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It’s all about choices
Posted by: mcq on Thursday, March 23, 2006

Yesterday I mentioned Robert Samuelson's article where he says our current immigration policy (or lack thereof if you prefer) essentially imports poverty. He also made the point that the wages for which illegals will work has an adverse effect on the low-end labor market. I don't see that as a particularly controversial point.

USA Today concludes an article about housing and laborers with this sentence:
A key problem, Retsinas says, is that “the labor market in our economy produces lots of low-wage jobs. There is an incredible disconnect between the housing market and the labor market.”
Or stated another way, 11 million people willing to work for very low wages has depressed the entire low-end of the labor market. The results are now showing up in other markets, such as housing. Americans who are unskilled and trying to support a family can't demand the wages necessary to do so because of lax employer enforcement and the willingness of illegals to work for less than American wage demands. Some argue that is the "free market" at work. Well, it's not. It's an artificial floor established by illegal labor which doesn't have to pay taxes or government mandated fees American workers must pay. Thus they're able to outbid citizens who want the work everytime.

Now of course there are other mitigating circumstances concerning home ownership as well. One is location:
The median home price in Los Angeles — the point at which half of homes cost more, half less — is $529,000, far beyond their means. Instead, they're hoping to buy a condo with no down payment and an interest-only loan of $300,000.
Of course location, at least in this country, is a choice. Where I live, houses average a bit over $200,000 with plenty of new developments having single family homes which start at about $180,000. But that's only significant if you live here. And, frankly, wages aren't as high here, even at the low end, as they are in CA.

Then there are children:
In California, Marisela and Jose Bacaro know what a back-breaking challenge it is to have children and afford a home. Marisela, 24, works as a coordinator for Hollywood Records in Los Angeles; Jose, 25, works at a bottling plant in Los Angeles.

On their salaries, it's hard to save money while raising Alexis, 6, and Emily, 4. “With kids, they always need something,” Marisela says.
Have children, buy a home? Have children, buy a home?

I don't know, maybe I'm old fashioned but I've always believed it is best to be able to afford a home first and then, when you can afford them, have children. Another choice.

Yes, I know "stuff happens", but that's the problem of those who allow stuff to happen in this day and age. I have difficulty mustering much sympathy for those who allow it to happen and then complain about it (or play the victim because of it).

But all that being said, anyone who doesn't believe that the influx of cheap labor from Mexico hasn't had an effect on some Americans is simply not dealing in reality.

It's a bit like Wal-Mart isn't it? We can lament the passing of the mom and pop shops it replaces or we can make the choice to patronize mom and pop and spend more on the same products.

We face the same sort of choice when talking about the cost of low end (and unskilled) labor. We can forego the cheap labor and demand that government enforce it's laws and businesses abide by them and see the resultant rise in wages and the price of products. We may also see a rise in home ownership and a lessening of poverty.

Or we can ignore it and continue to reap the benefits of low priced labor along with the social problems and costs it brings.

The politicians we hire to take on such problems on our behalf are, of course, going to do what is popular. If we use Wal-Mart as example of the effect, the conclusion is foregone. Lip service about border security, some sort of amnesty program wrapped up in the cloak of "guest workers" and the continued social problems and cost at the low end of the wage spectrum. While Wal-Mart is roundly criticised by many because it drives smaller shops out of business, they really go out of business because we choose Wal-Mart and its savings over the smaller shops.

Unlike shopping at Wal-Mart, an artificially low labor market doesn't really save us any money at the register. While we may enjoy relatively less cost when buying a house, we end up paying a higher price in the long run by having to subsidize those who are here illegally and forced to rely on the social services and health care we pay for (but they don't).

Yup, like most things in life, it's all about choices. And, if history is our guide, human beings usually don't make hard choices until they're forced on them by some disaster or catastrophe. Unfortunately I don't see this issue being any different.
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Previous Comments to this Post 

"I don’t know, maybe I’m old fashioned but I’ve always believed it is best to be able to afford a home first and then, when you can afford them, have children. Another choice."

Yes, but that would require delay of gratification, something we seem awfully unwilling to teach the youth of today. The lesson of "start small, start at the bottom rung, live within your means, and keep your zipper zipped" is ignored in the age when teenagers expect sexual freedom and encounter credit card offers.
Written By: Kimberly
Unlike shopping at Wal-Mart, an artificially low labor market doesn’t really save us any money at the register.
What on earth could this possibly mean? What constitutes "artificial" here? How do you know what the labour market should "naturally" look like? Isn’t government meddling in the labour market the "artificial" thing? Why do your free-market principles suddenly vanish when we’re talking about poor Mexicans?
Written By: Matt McIntosh
I made an economic argument yesterday refuting the notion of importing poverty. I would agree that illegal immigration presents social challenges far removed from the realm of economics. The best argument against the illegal aliens is that they consume public services without paying taxes. So it is entirely correct to conclude that the illegals have an unfair advantage (although I have had encounters with a lot of americans who will give you a discount if you pay in cash, wink wink nod nod). Simply put, any time there is any change in the economy there are always economic winners and losers. In other words, the economy as a whole may be better off, but the workers that are dislocated experience economic hardship. I suppose losing your job to an illegal alien would be no less painful than losing it to new technology (automatic checkout machines replacing cashiers for example). When Edison invented the light bulb, it caused layoffs in the candle industry. Americans did not reject the superior technology to keep their fellow americans employed. Likewise, most americans seem to be enjoying the low prices that the illegal alien labor produces. Imagine how much more expensive homes would be if the mexican brick masons were locked out of the market. Even though most people will give lip service to the idea of stopping illegal immigration, their economic choices reveal a different set of preferences.

