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J.K. Galbraith on Unz on Immigration
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TAC-WhiteAmerica My lengthy Fall cover article analyzing the politics and economics of immigration issues appears to be receiving a bit of renewed attention in somewhat unexpected quarters. The current issue of establishment-oriented Foreign Policy magazine carries a piece by prominent liberal economist James K. Galbraith arguing that my policy recommendations constitute one of the best means of reviving our currently depressed economy.

Although Galbraith focuses primarily on the economic benefits of my suggestion, the political dynamics are also quite intriguing. Obviously, the vast majority of working-class or lower-middle-class Americans would heartily endorse a large raise in their incomes. But it also seems likely that most of the less ideologically-oriented business community would support the idea as well. After all, few if any of the large industrial enterprises would be negatively impacted by wage changes which are far below the bottom-end of their own pay scale, and they would certainly benefit from the additional economic activity.

Moreover, even many of the larger, more powerful low-wage employers would probably gain much more than they would lose from the change. After all, their own revenue stream largely derives from consumer spending, while they could cover the costs of higher wages simply by raising their prices in lock-step with all their competitors. Liberal activists may routinely castigate Wal-Mart as being the worst national symbol of modern low-wage retail employment, but they ignore the fact that top Wal-Mart executives have actually spent years calling for large increases in the minimum wage, concerned that more and more Americans have been growing too impoverished to shop at their stores. The primary business losers would be Wal-Mart’s smallest, cheapest, and most poorest-paid competitors, whose much lower operating efficiency would tend to disadvantage them as all national wages rise.

Thus, nearly all the large corporations that hire DC lobbyists and fund political campaigns would probably benefit, perhaps considerably, while the main business lowers would be confined to some of their tiny rivals, who have no presence on K Street. From the perspective of politicians, this single fact would probably tend to dominate all other calculations.

To the extent that the political strategists running President Obama’s difficult reelection campaign recognize this simple point, they would have an excellent opportunity to slice away a good fraction of the Republican-leaning business community, while obviously losing nothing with ordinary workers or union leaders. But on the other hand, a shrewd and ideologically-flexible Republican candidate who struck first could similarly outflank and embarrass the current resident of the White House.

Politics sometimes follows twists and turns which are both quite ironic and very difficult to predict.

(Republished from by permission of author or representative)
• Category: Economics • Tags: Immigration, Minimum Wage 
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