Letter: Time to stop begrudging workers a decent wage

By William W. Chip on February 12, 2016

Financial Times, February 11, 2016

Sir, I read with interest Gary Silverman's Big Read article "Help wanted" (February 9). Focused on the US construction industry, Mr Silverman observes (I will grant correctly) that the repatriation of more than half a million illegal Mexican construction workers during the recent recession has left the recovering industry scrambling for workers.

Mr Silverman quotes from interviews with construction executives and consultants, but cites nary a word from any construction worker. Not surprisingly, those interviewed hold that filling the present shortage through recruitment and training of native-born workers would be prohibitively expensive. A consultant advises that having "to recruit millennials to stop working at Starbucks" will give rise to "huge cost increases", while an executive laments that his competitors are already "overpaying" their workers.

"Overpaid" workers! What am I missing here? As an economics student at Yale and Cambridge, I was taught that free markets are superior to controlled markets because supply shortages in a free market automatically lead to price increases that increase supply and mitigate demand to the point of equilibrium.

Why then do we rejoice when this dynamic fabulously enriches entrepreneurs who discover and fill unmet market needs, but gnash our teeth when the beneficiaries of price increases are from the working class, who in all developed countries face an ever-bleaker future of part-time, low-paid work? (And, by the way, Census Bureau surveys show that average wages for US construction labourers are only 2 per cent higher today than at the outset of the recession.)

We should also be sceptical of the elitist notion that the pool of trainable workers is limited to "Starbucks millennials". You may not find replacements for 500,000 illegal labourers by hanging around Starbucks, but you can find them at working-class high schools, unemployment offices, homeless shelters and other places if industry and/or the government will invest in their training. According (again) to Census Bureau surveys, only two-thirds of working-age Americans who have finished high school but not university (and fewer than half of high-school dropouts) are even participating in the labour market. The disappearance from the workforce of so many millions of young men, especially black and Hispanic, at least partly explains the sky-high percentage of American children nowadays being born out of wedlock, itself a contributor to our severest social problems.

In our capitalist, free-trade system, American workers must compete with lower-paid workers in places like Mexico and China in any industry that produces automobiles and other internationally transferable goods and services. Cannot those of us who have prospered in this globalised economy reserve for our fellow citizens a shot at earning a family-formation wage in the shrinking economic spaces, like construction, where the work must be done at home?

William W. Chip
Member, Board of Directors,
Center for Immigration Studies,
Washington, DC