The (Former) Economics of Child Care

2008-Jul-18

When I was a rug rat, my mother got divorced and got very little in child support. She managed to get a job at the “Five and Dime” and got paid a dollar an hour (this was a while ago…), making forty dollars a week.

She had to find a babysitter for me. The babysitter she found got paid twenty dollars a week, and babysat four children, making eighty dollars a week total. Twice what my mother was getting. Half of my mother’s weekly wage. Back then babysitting was a reasonable job. Not any longer.

At one time, service jobs paid a living wage. Until the “haves” decided that they could get away with paying less than a living wage. When there are ten jobs and nine workers, wages and benefits rise. No matter what laws you pass. When there are ten workers and nine jobs, wages and benefits fall. If you bring workers in from other countries, you can guarantee a surplus of labor, and you can guarantee that wages and benefits and worker protections will fall. No matter what laws you pass.

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H1B Auction

2008-Mar-18

Congress is about to try to repay all that corporate cash they are receiving by trying to give the corporations as much cheap labor as possible to lower our wages. Bill Gates just testified before Congress that the world will end if he doesn’t get a massive increase in H1B guestworker quotas:

Congress’s failure to pass high-skilled immigration reform has exacerbated an already grave situation. … Last year, for example, Microsoft was unable to obtain H-1B visas for one-third of the highly qualified foreign-born job candidates that we wanted to hire.

He claims he would be able to hire more Americans if only he could get those “highly qualified” foreign candidates. Of course those Americans might not be paid as much as the H1Bs:

These jobs are very, very, very high-paying jobs.

Wow! We must be paying H1Bs a whole, whole, whole lot for them to be “very, very, very high-paying”! (If he is telling the truth. Otherwise he is lying through his teeth.)

Let’s assume Bill is honest. One problem with the H1B program is that it is a lottery. If there are more applications that slots, then the slots are given away by random chance instead of allowing Bill to get the H1Bs he needs so desperately. And by random chance too many of those slots are given to H1Bs who are low-paid and untrained instead of to those who are “highly qualified” and “very, very, very” highly paid.

We can fix that! Easily. Just turn the H1B lottery into an auction. And I think we can simplify the process so that even poor Americans could administer it.

  • Each H1B application has an LCA (Labor Condition Application) filled out, many by email. This becomes the official application after the Department of Labor certifies it after looking for obvious errors.
  • Each H1B LCA must be placed online by the Department of Labor in a publically available place prior to the auction.
  • The LCA will have an Rate of Pay that will constitute what the employer is willing to pay the H1B.
  • The Rate of Pay must match or exceed the Level IV (Fully Competent) Wage Rate as determined by the Foreign Labor Certification Online Data Library. No other source for wage rates will be allowed. The FLC Data Center library has an updated list of prevailing wages for all appicable job classifications for all areas of the country. (It drastically understates wages that major employers actually pay, but it is a minimum standard until a better national standard can be determined.) If an H1B candidate is truly “highly qualified” and “very, very, very” highly paid, then surely they can reach the lesser standard of “fully competent”.

The only thing new so far is the demand that LCAs be made publically available before the H1Bs are given out, in order to make the process publically transparent to the taxpayers and voters. We now have all the information we need (Employer ID number, date of application, Level IV prevailing wage, offered wage, work location) to conduct an H1B auction. The auction part is the simplest part. I can write the code to conduct it automatically in five minutes:

-----------------------------------------------------------------------------
UNTIL quota reached or run out of valid applications
    for each occupation_code
        eliminate occupation_code if no more applications left for occupation_code

        for each area_code
            eliminate area_code if no more applications left for area_code

            the winner is MAX(offered_wage above prevailing_wage)
             
            if there are ties
                winner is employer with fewest wins so far

                if there are still ties
                    winner is employer with earliest application_date

REPEAT until done
-----------------------------------------------------------------------------

Benefits:

  • Easy: Little needs to be changed in the current process. The code to conduct the auction is incredibly simple and transparent.
  • Diversity: Currently the system is being gamed by IT groups flooding the process with applications and getting most of the H1Bs simply by filling up the lottery. Now each occupational category has a fair chance, and proportionately fewer IT jobs will be taken. And each geographical location will have a fair chance instead of just the major areas that pay most. So more of the country can see the wonderful benefits of H1Bs instead of just IT folks in major urban areas.
  • Transparent: With LCAs visible, anyone could duplicate the process to ensure it is operating correctly. With LCAs visible, anyone can see by auction time if an LCA is for a job where there are tons of available American applicants, ensuring that the Microsofts of the world are speaking the truth about the lack of Americans in that category, and whether the job classification and offered wage are appropriate. Even more transparency could be obtained if the resume of the H1B candidate were included with the LCA…)

If this modest suggestion were adopted, I wonder how many H1Bs would really be found to be needed.


Desperate Shortages?

