On September 12 Assembly Bill 10 was approved by the California State Assembly. It will increase the Californian minimum wage from $8 to $10 an hour by 2016. As you might expect, Republicans oppose this hike and Democrats, including Governor Jerry Brown, are in favour. And as you know, Democrats, and I can only assume none more so than California Democrats, are also opposed to enforcing America’s immigration laws. They use the full might of the federal Leviathan to stop any state from attempting to clamp down on illegal immigration, oppose building a fence and funding E-Verify (although they will ‘promise’ to do so, if they get amnesty first), and in numerous local areas where Democrats are in control, decree safe havens for illegal immigrants.
Hiking the minimum wage is a bad policy under most circumstances. If we add the problem of millions of illegal immigrants into the mix, it becomes even worse. Or good, depending on your ultimate political objective. It becomes so bad that to resolve many of the problems it creates, amnesty becomes more attractive. Typical of Progressives, they create a problem and then demand another Progressive solution to address it.
Calls for a higher minimum wage arise from the very real problem of low and stagnant wages for millions of poorer Americans. Artificially increasing workers’ wages, however, is bad economic policy, and just like many other Progressive policies, there are unintended consequences. These will impact primarily those it is intended to help. Simply put, an employer will not pay somebody if that worker earns their business less than what they are paid. Nobody should be surprised to hear this.
Of course some will benefit. The strongest and best workers will likely see their wages increased (assuming this is not complemented by a cut in working hours). This is what minimum wage advocates focus on. However, many others, especially the weakest, will be fired or never employed at all. Indeed, many of the losers from this legislation will never know they have been negatively impacted at all. And thus, the winners are primarily those Progressive politicians who meddle and interfere in others’ private affairs, not to make life better for the poor, but to obtain their votes.
Thus, this would likely complement that other Progressive policy, Obamacare, in throwing even more low income workers off of employment, full time or otherwise, by making it illegal in many instances to pay workers the appropriate amount. And thus more clients are created for the Democratic Party to service. The only alternative to paying someone more than they create in wealth is to not employ anybody at all. Of course, this is not the only alternative option. There is the illegal route after all.
There are over eleven million illegal immigrants in America, mostly from Mexico and Latin America. These tend to be low skilled or unskilled workers. Those with any skills will oftentimes be doing unskilled manual labour anyway because job mobility is obviously much reduced for the undocumented.
They compete with low skilled and unskilled Americans directly for jobs, and the low wages they get paid represents in effect a fiscal transfer from the poor, who get higher unemployment and lower wages, to the rich, who get to pay their gardeners and cleaners even lower wages. This at a time when income growth for the top twenty percent has been substantially higher than for the bottom sixty percent for many decades, no doubt caused in part from a large increase in the supply of cheap labour represented by illegal immigration with no corresponding increase in its demand.
Thus, hiking the minimum wage and not enforcing immigration laws are, on their own, bad ideas. Yet if we combine these two we get an even worse outcome (sort of like in the movie Zoolander when two bad ideas, smoking and gasoline fights, are combined leading to a rather unhappy outcome).
Dukakis argues in his New York Times piece that a minimum wage increase will make illegal migration less appealing, the reasoning here being higher minimum wages encourage the native born to seek employment. However, it will actually make it more appealing. Why? Because the demand for illegal immigrant labour will rise, because what workers should be getting paid according to supply and demand will be even further removed from what they are legally mandated to be paid, according to the supply of snake oil salesman and the demand for it from an increasingly uneducated, illiterate, and brainwashed society.
Most importantly, the native born will find it even harder to find employment because not only are there less jobs (all those jobs worth less than $10 an hour have flown to China or been automated, like in France) but increasingly those that are left will be filled by even more illegals. The reason is obvious; illegal workers and their law-breaking employers do not follow the law. Thus, illegal aliens become even more attractive to employers, as wages go up for legal workers, with no corresponding gains in productivity.
This perfectly demonstrates that liberal weakness of not only believing that government is the source of all that is good, and any positive advancement in society must originate in some kind of committee first, but that laws are actually followed. Of course, they are not. And thus gun free zones do not prevent mass murderers from bringing guns there (see my previous article) any more than legally requiring employers pay above market rates for wages surrounded by a sea of illegal migrants will prevent them from simply hiring these instead (it should be said of the right, in fairness, their war on drugs similarly assumes laws are followed).
But perhaps liberals are not being naïve here. Certainly, their interests are furthered by this legislation not just because the poor will vote for them but because this situation so described will lead to increasing calls for amnesty. Bring ‘em in, they’ll say. They’re undercutting your wages! Make ‘em legal and native workers suddenly become more competitive as there are no illegals left to undercut their increasingly absurd wages (until the next round of illegal immigrants arrive, of course). And so then they’ll get amnesty too. And there’s another twenty or thirty million votes (those illegals have dependencies now, don’t you forget) in the bag.
A large illegal population and high minimum wage do not mix. The fix? Amnesty.