03.31.06

How to make strawberries cheap and ethical

Posted in Liberty at 10:47 by RjZ

NOTE: I wrote this weeks ago and passed it to a few folks, because, frankly, I’m not so sure I’ve thought this one through. Now immigration is in the news, so here goes, anyway. I realize my sixteen or so regular readers may appreciate the travel articles more, but you can tell me by commenting if you think I’m on the right track or not.

I’ve written before that we often don’t recognize the real costs of the things we buy. One example: strawberries would probably cost $10 a tray if it weren’t for the black market of cheap, illegal immigrant labor.

When liberals fight for minimum living wage, are they considering the consequences of actually paying minimum wage for all jobs? That living wage will have to increase significantly if we expect the low-wage earners who pick strawberries to actually be able to afford to eat them. Meanwhile, many conservatives (the President, uncharacteristically, not among them) would have us expel immigrants in order to protect jobs for U. S. citizens. This would be great if it actually would provide jobs, but, in addition to being intractable and horrendously expensive to prosecute, U.S. Americans seem unwilling to perform these jobs, and if they did, how would we afford the products they worked to deliver?

At the same time, we fret about losing more and more quality jobs to foreign countries, but no one steps up to complain about spending $500 on a computer that does more (thanks in no small part to American creativity) than one that used to cost $3000. We don’t seem to mind much getting cheap technical support for that computer, either.

If South Asian Indians really are the best at providing technical support for the money—that is, if going overseas for this labor really is the best value—why wouldn’t we do it? They’ll keep coming here for microchip designs, after all. Politicians often complain that we’re not providing the necessary aid to many nations to foster democracy, but when we provide them with the knowledge of how to fish (jobs) instead of simply a fish dinner (aid), they complain that we’re losing jobs. We might not have to send as much aid to these countries if we were supporting their free-market and democratic policies with our dollars already. If people from all across the planet are willing to come to the U.S. and live in cramped quarters, doing jobs that the people already living here seem unwilling to do, why don’t we start collecting taxes from them as legal immigrants?

Allowing best-of-market practices to include labor ensures that even the lowest earning of our society still have a chance to afford all the products and services they wish. The alternative is a protective tariff, which simply prices us forever out of the world market. It’s clearly too late for that form of isolationism—where would we get our clothing, some of our cars, our computer chips and our cell phones?

Admitting that immigrants are a critical part of our labor force and are here to stay is equally important. The saddest part of our current situation is that immigrants are banished from using some important city services, which makes their lives dangerous and potentially a burden to American society. Moreover, they have access to services for which they do not pay their fair share. What we’re left with is a significant portion of our economy dependent on the suffering of illegal immigrants—suffering they’re glad to endure, by the way, because they feel it’s better than back home.

Some readers are thinking “Great! I agree! Let’s make foreign immigration easier and let’s legalize all these illegals. Life will be better for them, and they’ll start paying taxes to boot!” That’s my point, so I am glad you’re with me so far, but there’s a corollary that may concern you. Minimum wage has got to go (or at least be drastically reduced)! Companies won’t (and can’t) just start paying their workers what they should have been paying them legally all along without raising the prices of those strawberries and chicken parts. We won’t be able to afford those strawberries and chicken parts if they do raise the prices to cover their costs. Homeowners will fire their illegal maids and au pairs because there isn’t enough value in their services any more. Worse still, all these now-legals are out of jobs because there is no market for $10 trays of strawberries, $15/pound chicken and $12/hour maid service.

Our exceptionally high standard of living, held up on by an artificial minimum wage and on the backs of black-market immigrants who don’t get the benefits of the very policy meant to protect them, is part of the reason why many markets have moved to foreign labor in the first place. It should be disturbing to us that all the costs and inefficiencies of having an office of technical support in South Asia is a better deal than employing locals!

It certainly wouldn’t be easy to dismantle minimum wage from one day to the next, and steps toward this would have to be made carefully. In the meantime, politicians can either keep talking out of both sides of their mouths or consider addressing the black-market lie in which we find ourselves.

The fact is that we compete with other countries’ policies whether we like it or not. We can pretend that we live in a vacuum, but unless we close our borders off to these products and services, those places that produce them for the best value will win out. Those nay-sayers who claim that we’re transferring our suffering from our own citizens to the poor, unprotected workers in foreign lands ignore the realities that as workers in those countries earn more money and become aware of those Americans buying all their cheap clothes, they start to want them, too, and they start demanding more for their valuable labor. We raise them up with the power of our dollars, freely traded for the shoes and t-shirts they produced. At the same time, other countries compete with us of for labor and choices. Their citizens can’t always just pick up and leave, but the smartest and most entrepreneurial do somehow figure out a way to do just that. These creative individuals, the proudest Americans in nearly every generation, are what will fuel the next innovations that make the U.S. such a powerhouse. China is growing successful as the quality of life improves. They might have gotten there sooner if it weren’t for the brain-drain that occurred over the last few decades. Ultimately, we can most influence the policies of other nations with whom we have a healthy trade, and that will do more for their citizens and ours in the long run. It is frequently observed that two countries freely trading with each other will not go to war. I won’t defend that statement here, except to say that shooting at your customers is a good way to lose your market. I’d rather we all had strawberries we could afford.

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