Earlier (2004): Abolishing New England: Cheap Labor vs. College Kids
Wages look a lot better for local workers on Cape Cod this summer because the number of foreign workers has collapsed which, with a low unemployment rate nationwide, caused a labor shortage, boosting wages exactly as Harvard economist George Borjas has long predicted [Yes, Immigration Hurts American Workers, by George Borjas, Politico Magazine, September 1, 2016].
I visited Cape Cod a couple of weeks ago and saw a Starbucks ad in a local newspaper. The globe-straddling coffee emporium offered workers a seasonal bonus rate of \$5 an hour at several locations. The reason: It can’t get enough employees. Instead of offering \$14.25 an hour to cashiers, Starbucks will pay \$19.25. If the Cape had its normal influx of low-wage temporary workers from countries where many people earn under five figures per year, it’s hard to imagine that the company would offer the same wage.
And Starbucks isn’t the only place on the Cape desperate for workers.
- Brookdale Senior Living in Barnstable has an ad for a three-nights-a-week job, with a shift every other weekend, which offers applicants a \$1,000 sign-on bonus and limited benefits, including a 401(k) retirement savings plan.
- Christmas Tree Shops in Dennis MA went even better: The store offered a bonus of up to \$1,500 for a minimum wage, part-time summer season stocker. No doubt the shop would rather pay minimum wage with no bonus, but the labor pool is too small.
- Even municipal governments on the Cape must offer higher wages. Falmouth upped seasonal workers’ pay between 75 cents to \$1 an hour. But lifeguards enjoyed the real benefit. They received a \$300 signing bonus if they started work on or before June 27. And if they work until August 22, they receive another \$300.
That’s an additional \$600 the town was forced to offer because the pool of potential guards was so much smaller without foreign workers [Falmouth Raises Pay For Lifeguards, by Alex Newman, Patch, March 22, 2022].
And why should foreigners fill these jobs? Being coastal, many towns on the Cape have beaches on two or more sides. Many if not most residents know how to swim; some have pools at home. Many native-born Americans have the skills to be lifeguards. But now employers must pay what the domestic market dictates.
Cape Cod’s foreign workforce is lower in 2022 for two reasons: the China Virus “pandemic,” and the war in Ukraine
The pandemic has made foreigners less apt to travel to the states to work, and not just because they might fear traveling and contracting the pathogen. The U.S. still requires a vaccination for non-American travelers to enter the country. The same is true of stricter measures in other countries [Worker Shortages Cripple Pools and Summer Attractions for a Second Year, by Lindsay Cates, U.S. Chamber of Commerce, June 20, 2022].
Then consider the war in Eastern Europe [Conflict in Ukraine Impacts Flathead Valley Seasonal Workforce, by Denali Sanger, Flathead Beacon, August 31, 2018]. Cape Cod usually receives much of its summer workforce from the J-1 summer work program. It benefits businesses because it’s payroll tax-exempt on both sides [Payroll Tax Benefits for Employers, SeasonalStaff.org]. This makes it legally cheaper to hire foreign workers over native teenagers, senior citizens, the disabled, high school dropouts, American college students who want a summer job, and so on.
And foreign workers are more vulnerable to wage theft and being OK with generally lousy working conditions. A foreign worker knows that bellyaching about wages could get him fired. He’d lose his visa and be forced to go home [J-1 Visa Students Face Challenges Living on Cape Cod, by Sarah Mizes-Tan, WCAI, August 31, 2018].
Upshot: Many fewer foreign workers are streaming into American resorts and stealing jobs from Americans.
Result of the labor shortage: Higher wages for Americans.
Instead, until recently, Cape Cod had a summer workforce filled with foreigners. Companies didn’t need to pay anyone a living wage or care about their workers’ well-being.
Which brings up what Sen. Bernie Sanders used to say about the problems caused by guest-worker programs that harm the American people, even if he is a sellout on immigration and foreign workers now.
He laid out the problem well for Fox News’s Lou Dobbs 15 years ago:
If wages are going down, I don’t know why we need millions of people to be coming into this country as guest workers, who will work for lower wages than American workers and drive
wages down even lower than they are right now [What Bernie Sanders told Lou Dobbs in 2007 about why he opposed the Kennedy-McCain immigration bill, by Matthew Yglesias, Vox, February 12, 2016]
Sanders also questioned the necessity of importing foreigners to be lifeguards, which is also what happens in ski resorts in states such as New Hampshire and…Vermont. In the winter, J-1 visa workers fill jobs at those resorts…as if young, working-class white kids can’t do those jobs [A Look At The Foreign Workers Who Make Ski Resorts Go Round, by Megan Michelson, Powder, March 27, 2019].
A lot of people coming into this country are coming in as lifeguards. I guess we can’t find—that’s right. We can’t fine American workers to work as lifeguards. And the H1B program has teachers, elementary school teachers.
Sanders said the same thing in 2013 in discussing guest-workers and the Gang of Eight Amnesty [Sanders: Immigration bill threatens American workers, The Washington Post, YouTube, July 12, 2013]. Sanders asked whether the country needed “hundreds of thousands of entry-level workers” such as “waiters, waitresses, lifeguards, ski resort workers”—
Is it really true that we can’ find American workers to do those jobs? Frankly, I don’t believe it. …
When you go to inner cities, you have 30, 40 percent unemployment. Do we really need hundreds of thousands of workers, entry-level workers … coming in competing against these kids? I think not.
The varying impact of foreign workers on the Cape confirms George Borjas’ point: While the aforementioned J-1 is a non-immigration visa, and Borjas focuses on permanent immigrant labor, a 10 percent increase in the workforce caused by immigrants depresses wages by at least 3 percent.
It’s supply and demand: Foreign workers prevent labor shortages by flooding the labor pool with low-wage earners. But labor shortages benefit American workers. So Big Business loves flooding the country with cheap foreign labor because it depresses wages and benefits for Americans.
We have no reason to believe Americans in other resort communities are not enjoying the same wage benefits as Cape Codders.
And if companies in these regions are still struggling to fill jobs with native-born Americans, here’s another suggestion: try automation. If a restaurant desperately needs a food-runner, for instance, it should rent a robot that does the job, not import foreign, wage-busting, Democrat-voting, workers.
Still, the better solution for all is hiring flesh-and-blood American workers who need jobs.