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Would Raising The Minimum Wage Deter Low-Skilled Immigration?
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October 03, 2011, 11:20 PM
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On the main page, I offer my first response to Ron Unz`s American Conservative article Immigration, the Republicans, and the End of White America. Next week I`ll flesh out the idea of an actual "Sailer Strategy" for the GOP.
Ron argues that immigration restrictionism is a political nonstarter, but mass unskilled immigration benefits the plutocratic class, so it needs to be curtailed So, rather than restrict immigration to raise wages, raise wages to restrict immigration by boosting the minimum wage in the direction of prosperous Australia`s sky-high one.
I think a carefully crafted minimum wage law could play a useful role in a "defense in depth" system, but enforcement would be an obvious problem:
Recall the old joke in which the starving economist on the desert island trumps the physicist and chemist in their debate over how to open a can of beans: "Assume we have a can-opener." 
Ron`s suggestion implies: "Assume we have the rule of law." Of course, we don`t anymore—at least not in labor markets corrupted by decades of illegal immigration. The honest Finns can pass legislation about employment with some confidence that the law will be obeyed. But we have depleted that ancestral patrimony. So a new law would mostly just put out of work law-abiding American citizens.

 

Read the whole thing here.
Ron defends the enforcement feasibility via email:
Let`s assume that the MW legislation were enacted, and included very harsh penalties for violation, including prison sentences. Consider the following scenario: 
(1) Greedy employer hires Jose, just arrived from Mexico with little English as a dish-washer, paying him $7/hour rather than the required $12/hour.  Mr. Greedy laughs to himself about how he`s saving $200/week because the Mexican he hired is so ignorant and dumb.  Ha, ha, ha... 
(2) Six weeks later, Jose cautiously goes to Mr. Greedy, and in broken English, mentions that his friend Hector had told him about the wage law, but he`d very much hate to get anyone like his kind boss into trouble.  In fact, the more he thinks about it, the more he really misses his family back home in Mexico and since he just needs $15,000 to buy a truck for his ranch, maybe his kind boss could give him a personal "loan" for that amount, after which he`d go away and never bother anyone again, avoiding all the legal problems for everyone.  Mr. Greedy decides paying $15,000 is better than risking five years in prison, pays the money, and decides that Jose was the most expensive cheap dishwasher he`d ever hired. 
(3) Presumably, in a few cases especially stubborn employers or especially angry workers would actually lead to prosecutions, with the resulting massive publicity terrifying all the under-paying employers and tempting all the under-paid workers.  The risk-reward ratio of ignoring the minimum wage laws would be so extreme that only the most insane employers would take the risk. 
(4) So, the question comes down to whether such harsh legal penalties could be included in the law.  Now the vast majority of powerful business interests already pay well above the minimum wage, and even the ones which would be effected by the new requirements normally have well-organized payroll departments, and would tend to comply with all these requirements.  About the only group at risk of the penalties would be the sort of very small-scale/informal/marginal businesses that don`t hire big DC lobbyists, so none of the politicians really care about what happens to them.  In fact, their somewhat upscale competitors might prefer that they be driven out of business or at least inconvenienced so
as to weaken their competition.  And obviously almost all of these businesses are non-unionized, so on the Democratic side of the isle, the unions would like nothing better than to cause them trouble. 
Anyway, that`s my take on the enforcement issues...