Why Labor Unions Support Amnesty for Illegal Aliens

Tuesday, April 27, 2010

Disclaimer:  Don’t Tread on Virginia does not support amnesty for illegal aliens or minimum wage laws.  This article examines why skilled labor unions support these policies for their own interests at the expense of everyone else.  Please do not stop reading this article prematurely assuming this article or website supports these policies.  The purpose of this article is show that what’s good for unions is typically bad for America.

I've heard several talk radio hosts wonder why skilled labor unions support amnesty for illegal aliens.  The hosts typically allege that it will cost the union members jobs.  Many hosts write off the support for amnesty as support for liberal policies by the leadership regardless of the cost to rank-and-file members.  I agree that this is a frequent occurrence in union political involvement.  A key example is the union support for cap and trade when it hurts everyone, especially the industries with strong union presence such as mining and manufacturing.  However, this is not the only factor concerning amnesty.  In fact, there is an economically rational reason for skilled labor unions to support amnesty.  This reason is bad for the economy as a whole and those not in skilled labor unions, but it can benefit skilled labor union rank-and-file members.

The reason why it may be economically rational for skilled labor unions to support amnesty for illegal aliens is quite similar to the reason why they support minimum wage increases.  This article focuses on skilled labor unions because most unions are skilled labor unions and because advocating these policies will potentially benefit skilled laborers at the expense of unskilled laborers.

One of the main reasons employers hire illegal aliens is to sidestep the costs of burdensome labor and tax laws.  If you pay an illegal alien under the table, you can sidestep minimum wage laws, tax laws, and other labor laws.  Since the illegal alien is violating the law by being in the country illegally and working here illegally, you have a case of mutually assured destruction if the illegal alien reports the employer for violating labor laws or the employer reports the illegal alien to the INS.  Thus, hiring an unskilled illegal alien can be far cheaper than hiring a legal unskilled employee.  Hiring multiple unskilled illegal aliens can be cheaper than hiring one legal skilled employee (e.g., skilled labor union member) to do the same task.

Skilled labor is in competition with unskilled labor in many industries.  For instance, say an unskilled laborer can make one widget per hour while a skilled laborer can make three of the same widgets in the same hour.  The labor cost per widget is the same, ceteris paribus, if you paid the unskilled laborer $5 per hour and the skilled laborer $15 per hour.  The labor cost is $5 per widget despite the skill-level of the employee, so it doesn’t matter whether you use skilled or unskilled labor.

But, suppose there is a minimum wage of $5 per hour for all employees.  At this minimum wage, nothing changes because both skilled and unskilled laborers already make at least the minimum wage.   Now, suppose the minimum wage is raised to $8 per hour.  The labor cost for an unskilled laborer to produce one widget is now $8.  However, the labor cost for a skilled laborer to produce one widget is still $5 since $15 per hour is still above the minimum wage.  Skilled and unskilled labor are substitute goods, so ceteris paribus, the labor cost per widget would rise to $8 for skilled labor as well, for a skilled labor wage of $24 per hour.  However, labor costs are not isolated from other costs, so we can’t consider them ceteris paribus.  If $8 per widget for labor costs is too high for the employer, the unskilled laborers will be priced out of their jobs and replaced by cheaper skilled laborers in lieu of raising the wages of both types of laborers.  A reduced supply of potential employees with acceptable labor costs (now only skilled laborers) will increase the wages of laborers overall and reduce the total quantity demanded of laborers.  Wages of laborers will increase, but won’t skilled laborers lose jobs?  Probably not, and since skilled laborers are taking the place of unskilled laborers, they’ll probably gain jobs.  Remember, the total quantity demanded of labor will decrease, but the share of skilled labor in the total will skyrocket.  Plus, in this example, the work of one skilled laborer can replace the work of three unskilled laborers, so you would expect higher cost but more productive (skilled) labor to replace lower cost but less productive (unskilled) labor, raising wages but lowering the number of laborers.  Skilled laborers gain employment when a substitute good, unskilled labor, is priced out of the market.

That is why skilled labor union rank-and-file members benefit from minimum wage increases despite the fact that they typically make far more than the minimum wage.  However, this raises unemployment for the economy as a whole, especially for unskilled laborers.  What’s good for skilled labor unions is bad for the country.

Now, how does this tie into the main topic of this article, amnesty for illegal aliens?  Most employed illegal aliens are unskilled laborers and many are either paid less than the minimum wage or their labor costs are otherwise less because paying them under the table allows employers to sidestep labor and tax laws.

 Granting amnesty to illegal aliens takes away the threat of mutually assured destruction for the now legal aliens or citizens.  They can now demand that their employer pays them the minimum wage over the table and follows all labor and tax laws since they no longer need to fear deportation from reporting their employer for violating labor and tax laws.

