Our Immigration Policy Ignores the Social Utility of Tight Labor Markets

By David North on January 7, 2019

As a worker, I do immigration policy research.

As a consumer, I recently saw this sign in my neighborhood (Northern Virginia) supermarket: "No Alcohol Sold Between 12:00 and 6:00 AM".

The sign set me thinking: Are there any connections between those two items?

Strangely, there are, if you explore it more closely.

Although the management of the local Harris Teeter does not realize it, this sign is an indirect indication of a loose labor market, and thus an explanation of our current loose immigration policy. (The no-sales-in-the-middle-of-the-night stance reflects state law.)

More precisely, the sign assumes that:

  • Its customers expect — and get — access to Tide, tobacco, and Tabasco sauce at any time of the day or night, a remarkable luxury; and
  • The labor market is loose enough so that the store's schedule can be followed while enhancing or preserving the corporation's profit level.

What does that mean in terms of staffing? In order to fill a single position for 24 hours a day, seven days a week (for a total of 168 hours), the store needs to hire close to five workers, each working 40 hours a week, and with more hours than the 168 hours needed to cover sick leave, vacation, training, and bathroom breaks during the shifts. The store also needs to have at least some of its workers willing to work the graveyard shift, presumably for a small increase in pay.

Clearly, the store is able to find enough workers to fill these jobs, which reminds me that we have a hidden labor surplus.

Where is it hiding? It is in the dropping labor force participation rates my colleagues Steve Camarota and Karen Zeigler and Jason Richwine have described from time to time.

I see the local supermarket as a symbol of a society that is organized to meet even the most unreasonable demands of the suburban consumer class (no one has the God-given right to buy fresh asparagus at three o'clock in the morning) while keeping wages low enough to provide such sales at a profit to the owners. How can this be done?

By making sure that there is a loose labor market — and one of the key ways to do this is by having a loose immigration policy. (It also helps to have a scrawny public safety net and powerless unions, as we do currently.)

Harris Teeter, a growing supermarket chain based in North Carolina, does not seem to hire many temporary foreign workers; over the last four years it has applied for only 13 H-1Bs, all to work in headquarters, according to Myvisajobs. I doubt that the firm has any H-2Bs, and I have not encountered anyone at the local store who seems to be an illegal alien.

What the company does do is to hire immigrants who have arrived in the United States without Harris Teeter's help. The firm, of course, benefits both directly and indirectly from the large number of aliens in the general workforce.

The firm, at least locally, does not seem to favor aliens from a particular country; if anything there appear to be more Eastern Hemisphere people than Hispanics. When I meet a new cashier with an accent, I always ask where that person last worked, and this leads to a discussion of the home countries, which over the last couple of years have included such minor sources of migration as Albania, and St. Vincent and the Grenadines (the ex-British colony whose name could be used by a rock band).

Many other retailers have, in our area, followed the same pattern; there seem to be no one but immigrants working in the local drug stores, and few native-born workers in the banks and the liquor stores.

A Contrast. I spent a year in the 1950s in New Zealand as a Fulbright Student and learned at first hand what it is like to live in a really tight labor market, as existed in those days in that wonderful country.

Immediately before going to New Zealand, I was employed by an ad agency in mid-town Manhattan, and had grown used to a labor market that, while tight for America at the time, was quite loose by New Zealand standards. In New York, there were shoeshine people (called "boys" in that unenlightened era) readily available to shine your shoes. There were none in New Zealand.

Similarly, you could shop for groceries seven days a week in the States, but in Wellington, where I attended grad school, most of the shops closed promptly at noon on Saturday, and would not re-open till Monday morning.

If there were not (an unrecognized) surplus of workers, as we have here in the United States now, what happens to work under these conditions? What happens in a genuinely tight labor market?

This is what happens:

  • Some work simply does not get done — the shoes remain un-shined, the stores are closed on Sundays.
  • Some work is done by the consumer, rather than a paid person. You shine your own shoes, you mow your own lawn, and you cook your own meals.
  • Some work is done by a machine, and not by a human.
  • Jobs are filled by people who had few opportunities in the past, as in World War II, when suddenly it was OK for African-Americans and women to work in factories, older people were pulled out of retirement, and disabled people got jobs that they could not have obtained in the past.
  • And — here's what the employer class really hates — wages rise.

These are the hallmarks of a tight labor market, clearly a set of conditions favorable to most of the population, if not to the upper classes.

While, short of war, it is unlikely that the United States would ever have such a tight labor market, we could move in that direction, and to do so we must reduce legal and illegal migration.

Unfortunately, the results of a tight labor market, as I have described them, while good for the vast majority of Americans, are unlikely to happen because the haves do not want them to happen.

This explains why our power structure continues to — successfully — fight against any real immigration reform.