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Needed: More Immigrants

Posted by Don Durfee | CFO.com | US

April 4, 2006 3:14 PM ET

I’ve been getting a lot of reader mail in response to my recent story on immigration reform, "Help Wanted."

What’s striking about many of these letters is the depth of anger at US corporations who, in the view of some of these writers, selfishly want to use immigration to keep wages low. The basic argument is that the worker shortage is a mirage: pay more and you’ll find Americans to take even the most menial jobs.

I won’t defend the intentions of corporations. Clearly they’re pursuing their self-interest by advocating increased immigration. But I’d point out a couple of things. One is that you would have to pay a lot more to get Americans to take some of these jobs. Assuming that people would pay $5 or more for a Big Mac, that might work. But there’s another point. Much of the economy is global, and while some jobs (housekeeping, farmwork) have to be done in-country, there are many others that can be done more cheaply elsewhere. If Ingersoll-Rand can’t find enough machinists and welders in the US and can’t bring them in from another country, sooner or later they’re just going to move production to Mexico or elsewhere.

So the real question may be this: would you rather have the work done here, partly by immigrants, or would you rather lose those jobs altogether?

Comments (2)

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Some thoughts on immigrant workers:

I tend to lean to the free market position regarding labor rates - if someone will do the same job at a similar level of competence for a lower rate, they get the job.

However, since many among the immigrant workforce are not on any official payroll, the companies that employ them (directly or indirectly) often pay no employement taxes, resulting in even more savings over and above the hourly wage. The undocumented nature of this workforce enables both the "employees" and employors to avoid a variety of taxes used to provide medical care, education, and other city/state/federal services.

Nevertheless, these workers and their families still consume a variety of public services, notably medical care and education. The cost of these services are effectively borne by the documented workforce - you (I assume) and me. Part of the employee expense of companies that employ these workers are effectively subsidized by the legit workforce, contributing in part to my rising payroll, sales and income taxes.

The subject of illegal immigrants and crime, particularly drug production/distribution and money laundering, is another significant cost to the overall economy.

I'm all for giving the job to the lowest bidder, as long as everyone is playing by the same rules.

Posted by | April 05, 2006 02:42am

I agree. Illegal immigration isn?t good for our country, it isn?t fair to the legal workers who are competing for the same jobs, and it often isn?t good for the immigrants themselves (if it means that they are denied healthcare and have to live as fugitives).

There are two issues that get tangled together in the immigration debate. There?s the matter of enforcing our laws and preventing illegal immigration. And then there is question of how much, and what kind, of immigration we want as a nation. Many of the pundits focus on illegal immigration, but their real complaint is immigration, period.

My own view is that you have to fix the immigration laws and do a better job of enforcing them. There?s no way around it: it?s too easy for companies to hire illegal immigrants today. If a worker presents documents that look legitimate, a company doesn?t have to question them (in fact, it could face a discrimination lawsuit if it does). There needs to be a better way for companies to know if their job candidates are legal and big penalties for those who flaunt the rules.

At the same time, we should make it easier for people to join our workforce legally. (Thomas Friedman of the Times used a nice metaphor the other day: a tall fence but a wide gate.) Meeting companies? demand for workers is only part of it. Many immigrants make an extraordinary effort to come here and once here are determined to succeed. Their presence may be costly in the short-term, but over the long run their entrepreneurial energy helps keep our economy growing.

Posted by CFO Staff: Don Durfee | April 06, 2006 11:06am


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