The Real Immigration Problem Is Capital, Not Labor
Human immigrants are the same as you. Multinational corporations are not.
Why do companies relocate their manufacturing facilities to other countries? We all know the answer to that: To minimize labor costs. To lower the portion of the company’s revenue that goes to the people who do the work and to increase the portion of the company’s revenue that is reserved for investors and management. This is accomplished by the arbitrage of human desperation. A less desperate and impoverished group of workers is traded for a more desperate and impoverished group who will accept less money and a lower standard of living. In addition to this physical relocation of facilities, big companies routinely pursue the legal relocation of their operations to various tax havens, for the purpose of minimizing their tax payments. Physical relocation takes from workers, and legal relocation takes from the public of the nations that should, under a more common sense definition, be taking in tax revenue from these businesses. Working people get poorer, and the public gets poorer, and the gains are funneled into the pockets of the companies themselves, which is to say the investor and management classes. This is all done quite openly. It is not a secret at all. Apple manufactures its iPhones in gargantuan worker villages in poor countries like India and China and Apple evades tens of billions of dollars in taxes by stashing its money in offshore tax havens and Apple is, not coincidentally, worth close to $3 trillion.
This process of squeezing money from workers and the public and retaining money for a tiny sliver of wealthy people by moving freely around the world is one of the biggest creators of inequality globally, one of the biggest sources of corporate power, one of the things that makes modern global corporations more powerful than governments in many ways. None of this is viewed as a scandal. Hell, Apple is one of the world’s most admired companies. The unfettered flow of capital for the purpose of enriching corporations is seen as the natural order of things.
Now, why do working people relocate themselves from one country to another? For pretty much the same reason. They are seeking opportunity. They are seeking a way to improve their family’s lives. They want to leave a place with fewer jobs and lower wages and move to a place with more jobs and better wages. The process of human immigration is, at its most elementary level, the mirror image of corporate relocation. The difference is the way that these two things are treated. Capital moves freely; labor is tightly restricted. Who does this benefit? It benefits capital, and corporate power, and allows the rich to get richer at the expense of desperate workers. To a global corporation, a pool of poor labor that is locked in by national borders is a convenient thing to exploit. You can move all of your factories into that pool and reap the profits of paying much lower wages and then, if that nation finally develops to the point that workers demand a higher standard of living, you can just leapfrog over to another, more desperate nation and start the process over again. The free movement of capital comes with great benefits, but those benefits go almost exclusively to capital itself.
When you think about our national political debate over immigration in this context, it is clear that we are lunatics. If we wanted to have a completely honest discussion of immigration policy in the United States, it would begin with Point 1) Racism. That is the most powerful force that underlies the way that politicians approach this issue. It is an issue that is incredibly easy to weaponize, and it provides a handy set of scapegoats who can’t vote and who can be blamed for anything that requires an excuse. But of course that is not how it is discussed publicly. Instead, it is spoken of in terms of economics, as if cutting off the flow of immigrants to this country will provide some great benefit to the current citizens of the United States. That is not true. It will provide some great benefit to multinational corporations seeking to offshore jobs and it will provide some great benefit to unscrupulous politicians looking for a vulnerable group to blame for the fact that their state is a shitty place to live. But it will not provide you, the average person, with anything at all.
Championing the free flow of capital while calling for harsh restrictions on the free flow of labor—which is the baseline position of both the Republican and Democratic parties, who vary only in degree on this issue—is bad for most people. It is a pro-inequality combination. Period. Doing so while claiming that this is a “populist” position is one of the greatest con jobs in American politics today. Lip service is paid to being upset when companies move their factories from Michigan to Mexico, but 40 years of bipartisan policymaking has encouraged this process; at the same time, the individual humans who wade through the Darien Gap and crawl through razor wire in search of a better life are demonized as the source of the problems that are in fact created by inequality driven by increasing corporate power and wealth. I am not even going to go into the fact that the US government is responsible for screwing up many of the countries that these immigrants are now leaving—even on a common sense economic level, our national discourse around immigration is both inhumane and stupid.
Here is a little thought experiment: Which of these two scenarios is better for American blue collar workers? A) You allow companies to freely close down their factories and move them right across the Mexican border, where the workers are paid ten percent of what their American counterparts were earning for the same work. Or B), All of the factories that moved to Mexico are magically dropped back on the US side of the border along with their Mexican work forces? Consider the fact that in scenario B, large numbers of Mexican immigrants are entering America. Scary! Bad! Woo woo! But also in scenario B, those factories will immediately see huge wage increases because they would become subject to American wage laws and competition, and American workers would be able to go get jobs at those factories, and the American economy itself would grow, and demand for goods and services would increase, and there would be more jobs created elsewhere, a virtuous cycle. Yet, if you go by the conventional wisdom that flows from the mouths of our political leaders, and if you follow the logic of the policies that both Reagan and Clinton pursued with equal fervor, you would have to say that scenario A, in which your job is gone, is the economically rational move, and scenario B would be evidence of The Problem At the Southern Border [spoken with a grim look of concern and a small shake of the head].
