By Hal Rothman, 3-01-06
Any old Texican would recognize the axiom "to populate is to govern." This was the principle of the Texas Revolution in the 1830s, that by creating facts on the ground in Spanish-speaking Catholic north Mexico, they would in fact establish an Anglo-American, Protestant republic of their own.Hal Rothman says
"We all benefit from under-priced labor.."
Not so. Those who use cheap foreign labor, illegal aliens, seldom pass their savings along to the consumer. Business economics (Price Theory) says you sell your product at the market price. That price has nothing to do with how much it costs. What your product costs you determines your profit and, in the long run, if you can stay in that business. Go price a new house. Does the price reflect the fact that the builder used a lot of illegal alien labor? Not likely.
The ultimate in under priced labor in the U.S. was the use of slaves in the South before the Civil War. In 1957 Hinton Rowan Helper wrote the book "The Impending Crisis of the South" in which he condemned slavery not on humanitarian or moral grounds, but because it was an economic threat to the poor whites of the South. Helper used the 1850 census to show that in the decade from 1840 to 1850 the North had leapfrogged over the South in almost every way including what should have been the South's strength agriculture. When Southerners wanted Bibles, brooms, buckets and books, toys, primers, school books, fashionable apparel, machinery, medicines, tombstones, and a thousand other things, and they went to the North.
The basic problem of course is that in response to expensive labor the North had invested in automation where the South, with access to cheap labor, never bothered to put capital at risk to do so. If we continue to accommodate business desire for cheap labor we will return to the dependency of the pre Civil War South.
Let business pay up for the labor they need, invest in automation, or do without. The rest of us should not have to pay the high cost of cheap labor.
Hal,
I just finished reading your column about Latinos, which I enjoyed. I also just completed the Iowa chapter in my forthcoming book about the 2004 summer bicycle tour. Here is an excerpt that I think you might enjoy.
"In Marshalltown, Shane, Laura and I get off our bikes and join Ardath in front of the Times Republican for an interview with local newspaper reporter, Jenny Welp. As the interview concludes, a senior citizen rides by on his fat-tired bike and shouts from the street, “Welcome to our Mexican town!" Of course, he is referring to the growth of the Latino population in his part of Iowa. Normally I’m slow on the uptake, but for some reason I don’t let the moment slide by and blurt out a response. “They’re Americans!” I shout. The biker harrumphs as he continues down Main Street and around the corner, not caring to engage in further discussion of his stated opinion. Frankly, I do not know if all, or any, of the Latinos along the Lincoln Highway, are American citizens.
From the very start of our trip, all along our route, it is mainly Hispanics, Asians and Blacks working in the service industry who have been waiting on Ardath and me: greeting us from behind desks, stocking continental breakfast food bars, wiping tables, emptying trash, pushing vacuum cleaners, cleaning bathrooms, making the beds in our rooms, serving us at restaurants and waiting on us at grocery or chain stores. Alicia Perez, who stocks the food bar at one of our Iowa motel stops, tells us that Hispanics also work at the local packinghouse. She explains that although she was born in Iowa, people ask her if she has her green card. Alicia seems not be resentful of the misconception but wonders why people should be so antagonistic toward people who work for a living. It also makes we wonder if that passerby who shouted at us on Main Street might have skipped his high school civics course or if he actually paid much attention to the Iowa state motto, 'Our liberties we prize and our rights we will maintain.'"
It’s hard to make a machine that will take a steak from the cooler, prepare it, then take it to the stove and cook it. The real reason we need immigrant labor is that we are not willing to give up the lifestyle that it supports. Americans either don’t need or don’t want to do most of these jobs, and only a small portion of them can be mechanized.
But still, it does lower prices.
“Business economics (Price Theory) says you sell your product at the market price.” This is true. But in a competitive market where profit margins are small or moderate, reinvestment and growth are practically mandatory, and success is translated into stock value, labor costs have a direct affect on prices. This is especially true in service economies.
If the company that built Hal’s house had to pay higher wages to its workers their profit margins would decrease and they would be unable to maintain their business model as is. They would either have to raise prices to make up for the shortfall or reduce their reinvestments—either way they face a hit to their stock. If they chose the ladder (assuming other companies made the same decision), the new-home supply would decrease and prices would rise even more.
I think the bigger question here has to do more with the proximity question. What has gotten us through similar times in the past is our ability to absorb waves of immigrants and “assimilate” them. The impermanence of the current situation and the ability to maintain nonnative culture makes that much more difficult. I just would like to see some order to the whole affair. It doesn’t seem like any policy will work until there is control of the border and a system that directs immigrants toward the path of citizenship or a temporary worker program. I don’t see why that’s such a big deal.
In an ideal world people would be able to freely flow across national borders with little effect. Unfortunately, we ain’t there yet.
A recent op-ed piece in the Denver Post rhetorically asked question of whether or not ski bumming had become another job Americans would not do. Pointing out the increasing numbers of Latino laborers are working jobs traditionally filled by young white season workers. This is of course changing the face of resort towns throughout the intermountain West. As Hal, Mark, and Garron all point out this is the norm in today’s United States. There is a disconnect between this reality and the political, and often racist, rhetoric surrounding the debate by group such as the Minutemen and Colorado Congressman Tom Tancredo, though it does need to be mentioned that the Minutemen issue is as much about property rights as it is about race. I agree with Garron about the absurdity of the current situation, but we should be leery of solutions which will attempt to seal our borders. Rather, any solution will need to be more comprehensive in its approach by realizing the linkages between national economies and understanding that economic, cultural, and environmental realities cannot be defined by political borders.
Comment By ATR, 3-11-06"We all benefit from under priced labor"
What a strange idea. Even assuming, arguendo, that the marxist price theory advanced by Rothman holds, i.e. prices are determined by the cost of production- not supply and demand, we could ascribe the same benefit to the lax enforcement of any law that raises the cost of doing business. Under this theory we would all benefit from ignoring labor, environmental, and tax laws as well.
Even if construction of a house would be rendered uneconomic by hiring legal labor, one cannot be heard to complain any more than the smelter owner who is forced to shut down because of the clean air act, or the textile manufacturer put out of business because of child labor laws.