A Perverse Incentive

When I’ve complained in the past about the nation’s policies vis-a-vis illegal immigration, I’ve generally put my complaints in the context of my family history. This may be over-personalizing the politics, but it was the point I wanted to make at the time.

However, I did also want to make a more unsubstantiated claim; that the use of underpaid, subsidized (i.e., untaxed), essentially slave labor has the effect of undercutting both technological and economic progress. If, in 1895, candle makers had been willing to make candles “for pennies” (or less), then how long would the introduction of the electric light bulb been delayed? Just when would automobiles have replaced horseless carriages if liveries had been willing to charge two cents a ride in 1910? If I had to guess, I’d say that we’d still be hitching our wagons to ponies if that had come to pass. In other words, we’ve had an undeclared government subsidy of cheap labor, and one of the effects of that policy is to undercut incentives for improvement.

Mickey Kaus quotes Mark Krikorian

When the end of the last big guestworker program was being debated in the early 1960s, California farmers claimed that “the use of braceros [Mexican guestworkers] is absolutely essential to the survival of the tomato industry.” Instead, termination of the program prompted mechanization which caused a quintupling of production for tomatoes grown for processing, an 89-percent drop in demand for harvest labor, and a fall in real prices.

He’s saying that we need an army of underpaid, uneducated and often illegal immigrants picking crops in California because we don’t have the technology to do it cheaper, because we have the immigrants willing to do it for next to nothing.

Gotcha.

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