Of matrícula accounts and ITIN loans

July 11, 2005 10:49 PM

Embracing Illegals: Companies are getting hooked on the buying power of 11 million undocumented immigrants - The Underground Labor Force Is Rising To The Surface [pdf]
posted by kliuless (30 comments total)

kliuless - Interesting stuff.

The US is really being changed by all this and it is amazing how little it is talked about. In the time I've known LA (first visit to downtown 1999, last 2004 ) things changed.

Overall, surely it's a good thing, but it is surprising how people seem to talk so little about it.

You wonder whether the large number of illegals will force some kind of compromise, perhaps something like Germany's 'gastarbeiters'.
posted by sien at 12:10 AM on July 12, 2005

Gastarbeiters were not, are not, illegal.
posted by IndigoJones at 4:24 AM on July 12, 2005

No, true, they never were and that was not what was meant, apologies if it wasn't clear.

What was meant that a program that legalizes what is happening, perhaps giving a similar status as Gastarbeiters.
posted by sien at 6:04 AM on July 12, 2005

If the current pool of cheap labor becomes mainstreamed (and no longer cheap), who will be the next wave of cheap labor?
posted by sandking at 6:30 AM on July 12, 2005

Peachy.
posted by keswick at 7:19 AM on July 12, 2005

sandking: “If the current pool of cheap labor becomes mainstreamed (and no longer cheap), who will be the next wave of cheap labor?”
I’ve always been suspicous of the US’s supposed inability to secure its own border.
My guess is that the border states, especially, need a large pool of cheap, rights- and perks- free labor to keep up its standard of living. If they kicked them out, who’d mow the lawns, cook the food, clean the floors? If they gave them legal status, they’d become Americans and start demanding stuff.
Largest army in the world can’t secure a few miles of desert? Hmm.
posted by signal at 7:21 AM on July 12, 2005

Signal, your suspicion is entirely valid. To put it frankly, the agriculture sector would wither without illegals. On average, illegal workers save the average American household $50 a year in groceries. Without illegals, the cost of packing fruit, picking fruit, and growing fruit would skyrocket. Without the ability to fuck over their workers when a bad crop pops up, I'm not certain that crops which we take for granted would be sustainable anymore to grow in this country (strawberries, for instance).

Now, I'm not saying that's right. In fact, I think it's atrocious that we allow this semi-serfdom to still happen But that is the major reason why there hasn't been much emphasis other than lip service placed on border security - immigrant labor is vitally important to the economy, even before you factor in their roles in the service industry.
posted by shawnj at 7:40 AM on July 12, 2005

Yeah, your suspicion is always valid, it's just not always true. It is also pretty much impossible to fully secure the borders. We're talking about thousands of miles of wilderness for the most part here. It wouldn't just take a hit to your grocery bill, you'd also get a hefty tax raise to accomplish it, and by hefty I mean they'd have to take it all.
posted by Pollomacho at 8:19 AM on July 12, 2005

11 million illegals, 600,000 unemployed Americans. Do the math.
posted by delmoi at 9:30 AM on July 12, 2005

On average, illegal workers save the average American household $50 a year in groceries. Without illegals, the cost of packing fruit, picking fruit, and growing fruit would skyrocket.

Not doubting your word, but do you have a foot note for this figure? Shameful, if true. I mean, a dollar a week per annum is hardly skyrocketry. My daughter age five gets twice that amount for setting the table every night.
posted by IndigoJones at 9:51 AM on July 12, 2005

11 million illegals, 600,000 unemployed Americans. Do the math.

No kidding. I can't wait to start picking blueberries and cleaning up trash for pennies an hour.

That is where you were going with this, right?
posted by sonofsamiam at 9:58 AM on July 12, 2005

I'd be more than willing to pay an extra $50 -- or even $500 -- a year more for my groceries, if it meant the workers were being paid an above-poverty wage and were protected by health and safety standards.

A lot of us need to give up some of our wealth in order to allow others to have a decent life.
posted by five fresh fish at 10:44 AM on July 12, 2005

Not doubting your word, but do you have a foot note for this figure? Shameful, if true. I mean, a dollar a week per annum is hardly skyrocketry. My daughter age five gets twice that amount for setting the table every night.

