Sunday, May 17, 2009

How illegal immigrants create jobs.

Take the following true story as an example, and remember, tighter border control could have prevented this from happening.

The place, the American southwest, temperatures are soring. It’s hot out, really hot. The residents of the house aren’t old, but old enough that they aren’t in line for heavy garden work. The trees need trimming, the leaves racking and the weeds pulling. All the best intentions in the world didn’t get any of it done.

A landscaping company is called in and asked what they would want for a general clean up of the yard. The owner surveys the yard carefully and insists he will need $250. He’s thanked but the offer is turned down. In realistic terms the budget wasn’t going to allow $250 for that. So the work was put on the list of things to do, some day, in other words, it was unlikely to be done.

As one of the residents pulled out of the driveway he noticed that a neighbor had a team of workers cleaning his yard. Unlike the company that gave a quote earlier, these people didn’t have a logo on their truck. It appeared likely that they were illegal immigrants who had come to America just to earn a living. They were willing to do work that most Americans are not willing to do. This was proven very quickly.

When they were asked for a quote on the clean-up work they said $100. The next day the resident returned to see the men working next door again and told them that the quote was fine and asked when they would like to do it. The response wasn’t your typical American reply; “We’ll get back to you about a time next week.” The man who led the crew said: “How about now?” They finished the one house and began to work at the second property. Four of them were working and working hard.

How do I know that they were more willing to do the work that was being done? Simple, they charged $100 while the other company wanted $250. The cost of hiring the local company, with a native-born owner, meant a premium of $150 for the same work. The immigrant team was $150 more willing to work, or the native-born team was $150 less willing to work. Either way you look at it, the one team was more willing to take the work.

If native-born Americans were equally as willing to do this work then the rate difference between them and the “illegals” would be close to zero. If anything, the native-born might have a slight premium merely due to some people expressing a preference for them as workers. Of course, that would lower the wages of the illegals and only make them that much more competitive.

Also, we should ask: Did these “illegals” steal a job from the locals? No. First, you don’t own jobs, they are not property. A job isn’t like a car, something that you can take away from someone who owns it. Jobs are contracts between willing buyers and sellers. Neither should be forced into the contract unwillingly. But let us be clear about this situation. No job existed. A need existed. And it was unfilled. The residents sought out American workers and discovered that the fee they wanted exceeded the value of the work for the residents. No job was created simply because the cost of labor exceeded the value of the work.

The job was only created when the illegal workers were willing to do the work at a rate that the residents could afford. Certainly in this case, and many similar cases, these workers are not stealing jobs, but creating completely new jobs. They are creating jobs by being willing to do work that others are unwilling to do at prices that attract buyers. Unemployment is always a creature of wage rates. Even today full employment would be possible—at a low enough wage—but most people won't take the positions. That some people are willing to work for those lower wages creates jobs that otherwise wouldn't exist. Precisely why is it that we are trying to stop them? Who actually benefits from that?

Let’s evaluate all the interested parties in this real life exchange. First, the residents of the house are clearly better off. They needed the work to be done, weren’t that willing to do it themselves because of their circumstance. To them the yard work was worth more than the cost of hiring the workers. By their own estimation, they are richer, since then now have something of value, which is worth more than the value of the money they parted with.

Second, we have the immigrant workers. Clearly they wanted the money and were willing to exchange some labor for the cash. They did so because they perceive themselves richer with the extra cash, than with extra leisure time. There is no shortage of leisure time when you have no work. These workers are better off. And I presume that their families are better off as well.

Is the “native-born” worker, who didn’t get the job, worse off? No, he wouldn’t have gotten the job either way. His labor cost more than the residents were willing and able to pay. He didn’t lose a job since the job was never his to lose.

The yard looks better, and that has some value to the neighbors who live nearby. They prefer to see a neat and clean yard than one looking like jungle bush. All these people are slightly better off because a transaction was made voluntarily between willing buyers and willing sellers.

Of course, Homeland Security is working hard to make sure this doesn’t happen any more! And, think, the Boy Scouts are learning how to engage in armed assaults on gangs of illegal gardeners, nanny’s, busboys and maids. God bless America.

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