Duke-onomics

Michael Dukakis, one time Governor of Massachusetts and candidate for President, solves the illegal immigration problem for us with an op-ed in the Times - price them out of the market:

If we are really serious about turning back the tide of illegal immigration, we should start by raising the minimum wage from $5.15 per hour to something closer to $8. The Massachusetts legislature recently voted to raise the state minimum to $8 and California may soon set its minimum even higher. Once the minimum wage has been significantly increased, we can begin vigorously enforcing the wage law and other basic labor standards.

Millions of illegal immigrants work for minimum and even sub-minimum wages in workplaces that don’t come close to meeting health and safety standards. It is nonsense to say, as President Bush did recently, that these jobs are filled by illegal immigrants because Americans won’t do them. Before we had mass illegal immigration in this country, hotel beds were made, office floors were cleaned, restaurant dishes were washed and crops were picked — by Americans.

...

But if we want to reduce illegal immigration, it makes sense to reduce the abundance of extremely low-paying jobs that fuels it. If we raise the minimum wage, it’s possible some low-end jobs may be lost; but more Americans would also be willing to work in such jobs, thereby denying them to people who aren’t supposed to be here in the first place. And tough enforcement of wage rules would curtail the growth of an underground economy in which both illegal immigration and employer abuses thrive.

Raising the minimum wage and increasing enforcement would prove far more effective and less costly than either proposal currently under consideration in Congress. If Congress would only remove its blinders about the minimum wage, it may see a plan to deal effectively with illegal immigration, too.

D'oh!  The problem isn't that too many unskilled workers cross the border; it's that there are too many jobs in this country with a pay rate suitable for unskilled workers!

Let's note that the Duke's co-contributor is a student of the dismal science:

Michael S. Dukakis, the governor of Massachusetts from 1975 to 1979 and from 1983 to 1991, is a professor of political science at Northeastern University. Daniel J. B. Mitchell is a professor of management and public policy at the University of California at Los Angeles.

Well.  One can't say this idea lacks imagination.  Personally, I wonder if the authors attempted to imagine the impact of this proposal on low-skilled native born Americans, but hey - Democrats always want to raise the minimum wage, so this might just become the next fantasy reason for doing so.

INCOMPARABLY WORTHLESS:  Per this old thing, the Duke

has endorsed the so-called comparable worth doctrine -- an approach that assumes that workers in occupations traditionally dominated by women earn less than workers in different but "comparable" jobs generally held by men.

Say no more.

 

Comments

[clarice]

Rconomics--a game anyone can play..And everyone's a winner.

[Foo Bar]

Personally, I wonder if the authors attempted to imagine the impact of this proposal on low-skilled native born Americans

Well, right there in the excerpt you quoted, they say:

If we raise the minimum wage, it’s possible some low-end jobs may be lost

Wouldn't that suggest that they are well aware of the counter-argument to which you allude but do not consider that effect to be large enough to outweigh the benefits of their proposal?

[Old Dad]

And Dukakis could have been President? Shudder....

We're enjoying what many economists might call structural full employment...or close. Ergo, there aren't enough Americans to take the jobs we have. Hence, the long term trend in increasing productivity.

So let's raise the minimum wage for the lowest skill positions. Two results occur simultaneously--supply of illegals increases and demand goes down or stays flat, but prices increase.

Dukakis is a bloody genius.

[Tollhouse]

/[Once the minimum wage has been significantly increased, we can begin vigorously enforcing the wage law and other basic labor standards.]/

Why don't we enforce now? I didn't see them explain any reason not to.

[Gary Maxwell]

Well Dukakis deserves a pass, he is still recovering from his drubbing in all but one state ( guess who?). But a UCLA prof parrotting this drivel? It must not be the elite University it aspires to be.

Even better. Why dont we raise the minimum wage to $30 a hour? Then when we wreck the economy our workers will head to Mexico looking for work and the Mexicans will hear from them that no jobs are to be had and will stay home. As the Guiness commercial says "BRILLIANT".

