Posted on June 20, 2007

Importing Poverty

William Hawkins, Washington Times, June 20, 2007

The argument that illegal aliens have been needed to fill a labor shortage in the U.S. economy is not supported by the facts.

According to the Census Bureau, 14.3 percent of illegals work in manufacturing. Yet, manufacturing has lost more than 2 million jobs since 2000, with more jobs lost every month.

Hordes of American citizens would love to regain factory employment, as they have not been able to find comparably rewarding jobs elsewhere; but illegals have been hired in their place. Most illegals are in the low-end of the labor pool, where unemployment is higher than average and wages are declining, the opposite of what would happen in a market with a shortage. Even in the economy as a whole, real wages for 93 million nonsupervisory, private sector workers fell again in April.


Firms that hire “cheap” illegal workers do so to gain a competitive advantage against firms that obey the law. Honest business owners are placed in the difficult position of having to choose between emulating the unlawful behavior of rivals or risking the loss of contracts to them. A system that creates this kind of ethical dilemma should not be “regularized” into law.

There is, however, no such thing as “cheap” labor in an advanced society like ours. The higher costs for health, education and welfare, not to mention crime control, from a large increase in the number of people living in poverty is substantial. This financial pressure is already undermining state and local governments, school systems and hospitals.

Robert Rector of the Heritage Foundation concluded that the Senate amnesty bill “would be the largest expansion of the welfare state in 35 years.” His research shows “the U.S. has imported poverty through immigration policies that permitted and encouraged the entry and residence of millions of low-skill immigrants.” He puts the annual cost to taxpayers at $89 billion, which will increase sharply if more illegal aliens become eligible for aid under an amnesty.


Shortsighted decisions can undermine the long-term advancement of economic prosperity and national capabilities. Japan, with a very restrictive immigration policy and a static population, has plentiful capital and leads the world in robotics. In contrast, the most destitute places on the planet are awash in cheap labor. It is not the number of workers, but their productivity that determines living standards. The great achievement of America is to have elevated the working class to the middle class through innovation and investment.


Importing poverty is also risky politically for broader business interests. The Service Employee International Union, which has expanded rapidly by recruiting low-wage immigrants, hailed last November’s election results, claiming “By voting to change the leadership of Congress, and electing eight new pro-worker [i.e. Democratic] governors . . . more progressive voices were heard.” Higher income taxes to finance social programs on a redistributive basis are at the top of SEIU’s agenda.