Occam's Razor

What’s old is new! What’s old in this case is the following post, first posted nearly ten years ago in August 2007. Given Trump’s desire to deport pretty much anyone, it’s as topical now as it was then. And it’s one of my better posts. So time for a repeat. Enjoy!

Here is a basic truth about American history that you are unlikely to find revealed in our history books: our success as a country is due to immigration. Most likely, our country’s decline will start when immigrants decide to go elsewhere.

Immigrants have always been crucial to our country’s success. When we could not get enough immigrants, we captured slaves and brought them over here instead. Yet through much of our history, whether here legally or illegally, immigrants have been scorned. In truth, immigrants are the gasoline that fuels our economy. We say we do not want them in our country, at least the ones who are not here legally. Yet if they were to go, our standard of living would decline precipitously. Inflation would go through the roof. Immigrants make it possible for the rest of us to live the American Dream. My vaunted six-figure salary is directly due to the guy making $15,000 working for Goodwill who doesn’t seem to speak English and who hauls away the trash from my office everyday.

Thankfully, there is little chance that people will stop coming into our country, no matter how impressively we build our barriers. It does not matter how low on the totem pole immigrants will be when they get into this country. Invariably they will be better off than where they came from. Cleaning out toilets in airports may not be your idea of a great job. It is probably not their idea of a great job either, but it beats starvation, or regular dysentery drinking the polluted water back home, or raising an uneducated child in a tarpaper shack.

Thank goodness, we have people willing to clean toilets at any price. How long do you think your local airport would be able to stay in business if they had no one willing to do this disagreeable task? How many restaurants would be in business at all if all the illegal dishwashers and potato peelers in this country suddenly disappeared?

The argument I hear is that, “Well, if they all went tomorrow, businesses would have to raise salaries. Good Americans would fill those jobs. And what’s wrong with that?” As a liberal Democrat, I like the idea of our citizens making more money. I just hope it will actually improve their standard of living. I do suspect though that if there are 200 jobs needing to be filled and only 100 people willing to work for wages businesses can afford to pay, there are going to be some economic adjustments and they will not be for the better. Of course, businesses would do their best to cope. They would try to become more efficient and resourceful. At some point, we would end up with an effective unemployment rate of zero. Then the excrement would hit the fan. I am not sure which businesses would be the first to go under, but I bet people who are asked to do the most disagreeable jobs would be the first to bolt. Dishwashers would become very hot commodities. Those restaurants profitable enough to employ them at higher wages would thrive. Those which cannot, and restaurants tend to survive on tiny profit margins, would close shop. I can even see a new version of the draft, not to fight our wars overseas, but to make sure restaurants have enough people to serve meals, sweep floors and do the dishes.

Perhaps with higher wages more of us who are already employed would be willing to work a second job (if we are not already, trying to keep pace with the cost of living). At some point, that market would exhaust itself too. The likely result would be a phenomenon we remember from the 1970s: stagflation. Stagflation is rapid inflation during a period of recession. We would be lucky though if this were the worst of it. The short-term result would be that as unemployment up the food chain increased from the fallout, more and more people would be willing to work in these relatively low wage jobs. The effect though would be to push down standards of living for all of us. These jobs, while necessary, are simply not as productive as those that generally pay more money. Decreased productivity is one of the major drivers of stagflation.

A workforce of course is the fuel of any economy. We may think we can automate everything using computers, but even if that were possible, someone has to keep those computers going. Goods do not magically get from points A to B. It is our willingness to be employed, and in effect be the lubricant that keeps our complex society functioning, that makes our advanced society possible.

In effect, our economy, much like our social security system, is a great Ponzi scheme. Growth, as is always the case, comes from the bottom up. If we cannot convince lots of poor people to start at the bottom and engage in economic Darwinism to try to ascend the economic ladder, the system eventually collapses. I see signs of it already. My daughter, though she has never held a full time job and just recently graduated high school, refuses to work just anywhere. She has her standards. She has decided that she can work at a Barnes and Noble or a Vie de France, but not at a Bloom supermarket, nor at a McDonalds, nor at a Subway … in fact, her list of places she is not willing to work is much larger than her list of places she would work. Fortunately for her the labor market is pretty tight here in Fairfax County, Virginia so she has the luxury of being somewhat choosy.

Of course, she has to survive. If her choice were between starving and working at a McDonalds, I am sure she would choose working at McDonalds. However, why should she do what she considers demeaning work in a business that she does not like? For example, why work at a Wendy’s when she would likely be the only Caucasian woman working there and she cannot speak more than a dozen words of Spanish? Why get hot and sweaty trying to keep up with jangling timers continually going off on the French fries machines when she can work behind the counter in a nice, cool and air-conditioned Vie de France restaurant instead? Others, who came from a harder school of knocks, are supposed to work at Wendy’s. For them a Wendy’s job probably really is opportunity. She perceives it as a low-grade horror.

Arguably, if all the Wendy’s in America went out of business we would probably be a lot healthier. Still, Wendy’s alone pumps a huge amount of money into the economy. The parent company Wendy’s International had sales of $2.45 billion dollars in 2006, owned 12.7% of the burger market and employed 57,000 people. If it closed because it could not profitably stay in business, more than 57,000 people would be affected. Its suppliers would be laying off people. Cattle ranchers would reduce herds. Grain prices would fall. Perhaps other businesses would pick up its market. However, if we did not have enough people willing to work at the bottom of the labor scale the effect on the labor market would quickly spread across the economy, likely causing a chain reaction.

If there were no more immigrants I would end up mowing my lawn again, which might not be a bad thing either. It would cost me more to get my roof replaced, if I could find anyone willing to do it at all. Either my six-figure income would feel a lot more like a five figure income, or I would be a lot busier incompetently trying to do the things I pay people to do for me. I would have to hope that I would die in my bed. It is unlikely I could afford a nursing home at any price. It would be a luxury only for the richest among us. Perhaps the poor house would make a comeback.

While I do not particularly like the idea of immigrants streaming across our borders illegally, I also understand why it has been in our economic interest to look the other way for so long. That our standard of living is rising at all is largely due to our glorious cognitive dissonance on this issue. If we could actually fully enforce our immigration laws then within a year we would be protesting en-masse on the Mall in Washington demanding the immediate repeal of these laws. The last thing we will give up is our slice of the American dream. Immigrants serve us that slice.

The good news is the immigrants who come to our country choose to come here, often at the cost of enormous peril. They understand the tradeoff. They will do our scut work for us, gambling that in time given their perseverance, luck and circumstance they will be in our shoes someday. They might aspire to be Bill Gates, but even if they only get up half the ladder, they are better off than they were. So are the rest of us.

Therefore, instead of railing against immigrants and protesting at local day laborer sites, as some want to do here in Herndon, Virginia, perhaps, if you speak their language, you should be thanking them for coming instead.