Most of that is from Eric Schlosser's book Reefer Madness about the black market in America. His note on that figure:

"The typical American household spends roughly $5,031 a year on food - and about $500 of that is spent on fruits and vegetables. According the Philip L. Martin, the cost of farm labor represents less than 10% of the retail price for fruits and vegetables. If the wages of American farmworkers were doubled and the higher labor cost was directly passed to consumers, it would add $50 to the average household's yearly food bill. Moreover, this estimate may be too high. Many processed fruits and vegetables are no longer picked by hand. The typical American household spends only $301 a year on fresh fruits and vegetables. Increasing that sum by about $30 - less than the cost of two CDs - could eliminate most of the hardship and poverty among California's farmworkers."
posted by shawnj at 10:46 AM on July 12, 2005

Oh yeah. I keep meaning to read that book. Thank you for the reminder.

Mind you, it then becomes a questions of how many illegals are actually picking crops. Where I live in the leafy suburbs, it's mostly garden work, cooking, cleaning, child care- the sort of things people used to do themselves.
posted by IndigoJones at 11:51 AM on July 12, 2005

A lot of us need to give up some of our wealth in order to allow others to have a decent life.

The minimum wage in Mexico City, a relatively wealthy place by Latin American standards, is the equivalent of $6 a week. $6 a week. People have been flooding out of rural Mexico and into the DF to get this $6 a week.

Migrant (mostly illegal) workers that pick fruit in Mexico live in housing that I wouldn't let my dog sleep in.

The crappy pay that they get in the US is a decent life compared to what they get in Mexico. (I'm not saying it couldn't get better, just sayin')
posted by Pollomacho at 12:22 PM on July 12, 2005

Come to think of it (tips hat to Pollomacho), a lot of my produce comes from S. America. Between that and slave labor in China and the general race for the bottom- remind me again why globalization is an unalloyed good thing?
posted by IndigoJones at 2:57 PM on July 12, 2005

Globalization means equalization.

The migrant workers picking fruit in Mexico for six bucks a week are doing it because it's even worse back where they came from.

If you look at the history of exploitive labour, you see that it keeps moving from nation to nation as the exploited labour market demands better pay and conditions. Eventually these companies are going to run out of places to screw over.

Take Delta tools, for instance. They used to build their large power tools (tablesaws, jointers, planers, etc) in America. When labour expenses got too costly, they set up shop in Taiwan.

A few years ago Taiwan got too expensive for Delta and they found it worth their while to entirely abandon their factories and set up shop in China.

King Canada bought up those factories on the cheap and now knocks out clone equipment based on Delta's old designs. Because infrastructure and design costs were negligble for King, they can offer reasonably good tools for cheap despite having labour costs higher than they'd have in China.

Meanwhile, Delta employs Chinese workers who were previously living subsistence farming lives. Those workers choose to work at Delta's factory because, presumably, it's a helluva lot better than starving to death on the farm.

So the progression has been from (a very few well-paid American toolmakers and a lot of starving Asians) to (a bunch of poorly-paid Taiwanese toolmakers and a lot of starving Chinese) to (a bunch of decently-paid Taiwanese toolmakers and a bunch of poorly-paid Chinese toolmakers).

It's progress in the right direction. Painfully slow and terribly unfair, but it's in the right direction.
posted by five fresh fish at 4:45 PM on July 12, 2005

five fresh fish: The problem is that it doesn't always work that way and that if laws are made by rich pressure groups then progess toward a generally more rich society may not happen.

Without a legal framework that keeps this sort of thing on the books the consequences could be a return to surfdom.

A case in point is these Latino workers. By keeping them illegal their wages will stay very low. If they were to be given some legal status then they would be able to get some rights, but a combination of politicians desire not to talk about it and the farm lobby's desire not to have it change nothing is changing.

Even within a legal framework if the laws are made without taking notice of those on the bottom the same could happen.

Whats happened with the US minimum wage over the past 30 years is a case in point. In real terms it has declined. There has been growth, but there is a real threat that the US is slowly moving toward a caste type system.
posted by sien at 5:01 PM on July 12, 2005

We can help by buying fair trade fruit.
posted by NickDouglas at 10:05 PM on July 12, 2005

So the progression has been from (a very few well-paid American toolmakers and a lot of starving Asians) to (a bunch of poorly-paid Taiwanese toolmakers and a lot of starving Chinese) to (a bunch of decently-paid Taiwanese toolmakers and a bunch of poorly-paid Chinese toolmakers).

