French Riots and U.S. Immigration Issues Have Common Cause

03/30/2006

Supply and Demand of Workers Is the Common Denominatr

Paul Munnis

The people of France for many years experienced abusive work regulations by their companies and the result lead to worker backlash. The country went too far the other way after WWII and they instituted work rules that made it near impossible to get rid of a worker – job security was very important to French workers.

Attempts to right the imbalance in supply and demand for French workers, by a far-right conservative government, has caused legislation to pass that the French worker simply reject. French workers have taken to the streets to show their opposition and anger. They are scared of the economic forces that are ruling their nation and which they cannot control.

On the one hand the pure socialist approach of “favor the worker” has failed France.

On the other hand, a right-wing conservative approach of “treat workers as disposable commodity” is a failed policy in France.

The French have not been able to find a middle ground and it is missing because youth in France are heavily unemployed and jobs are precious. The French economy is simply not creating new jobs. Thus shedding youthful workers is seen as “age prejudice” and it is understandable that riots result. The French lack a “third way.”

It is in precisely this area that America seeks to provide a third way, a middle course, one where the forces of capitalism and the forces of socialism are balanced and where this sort of conflict does not rise to the level of civil conflict.

Americans seek to allow the free market to operate, to permit job demand to rise and fall with market factors, to allow wages to have a minimum wage floor, and to allow wages to float upwards depending upon supply and demand for workers by skill levels.

In a very real sense the debate today over illegal immigrants is a debate over whether to allow the supply and demand of workers to be stimulated by cheap foreign labor invading American shores or not. When employers say “they cannot get cheap labor for menial tasks,” they are right. When Unions say “if you want the menial jobs filled by American workers then pay them a living wage” – they too are right.

We use macro economics to stimulate the economy so as to produce new jobs. When used properly, deficit spending can stimulate an economy to produce more jobs thus increasing worker demand; yet it must be done carefully, lest inflation be created and wages go off onto a crazy upwards and unconstrained wage spiral. That raises the cost of goods and services and inflation results.

A key method for handling the balance between worker supply and demand is immigration law and immigration quota. This is true for both skilled and unskilled labor. Other ways include regulating the money supply, adjustment of the minimum wage, fine-tuning tax policy, and application of labor laws such as the Taft-Hartley Act which regulates the competition for labor.

The amendments to labor law enacted in Taft-Hartley added a list of prohibited actions, or “unfair labor practices,” on the part of unions to the National Labor Relations Act, which had previously only prohibited unfair labor practices committed by employers.

The Taft-Hartley Act prohibited jurisdictional strikes, secondary boycotts and “common situs” picketing, closed shops, and monetary donations by unions to federal political campaigns. Union shops were heavily restricted, and states were allowed to pass “right-to-work” laws that outlawed union shops. Furthermore, the executive branch of the Federal government could obtain legal strikebreaking injunctions if an impending or current strike “imperiled the national health or safety”, a test has been interpreted broadly by the courts. Using Taft-Hartley, America righted the imbalance we had. It established America’s “third way.”

The Act has both its opponents and supporters but it has produced a third way for Americans, one in which the forces of socialism and capitalism are allowed to compete and to balance on the basis of supply and demand for skilled and unskilled labor.  It has thus had the effect of leveling the playing field for American worker supply and demand for both skilled and unskilled labor.

It is precisely this sort of law that France lacks and it is why they cannot strike a balance and thus riots have erupted. It is this balancing of worker supply and worker demand that the immigration reform laws being discussed in the Congress today threaten and we Americans all know it. The role of immigration is tangential to the issue of overall workforce needs.

Capitalists and Socialists both have a lot of skin in the availability of cheap labor and thus we are back to worker conflict. One cannot have balance when a government tilts the size of the American workforce based upon emotion and based upon demonstrations. In fact managing the workforce is a technical task and not an emotional one.

America is rapidly moving to just the opposite problem that France has, we have a growing shortage of workers caused by Baby-Boomer retirements whereas the French have a surplus of workers caused by a lack of job creation. For the U.S. allowing illegal immigrants to enter without control increases the number of workers artificially, lowers wages, and changes the social contract between worker and employer. Thus it is not just an immigration issue but an economic issue that is being hotly debated today.

The American way has worked pretty well since it was overhauled in the 1930’s and then tuned during the 40;s and 50’s in response to world economic depression, wide-spread job loss, recession, and national hunger that we experienced on a very large scale in the U.S. during that time. We used each bad experience to tune our economy and to get it right.

Introduction of labor and management reforms have their origins in the “New Deal,” and both Republicans an Democrats realized that the third way was the only path that had a chance of striking the needed balance. We watched the social revolutions in Europe and we learned from them. As a nation we agreed to try to manage our economy and so far it has worked. Now guest worker and illegal alien legislation threatens an issue that is highly explosive and made into an emotional issue rather than the technical issue that it really is.

What is needed is a careful technical study of workplace supply and demand and adjustments to immigration quota so as to allow immigration balance. These are technical methods that our Department of Commerce and Department of Labor know full well how to compute and to apply in concert with the Department of Immigration. The Department of Immigration is charged with border protection and they are not doing their job to rgulate foreign worker flow. Congress has not been doing its oversight job and so the result is chaos.

The fact that Congress and the Agencies are not doing their job is yet another witness to the incompetence of the Bush Administration and their failed governance of America. If we want to resolve this immigration issue then it can be done in just about 30 days with nothing more than a telephone to check with major industry groups what their work-need projection consists of for the next two years—plus a $10 calculator to compute the new entrants needed to the U.S. workforce in the next 90 days vs a 90 day outlook for worker layoff and retirement. The difference is the quarterly immigration quota. An bright eighth grader could conduct that study.

After that, get the Federal government to protect the borders of the states where the violations are happening. That is what we are paying for as taxpayers and if Bush can’t do his job he can leave and we’ll get someone that can.

These methods of macro economic balancing of the American workforce have been taught by colleges and universities for years now. Our American Unions are so on top of these methods that they can do them in their sleep. Unions keep a careful watch on key idustry segments. Thus we do not need new laws, we do not need a repressive society, we do not need Bush to get America back on track, and most of all we do not need street riots to balance out our workforce needs. But we do need an Administration that knows how to govern America and that does its job with skill.

When a citizen looks at what the Bushies are doing and not doing then it looks like they are using immigration as a wedge issue to divide Americans instead of uniting us and possibly to deflect the growing demand to force Bush to resign or to be censured or impeached. Are millions of American jobs being risked to save Bush his job? We think that to be the case.

We know that they are desperate in the GOP these days and this shows just how desperate they really are. Americans need to calm down, encourage the righting of the supply/demand worker immigration quota, and fire Congress, replacing them with people that know how to manage a nation. For what we are paying Congressmen we have a right to an educated group of representatives that know what they are doing in government. These people clearly do not know what they are doing or else they are creating conflict on purpose which makes firing them even more compelling.