2007-Nov-12

Every time corporations want to increase the quotas on guestworkers they repeat the same tired old lies about a supposed “desperate shortage” of workers in some field or other. Actually under capitalism there can never (by definition) be a labor shortage in any field. Any temporary shortage is quickly followed by a rise in wages and benefits until the shortage is alleviated. No wage increase, no shortage.

So should you send your kid to college to study science and math and engineering to alleviate the “desperate shortage” showed by current lowering enrollments in those fields? Hmm:

…the fact is that university enrollment in science programs has historically risen and fallen in almost perfect correlation to the opportunities in the job market.

…the U.S.-born scientist as a practical matter really only has access to the scientific job market in the United States, whereas his or her European counterpart has access to opportunities in the United States and the European Union.

…if there were indeed an undersupply of scientists, you?d see hyperinflation of salaries, which of course is simply not the case in any field of science. For example, a graduating Ph.D. in physics at Lawrence Berkeley National Laboratory in California currently receives a starting postdoctoral salary between $39,312 and $55,788. The other national laboratories and the National Institutes of Health offer similar salaries. According to the laws of labor economics, if there is no hyperinflation of salaries, then there can be no labor shortage. However, I do think that there is a shortage of U.S. citizens who are willing to spend 10 or more years to get a Ph.D. in physics for a starting salary of $39,312 a year.

…we were able to identify only 11 African American Ph.D.-level physicists with career positions in the major DOE-funded national laboratories. This was out of a total of 3200 Ph.D.-level physicists employed by the laboratories. Out of the top 20 physics departments, there are only two African Americans in tenure-track faculty positions. What we conclude from this analysis is that foreign nationals are preferred over African Americans in hiring at these facilities.

…the income of a foreign national with a J-1 visa, typically used for postdoctoral appointments, is not subject to U.S. income taxes. This puts the foreign national at a 15% salary advantage compared to the U.S. citizen in the same postdoctoral position.

My daughter went to a high school whose purpose was to persuade kids to major in science, math, and engineering. I’m glad she resisted the temptation. She’s better off.


Gut Feelings

2007-Jul-17

Chertoff, our Homeland Security czar, has a “gut feeling” that we will have a terrorist attack:

Chertoff indicated to the Tribune that the assessment is “not of a specific threat, but of increased vulnerability”

And sure enough, here come the terrorists with a virtual free pass across our southern border:

The FBI is investigating an alleged human smuggling operation based in Chaparral, N.M., that agents say is bringing “Iraqis and other Middle Eastern” individuals across the Rio Grande from Mexico. … A spokesman in Albuquerque said the FBI had “no viable information” that could lead to a case.

What was that we heard about fighting them over there so we wouldn’t have to fight them here? I’d have a gut feeling too if my incompetence at doing my job let all the terrorists come here just so we can keep on getting that supply of illegal cheap labor.


Illegal Immigration and Liberals: a Typology

2007-Jun-22

Nativist Zenophobic Liberal – Wants to provide his family with food AND clothing AND shelter instead of having to choose just one.

Limbaugh Liberal – “Anybody who disagrees with me is a racist!”

Limousine Liberal – Owns a business that will benefit financially from cheap labor. Wants to replace his uppity black landscaper who wants a living wage with a brown one who will take much less, but keep his Liberal cred by still hiring a “minority”.

Latte Liberal – Wants to remove all borders because if he loses his crappy job he can always go back and live in Mommy’s basement.


Playing the Race Card: Black vs Brown

2007-Jun-02

The Neo-Cons in the Bush Administration had a novel tactic in getting Samuel Alito’s nomination to the Supreme Court confirmed. They tried to push the claim that anyone who opposed him could only be motivated by racism: “blue-state liberals against a modest Italian-American”.

Playing the race card by using false accusations of racism to defend a morally suspect political agenda worked so well for the Bush Administration that the fake liberals have been using it to justify their support for the Bush Neo-Con agenda of illegal immigration, by implying that any criticism of amnesty is racist.

When dealing with the Bush Administration (and all too often the Democrats who support them), it is safe to assume that whenever they hurl an accusation, they are trying to distract attention from the fact that they are guilty of whatever they are accusing others of. And the same goes here. If they are claiming it is racist to oppose the cheap labor corporate proponents of illegal immigration, it is more likely that the illegal immigration they encourage is serving the interests of racism, not ending racism.

Who wins and who loses through illegal immigration?

The biggest winners are employers of iillegals. First, they get the cost savings of cheaper labor. Second, they can now pay everyone less for the same job, since those who got fired and replaced by illegals must now accept lower wages in order to work, as the wages of all workers doing that job are reduced to what the lowest paid workers will accept. And once certain jobs are performed mostly by illegals, benefits (such as medical or pension benefits) are reduced or eliminated, job safety standards can be ignored, and unionization becomes impossible when strikers can always be replaced by an infinite supply of scab laborers. And those cost savings give corporate criminals an incomparable competitive advantage over employers who obey the laws. As long as employers know they will suffer no sanctions, the advantages of employing illegals over Americans are truly amazing.

