Immigration Reform: The Decline of the Middle Class and American Geo-Political Power
There is a mindset that permeates economic and political thought in American, that every job deserves a willing worker, this notion as played out in our trade and immigration policy, if continued will lead to the end of the United States as a broad base middle class society and diminish our geopolitical power.
Over the last three decades, through the liberalization of our trade and immigration policies, the United States has vastly increased the supply of labor in our domestic labor market. These policies, more than any other single factor, are the reason for the growing inequity, declining spending power of working families and inability of governments, at all levels, to match revenues with spending priorities.
Our labor markets are broken. No one in power or influence seems willing or able to talk about our decline in terms of our labor market. The balance between employment and the workforce is critical to our economy, to the access of the “American Dream” and to our geopolitical power.
And yet our policymakers in Washington and in Business are moving forward with the greatest single expansion of our (legal) labor force in the history of our nation. They are doing so without any discussion of the effect on our labor market, on inequity in our society, on the long term effect on our broader economy. All these considerations are being brushed aside by the desire of both parties to hold the office of President and by the desire of business to have a growing source of ready and cost-effective labor.
Business intends to lower the cost of their labor, not by innovation or capital investment, but by simply planning to use access to a growing supply of labor as leverage in the market to place downward pressure on the wages and benefits of working American families. If we move forward with this immigration plan, millions of American families will be placed under even greater economic pressure. While no occupation or profession will be immune to this labor marker pressure, the sad fact is that the Americans who work the hardest and make the least will feel the biggest impact of this labor force expansion.
Wages are depressed in the United States because too many workers are chasing after too few jobs. It really is just that simple. You only need to look at the numbers of unemployment, the underemployed, the number of workers without health care benefits, those without adequate retirement plans and the number of workers that have gone into retirement early or have simply left the labor market. (The lack of retirement savings by the post-baby boom generation is a ticking time bomb.) We have dis-incentivized work and made work less accessible to millions of Americans
We currently have a highly subsidized labor market. Governments, at all levels, have stepped in to make up the difference between what businesses pay in wages and benefits and what a family needs for their basic needs. Food Stamps are just one example of a program meant as a temporary bridge for those in poverty, which has become a permanent condition for the working poor. The fact that growing numbers of worker families do not have the income necessary to pay federal income tax speaks to the unsustainable nature of the current condition of our labor market. The level of government subsidies of our labor market is absolute proof that our labor force has been expanded faster than the ability of our economy to provide quality employment.
As a nation we need to address our immigration policy in terms of a broader discussion of our labor market crisis, to do that we need to recognize some fundamental facts. Government has a very real impact, through trade and immigration policy, on the size and health of our labor market. Our federal government, despite an amnesty program in 1986, has simply refused to take any practical measures to enforce our immigration laws.
Businesses will always argue for an expansion of the labor market as a source of lower-cost labor and, no matter how limited in their spending power, as consumers of their goods.
And we must dispel the myth of a labor shortage. If every job in the United States has a willing worker no matter how low the pay, no matter how poor the working conditions or no matter how lacking of benefits, then there will be a continual downward pressure on American workers’ standards of living. We continue to see the decline of the American middle class and a decline in American world power.
As a nation we need to get back to a place where workers have better choices. We need a labor market where workers can turn their noses up at the lowest paying and least desirable jobs. We need to be in a place where some jobs go begging for workers and some business models are unsustainable, and yes, even some businesses will fail because they are unable to attract a workforce in a highly competitive labor market.
We cannot turn our backs on the market forces, the economic processes that made us a wealthy prosperous nation, a broad base middle class nation. The future of the American Dream and of American world power depends on our ability to make rational long-term choices about the balance between the size of our labor force and employment opportunities.