Part of the reason why our immigration debate is so bad is the perception among many people that there is a fixed number of jobs in this country. If someone comes in, they are taking a job that could have gone to you. This is not true. Economies expand and contract. Jobs are created when they expand. (Also, you could have gone down and gotten a day laborer job yesterday, before someone came over from Mexico to do it. But you didn’t, did you?) Apart from racism, the biggest driver of immigration panic among the general public is economic superstition. This panic is particularly ironic when you consider that we are a nation of immigrants. “I am so proud of my forefathers who crossed the oceans to come here and worked their way up in this land of opportunity,” people say, teary-eyed. “And now, we must seal the border to keep anyone else from doing the same.”
Sure, large and sudden influxes of immigrants can create temporary logistical problems for the cities where they go, which are forced to scramble to deal with them. In a rational nation, this sort of problem could be easily overcome by federal funding to the affected cities to meet the immediate needs of the immigrants without laying the burden on the cities themselves, and by quick processing that would allow those immigrants to work legally. This Wall Street Journal story on the problems that Denver is facing makes these realities abundantly clear. The people who come here are the same as us. We are separated only by an accident of birth. Rafael Crinzone, a Venezuelan migrant quoted in that story, came here with his wife and small daughter because he could only make $5 a week at home. “I’m just a person who wants to work,” he says. “Things are complicated, but I am going to do whatever I can to stay.”
So let immigrants come, and let them work. Remember how every business owner in America was, not long ago, howling about the “labor shortage” that was holding them back? Guess how we solved that problem: Immigrants. Immigration is what enabled the American economy’s “soft landing,” which we are now living through. The recent immigration surge helped to grow the US economy by trillions of dollars and will raise government tax revenue significantly. I can’t help but think that perhaps our national dialogue over immigration would be of a higher quality if Democratic politicians would make an effort to get the point across that immigration is actually not bad for the economy, rather than cowering and kowtowing to racist Republican fearmongering, and doing everything in their power to pass a harsh anti-immigration bill in a sweaty effort to co-opt the xenophobia vote.
Pathetic.
There is a strain of political thinking that tries to simultaneously occupy the right wing and “pro-worker” lanes by casting immigrants as the villains in the story of American inequality. This is bullshit. Immigrants are not the problem. Capital is the problem. Immigrants are people who want to work, which is to say, they are part of the working class. Immigrants are not inimical to the interests of labor; they are labor. The labor movement should always welcome them in as brothers and sisters. Their interests are the same as ours. I beg any well-intentioned people who are concerned about the very real erosion of the US manufacturing base and the many decades of declining labor power and the hollowing out of middle American factory towns not to be seduced by the semi-plausible idea that this was caused in any meaningful way by immigration, or that sealing the borders will solve the problem. That’s not how it works. Don’t think in terms of Americans and foreigners. Think, instead, in terms of working people and bosses, labor and capital. That is the divide that matters.
It is not immigrants coming in that make jobs disappear—it is capital going out. That capital serves only the rich. For them, borders are nothing. They have private jets. We need to be smart enough to think beyond borders too. Borders are not real. Shared humanity is.
Also
My book about the labor movement, “The Hammer,” comes out this Tuesday, February 13. You can preorder it here, or wherever books are sold. Some information on my book tour is above, as well as here. My first stop will be in DC this coming Thursday, February 15, alongside Sara Nelson. Please come out and see me if I come to your city. (I’ve booked a March 21 event in New Orleans also, and I’m still adding more stops as well, so stay tuned.) I had a good discussion about the book and labor issues in general with David Roberts on the Volts podcast yesterday, which you can listen to here.
Last week I wrote about the need for public funding of journalism. I discussed the 2009 demise of Portfolio magazine, Conde Nast’s splashy $100 million business magazine that represented the end of the glossy print era. I included in the post a photo of the Portfolio launch party showing its editor as well as a Conde Nast executive, with a caption saying “Both of these men are homeless now.” Because I like to think that you, my readers, are not idiots, I assumed that everyone would understand that this was a joke. However Matthew Cooper, the editor in the picture, emailed me to say: “Hamilton, being on the masthead of two magazines--the Washington Monthly, where I'm Executive Editor--Digital and Washingtonian, where I'm a contributing editor, I’m quite sure that I’m not homeless. David Carey, the publisher of Condé Nast Portfolio when I was there—he’d come from The New Yorker—went from being group publisher of the Condé Nast magazine empire to chairman of Hearst Magazines to SVP of the entire Hearst Corporation which includes all of the print, film and TV assets. Perhaps you'll want to change your caption.” Please make a note of this. If my captions throw you off, you may find more humorless publications to be more to your taste.
I want to thank all of you who subscribe to How Things Work despite its shocking disregard for accuracy in curricula vitae. This site is an experiment in a communist form of funding: I ask you to pay if you can afford to, and I am keeping the site free for everyone else in the meantime. If you enjoy what you read here, please become a paid subscriber to support my work. Independent journalism will survive if we all give a little. Thank you.
Excellent analysis. The biggest problem is that private equity now makes all business decisions for almost every corporation. Vanguard and Black Rock not only have seats on every single board, they also own much of the commercial and residential property in the cities. Private equity has no interest whatever in value; the only thing that matters is next quarter's P&L statement with dividends for investors. The business of America used to be business, but now it's profit. You can see the damage that this sort of ownership has by looking at the 737 max disaster; boing sold that division to private equity, who decided that it would be more profitable to skip certain safety steps.
Here's the question for you: is it possible to solve this without completely tearing down this odious system? Is it even possible?
lol at these dorks emailing to assure you they're still rich. I'M SO RELIEVED