The Freedom to Import Labor
On August 25, hundreds of armed federal Immigration and Customs Enforcement (ICE) agents descended on a Howard Industries factory in Laurel, Mississippi. The fact that Howard Industries is one of the top employers in the area, where nearly 30% of the population lives below the poverty line, did not dissuade the federal government from carrying out the single largest immigration raid in United States history, arresting 595 employees and causing significant disruption and expense for one of the town's most effective benefactors. This mass arrest of undocumented workers voluntarily employed by a wealth-creating domestic company certainly did not help the Laurel economy, but it did allow the federal government to take advantage of xenophobic, anti-immigrant sentiments at large for the purpose of consolidating unprincipled political support behind certain folks in plush chairs in Washington, D.C.The Laurel raid was not the first such endeavor this year by ICE, which has apparently decided to follow along with the Olympic spirit in breaking as many records as possible. It was only three months earlier, on May 12, that the federal immigration police set the previous arrest record, that time in Postville, Iowa. That town, from which 389 workers were taken, is still suffering from the effects of losing a significant portion of its workforce. The corporate entity involved in that dust-up was Agriprocessors, which was engaged in the mundane business of operating the world's largest kosher meat-processing plant in the small Iowa town. Like Howard Industries in Laurel, Agriprocessors was one of the largest employers in Postville.
On March 6, well before the mass kidnapping in Iowa, several hundred ICE agents raided Michael Bianco, Inc., a leather manufacturer and U.S. military contractor operating in New Bedford, Massachusetts. In that sweep, ICE arrested more than 350 workers, including the company owner and several managers. Again, the purported purpose of the arrests was to discourage illegal immigration and to punish those who hire off-the-books workers. An important threshold question that seems to have not been asked is whether immigration restrictions actually help the domestic economy. As was documented in an August 17, 2008 Associated Press article, many Postville residents characterize the May 12 raid as an unmitigated "disaster" for their town's economy. This result should come as no surprise, since the federal action disrupted an agreeable employment arrangement that benefited the workers and employer, not to mention the local community at large.
A second important question that no one is asking is whether such restrictions have any effect on the various human rights abuses and unfair trade practices associated with illegal immigration. Since the New Bedford raid in March, many former Michael Bianco employees have joined a lawsuit against their former employer, claiming that the company often cheated its workers out of overtime pay and even hourly base pay. While some would make the case that such abuses show the need for further crackdowns, such interpretations put the cart before the horse. It is the secretive, black market nature of this sector of the labor market that makes undocumented workers particularly vulnerable to such overreaching and maltreatment. If workers were free to move on to more promising employment, rather than imprisoned by their fear of government kidnapping, they would not be so willing to acquiesce to unfair employment practices. Indeed, such practices in a free, open market would quickly be penalized, as competitors would take advantage of the disparity between each worker's marginal productivity and hourly wage by hiring away the underpaid laborers. In the labor black market, as with other sectors of the black market, formal dispute resolution is either unavailable or too risky and so disputes are often not resolved in an equitable fashion.
If one's purpose is to strengthen the domestic economy while protecting human rights and promoting entrepreneurship, one must oppose the government's restrictive central planning of immigration. Such planning hurts real, productive, innocent people, is uncharitable, and is destructive of the very engines of enterprise that keep the United States running as an economic power. If we are to be a free and prosperous people, we must have free labor.
(Also published in the September 2008 issue of Dicta, Suffolk Law's newspaper.)
On March 6, well before the mass kidnapping in Iowa, several hundred ICE agents raided Michael Bianco, Inc., a leather manufacturer and U.S. military contractor operating in New Bedford, Massachusetts. In that sweep, ICE arrested more than 350 workers, including the company owner and several managers. Again, the purported purpose of the arrests was to discourage illegal immigration and to punish those who hire off-the-books workers. An important threshold question that seems to have not been asked is whether immigration restrictions actually help the domestic economy. As was documented in an August 17, 2008 Associated Press article, many Postville residents characterize the May 12 raid as an unmitigated "disaster" for their town's economy. This result should come as no surprise, since the federal action disrupted an agreeable employment arrangement that benefited the workers and employer, not to mention the local community at large.
A second important question that no one is asking is whether such restrictions have any effect on the various human rights abuses and unfair trade practices associated with illegal immigration. Since the New Bedford raid in March, many former Michael Bianco employees have joined a lawsuit against their former employer, claiming that the company often cheated its workers out of overtime pay and even hourly base pay. While some would make the case that such abuses show the need for further crackdowns, such interpretations put the cart before the horse. It is the secretive, black market nature of this sector of the labor market that makes undocumented workers particularly vulnerable to such overreaching and maltreatment. If workers were free to move on to more promising employment, rather than imprisoned by their fear of government kidnapping, they would not be so willing to acquiesce to unfair employment practices. Indeed, such practices in a free, open market would quickly be penalized, as competitors would take advantage of the disparity between each worker's marginal productivity and hourly wage by hiring away the underpaid laborers. In the labor black market, as with other sectors of the black market, formal dispute resolution is either unavailable or too risky and so disputes are often not resolved in an equitable fashion.
If one's purpose is to strengthen the domestic economy while protecting human rights and promoting entrepreneurship, one must oppose the government's restrictive central planning of immigration. Such planning hurts real, productive, innocent people, is uncharitable, and is destructive of the very engines of enterprise that keep the United States running as an economic power. If we are to be a free and prosperous people, we must have free labor.
(Also published in the September 2008 issue of Dicta, Suffolk Law's newspaper.)
Labels: employment law, free trade, immigration, labor, protectionism
posted by Dick Clark @ 16:38
2 comments
2 Comments:
It is the secretive, black market nature of this sector of the labor market that makes undocumented workers particularly vulnerable to such overreaching and maltreatment. If workers were free to move on to more promising employment, rather than imprisoned by their fear of government kidnapping, they would not be so willing to acquiesce to unfair employment practices.
John Lott (the gun guy) gave a guest lecture during my microecon class at Hillsdale one time, and he made this point. He asked why nobody violates the minimum wage law by paying workers under the table, and (when the class didn't know) he said that answer is that the worker can sue for double (maybe treble?) damages.
I.e. if McDonalds hires you and says, "Look, we can only afford you at $4 per hour in cash, is that cool?" then that worker can decide to sue McDonalds two years later and get back all the difference between $4 and minimum wage, times 2 (or 3, I forget). So McDonalds won't risk it.
On the other hand, an illegal immigrant is much less likely to run to the government once his or her "tab" builds up to thousands of dollars, and so companies aren't afraid to pay them less than minimum wage under the table.
Of course, I think minimum wage laws hurt poor workers too.
I would naturally agree that the minimum wage hurts the poor. In the instant case, however, the news coverage made it sound like the business proprietors were actually paying their employees less than the agreed upon amount. Paying less than the agreed fee for services rendered is certainly a rights violation.
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