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Liberals for Low Wages

Progressives are reluctant to undercut the price of labor---except when it comes to immigration.
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I don’t normally write about immigration, because it’s not really my “thing,” but I agree with the restrictionists that there’s something very puzzling about progressive willingness to embrace a particular kind of business talking point. Here’s Kevin Drum doing it:

[The North Carolina Growers’ Association] is required to heavily advertise for native workers before their applications for H-2A guest worker visas are approved, but these efforts seldom pay off. Even when unemployment was at its height in 2011, they received a grand total of only 268 referrals. They hired 90 percent of the applicants, but only 163 showed up for work on their first day—and that was the best response in NCGA’s history. . . .

Within two months, 80 percent of the native workers had quit. By the end of the growing season, only seven were left.

Now, as Matthews notes, this report doesn’t exactly come from a neutral source. It’s from a pro-immigration group working with a group of pro-immigration farmers. But unless they’re flat-out lying here, the numbers are pretty compelling. Most Americans just aren’t willing to do backbreaking agricultural labor for a bit above minimum wage, and if the wage rate were much higher the farms would no longer be competitive.

Anyone want to send me some contrary evidence? I’d be interested to see it. But all the evidence I’ve seen in the past points in the same direction as this study: it’s all but impossible to get native workers to fill field labor jobs. Immigrants really are doing the work we won’t.

Emphasis mine.

So, here’s my question: is there any other situation where progressives are inclined to believe that low wages are the key to competitiveness, and that this is a good reason to keep wages low? Any other industry granted this exception to the general progressive view that workers deserve compensation commensurate with the dignity of labor as such? Are progressives inclined to believe that, say, coal miners should be paid only slightly above the minimum wage for their back-breaking (and dangerous) labor, as opposed to getting the much higher average wage that they earned (in large part through unionization)?

What would happen if agricultural labor were better-compensated? To some degree American agricultural enterprises would become less-competitive—we’d import more of some kinds of food from abroad. Which would mean more money flowing into the agricultural sector in those countries, and more employment for agricultural labor there, as opposed to here. From the perspective of the farm laborers that’s not obviously a bad outcome—they have jobs and not have to uproot themselves to get them.

Another possibility is that American farmers would innovate, and find ways to get the same crop yields with fewer workers, through the application of automation. That advance in productivity would reduce agricultural employment overall, with the remaining employees earning a higher wage, more conducive to economic and social security. Genuine advances in productivity are usually counted as a good thing for everybody.

The American agricultural mix might change. America farms might focus more on those crops where there is a greater return to the application of capital, while more labor-intensive agriculture moves to countries with lower labor costs. There might be environmental consequences to that kind of change, but these could be addressed with regulatory legislation. If the end result is greater specialization, that, again, is not obviously a bad outcome for anybody—comparative advantage and all that.

Or America might shift not into more capital-intensive agriculture but into higher-value agricultural products. For example, suppose a greater percentage of American farms produced organic food. Organic is more labor-intensive, so that would seem an illogical response to higher labor costs. But it’s also a premium product that commands a premium price. Is it completely impossible that Americans could be convinced to pay a greater percentage of their budget on food, and a smaller percentage on other consumer goods, because the food is of “higher quality”? Clearly a certain percentage of Americans already do that—the question is whether that market could be expanded. I don’t see why not. The result might be the purchase of fewer plastic toys from China, more money spent on organic grapes and strawberries, and higher wages for the stoop laborers on those organic fruit farms. Again, not obviously a bad outcome.

We don’t know precisely what would happen, but it’s never as simple as “if this input factor changed, we’d all be out of business.” Business isn’t infinitely adaptive, but neither is it that rigid.

So here’s the point: would progressives make arguments like this if the minimum wage were $12/hour? Would they be arguing that farms should get a special exception to employ workers for less than the minimum wage, because otherwise they’ll go out of business (and, I guess, we’ll have no food)? I think to ask the question is to answer it.

And here’s another point. The smart pushback against the Jason Richwine argument—that measurable IQ differences between Hispanics and Anglos prove that mass-immigration from Mexico means importing a permanent class divide, with serious fiscal consequences—is that class affects IQ as well as the other way around. Take a group of kids who, based on ethnic and class background, would appear to have limited academic prospects, and put them in a situation where they have more resources (and those resources are applied well) and you discover that there’s more diversity in ability than was visible at the outset. I’ve seen this dynamic at work in the charter school network I was involved in founding, so I find it persuasive (though I think there are very tough questions of scale to be addressed before blithely acting as if we have the “solution” to things like the test score gap).

But, if we’re going to argue that mass immigration isn’t going to create a fiscal problem so long as we don’t allow class divisions to deepen and fester, then shouldn’t we be doing something to make sure class divisions don’t deepen and fester? Like, make sure wages, even for relatively low-skill manual labor, are high enough to allow a semblance of a middle class existence? If you believe that low IQs are partly caused by growing up poor, then isn’t a low-wage policy even more pernicious than it would otherwise appear, as it hobbles a substantial portion of the next generation as well? Wouldn’t a low-wage policy wind up making it seem like Richwine was right after all?

Personally, I’m in favor of relatively liberal labor markets, which generate real aggregate economic benefits. But I’m also not under the illusion that labor has equal bargaining power to capital under either hypothetical laissez-faire conditions or the world we actually live in. And I’m acutely aware of the how good private interests are at promoting policies to privatize profits and socialize costs. Immigration is one of those policies. There are real economic benefits to a more liberal immigration policy. But there are also costs, and those costs ought to be accounted for—and paid for—like any other externality. My personal policy preference—a substantially higher minimum wage and an immigration system that auctioned work visas and green cards—is designed both to make our labor markets freer and less encumbered by bureaucracy and to make sure this doesn’t lead to a negative wage spiral.

Maybe I’m wrong about that policy mix. But starting from the proposition that low wages are a bad thing is immensely clarifying. I wish more voices on the left would bring that clarity to bear when they discuss immigration.