Politics from the Palouse to Puget Sound

Saturday, August 25, 2007

Real Free Trade

It all started with lead paint on Chinese made toys, on to the shortage of farm labor, and quickly degraded that I am “unpatriotic to buy foreign goods”. This discussion with my mother-in-law followed those predictable lines. “It is just terrible that we no longer make things and depend on others to do this work” she says. My banal response “The Chinese can make our cheap products, we pay them almost nothing. Buying the stuff allows us to use our money for other things we couldn’t afford if it weren’t for their cheap labor.” “We should do things the rest of the planet will pay a premium for and not assemble plastic toys for $2.00 / hr” I thought to myself, instead my stronger point “our unemployment levels are super low, where are we going to hire people?” Where, indeed?

The economic benefit for free trade between the US other nations is obvious making me free trade supporter. However, there is an area of trade that we refuse to free up.

The radical idea: let’s have free trade in labor. I’m a firm believer that we keep our borders secure and that we get to decide who and how someone enters the country or becomes a citizen. But our neighbors want to come here to work, and to do the kind of work we don’t want to do. So I say let ‘em.

Farmers historically hire ‘under-the-table’ workers at low wages. That source of labor is drying up due to our tighter borders. Tie in the possibility of a raid by immigration enforcement that could end your harvest in the middle of a 6 week season that produces ALL of your income. Farmers are in a tough spot. So government to the rescue. The H2A visa program is designed to address the seasonal requirements of agriculture. But it is so burdensome that the H2A visa amounts to a tariff on labor. Tariffs are bad, let’s get rid of them. The H2A visa requires farmers to pay a higher rate than typical for farm labor, advertise for a month for local people (in a newspaper no migrant worker would read) to do the work, then pay $2400/year to the immigration service, another $300 for each visa, $200 or so for round trip transportation, and provide onsite housing that meets federal standards. The costs are so burdensome that many farmers with labor intensive requirements have chosen to plant only an amount crop they know they have laborers for. See a typical story.

The current system is broken. "la tira" (throwing cash) pay method keeps illegal farm laborers poor and evades taxes. Likewise, for the other common method to employ illegals - through an intermediary who actually does the hiring and paying. There is plenty of evidence for troubled times for farm and other low wage jobs. California, Washington, Colorado are all experiencing tough times. Keeping labor trade restricted means we don’t get to tax those employees and hey unless they become citizens they’ll pay social security and never collect it – a good deal for me.

Free trade and illegal immigration addressed in one leap.

The entry barrier for Mexicans in particular is high, even for tourists. We need to eliminate those barriers. To do this 'work visas' need a complete overhaul that allows easy movement of labor across the borders with our neighbors. Let's keep it simple, arrive at the border, prove you have transportation back to your country of origin, we verify with your country that you are not a felon, then come on in with your 6 month work visa.

To stay in the country should be kept simple too, go to the closest immigration service, renew your visa, and go back to work. The whole solution can be managed by the current immigration system, with some additional funding to keep track of so many more visa holders. Add to that the craziness of not enforcing our current out-of-date laws would be less tempting, resulting increased collection of taxes and this solution could be much cheaper than building a fence.

I’m not suggesting a NAU (North American Union) or even a European style free movement of a Schengen arrangement. But the current system is broken and forces masses of immigrants and employers to break the law while we mostly look the other way because the labor is desperately needed. That is bad law.

Maybe with free trade in labor we could make our own cheap plastic toys.

1 comment:

Tom Forbes said...

As someone who has spent nearly two months in Mexico over the past year and a half and who has several Mexican friends, I can add a little of my own perspective to this.

Despite recent improvements, Mexico is still a very classist and corrupt country. The middle class is fairly small (but growing) and it is hard to work your way up to the top, no matter how hard you try. Because of the constant liberal negativity, we often forget what a relatively just and fair society the U.S. is and how that is attractive to foreigners.

Trust me, Mexicans would rather stay in Mexico if they could. One way for us to stop illegal immigration is to invest more in Mexico's economy. As Bruce stated, free trade is key to the immigration problem, just as it is for many other problems.

Monterrey, the city which I always visit, is a perfect example. It is very Americanized because of free trade, with many good paying jobs and decent housing and education available. But of course, we're never going to be able to develop the whole country. Many illegal immigrants come from rural areas, which are desperately poor and underdeveloped.

Rightly or wrongly, most Mexicans that I have spoken with view a border fence as a racist overreaction. Mexicans are a very proud people. Many feel they play an important role in the U.S. economy and are not recognized for such.

While some people are racist, I think the vast majority of Americans are just frustrated that our government has allowed the situation to fester for so long. Like health care and Social Security, immigration is political hemlock, so no politician will do anything about it.