Part Two – Wage Depression versus the Minimum Wage
by Phil Manning guest author
It is my intention to write a series of articles outlining my views concerning the damage illegal immigration does to the US economy, social network, infrastructure, and ultimately our national interests. In Part One I addressed how I believe an unstable southern neighbor bordering our southern region adversely affects our national interests. Here now are my thoughts on illegal immigration starting with the effects on the US wages scales and thoughts on the current national discussion on the minimum wage requirements.
For purposes of discussion it is generally postulated from most sources that there are 10 to 12 million illegal immigrants in the United States. Therefore, for ease of discussion I will take the middle ground and use 11 million as the general number for reference. Given that the US has 11 million low skill and uneducated illegal immigrants in our midst, why are we surprised that wages have been stagnant for the last 20 years? This fact has been reported by numerous federal agencies and recently by the President in his State of the Union speech (28 Jan 2014). Labor is a commodity that has intrinsic value based on quality, supply, demand, and requirements. As a commodity a person’s labor is valued by their education, skill, experience, and need within the geographic specific labor market place. Mathematical formulas can and are devised to establish wages based on these factors as any human resources professional will tell you who has done labor market surveys.
In allowing illegal immigration to occur on the scale of 11 million people within a country of roughly 300 million and a legal citizen work force of 90 million, we are accepting the impact low paid illegal workers have on the wages of all citizens of working age. Illegal low paid labor depresses the wages for all of us. Some would contend that this cannot be “for all of us” but I counter that when my wages are based on fair market value for the goods and services I can acquire with those wages then artificially low costs drive wages down. If I had to pay more for fairly produced goods and services that were higher than they currently are then I would be paid more based on market analysis. Not only would I pay more for fair labor market goods and services but the taxes associated with higher acquisition costs and wages would also conversely increase.
Of more significant note is that low-cost illegal labor more directly affects our own legal lower wage workers. This effect does not discriminate by race or ethnicity – US citizens of all backgrounds are affected. It was related to me by a trusted source in the construction business, that during the housing boom year that ended in or about 2006 (depending on your location), that in the Colorado Springs, Colorado area most house construction framers were illegal immigrants. Construction framers perform the task of installing the structural frames once a foundation is laid and prior to installation of external and internal walls. At that time illegal immigrants working as framers were being paid six to seven dollars an hour with no benefits or tax withholding (i.e.; direct cash payments). Prior to the use of illegal immigrant framers in construction legal workers were being paid $15 to 16 an hour with benefits and tax withholding. These legal workers were certainly not being overpaid in this economic boom time but they were legally and gainfully employed for relatively low skill manual labor. As competition increased to unsustainable levels construction contractors turned to illegal immigrants to cut costs and the direct ‘losers” were legal citizens or workers.
In addition, low-cost illegal labor hurts other parts of our legal working class and entry-level workers. Check the statistics on employment status of our urban poor, particularly minorities, and you find what should be a highly publicized catastrophe, where mostly black and Hispanic people such as young males have no work or potential opportunities. Here in Colorado Springs the urban minority young male unemployment rate is 52% and it is worse in much large urban areas. In effect we have imported a large poverty population further impoverishing our own citizens on the lower end of the socio-economic scale. Why?
I would add here that many Americans believe that illegal immigrants take jobs that we do not want to do or are too manually difficult making them undesirable. Further, many Americans believe most illegal immigrants are working in farm fields performing back-breaking manual labor. The last 2010 census found that evidence indicated that only one out of every 20 agricultural jobs was being performed by an illegal immigrant. I would add that illegal labor affects our entry labor workers such as teenagers and young adults who would normally be performing low skilled jobs as they completed their education and job training, and learned the personal values of making their way economically.
The following is an actual life event of a close and long time personal friend named Ron Cuthrell. This man was born in raised in the small Iowa farm town of Cherokee where the major employer was a chicken processing plant owned by Tyson, a large chicken processing company with numerous nationwide plants. Ron, a high school graduate went to work for Tyson and joined the Iowa Army National Guard serving several years during the Viet Nam War. He married, started a family, and through hard work and developed skills moved up at Tyson through the years until being promoted to foreman making $15 an hour working 40 to 50 hours per week. He acquired a home valued at $100K and a mortgage with a $50K balance. Life was good and fulfilling for Ron and his family. Then, without warning, Tyson announced the plant was closing and it was shuttered in a matter of weeks. The town of Cherokee was devastated in a variety of ways and Ron went from having a long time job to being unemployed and his home value plummeted to equal his mortgage with his earned equity gone. A few months after the plant closing Ron was contacted by Tyson and offered his old position back at the re-opening plant but at half the pay he had been receiving. He along with most of his co-workers refused Tyson’s offer. In rapid succession cheap apartment buildings were constructed followed by the arrival of bus loads of Spanish-speaking people to man the plant.
Tyson successfully challenged formal protests of unfair labor practices and “legally stonewalled” the process for years. Unfortunately the federal authorities never took much interest in addressing the problem. Life as Ron and his neighbors had known, changed drastically and never returned. Ron uprooted his family, where they had lived for generations, and moved to Arizona eventually finding gainful employment after a couple of painful years. As for the plant, it was eventually closed many years later after competitors filed complaints and federal authorities finally took action against Tyson’s illegal labor force.
Bottom-line: Illegal immigrant labor takes jobs from those least able of our own citizens at costs at which they cannot compete.
At this time in the political discourse there is a lot of discussion to increase the federal minimum wage. By the lack of effective action to control illegal immigration our governments (federal, state, and local) have directly contributed to our rates of unemployment particularly among the working poor. It is astounding to the author that having contributed to one of the leading causes of unemployment among the working lower classes our government is discussing raising the minimum wage from$7.75 to $10.10. If the minimum wage is raised, our federal government is making our unemployment situation worse by making the illegal labor force even more attractive to unscrupulous employers.
In conclusion we must demand from our federal government to control our borders, turn back the illegal immigrant labor force, and thus restore our legal citizen labor market to a healthy and sustainable status.
Author’s bio: Phil Manning is a retired Air Force officer who has been stationed in Central America and traveled throughout South and Central America. His experience has included providing and overseeing military security cooperation efforts in Honduras, Costa Rica, El Salvador, Turkey, and Saudi Arabia. He currently holds a Department of Defense Top Secret security clearance as a civilian contractor in Colorado Springs, CO where he works as a project manager and has supported DOD, Department of Homeland Security (DHS), Department of Health and Human Services (HHS), Air Force Space Command, US Northern Command, NORAD, and Army Space and Missile Defense Command.