Thread: Illegal Immigration's Little Secret

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Illegal Immigration's Little Secret


By Richard N. Baldwin T. /HispanicVista.com
November 3, 2005

From Mexico

We constantly hear about the costs imposed on the US by illegal immigration. But let's look at some of the other factors less in the public view. And in this case, the subject is mainly about immigrations from south of the border (read Mexicans).

First, remember this. There are some very attractive qualities in illegal immigrants for some sectors in the US. First, the illegal is willing to work for less. Even at minimum wage, he makes undreamed of money in his native land. And with some real ambition, he can move up the wage ladder rapidly. Second, the illegal is less apt to become a "trouble maker" that complains about his "rights", simply because he has no legal rights. Third, he is very unlikely to become pro union. After experiencing the typical unions in México, he wants to avoid unions as much as possible.

Regarding the union structure in México, first realize that the older established unions are part of the political structure. As long as the members can be manipulated to vote as they are told, that is all that is required. In every union, one of the most important departments is the "enforcer" section to keep the members in line. And these guys play rough. Add to this is the fact that a significant part of the income of unions is the "under the water" fees that the unions collect from the employers. Because of the extremely low wage structure, the traditional dues structure is too low to support the union's operating costs. So, when negotiating a contract with an employer, one of the big things for the union is to collect as large a "fee" as possible from the employer. Talk about a compromised position for the representative of the workers interests to be in!

And another benefit for illegals is the fact (contrary to general belief) that in general, they tend to be very law abiding so as not to attract undue interest to them by the authorities. In other words, to keep a low profile.

Now, if you are a US employer being pummeled by the global economic structure and are trying to keep your head above water against Chinese wages, the illegal makes good economic sense.

Many larger corporations, in years past, simply went along with union demands for higher wages and benefits by passing the cost on to the consumers. In a lot of cases (the steel industry comes to mind) the companies simply raised their prices by the same amount as the workers wages went up. (As if the cost of labor was the total of the cost structure.) And remember this: Cutting back benefits and wages is very, very difficult. That is why there is no steel industry to speak of in the US today. And that is why the auto industry has a base hourly pay of $27.00 per hour. Add the benefits and other labor related costs to this and you have about $60.00 per hour (the "loaded labor rate"). How do you compete in a world market where your competition is paying around a $20.00 loaded labor cost?

There are a number of ways for corporations to make changes to survive. First, subcontract as much as possible to smaller and non-organized companies to cut costs. The General Motors auto that you have consists of more than 60% parts that come from non-General Motors plants. And the rising bankruptcy procedures in progress are another way to cut back on both wages and benefits. But as far as illegals for cheaper labor, this occurs more in the smaller companies because of lower visibility.

On the other hand, you might remember the KBR division of Halliburton. In a recent and very detailed investigative study by the Chicago Tribune, it is revealed that in Iraq, where KBR is a major (no bid) US Government contractor, a lot of the grunt work is being done with imported illegal labor (from Asia in this case). This is being done through subcontractor labor contractors and at arm's length from the parent company. This reminds me of the character Gordon Gekko, played by Michael Douglas in the 1980s movie Wall Street. And do you remember Gekko's slogan; "Greed is Good"?

Finally, the agricultural industry and the construction industry are staffed heavily with illegals. In fact, there is a big movement of these workers to New Orleans to take part in the reconstruction of that city now.

Now, ask yourself why, for more than one US administration, there has been so little real effort to control illegal immigration? This has been going on for a good number of years, and no quick fix, like a big wall, is going to eliminate it. It is a very strong part of the US economic structure. Wake up to reality.

Personally, I remain strong in my belief that the only solution to this mess is to set up a functioning system of temporary labor supply to legally address the need for imported labor. And rather than depending only on "border control", create a functioning immigration service to properly and efficiently screen these needed workers. The rest, including national security will all fall in place. As it is now, both the "desirables" and the "undesirables" are swimming the river to the North. On top of this, in many cases when the undesirables are caught, the ICE simply lets them go their way because if they aren't Mexican, they can't send them back to México. How stupid can this mess get?

I feel that Canada's immigrant worker program should be looked into for lessons on how to intelligently run such a program.

But remember that the present illegal system has some very influential adherents. They are going to try and keep things just like they are.

Maybe the idea of another Ellis Island operation makes sense?

How do you compete in a world market where your competition is paying around a $20.00 loaded labor cost?

Brian503, have any idea how the author got the $20.00 loaded labor cost figure? I wonder in which countries is this figure applies?

I have no idea where or how he came up with the figure.