And the few well paid Americans? Not to sound truculent or uncaring, but as an American whose company likes to sell to well paid Americans (leaving aside questions of national sentiment, which as global thinkers we must), I have to think first of them. Charity beginning at home and all that. (And what happened to the Delta factory in America? The one that King Canada (Canada?) did not buy? Nevermind the question of the tools' actual designs.)

There's also the question of mere law. If rule of law is the basis of a sound society and sound economy (as I believe it is), then better China & Mexico should establish same and see the wonders it brings. To the degree America finds rule of law inconvenient, so much the worse for America. Myself, I thought that Zoe Baird should have been disbarred.

But then, I am neither lawyer nor economist.
posted by IndigoJones at 4:24 AM on July 13, 2005

Make them all legal. Allow in temporary workers on second-class work permits. Require employers to offer work to legal US residents first (paid at or above the US minimum wage), but to fill in the gaps with temp foreign labor paid wages lower than the US minimum -- on the assumption that the wages (and the workers, eventually) are going back to a place where they don't need such a high minimum. Adjust their minimum wage based on their country of origin.

Then make employers responsible for checking work permits of all employees. Send employers to jail and confiscate their property if they do not.
posted by pracowity at 6:17 AM on July 13, 2005

sien: This might shock you, but the answer to your concerns is activism/unionism. When workers give up on organization, they give up their ability to negotiate fair contracts.

Unionism is what got workers the benefits they enjoyed back in the glory days of the mid-century. Good wages, health care packages, retirement funds, decent working hours, vacation time, paid leave, almost everything that is good was the result of union negotiations.

Now, yes, I realize that a lot of the biggest unions became absolutely corrupt organizations, and that this led to the current situation where many people despise unionism. And almost rightly so (almost, because no matter how bad the unions are, they're matched by the unethical practices of corporations.)

Unions don't have to be corrupt. Workers who care about fairness and such can become active in their union, demanding openness and accountability.

In summary, the only way the individual worker and citizen is ever going to keep the ruling scum from screwing them over is to get off their fat, lazy asses and demand better.

The way things are going, I think things will have to get a lot worse before the mass public is so motivated. A real shame, that.
posted by five fresh fish at 9:39 AM on July 13, 2005

Indigo: What about the American workers? I'm sure they were perfectly capable of finding new work. Even as the toolmaking trade has declined in America, the skillset is certainly such that it translates well into other industries.

And besides, like I said before: those of us living the privileged lives of filthy-rich Westerners -- and that is basically inclusive of everyone so lucky as to live in the West, because exceptionally few of our population is wholly and inescapably resigned to a subsistence life -- are going to have to give up some of our wealth so that others can live better.

The disparity between "us" and "them" is going to have to be reduced. And, as I said, it eventually will be: sooner or later the cheap labour countries will all have been tapped into and will become middle-class/first-nation countries. It'll take generations of time, but it's inevitable.

The Delta factory in the USA would have been dismantled long ago. I suspect that at that time, Delta found it cost-effective to either move the machinery across-sea, or destroyed it to prevent a home competitor from stealing its market. In the current situation, King Canada doesn't really compete with Delta: the newer Delta products justifiably demand a higher price, and are made to a higher quality standard.
posted by five fresh fish at 9:52 AM on July 13, 2005

And, finally, yes: spending your consumer dollar in ways that help equalize global incomes is very important.

Take chocolate for example:

The chocolate used in low-grade candy bars, like Hershey's and Mars and Nestle, are slavery chocolate. When you purchase a candybar, you are supporting slavery. These are people who are dying to provide you with a minute's worth of junkfood delight.

IMO, once you are aware of this, it is entirely inexcusable and unethical to purchase that chocolate.

Fair trade chocolate, on the other hand, ensures the farmers are making a liveable income from their work. It's only a dollar's difference at the store, but it saves lives.

And, to boot, FT chocolate is generally grown using sustainable farming practices, unlike slavery chocolate, is generally organic, and is leagues better-tasting than junk chocolate.

The same sort of thing applies to coffee and fruit. Organically-grown bananas cost pennies more and save workers from being poisoned by insecticides that are outright banned in North America as too health-hazardous.

It takes so little effort and so little money to make a substantial difference in hundreds and thousands of third-world lives, just by choosing to spend your consumer dollar wisely.

