Sunday, 14 July 2024 08:53

Immigration: The only time the GOP cares about the working class

Wednesday, 29 April 2015

Last Monday, Scott Walker, Wisconsin's Republican governor and a presumed GOP presidential hopeful, kicked the hornets' nest that is the immigration debate.

He told Glenn Beck's radio show that America needs to "make decisions about a legal immigration system that's based on, first and foremost, protecting American workers and American wages," and that this concern should be "at the forefront of our discussion going forward."

Walker's comments are significant because they're something of a reversal for him, but also because they break with the "legal-immigration-good, illegal-immigration-bad" orthodoxy of the GOP establishment.

Lumping both forms of immigration together as equally questionable makes sense from an economic perspective; market forces don't care about legal formalities like borders. But it takes near-cosmic chutzpah for Walker to say our first concern should be American wages and workers, given that pretty much every policy move by the Republican Party and the conservative movement seems designed to keep lower class incomes as depressed as possible.

By now, the battle lines on this issue should be familiar. First you get the argument from the center left and right that whenever immigrants, documented or undocumented, come to America, they bring added demand to the economy: They gotta eat, drink, put a roof over their head, get health care, and entertain themselves, just like everyone else. Even as they take on work, they increase the economy's overall ability to create jobs. So claiming immigrants "take jobs from Americans" is wrong.

This is the view of the economics of immigration from 30,000 feet, and it's right as far as it goes.

But closer to the ground, the terrain becomes more complicated. The U.S. economy isn't one big market. It's actually lots of overlapping markets, with different types of businesses and workers participating in each. And sometimes movement between these markets is easy for those workers, and sometimes it isn't. So it's possible for big influxes of low-skill, low-education immigrants to decrease wages and jobs for low-skill, low-education natives. You get more workers in particular markets, so wages go down. Meanwhile, the wealth created by those new entrants flows to other parts of the economy, so jobs in that market don't increase all that much. And the native workers in those markets can't easily hop to other markets, so they're stuck with depressed wages and fewer jobs.

You can click through the links for a fuller examination of this phenomenon. But the short version is that it's possible the second story is true, even if concrete evidence has been hard to tease out.

What this all boils down to is a problem of bargaining power. If you increase the number of workers in a market, but don't increase the number of jobs proportionally, employers can play workers off one another, driving wages down. That's why some Republicans like Alabama Sen. Jeff Sessions — whom Walker is apparently taking his cues from — are opposed to increasing legal avenues for high-skill immigrants. Tech workers, doctors, lawyers, and other professionals don't like seeing their incomes reduced either.

But immigration policy doesn't occur in a vacuum. There are lots of ways we could increase worker bargaining power, especially for low-skill Americans, while still taking in many more immigrants than we do now.

We could break up the work the economy already provides into smaller chunks that can be distributed to more workers, through things like national paid leave mandates, paid vacation, strengthened overtime laws, and a shortened work week. We could get the Federal Reserve to run much more aggressive monetary stimulus, or even fundamentally reform the way that policy operates, so that the boost the Fed pumps into the economy goes straight to the Americans hardest hit by bad economic times. We could ramp up government stimulus spending, the generosity of the social safety net, or both, which would also create jobs. And we could change laws to make unions more powerful, so they'd be ready and waiting to take on new immigrants as members and fight on their behalf.

Full employment should really be the top line goal, and it's what the first four of those five policy options aim at. (With an expanded social safety net and stronger unions also acting as a backstop for wages when full employment isn't reached.) When there are more workers than jobs available, bargaining power is going to go down across the economy. But at full employment, the first story about immigration — about how it just grows the size of the pie, and everyone benefits — is most likely to be true, because employers aren't able to play the new workers off the old ones.

Fundamentally, the U.S. economy faces a two-stage problem: First, the share of national income going to labor is getting smaller, as more and more is gobbled up by people who own capital. Second, of that share going to labor, a bigger portion is going to elite workers, leaving the working class with less and less. That's the context in which the question of immigration has to be understood. Full employment and increased bargaining power for all workers would solve both these problems — equalizing shares between workers, and getting them a bigger slice of the pie vis-a-vis capital.

 In a sane and decent world, we would open our borders as wide as humanly possible. Because letting other people immigrate to America makes their lives better; much better in many cases. And we would rely on all those other policy levers to keep the wages and jobs of immigrant and native-born Americans alike healthy and robust.

The perversity of the whole immigration discussion amongst conservatives and Republicans is that they've already rejected all these other options for increasing worker bargaining power. That the elite GOP establishment still wants more immigration even after that rejection should make their goal plain as day: keep capital's share as high as possible!

 But for anyone on the right that still wants to claim they give a damn about working class Americans, trying to limit immigration is a kind of ad-hoc fallback position to keep wages up.

Source: The Week Magazine

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