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Cheap Labor Is Nobody's Right

A Commentary By Froma Harrop

Friday, July 26, 2013

The Declaration of Independence says nothing about a right to cheap labor, but not everyone has noticed. Companies routinely pay market rates for electricity, real estate and legal services. But many find great injustice in market economics, as applied to wages they must pay to attract unskilled labor.    

When companies can't find people to work for the meager amounts they are offering, a "labor shortage" is declared. And politicians seeking their favor come up with solutions such as the low-skilled visa program tacked onto the immigration reform plan. The so-called "W visa" would admit more immigrants to work in restaurants, stores, hotels and other enterprises.    

The bipartisan immigration agreement is most welcome for humanitarian reasons and its measures for seriously enforcing the law against hiring undocumented workers. The provision to bring in more unskilled workers, however, is most unfortunate.    

But it reflects a national conversation in which Americans without high school degrees play little part. They have no interests of their own in the eyes of those in power. They were put on this earth to make others comfortable.    

Under the law of supply and demand, when something is in short supply, the price for it rises. So if there were a shortage of unskilled workers, their pay levels would rise, right? But they have not. On the contrary, they have fallen.   

The median hourly wage for maids and home health aides fell 5 percent from 2009 to 2012, after inflation, according to an analysis by the National Employment Law Project. In that time, the median wage for restaurant cooks plunged over 7 percent.    

Even more depressing than the reality is a chief rationale for keeping these wages low -- that it makes a whole bunch of services, from restaurant meals to housecleaning, more affordable for other Americans. It's good for the consumer -- assuming, of course, that you ignore how substandard pay affects the purchasing power of the working poor.   

The real theme here is that low-skilled workers are "not one of us." Restaurant prices could go down if owners paid their accountants less or accepted smaller profits. But somehow those at the bottom of the wage scale have become the group assigned to keep prices low. They're nobodies.    

In Beverly Hills, the owner of Urasawa, a stratospherically priced restaurant known to drop bills for $1,000 on tables for two, is being investigated for allegedly withholding overtime pay for kitchen staff, some making less than $9 an hour. These workers, generally immigrants from Mexico, say they were also denied the right to take breaks.    

This is apparently not a unique case. Mario Batali and partners recently paid a $1.5 million settlement to workers at their fancy restaurants in New York.    

By legalizing their status, the immigration reforms would empower undocumented workers to demand better pay and conditions. But some labor economists see the large supply of low-skilled help and entrenched attitudes impeding their upward mobility.    

Many illegal and legal workers operate in a cash economy. They get picked up at street corners to do hard labor. Or they get hired for domestic work through a middle-class grapevine. The matter of wages and conditions, or lack of tax filings by the employer, never comes to the government's attention.   

"We see employers in a number of industries act as if there is a third-class labor market that is paid below the minimum wage and are made to suffer all manner of violations of labor law," Nik Theodore, a University of Illinois urban planning expert, told The New York Times.    

This kind of thinking has got to stop. An inexhaustible supply of low-paid labor should not be anybody's right.

Follow Froma Harrop on Twitter @fromaharrop. 

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