If you're not part of the solution, you're part of the problem.
posted by five fresh fish at 9:59 AM on July 13, 2005

i know this has turned into a debate about free/fair trade, but i just wanted to add a similar story about how providing access to credit can help the poor :D (not payday loans or predatory lending!)

Of Brazil's 5,500 municipalities, 1,700 until recently had no banking services. That means a huge chunk of the population couldn't save money in interest-bearing accounts, couldn't make purchases on credit, and couldn't build up the kind of financial record that could help them qualify for a mortgage or a car loan.

Now that's changing, thanks to regulations that allow banks to offer a new type of account, designed especially for the poor. Today anyone with a national identity card and tax number can open a bank account. And they don't have to walk into a bank branch to do it: The new accounts are available at corner groceries, post offices, and gas stations. With a PC or just a magnetic card reader, even a baker can be a banker, handling transactions such as bill payments, deposits, and withdrawals, and earning fees for each transaction.

For Brazil's banks, it's a chance to cast a wide net at little expense. The overhead is minimal, since there are no bank branches. And the cost of capital? Well, it's close to zero. That's because regulations introduced in 2003 allow banks to use up to 2% of their reserve requirement -- money that would otherwise be parked in a non-interest-bearing account at the Central Bank -- to make small loans to the poor. The interest charged on such loans cannot exceed 2% a month, a steal compared with the 10% to 12% most Brazilians endure. The amount of the loans is also capped, at $110 for individuals, and $370 for small businesses.

as to free/fair trade, here's a look at walmart vs. costco's labour practises, just one more battle along the front :D

In a country where the retail industry has been convulsed over the past decade by the rise of Wal-Mart and rival discounters, Costco’s discount warehouse club is part of the revolution. But unlike Wal-Mart, whose low-cost labour model has provoked increasingly vocal criticism, Costco has managed to remain competitive while providing its workers with the highest wages and best healthcare plans available anywhere in the US retail industry.

cheers!
posted by kliuless at 3:42 PM on July 13, 2005

Damn. I may have to get a Costco card again. I like supporting companies that Do Good.
posted by five fresh fish at 4:05 PM on July 13, 2005

What about the American workers? I'm sure they were perfectly capable of finding new work. Even as the toolmaking trade has declined in America, the skillset is certainly such that it translates well into other industries.


Whoa! There are parts of the country you could start a fist fight with a comment like that. New work? As you also said, "the Delta factory in the USA would have been dismantled long ago".

Slave labor chocolate, bad. Slave labor factories in China making things like, well, tools, also bad. Government comes in and uproots entire villages to work in crappo factories to undercut the competition. Always the low price. Always.

Unions. Actually, illegal aliens are the current best hope for unions. But that gets us back to the question of rule of law and to whether we think it a good thing or an irritant. Hell, even Mrs Clinton is making noises, which is pretty funny, really.

As to Costco, better than Walmart and good on 'em. Better yet, patronize small business, at least until they are forced out of business. Acting locally again.

As to the spreading the wealth so we all become middle class- not sure it really works quite like that. Not in the age of fiat money, anyway. Is America rich? We're up to our eyeballs in debt. China? Well, they own a good deal of that debt. Traditionally a mercantilist country, China. which can get you into trouble or Opium Wars.

Got no answers. I see one huge collapse coming sooner or later. But I'm too sleepy to continue, and at this late date I doubt anyone's reading the comments anyway.
posted by IndigoJones at 7:29 PM on July 13, 2005

I'm late to the party as always, but I have to reply to this:

The minimum wage in Mexico City, a relatively wealthy place by Latin American standards, is the equivalent of $6 a week. $6 a week. People have been flooding out of rural Mexico and into the DF to get this $6 a week.


I have no idea where you get that from, pollomacho, but you are way off. The minimum wage in the country is about $4.50 a day, and I doubt many people in Mexico City are getting less than double that.
posted by Penks at 10:46 AM on July 14, 2005

hey, this is been going around too :D

The Costco Challenge: An Alternative to Wal-Martization?

btw, re: fiat money, it's had a bad track record, but with proper management, i don't necessarily see it as leading to economic collapse! ... + i think the proliferation of different kinds of money should help overall systemic stability :D

cheers!
posted by kliuless at 4:22 PM on July 14, 2005

How Costco Became the Anti-Wal-Mart
looks like nytimes picked it up! fwiw :D
posted by kliuless at 10:10 PM on July 17, 2005