NYT: Law of supply and demand applies to immigration

From the New York Times, an article about Los Angeles and immigration:

Being Legal Doesn’t End Poverty 

By JENNIFER MEDINA 

LOS ANGELES — THOSE pressing for change in the country’s immigration system like to say that creating a path to citizenship will bring the estimated 11 million undocumented immigrants “out of the shadows.” It is taken as a given that legal status will help them climb the economic ladder. 

But in this city, and in urban areas across the country, it seems clear that even with full citizenship, many could remain in the shadow economy, earning cash for low-wage jobs. 

Millions of workers in the United States — those who sew clothes, mow lawns, care for children, construct homes, clean offices and serve food — function almost entirely in a cash economy. For undocumented immigrants, working for cash tends to be the most reliable way to earn an income while avoiding any attention from the government. 

Advocates of the immigration bill have used economic mobility as an argument for legalizing the millions already living here. They enthusiastically embraced a Congressional Budget Office report last month that said the Senate’s immigration bill would increase the size of the labor force and lead to greater productivity, which would raise average wages in the long term and have broad economic impact. Last week, business groups continued to pressure House Republicans to consider similar legislation. 

But it is hardly a given that citizenship is a route to better jobs. 

“Having legal status takes away one threat that people held over their workers, but it doesn’t do much more than that,” in the workplace, said Victor Narro, the project director for the Labor Center at the University of California, Los Angeles. 

When the Labor Center studied wage violations in 2009, it found that foreigners in general were more likely than native-born workers to be paid less than the minimum wage and that undocumented immigrants, particularly women, were even worse off. But the study also found that foreign-born workers who were legal residents were almost twice as likely to be paid less than the minimum wage as American-born employees.

By the way, the minimum wage is a bit of a red herring. You probably need two parents each making, say, three times the minimum wage to have a chance of affording to buy a home in immigrant-heavy California. The husband probably needs to get up to about five times the minimum wage to afford kids.

But, the minimum wage is still part of the picture.

 The cash economy is particularly important in California, which has more undocumented immigrants than any other state and the eighth largest economy in the world. The sheer size of the immigrant work force and economy allows business owners to create a norm of paying off the books that would be unthinkable in another time or place, said Ruth Milkman, a labor expert and professor of sociology at the City University of New York Graduate Center. 

“Employers have really gotten into the habit that this is the normal way of doing business,” Professor Milkman said. “They don’t particularly want to change, and nobody is making them do it. The immigration bill certainly doesn’t change much for employers who take the low road.” 

Day laborers, those men standing in front of Home Depots and on street corners looking for whatever work comes their way, are perhaps the most widely recognizable stream of cash workers. Often, these men were mechanics, engineers or even architects and doctors in their home countries.

No, not the last three categories.

The vast majority are undocumented immigrants. But in recent years, with the economy struggling, more of these immigrants have been standing in lots next to citizens, who are equally eager to find work, said Chris Newman, the legal director for the National Day Laborer Organizing Network. 

“We see people who rotate in and out, they come find work for the day and go to another job at night,” Mr. Newman said. “You lose a foothold in the formal economy and it’s a natural place to go.” 

Last month, the Labor Department reported that there are 2.7 million temp workers, more than ever before. As more large companies rely on temp agencies to fill their ranks, it is possible that more American workers, legally or not, could be treated like day laborers — who can be employed one day and out of a job the next. Mr. Newman repeated something that he has said to himself over and over again amid the debate in Washington: “Immigration laws are malleable, but the law of supply and demand is immutable.”

Right.

The way he sees it, as long as there is growing demand for an informal labor market, there will be people to supply that work force.

Or as long as there is a growing number of people to supply that work force, there will be employers offering only low wages. It really does work in both directions. To help our fellow American citizens, it makes sense to push on both the immigration restriction lever and minimum wage lever simultaneously. They work together to make the other more effective.

Jennifer Medina is a national correspondent for The New York Times.

And here's a sushi restaurant on Rodeo Drive that charges about a $500 per diner, but doesn't let kitchen workers take bathroom breaks or get paid overtime:

But by all appearances, there has been no backlash against the restaurant. Jonathan Gold, the influential food critic for The Los Angeles Times, named it the No. 2 restaurant in the city earlier this year, with no mention of the recent controversy.