and a 400% increase in immigration agents. Roadblocks are setup to stop all traffic up to hundreds of miles from the border.

    To say that there is “zero” is simply another of those fact-free opinionations that seem based more on reflexive xenophobia and the blame game shell con that distracts from the genuine structural problems affecting the country, that have been manufactured by and for the elites, to cause blame to fall on those who have absolutely no political power in this nation. Yeah, it’s all the fault of “immigrants” – while we all owe more and more, to the corporate company store.

    Well I could agree that the “zero” is “effectively” what we get from unworkable and draconian ever more authoritarian government “final solutions” that ignore reality or the level of totalitarianism it would take get one hundred per cent compliance with all its badly crafted laws.

    I for one am not willing to indulge in a “two minutes’ hate” of some scape goat underdog to make me feel better about how Wall Street and its military-industrial partners eviscerate the Bill of Rights while offshoring my job and then stealing my hard-won savings.

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  8. Ron Unz’s proposal has traction because it is administratively feasible (only one number changes) and the basic concept already has the public’s awareness. However, it is far from the ideal remedy for low working-class wages, and I give credit to James Galbraith for frankly discussing the drawbacks.

    A better but less politically viable approach would be to eliminate all income taxes on wages below $12 an hour, and I mean all, including the hidden employer-paid portions of Social Security, Medicare, unemployment insurance, etc. Workers would still receive the benefits of these programs as if they had been taxed.

    This would both increase real low-income wages and create jobs by removing barriers to hiring.

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  9. In her first comment above, Fran Macadam puts her finger on an important point when she proposes a clear separation between enforcement of immigration laws and enforcement of labor laws. I’m not sure I would entirely agree with her regarding practical measures. I wouldn’t say that the two spheres ought to be kept absolutely separate as a matter of inviolable principle, on the order of, say the separation of powers in government. (I’d guess that she wouldn’t carry purism that far either.) I also doubt that draconian enforcement of immigration laws would have the general consequence of worsening conditions for illegal workers; I’d say rather that it would be more likely to deter them from immigrating in the first place, and that this would be a good thing.

    But Fran points to a real and fundamental problem with mixing enforcement of immigration and labor law when she notes that doing so will put both exploited and exploiters on the same side of the law with regard to labor law, and opposed to enforcement. More generally, she makes the point that reasoning is simpler and more effective when one keeps different things separate unless there’s some strong practical reason for treating them together, and is careful not to lose sight of the differences, and their implications, even when things get combined in practice. I don’t know how this principle would best be applied in practical measures regarding immigration and labor conditions, but it’s definitely a principle to keep in mind.

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  10. As I continually blog, the top objective of our corporate masters is a second amnesty for illegal aliens, yet public opposition is so strong that they can’t ram it through Congress no matter how much they contribute to the pockets of Congressmen. So they ordered Obama to pass his own law, with a pen, and flood the nation with millions more desperate foreign workers for another decade.

    He will cover his dirty deed by providing small and overdue help to our poorest workers by increasing the minimum wage, mostly to make up for losses due to inflation. Then a direct bribe to millions of unemployed Americans by sending them checks for another year for doing nothing, so they are not enraged that millions of jobs were opened to illegal foreign workers. Once again, only in America would a government pay billions of dollars for extended unemployment benefits while granting legal work status to millions of visa-less foreign “visitors.”

    The minimum wage boost is overdue and will be overcome by inflation in another four years. The extended unemployment will run out in a year. But a second amnesty will cause massive damage for decades as millions more poor, desperate foreigners head to the the USA. They may claim they were already in the USA before the amnesty deadline, and there are thousands of “immigration advocates” willing to vouch for them or provide false documents. Otherwise, they’ll just wait the for the next (third) amnesty.

    Meanwhile, some 20 million new voters for the Democratic party will be created. They will not be legal citizens, but Obama has fought any state law requiring proof of citizenship or even an ID to vote. Spinmasters say none of this is needed since there are very few cases of voter fraud. That is correct, since there is no method to confirm a voter’s identity, cases of voter fraud are never detected. I suspect the numbers of non-citizens voting in national elections are in the millions.

