Wages in the United States have indeed been falling with respect to prices, and with respect to profits, since the 1960s. In 2006, wages and salaries made up a smaller proportion of the country’s gross national product than at any time since the government started collecting those statistics in the 1940s, while corporate profits rose to record highs.1 The gradual gains made by the working class during the first half of the twentieth century were being chipped away in the second half—just as immigration rates began to rise again. Why did this happen?
If you look only at the small picture, it indeed seems to be the case that immigrants and low-skilled citizens are competing for the same jobs. Businesses certainly want this kind of competition—it means they can find people willing to work for low wages. And, businesses argue, low wages keep prices low.
It’s true, if you look at the U.S. economy as a whole, that prices for some kinds of products have gone down and that people in the United States are consuming a lot more of those products. Clothing and electronics are two good examples of how manufacturers and retailers have been able to use low wages and deregulation—both inside the United States and outside—to keep prices down. And U.S. consumers are buying lots of those things. Most of the clothes and electronic devices we buy are produced outside of the United States in factories that pay low wages, in places where governments keep taxes and other expenses low. So companies can keep prices low for consumers while still making a profit.
If prices for some consumer products, especially those produced abroad, are kept low, prices for other kinds of goods and services are rising in today’s economy. A lot of the things that are getting more expensive are basic human needs—things like health care, housing, and education. Middle-class and even low-wage workers in the United States may benefit from cheap shoes, cell phones, and iPods, but at the same time they are finding it harder and harder to buy a house, get the health care they need, or send their kids to college.2
What’s going on? And what does it have to do with immigration?
Study after study has shown that since the late 1970s, the distribution of wealth in the United States has become more and more skewed. By the end of the century the richest 1 percent of the population owned about 30 percent of the country’s wealth, and the top 5 percent controlled 60 percent of the wealth.3
True, immigration also increased during the last decades of the century. But this does not prove that immigration was the cause of the growing inequality. Coincidence does not prove cause and effect. Rather, the same global economic restructuring that exacerbated inequality in the United States also contributed to increasing immigration. In fact, we could argue that cause and effect are reversed: increasing inequality created demand for immigrant workers and thus spurred immigration.
Rising inequality, concentration of wealth, and cheap products all go together. To understand how and why immigration fits into the global economy, we need to understand how this system works.
Products can be produced cheaply when business expenses—things like wages, benefits, taxes, infrastructure costs, and the cost of complying with health, safety, and environmental regulations—are low. Businesses have always wanted to keep their costs down—that’s why they tend to oppose regulations such as those listed above, which add to their expenses. Inequality helps them keep costs down in several ways.
First, when workers are poor and lack legal protections, they are more willing to work long hours for low wages. So businesses benefit when there exists a pool of workers without economic or legal recourse. This is one of the reasons why early industries relied on immigrant workers; why agriculture in the United States has used slavery, guest workers, and immigrants; and why businesses tend to oppose restrictions on immigration today. It also helps to explain why deregulation of the economy, and even why increasing repression and criminalization of immigrants, actually creates greater demand for immigrant workers.
In a democracy, it’s hard to justify deliberately keeping part of the population poor and excluded by legal means. Racial slavery was one means used to do precisely that until the 1860s. Temporary guest-worker programs, Jim Crow laws, and other forms of legalized discrimination—in the North as well as the South—were other methods that kept a supply of workers without rights available until the 1960s. In the western United States, legal restrictions against U.S. citizens of Mexican origin served the same purpose as Jim Crow did in the South. It’s no coincidence that in periods when rights have been expanded to previously excluded sectors of the population, businesses have sought new sources of exploitable labor.
Sociologists have used the concept of the dual labor market to explain how this system has worked throughout the history of the United States (and other industrialized countries). The primary labor market refers to jobs that are regulated. Workers are protected by laws that establish living wages, health and safety standards, and benefits. Their jobs are long term and secure. Their right to organize unions is accepted and protected by law.
The secondary labor market consists of jobs that are generally not regulated. Wages are low, and working conditions are dangerous and often harmful to workers’ health. Not only are the jobs unpleasant and poorly compensated, they are also dead end: there is little or no room for advancement. Poor working conditions are often justified with subtle or overt prejudice against the people who work in those jobs: they are seen as less intelligent, less deserving, and congenitally suited for the kind of work they do. Often they are not citizens. Until the 1930s, most factory work fell into this category.
Why would people acquiesce to working under these substandard conditions? Inequality helps to provide the answer, in some obvious and some less obvious ways.
Let’s look at the obvious ways first. Inequality maintains a population of poor people who lack access to resources, and who may have little alternative but to accept jobs under the worst of conditions.