The next winners are the illegals themselves. As I outlined previously, illegals can leverage the first world wages here against the third world cost of living of their extended families to get a strong competitive advantage over their neighbors back home through remittances.

So who loses? Blacks, first and foremost, as I noted before. The question is why would Liberals, Democrats let it happen? Why would Democratic politicians let Blacks, their most loyal supporters, slide into oblivion by supporting handing their jobs off to illegal immigrants?

Well, because that’s what happens every time a new wave of immigrants enters the country. White Liberals dump Blacks just as eagerly as white Conservatives do.

This time around part of it is crass political number crunching. Hispanics now outnumber Blacks and if Democrats can curry their favor and a majority of their votes, they may be able to make up for losing the votes of all the white racists in the South after the Civil Rights Act of 1964, especially since all those white racists voting solid Republican means Blacks really have nowhere else to go, so Dems can give them lip service and then abandon them with impunity.

And the dirty little secret…despite Democratic gloating that on the immigration issue Republicans are split between corporatist Republicans (“amnesty!”) and racist Republicans (“fence!”), Democrats have just as bad a split. Only on the Democratic side the corporate Dems and the racist Dems are the same damn Dems. But the racism is different.

When my Ex was young she went to summer camp, and when she returned her best friends refused to play with her. It seems that Blacks get tans too, and she was now a shade darker than her playmates, so she was too dark to be able to play with them. Republican racism is very simple. Everything is just black or white. But Democratic racism is complex, all shades of brown and gray. But with every wave of this “nation of immigrants”, the new immigrants always turn white but Blacks still end up at the bottom. Because each wave uses blacks as the spring board to step on to climb their way up the ladder:

IN 1971, THE Amsterdam News, New York City’s oldest African-American newspaper, published a cartoon by Melvin Tapley that gave vent to a uniquely black ambivalence toward immigration. The cartoon portrayed a downtrodden black figure crouched on the ground, labeled “US Folks,” a double entendre for “us folks” and “U.S. folks.” A chain of other figures, representing Spanish Americans and the foreign born, climb on the back of the crouched black figure, to pluck fruit off the tree of opportunity. Tapley had no illusions about the struggles of these immigrant minorities. Although he portrays them as getting ahead on the backs of blacks, immigrants too must climb over the wall of prejudice, and they reach only the lowest branches on the tree of opportunity.

The accompanying editorial read as follows:

News from the Census Bureau that Spanish-speaking Americans are now able to earn higher incomes than Blacks will not come as a surprise to many of us.

Since our arrival here in 1619 as slaves, Black Americans have watched millions of European immigrants arrive and within a short time hold jobs and reach levels of incomes Blacks were not allowed to attain.

In fact, during the early part of the century the hordes of Irish, Italian, Jewish, Polish, German, Scottish, Greek, Spanish, and other European immigrants frequently replaced Blacks as longshoremen, street-car motormen, construction workers, jockeys, blacksmiths, and able-bodied seamen. Outright, rank racism, and discrimination were the tools by which Blacks have been deprived of work over the decades.

The cartoon and editorial reflect a long strand of black thought, which regards immigrants and immigration with an ambivalence verging on resentment and bitterness. This should come as no surprise. As Lawrence Fuchs reminds us: “In 1883, when Emma Lazarus, a daughter of immigrants, wrote the impassioned words ‘Give me your tired, your poor, your huddled masses yearning to breathe free,’ the Supreme Court undermined the last of the civil rights laws passed by Congress following the Civil War.”3 And 1965 — the year these rights were finally restored — also marked the beginning of a massive influx of immigrants from every part of the world who were thrust into competition with blacks for jobs and opportunity. The crowning irony is that most of these immigrants would not be here, but for the black protest movement that led to immigration reform abolishing the national origins quotas that had chocked off flow of immigrants from nations outside of northern and western Europe.

Let me throw down the gauntlet: my challenge is to think about immigration from the standpoint of this black figure, crouched on the ground as others pluck fruit off the tree of opportunity. Dare we also read the immigration literature — the celebratory narratives of immigrant progress and triumph against adversity — from the point of view of “the man farthest down,” to borrow a phrase from Booker T. Washington?

When white “liberals” speak of immigration, they do it from a long history of themselves using it to give themselves advantage at the expense of others. It’s time they started to think of the wider context of who is being hurt as well as who they can obligate for future political favors. They have no basis for their self-righteousness. The effects of their racism are just as deep and lasting as that of the more honest racist on the other side. It’s time they faced up to it.


Immigration by the numbers

2007-May-20

Roy Beck‘s video should be seen by anyone wanting to understand the consequences of the recent bills recently pushed in Congress, supposedly to “fix the immigration problem”, but really to fatten the wallets of the “cheap labor” upper caste. It’s worth your 13 minutes:
http://video.google.com/videoplay?docid=4094926727128068265