    Meanwhile, cities will be further swamped with foreign refugees willing to work for cash at below minimum wage, and collecting billions of dollars in welfare, earned income credits/payments, and child tax credits/payments. Schools, jails, and hospitals will be further crowded. Congress will be forced to reduce benefits to poor Americans to control costs. Anyone who objects to Obama’s obviously unconstitutional assault on American worker wages and America’s poor will be called a racist to end serious discussion.

    If anyone doubts that Obama will do this, just read about the Dream Act. That was rejected by Congress last year, so Obama used his pen to grant amnesty to a million illegal foreigners. No one in our corporate media objected, few in Congress protested, and no one took legal action. The same reaction occurred when the head of the NSA admitted that he lied to Congress several times under oath, which is a felony. He was not charged with a crime, and wasn’t even fired! And he lied about massive illegal activity by the NSA, yet no one was indicted, no one fired, and nothing changed. The USA is now run like a dictatorship in which Congress has little power and the President and his appointees do as they please, regardless of the U.S. Constitution or laws. This problem has grown worse over the decades, yet it’s reached the point where the President openly boasts they he does whatever he pleases, with a pen.

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  11. There is offered no proof at all for the first paranoid suspicion (it’s simply made up and is contrary to good sense, since it makes anyone caught a felon to be deported, even if legal), while the second is an impossibility – just how do the illegals do all that easy collecting of welfare by the millions when proof of legal residence is required for any of it, at a time when even citizens are being cut off? How do they get tax refunds on undeclared income, without even social security numbers, required to file and to get bank accounts? These are people being exploited for cash payments, who have no recourse to support or enforcement of labor laws from the system, the very characteristics that make them so attractive to the many unscrupulous employers who knowingly use them through subcontractors. One wonders how these millions of illiterate untouchables are able to game the system while many millions more of Americans are unable to?
    Pure uninstructive and misleading nativist xenophobia.

    “I suspect the numbers of non-citizens voting in national elections are in the millions.

    “[illegals] collecting billions of dollars in welfare, earned income credits/payments, and child tax credits/payments.

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  12. The path to citizenship is a ruse. A social security card is the ticket to benefits and Obama wants to grant that instantly. If he grants some 20 million foreigners social security cards, the demand for government help will soar. Right now, corrupt state governments are even providing state driver’s licenses to illegals, and the Mexican consulates provide ID card with an American address. Schools, free school lunches, public housing, and the ER require nothing.

    I noted yet another slur used to denounce people concerned about America’s poor, unemployed, and low paid “nativist xenophobia”. Let’s not discuss reality, just call patriots childish names. This is right out of corporate America’s playbook, fully backed by the greedy US chamber of commerce. Just tell spineless liberals and progressives that if they oppose flooding the nation with millions of desperate workers, they will be called racist or nativist or xenophobia, and they run and hide.

    Meanwhile, legal work status only helps illegals move on to better ($10 a hour) jobs so more ($15 an hour) Americans can be laid off. Legal status will not improve farm or construction wages, because if they get uppity and want more than $5 a hour, they get fired and the latest batch of newly arrive illegals get their job.

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  13. “If he grants some 20 million foreigners social security cards”

    Amazing how another 10 million managed to secretly rush in overnight and how quickly they were all counted! :-)

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  14. As much as I support raising the minimum wage I doubt it will do much to curb illegal immigration. Many employers prefer to hire illegals because they work harder and cause less trouble in the workplace. American youth are not getting a level playing field though. They are competing with workers so motivated to work they are willing to move thousands of miles to a country in which they don’t speak the native language. The ordinary workers in these countries stay home, while the extraordinary leave. So in essence, ordinary American kids are competing with extraordinary foreign kids. American taxpayers subsidize the expenses of education, medical care, and other infrastructure costs for the legal and illegal immigrants because the employers lobby the media and government officials to keep it this way. It’s too bad Americans don’t realize its the young Americans that are getting the shaft regarding American immigration policy. Immigration advocates win, foreign kids win, of course employers win, and unfortunately the American kids are the big losers under current immigration policy. Someday the kids are going to figure that out.

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  15. I saw Nick Hanauer on CNBC and he is big on the minimum wage. He was an early Amazon investor and has a billion dollars or something. He said if the minimum wage had kept pace with productivity since 1970 it would be 21.70 cents an hour.
    I thought that line was extremely compelling.

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