[Tom Maguire]

If we raise the minimum wage, it’s possible some low-end jobs may be lost....

Wouldn't that suggest that they are well aware of the counter-argument to which you allude but do not consider that effect to be large enough to outweigh the benefits of their proposal?

Good point. I had read that in their column but was laughing too hard to really reflect on it.

Let's just see - raising the minimum wage from $5 to $8 will end the flood of illegals without raising domestic unemployment among the unskilled? Why will it be that only illegals are priced out of the market and choose to stay home? Why, for that matter, don't we think that a desperate third-worlder might happily displace an American slacker who wouldn't work for $5 bucks an hour but is willing to show up for $8?

If I were an employer, I would still prefer the hard-worker, not the shirker, and I would still feel the illegal was easier to abuse.

Or is the "stricter enforcement" to which they refer not *really* OSHA, but more like the immigration/green card laws?

[Forbes]

Well, can we burst the Duke-onomics bubble of an idea by letting the guv'nor and good professor in on a secret?

Most of these low-skill, illegal immigrant workers are paid off the books--just go into any restaurant, and see for yourself--so raising the minimum wage won't change anything. (And in any high cost blue state (NY, CA, MA), the illegals are paid more than the minimum wage.)

So guv'nor, why does it take a raising of the minimum wage before enforcement action can be contemplated? (Or is this just another bait-and-switch proposal like "comprehensive" reform, because cities like New York, Boston, and LA are already sanctuaries from prosecution due to illegal immigration status?)

[Patrick R. Sullivan]

As Forbes notes, there are alternatives to paying the minimum wage; off the books, cash payments. So, employers who couldn't afford to pay $8 would offer that, and the Mexicans would almost surely accept (if it still beats wages in Mexico).

Which would decrease payroll taxes, and further hasten the implosion of Social Security and Medicare. Duke is a genius.

[cathyf]

Um, so paying less than the minimum wage is like, dude, illegal. So who is more likely to work for the illegal wage, the illegal worker or the legal one?

(Where's the rolling eyeball smilie when you really need it?)

cathy :-)

[richard mcenroe]

So we're going to end illegal employment by making it even MORE expensive to hire legal workers.

Riiiiiiight. Did that tank hatch clonk old Dooky on the head during that photo op?

[Soylent Red]

Forbes is the man, but doesn't take it far enough...

What motivation do employers have for hiring illegals? Easy. They cost less.

Raising minimum wage, among other economic horrors it will create, will work to increase illegal immigration by making it more attractive for employers to work off the books.

This could be the most assinine idea I've ever seen...

[ed]

Hmmmm.

Shortest argument against this proposal:

It's by *Dukakis*.

[Forbes]

As Soylent Red points out, the dilemma of illegal immigration will be exacerbated, when, as so-called comprehensive reform envisions, the illegals are "regularized." This means the former illegals will have to be paid on the books because they will now have the protection of workmen's comp insurance, unemployment insurance, and social security and medicare benefits.

Due to the high cost of employing this unskilled worker population, this will only encourage a follow-on wave of illegal immigration to compete for these low-skill, low-wage jobs--and again, perform the job off the books.

As one friend who owns a restaurant in Manhattan told me--with perhaps too much hyperbole--half the resaurants in Manhattan would go out of business if the "illegals" were regularized.

The opposite side of that coin tells me that resaurant meal (and domestic help and lawn care) prices are subsidized by the labor of illegal immigrants. The solution is not uncovered by raising employment costs which is itself the policy that creates the opportunity for someone to underbid for the job.

[dick]

If anyone will go look at what happened to Massachusetts and norther New England when the state legislature passed laws that the Duke thought would help in his presidential big, they will see just how bad he is at economics. The businesses left the state in droves and moved south and it is still happening in Mass today because of the latest democratic boondoggle in that legislature.