Getting back to the illegal alien issue, I suppose if some type of guest worker program could be instituted such that those people paid taxes, then that would greatly diminish the argument against having latinos coming here for work. The playing field between americans and latinos would be more or less leveled. I would assume that the latinos would demand more than $5.00 per hour if they had to pay taxes. This would, in effect, raise the wage floor. I do not think that this will ever happen politically. Most americans would view this as increasing competition for jobs, rather than eliminating the unfair competitive advantage of the illegal labor. The reality is that these people are going to come here illegally and the unofficial policy of the government is to look the other way, all the while making public proclamations that they are against illegal immigration. I believe that it is not in our society’s best interests to unofficially condone an illegal activity. There are really only two choices. Either (1) Enforce the current laws and keep the illegals out and deal with the consequences to the US and mexican economies; or (2) Legalize the importation of foreign labor and bring it into the system.
Written By: Greg Abbott
URL: http://

I understand that the idea behind QandO was to encourage the abandonment of the ineffective big ’L’ Libertarian approach of "ideological purity or the highway" and instead work to move current law and practice in this country in a more libertarian direction. What I don’t understand is how attempting to restrict the flow of labor does that. And the WalMart comments are something I would expect from a Green party activist or a "Crunchy" Con not someone who considers themselves at least somewhat libertarian. Wouldn’t increased immigration enforcement/restrictions and shunning of WalMart lead us to a less libertarian world?

It’s not even that I think the ideas you express are awful or without merit, I’m just having trouble identifying them as libertarian—although you didn’t call for government action on the WalMart one so that’s more of a "what we ought to do" instead of a "what should be enforced."
Written By: Jimmy
URL: http://
"Wouldn’t increased ... shunning of WalMart lead us to a less libertarian world?"

Why is that a less libertarian world? How is it "libertarian" to say that Walmart should exist? It is libertarian to say that Walmart should not be legislated out of existance or (over) regulated. But if Walmart were to go out of existance because individual people chose not to shop there for whatever reason, it is still individuals choosing.

Saying that Walmart is an inherently good thing is corporatist, not libertarian.
Written By: Tito
URL: http://

You have a point. However, I hedged my response to McQ by saying that, without government action, personally disliking and thus avoiding WalMart is perfectly acceptable to me.

WalMart isn’t an inherently "good thing" in my opinion. My point was that disliking WalMart because it pays workers less than some find acceptable seems to be at odds with the libertarian philosphy that individuals should be allowed to choose their working arrangements.

My second point (if I actually had one) was that politically, WalMart has become a political and cultural touchstone with left progressives on the anti- side and free market libertarian types generally on the pro- side. Invoking the name of WalMart in a negative way puts McQ in the company of the non-libertarian side. That is not to say that criticism of WalMart is illegitimate for someone who considers themself a libertarian. Just pointing out the juxtaposition.
Written By: Jimmy
URL: http://
I made an economic argument yesterday refuting the notion of importing poverty.
Actually you made an argument you thought refuted it. Then, when answered, you never came back. I’m afraid that’s not how it works here ... you may wish to revisit your "refutation".
Written By: McQ
What I don’t understand is how attempting to restrict the flow of labor does that.
If everyone plays by the same rules I have no problem with that. Let the labor ’flow’.

But that’s not the case as we now have it, is it?
Written By: McQ
Invoking the name of WalMart in a negative way puts McQ in the company of the non-libertarian side. That is not to say that criticism of WalMart is illegitimate for someone who considers themself a libertarian. Just pointing out the juxtaposition.
I said nothing negative about Wal-Mart. I simply pointed out that one of the criticisms of Wal-Mart is it drives mom and pop shops out of town. In reality it doesn’t. Consumers do. They choose the savings at Wal-Mart over supporting the M&P shops and their higher prices.

It’s a choice each consumer makes.

It’s the same thing with illegal aliens. We have to choose whether we want to enforce our laws, see a fair and open labor market (where no job seeker is penalized because of his citizenship) and let the costs settle where they may, or we choose the artifically cheap labor (which we subsidize when we pay for the social services they consume) because it benefits us in the short term.
Written By: McQ

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