Immigration and Minimum Wages

Which candidate will address the economic anxiety of voters?

Middle class incomes have not rebounded over the past 7 years even though real estate and stock market asset prices have rebounded nicely.

Waiting for Hillary at the U of New Hampshire

Fewer people are under water on their mortgages.  Good.    And 401k balances have recovered--at least for people who had investment assets in the first place.   Also good.

People with assets have done well.  But people living on their incomes have not.  incomes have stayed flat.  People are unhappy.   As Bill Clinton's campaign noted 24 years ago:  "It's the economy, stupid."

Trump made news on day one of his campaign by mentioning Mexican rapists and criminals, and maybe a few good people.   Instead of this burying his campaign, it launched it.   He uncovered a great reservoir of resentment of immigration, both legal and illegal.  Events helped him: the Boston Marathon bombing, the San Bernardino shootings, the murder of the woman in San Francisco, the shootings in Paris. 

Americans have been rattled and Trump has defined this debate as a matter of American pride and safety, plus resentment at uninvited and unwelcome guests at the American dinner table.

The progressive left orthodoxy is about multicultural inclusion.  So if the issue is respect for ethnic diversity vs. disrespect for it, Trump took the fear and resentment side and Democrats are taking the respect side.  Trump appears to be winning.  People are worried and angry.    The Republican voters have very little interest in the establishment candidates who speak of inclusion of Hispanic and Muslim immigrants.  Jeb Bush and Lindsey Graham saw their crowds and poll numbers collapse.   I heard with my own ears the boos they get at Tea Party events in South Carolina, Graham's home state.

 Hillary speaking on college debt costs

But there is a principled and consistent position for a Democrat to take regarding immigration, a position which would be consistent with Democratic candidate claims to be for the forgotten middle class, for youth employment, and for a minimum wage that brings a person out of deep poverty: limiting immigration.

Fifty years ago Medford youth routinely thinned pears in the orchards in June then picked ripe pears in August and September.   Orchards supplied school buses to pick young people up in front of a few schools to drive people out to the orchards at 7:00 a.m. and return at 3:30.  No longer.   Those jobs are now done by people from Latin America.

I was a guest at a holiday staff party in January for a local fine-dining restaurant and inn.   I thought I knew most of the staff; I eat there frequently.   But I didn't recognize over half the people--the housekeepers and kitchen staff.  They were almost entirely Hispanic, with limited English.   They brought their whole extended families to the event, spouses and children.   There are, in effect, two staffs at the restaurant, a "white" staff of hosts and servers, visible to the public, and an Hispanic staff behind the scenes.  The restaurant owner explained, saying that you could not run a hotel or restaurant without Hispanic workers.  They have been there the whole time, behind the swinging double doors in the kitchen and changing the bed sheets in the guest quarters.

What would happen if immigration were dramatically reduced?   Presumably the demand for those orchard and back-of-the-house jobs would continue and employers would need to raise wages to bring native born young workers back into those jobs.   When I was in college a young person could work his way through a state university by working those jobs summers and part time during the school year.    In my own case, in 1970, tuition at Harvard was $2,000 a year, and the part time job I had at slightly better than minimum wage paid $2.20 an hour.   It took 900 hours per year of that job to pay a Harvard tuition.   Today that same job pays $11/hour and Harvard tuition is $45,000.  It would take over 4,000 hours to earn the same amount.  (Actually more.   In 1970 a person earning the $3,000 a year I earned from various summer and school-year jobs paid essentially no income tax.   A single person would need to earn $60,000 to net $45,000 after taxes today.)

Tuition at Oregon state colleges are about $7,500/year and students find jobs paying just a bit over minimum wage, about $8.50-$9:00 an hour.   It would take about 900 hours at such a job to equal tuition at the local state university.   

Think of the implications:  a young person hoping to work her way though college at a state university now takes the same effort--900 hours--as it used to take to work ones way through the most expensive college in the world fifty years ago.    College is expensive, wages are low.

The result is that college students take on debt to attempt to cover the gap.  Hillary Clinton says we need debt refinancing for students.

But the source of the problem isn't interest on debt, it is the wages for low skilled jobs in relation to the prices of things.   Trump is on the dangerous side of this argument.  Trump says he would not change the minimum wage.   Trump's solution to the anxiety and resentment is to treat it as an issue of culture and ethnicity.  

But there is another approach, open to Bernie and Hillary, if they will take it. They could discuss the consequences of immigration on young American workers, on agriculture and construction labor markets.  They could affirm their first duty is to Americans attempting to get onto the first rung or two of the job and experience and career ladder.

Does it need to be hard-hearted?  Well, it might make the first focus of their compassion American workers.  Those Americans may like that.   But what about the Latin American and Middle Eastern potential immigrants, and their problems, and the desire for new families here to unify?  Their interests might come second.  How will that play?   

I don't know.   Maybe like they are being a commander in chief putting the interests of American troops first.   American troops might feel good to know that.

Neither Bernie nor Hillary will feel comfortable discussing immigration as an economic issue for working people because the issue has been commandeered as an ethnic pride and homeland security issue by Trump's campaign.    And white resentment of needing to "push one for English" is easier to rouse up than it is to discuss the supply and demand curve for youth employment.    

But immigration is in fact an economic issue, with great importance to the people who pollsters say is the Trump base of support, adults without college.  Those people used to be Democrats.   If Democrats won't put their interest first, they will look to someone else who will.

The problem with immigrants is not that they are bad people, it is that they are excellent employees, depressing the wages that might be paid to excellent job-seeking American employees.   But that is a path toward a policy that might well address the problem of the students in the photos above: jobs for Americans first.

One of the big questions facing American voters this year is which party will address the economic anxieties of the American working people.   Trump has proposed a solution.  Hillary and Bernie should do the same.   They don't have to be racist or xenophobic to do so.  They just have to be willing to say that they put the interests of American workers ahead of the interests of foreigners who want to be American workers.