Don't forget that Duke is the one who forced the state to build a prison in the middle of the state where there was no public transportation rather than in the military barracks already owned by the government in Boston Harbor. To top it off the town did not want the prison and the site was right in the middle of an aquifer. Weld took over and pulled the prison and then they had to create something else to use the bulding for. Cost the state millions. Add that to his start of the Big Dig and you have a really great economics maven there in the Duke.

Only job he was ever any good at was when he hosted that public television show. That he was good at; the rest, no.

[Jabba the Tutt]

First of all, illegals and their employers already break numerous laws, why wouldn't they break the new minimal wage law too? And wouldn't this hurt legal and native workers having to compete against illegal actors?

Second, the South African apartheid regime also had a very high minimal wage combined with, shall I say, vigorous labor law enforcement. The purpose was to make race discrimination overcome the natural inclination to try to pay less for labor or anything else.

Glad to see that Gov. Dukakis is learning from the apartheid regime.

Kakisarchy = rule by the worst

Dukakisarchy = rule by two of the worst

[ARC: St Wendeler]

Wait a minute.... what's the unemployment rate again? We don't have a problem of people not being able to find good paying jobs. We have a problem of not having enough labor to satisy demand - which means that most jobs go for much higher than the minimum.

Dukakis is a tool... If he thinks we have an illegal immigration problem when they're being paid less than the min wage, does he think they'll be less likely to come to the US for even higher wages? Or does he think that employers will be less likely to seek out illegal immigrants so they can take advantage of their status and pay them something less than $8/hr?

A guest worker program would resolve the issue, but must be combined with border security. I approach the issue purely from an economic and national security perspective and my libertarian leanings start to emerge. I realize that I part company with much of the conservative base on this issue, but damnit... it's what Karl has told me to do.

Regards,
St Wendeler
Another Rovian Conspiracy

[Soylent Red]

Forbes:

I think all this blather about minumum wage is quite instructive in how the liberal talking heads are desperately out of touch with actual business concerns.

Consider the overall roots of illegal immigration. Anyone who has ever owned or operated a business, hourly labor is tallied under the broader heading of "overhead". If you get paid by the hour, you are a variable cost. As such, you are on the front line of cuts when margins get out of whack.

Those are some pretty hard words for most people. Nobody likes to be on an existential level with the electric bill. Still, it's a cold fact of business.

Assuming you can absorb all that into your consciousness, there is a greater hurdle to overcome.

Labor, and particularly unskilled labor, is a commodity (moreso in a globalized economy). An American with ten fingers and toes can pick lettuce with more or less the same efficiency as a Mexican. Thus, when your labor product is roughly the same, but your wage is higher, you become a target for underbidding.

Since wage is only a small part of the cost of labor, you can multiply this effect by adding in such things as medical benefits, vacation pay, maternity leave and so on. And lest I forget, unionization increases cost of labor as well, as it tends to set an artificial (and non-competitive) cost for labor.

Libs don't see things under the cold light of capitalism though. People have a "right to work", a "right to health care", and most importantly, are viewed in terms of individualism rather than as part of a national or international labor pool.

[Soylent Red]

Ah, and while I'm ranting...

We have reduced unemployment to nearly the sum of frictional and structural unemployment.

Amnesty will immediately increase unemployment rates, giving Dems yet another reason to bitch. Moreover, amnesty will immediately move all gray market labor over onto the legit side, thus making them eligible by law for all the perks and bennies legitimacy confers. Thereby causing a rise in the number of minimum wage workers who get the accompanying other factors that boost cost of labor.

So, even if we raised unemployment to $8, any possible net gain would be negated by amnesty, due to the influx of low end workers causing wage inflation.

Democrats somehow seem to forget this when advocating both actions at the same time, proving once again that Dems are by nature clueless when it comes to basic economics.

Thank you for indulging me...

[Tom Maguire]

Libs don't see things under the cold light of capitalism though. People have a "right to work", a "right to health care", and most importantly, are viewed in terms of individualism rather than as part of a national or international labor pool.

Hmm, that may be the only time the libs think of people as individuals rather than as a member of some (generally oppressed) group.