Tag Archives: labor

Some Thoughts About Immigration

midtownsign

The morning of February 16, 2017 I had a breakfast meeting at a restaurant in Winston-Salem. When I arrived I found a sign on the door (pictured above) announcing that the restaurant was offering a limited menu and open for limited hours due to the “A Day Without Immigrants” protest. While I’d seen something about the protest on the morning news, I hadn’t really paid attention, and to be honest I was a little surprised to discover that the protest had made it’s way to our small North Carolina city.

midtownmenu

When I got to our table I looked at the menu that the restaurant had printed for the day and on the back I found a letter to customers (pictured above, and sorry for the poor quality). After reading it I asked our server about the protest she said that the kitchen staff had talked to management the day before to let them know they were going to participate, and management had hustled to put together the limited operation so they could open their doors. After the meeting was over I headed to my car, and before leaving the parking lot I decided to post these pics and the following post to Facebook:

Had a breakfast meeting at Mid Town. They are working with a limited menu and shorter hours to support their staff who are taking part in the “Day Without Immigrants Protest.” Our server said it was just about their entire kitchen staff. Have to say I admire the folks at Mid Town for taking this route. As far as protests go I think this is a very effective approach – makes crystal clear the impact that our immigrant neighbors have on our community and economy.

Well, it probably wouldn’t surprise you to hear that I got some feedback on the post. Some agreed, some disagreed, and as always I enjoyed the back and forth. The best feedback I received, however, was in a series of private messages from a friend who works for a company that processes chickens. He didn’t want to post his comments on my Facebook post because he didn’t want to “start a big war of words” on my post, but he did give me permission to share his perspective and so I’ve pasted some below. Please take a moment to read it, because I think his experiences and viewpoints are important to keep in mind when we discuss immigration. Here’s the first message he wrote:

Saw your post. And this might get long. Sorry.

We have been planning for this day all week. Honestly about all we have done this week.

We have 1500 workers across 10 states and are directly responsible for supplying about 20% of all the chicken consumed in the US. Our workforce is about 90% Hispanic. We (along with Tyson, Perdue, etc) have been working hard to minimize the impact on the nation’s food supply. There are several plants running at 75% and less capacity today. Some plants not operating at all.

Trust me, without the immigrant workforce, this country does not eat. It is not a matter of just a limited menu, or prices being higher. We do not eat! We have been working on utilizing the EB3 visa program to bring in workers. Long story, but basically it allows someone to come in to the country and bring their immediate family. They must work for us for 1 year. After the year is up, they are free to stay and work anywhere they want. They can stay with us if they want. Or they can go work for you.

Well, we have to prove to US Govt that we cannot get good ol’ red blooded ‘Mericans to work. So we ran a few ads on Monster, etc. We received 250+ responses for Monroe NC. We asked all of them to complete an application.

  • Of the 250, we received 15 applications. We tried to schedule interviews with all 15.
  • Of the 15, 6 replied to scheduling something.
  • Of the 6, 3 actually scheduled an interview.
  • Of the 3 scheduled interviews, 1 showed up.
  • The 1 that showed up brought in a document for us to sign that stated he had an interview so he could get his unemployment benefits. He did not want a job. All he wanted was his form signed so he can keep collecting his benefits.
  • All done we had 0 out of 250. Meanwhile we hire about 40 workers per week. But nobody named Bob, Mike, John, Brian are showing up.

This is unskilled labor. It is hard work, but unskilled. We pay about $17-$20/hour. We are not looking for the cheapest labor we can find. We are not looking to pay under the table. We need workers. These immigrants are NOT taking people’s job. They just want to work and make money and the citizens are too lazy to do these jobs.

I wish we had a pretty open worker visa program. Do a decent background check. Give them a real SSN. Allow them to work. Then we do a mandatory backup withholding of 20% for federal tax and 5% for state. Get it all above board. Tax revenue increases. From a humanitarian side, people are not being taken advantage of.

So there, in a nutshell, is the scope of the issue we’re dealing with when we talk immigration. The current administration likes to focus on building a wall to keep bad, dangerous, illegal immigrants out of our country and by doing so they are scratching the itch of many Americans who feel disenfranchised, but the reality is that we need the immigrants or we don’t eat, plain and simple. But what about the idea that these illegal immigrants are stealing Americans’ jobs? Well, my friend addressed that with the job-posting experience and after a couple of messages back and forth he expanded a bit on why many business owners might not want an effective legal immigration system:

I am adamant about getting things above board. Most of our competitors want the undocumented worker. It means that even if they pay the same net wage we do, they can operate 25% cheaper than we do.