For the former illegal aliens, this is effectively a minimum wage increase for unskilled laborers, which will price many of them out of the market in favor of skilled laborers.  This benefits rank-and-file members of skilled labor unions, again at the expense of unskilled laborers and the economy as a whole, especially the former illegal aliens.  Additionally, former illegal aliens that are in fact skilled laborers will join skilled labor unions, increasing the declining memberships of private-sector skilled labor unions.

In summary, as is often the case, skilled labor unions benefit at the expense of unskilled laborers and the economy as a whole.  Granting amnesty to illegal aliens means skilled labor union employment will increase while overall employment decreases.  So, skilled labor union support for this policy is more than just liberal politics.  Although, like most liberal policies, it favors one group at the expense of all other groups.

Essentials to Restoring the Several States Back to Jeffersonian Federalism

Sunday, April 18, 2010

• Repeal the 17th Amendment (Direct Election of U.S. Senators)
• Repeal the 16th Amendment (Income Tax)
• Bring Back Nullification As A Viable State Option For Unconstitutional Laws
• Restore the Sovereignty of the Several States Protected by, but not Created by, the 10th Amendment
• Repeal the General Welfare Clause of the U.S. Constitution
• Repeal the Interstate Commerce Clause of the U.S. Constitution
• Roll back Hamiltonianism in all of its forms
• Eliminate the Federal Reserve

Divorce the Leadership, Not the Party (No 3rd Party)

Thursday, April 8, 2010

This post is in response to the post, Maybe it's time for a divorce..., by Marc V. at Considered musings and random commentary.

While I agree about Tiger being a sleazebag, etc. and Marc V.'s insights on fidelity, marriage, etc., I strongly disagree with Marc V.'s call to divorce the Republican party and start a third party.

The "Republican Party" has strayed, cheated, lied, been condescending, gambled, spent money on members of other parties, etc. Repeatedly. Long before Reagan, but especially since. How long should voters stay in an abusive relationship?

It may be time to throw the bum out...

Maybe it IS time for a divorce --er, third party. Get out there and date again. Find the right politician, not the loons, crazies, shiftless, druggies, or any of the other in the pantheon of low-lifes willing to take over our money and our lives.

How many of us have pled with representatives to NOT abuse us? Not just republicans, but democrats alike. DON'T DO TARP (did it anyway). DON'T DO BAILOUTS (spent our money on harlots and booze, and then gave the booze to underage boys along with the keys to OUR cars). DON'T DO GOVERNMENT HEALTH CARE! DON'T DO Crap and Tax! DON'T DO ...

The list goes on, and politicians on both sides ignore the people they are married to... the voters.

Maybe it's time.

I have many concerns with this line of thinking:

1) A third party is a guaranteed way to split the vote and give the liberals a permanent majority and therefore destroy the country further than they've already destroyed it.

2) Parties don't stray, cheat, lie, condescend, gamble, or spend money on members of other parties, only people (i.e., the leadership, members, etc.) can do that.  Political parties are collections of individuals with (hopefully) common ideals organized to further these ideals using the economies of scale that only a large organization can produce.  The leadership and certain liberal members of the party have committed these acts, but not the party itself.  The party is not the problem, its leadership and certain members are the problem.

3) Any political party will become a bureaucracy when it becomes large enough and experiences success.  If the TEA Party became a political party, the same problems would soon occur in it as in all political parties, if it ever became a success (see #4).

4) There's a reason why no third party has been successful in America politically:  It's incredibly difficult to get on the ballot with equal footing as the first two parties in most states.  There are so many hurdles to overcome, that we'd have a better chance in totally overhauling the Republican party to be the extreme conservative / constitutional party it needs to be than to start from scratch.

5) I think Marc V. is confused regarding TARP, Bailouts, ObamaLackOfCare, Crap and Tax, Porkulus, etc.  There was way more outrage after the travesty of TARP than before it.  I wish there was more outrage on the right before it passed, but that simply wasn't the case (regretably).  Regarding the rest, have you looked at the vote counts by party for these?  Really?  Are you really going to blame the Republicans for these?  Really?

6) I support divorcing (i.e., voting out of office, firing, or impeaching) the people in the Republican party that have committed these acts, not the party itself.  What are we, cowards afraid to fight?  If we can't fight to take back our party from liberals in disguise, how can we take back our country from liberals in disguise and in plain sight?

7) Look at the conservative take back of the Republican Party of Virginia.  With Pat Mullins at the helm, we swept the statewide offices with hardcore constitutional conservatives.  It can be done! 

In summary, divorce the leadership, not the party (no 3rd party).