How Expensive is Cheap Labor?

If you were keeping a file folder with newspaper clippings about how the migration of poor people from south of the border is holding down wages in United States, your folder wouldn’t have much in it. While most people who favor enforcement of immigration laws have made this claim for years, the mainstream media just hasn’t been interested.

At last, a front-page article in the Dallas Morning News has provided some real numbers for at least one of the nation’s top five metropolitan areas. The story, based on U.S. Census Bureau data from 1999 to 2005 shows the median household income in the Dallas-Fort Worth region fell 10 percent when adjusted for inflation.

Oh so? But aren’t we told that the migration of millions of low-income workers into our country is a net gain? And that they come here simply to do the jobs that Americans won’t do? Well, yes, we’re told that by President Bush and others like Lonnie “Bo” Pilgrim who claims that he can’t find enough workers to pluck chickens at his 26 Pilgrim’s Pride plants.  Already, he’s got three of those plants operating in Mexico.

Pilgrim is just one of many top businessmen who want a guest worker plan so that the flow of inexpensive labor keeps coming — but without the risk of fines under the current wink and nod system. At a news conference, Pilgrim was joined by David DeJong, owner of Horizon Dairy, who stated, “I would not be able to operate my farm the way I do without immigrants.”

Well, that’s a true statement in at least one sense. Without illegal immigration or a guest worker program, DeJong might actually have to pay market wages. Consumers would pay a little more at the grocery store, and market forces would actually be allowed to work.

The Census Bureau report reflects the consequences of allowing Mr. Pilgrim, Mr. DeJong, and others to enjoy the fruits of cheap immigrant labor. The percentage of people in the Dallas-Fort Worth area living in poverty is up from 10.8 percent in 2000 to 13 percent in 2005. The experts say that’s because of who’s coming across the border. “The type of people we’re drawing are less educated,” said Pia Orrenius of the Federal Reserve Bank of Dallas.  “Job growth is strong, but many expanding sectors are hiring for low-skill positions.”

Bernard Weinstein, Director of the Center for Economic Development at the University of North Texas, said that the workforce is responding by offering more low wage jobs.  “It certainly drives home the need to invest more heavily in education,” he said.

But would President Bush and Bo Pilgrim really want this migrant workforce to be more educated?  Their actions suggest that they would not, because with education would come a demand for higher wages, and then Mr. DeJong would not be able to run his business “the way I do now.”  That is, on the backs of poor, uneducated migrants.

Unfortunately, President Bush and his businessmen buddies are willing to accept this undeniable erosion of wages in order to get the cheap labor. They don’t seem to have any problem with the stress that illegal immigration puts on schools and hospitals. They don’t even notice the added crime and disease in this country that comes with our current lack of enforcement.

Add to that the cost of implementing a guest worker plan such as the one passed in the Senate.  The Congressional Budget Office has just issued a little-reported analysis showing the Senate bill would cost the taxpayers $126 billion during its first decade.  CBO says it would require 31,000 new federal workers just for law enforcement and that newly legalized immigrants would claim $50 billion in federal benefits including Medicaid and Social Security.  And government estimates are almost always low.

Dolly Parton once said, “It costs a lot of money to look this cheap.”  In the case of immigration — both legal and illegal — it costs a lot of money to get all this cheap labor.  More and more, the American taxpayer is waking up to the fact that cheap labor is way too expensive.