The Hispanic community says you are “baptized” each time you get a new fake ID. Our competitors will make them new identities each year so they can evade the tax system. They will file 1099’s using a SSN for 2015. Give the guy a new name and SSN (baptize) for 2016 and file 1099. Baptize them again for 2017 and file 1099. Rinse repeat. Year after year. Nothing gets in to tax system.

If you are legal, our competitor will “baptize” you anyway because they do not want anyone legal.

Talk about making your blood boil, how does that make you feel? Pissed off, right? Now here’s something he shared that my downright scare you:

One of the things we are worried about is they do this in the late summer/fall and do it for 10+ days. Whole year of harvests of fruits/vegetables are left in fields to rot. That will prove a huge point. Or, they do not show up to harvest turkeys in late October/early November and 1/3 of all US homes do not have turkey on Thanksgiving. That will not go unnoticed. These folks know they have the US by the balls because of the food supply. They will use it in a big way at some point. Today is minor I am sure.

So here’s the deal as I see it. Building a wall and going on a massive immigrant round up might make some of us feel good, perhaps a little safer, but the reality on the ground is that it will solve nothing. In fact it would create a massive problem for our economy and when the roundups are done we’ll be sitting around wondering why we can’t have fresh produce turkeys for Thanksgiving. And if the economic realities dont’ sway you, maybe humanitarian concerns will. Again from my friend:

Women get raped trying to make it here. People are left for dead after a mule steals all their money. They are treated like shit when they get here.

We have competitors that do not pay them. This guy has a compound in eastern NC. Lots of mobile homes. They all live there for free. He feeds them for free. He provides clothes. He transports them everywhere. They are all trapped like slaves.

So what’s the answer? My buddy provided some pretty simple action steps earlier:

  • Establish an effective, open worker visa program.
  • Do a decent background check.
  • Give them a real SSN.
  • Allow them to work.
  • Do a mandatory backup withholding of 20% for federal tax and 5% for state.

The result would be the decriminalization of our immigrant labor (black) market, an increase in tax revenues, a decrease in incentives for illegal border crossings which would eliminate any need for a boondoggle of a wall that wouldn’t work anyway.

Of course this all makes a lot of sense so it doesn’t stand a chance in DC.

A Modern Day, Budweiser-Drinking Karl Marx

If I were to paraphrase what PIMCO's Bill Gross wrote in his investment letter it would be, "Financiers of the world your ride on the backs of laborers is coming to an end. If you want to keep living in luxury you better find a way to make sure they feel justly rewarded and not like you're bending them over the rail…so to speak." Here's an excerpt of what he wrote:

Ultimately, however, both labor and capital suffer as a deleveraging household sector in the throes of a jobless recovery refuses – if only through fear and consumptive exhaustion – to play their historic role in the capitalistic system. This “labor trap” phenomenon – in which consumers stop spending out of fear of unemployment or perhaps negative real wages, shrinking home prices or an overall loss of faith in the American Dream – is what markets or “capital” should now begin to recognize. Long-term profits cannot ultimately grow unless they are partnered with near equal benefits for labor. Washington, London, Berlin and yes, even Beijing must accept this commonsensical reality alongside several other structural initiatives that seek to rebalance the global economy. The United States in particular requires an enhanced safety net of benefits for the unemployed unless and until it can produce enough jobs to return to our prior economic model which suggested opportunity for all who were willing to grab for the brass ring – a ring that is now tarnished if not unavailable for the grasping. Policies promoting “Buy American” goods and services – which in turn would employ more Americans – should also be reintroduced. China and Brazil do it. Why not us?
If structural solutions are not put in place, a six-pac market observer should look at both stocks and bonds as rather flabby knock-offs of their former selves; no resemblance at all to Jack LaLanne but more to a 55-year-old terminator grown fat and rendered out of shape by years of neglect and perhaps greed for short-term profits as opposed to long-term balance. There are no double-digit investment returns anywhere in sight for owners of financial assets. Bonds, stocks and real estate are in fact overvalued because of near zero percent interest rates and a developed world growth rate closer to 0 than the 3 – 4% historical norms. There is only a New Normal economy at best and a global recession at worst to look forward to in future years. A modern day, Budweiser-drinking Karl Marx might have put it this way: “Laborers of the world, unite – you have only your six-packs to lose.” He might also have added, “Investors/policymakers of the world wake up – you’re killing the proletariat goose that lays your golden eggs.”

H/T to Ed for the link.