But inequality works on a regional and global, as well as a local, level. These larger inequalities help to explain why industrial societies have tended to rely on immigrants, rather than the domestic poor, to fill jobs in the secondary sector.
The southern and eastern European immigrants who filled the factories and the mines and the Latin American and Asian immigrants who now fill the sweatshops, the fields, and the lower ends of the service sector share several characteristics that are related to regional inequalities.
First, the dollar is worth more in the home country than it is in the United States. Immigrants tend to believe that the United States is a country of fantastic wealth, where hard work can bring unbelievable reward. And they’re right: 26.3 percent of Mexicans, 46.4 percent of Filipinos, and 90.8 percent of Nigerians live on two dollars or less per day in their respective homelands.4 These people know that they could earn more in the United States.
Of course, the cost of living in Mexico, the Philippines, and Nigeria is much lower than the cost of living in the United States. The minimum wage, or subminimum wage, that a Mexican worker might earn in the United States wouldn’t be enough to support a family here—but it can mean the difference between utter dispossession and dignified survival, or between minimal survival and hope for the future, in Mexico, Nigeria, or the Philippines.
This brings us to the second piece of the puzzle: immigrants are willing to accept conditions abroad that they would never accept at home. Many people immigrate planning to spend a brief period of time working abroad, living under the most onerous conditions, and earning money that can be used to help those who remain at home, and then to return home themselves to purchase a house, buy land, or start a business. Migrant workers who come with this intention are not terribly concerned about their living conditions while in the United States—they are often willing to work fifteen hours a day, live six to a room, forgo any social life, and eat out of tin cans in order to save as much money as possible and return home as quickly as possible.
Immigrants do jobs that American citizens wouldn’t do—in Mexican president Vicente Fox’s notorious words, “jobs that not even blacks want to do”—because they are not trying to live a decent life in the United States.5 They couldn’t, on their meager wages. Their frame of reference is their much poorer home country, and what seem like unlivably low wages here are worth a lot more there.6
Over time, however, even these migrants’ frame of reference changes. Some do return home with their savings, but others begin to set down roots in their new land and bring or establish families here. World War I, and the subsequent immigration restrictions, accelerated this process for European immigrants, who could no longer return home. As they begin to assimilate into the new society, immigrants are no longer willing to work for substandard wages and conditions. They begin to struggle to better their conditions in their new home.
For the European immigrants in the early part of the century, this process was in general successful. The growing strength of labor unions, combined with federal legislation that began to regulate the conditions of work, changed the conditions of factory work during the 1930s and 1940s. Instead of being dangerous and underpaid, the assembly line became the basis of a middle-class lifestyle. Industrial workers could buy houses and cars, take vacations, and send their children to college.
Some sectors of the economy were excluded from the New Deal reforms of the 1930s and 40s, though, and remained in the secondary labor market. The main areas left out of the reforms were agriculture and domestic service. (As of 2006 the National Labor Relations Act still excludes agricultural and domestic workers.) Since these were the sectors where most of the workers were and are people of color, especially African Americans and Mexican Americans, most analyses conclude that the New Deal reforms, while not explicitly mentioning race or privileging white people, in fact had the result (and probably the goal) of reinforcing racial inequality and the dual labor market.
Other federal reforms of the middle of the century also contributed to hardening preexisting racial inequalities. The GI bill of 1944, for example, helped millions of people from the working class get access to higher education—but most colleges and universities in the United States still excluded blacks. Federal housing loans and mortgage policies also exacerbated racial inequality, since racial covenants, written and unwritten local codes, and lending policies clearly excluded nonwhites.
When southern and eastern European immigrants came to the United States in the late nineteenth and early twentieth centuries, they were not considered white—at least not fully white. They went to work in the factories and in the mines under abominable conditions. Because they were poor, because they were marginalized as noncitizens and as newcomers, and because legislation protecting the rights of factory workers was in its infancy, businesses were able to use them as a secondary labor market to build their industries. African Americans and Mexican Americans were even further legally marginalized because racial segregation and discrimination were widespread and encoded in the law.
The mid-century reforms extended rights to European immigrants at the same time as they drew the lines more firmly against people of color, whether immigrants or citizens. People of Mexican origin—including many who were U.S. citizens—were deported in massive waves in the 1930s, just as the New Deal was beginning to improve the conditions of work in the factories. The continuous expansion of rights described in the introduction needs to be qualified with the continuous exclusion from rights that accompanied it. Each period of expansion and reform has been accompanied and/or followed by a redefinition of exclusion. And exclusion guaranteed the continuing existence of a pool of workers for the secondary labor market.
The bracero program established in 1942 created a new legal way for Mexican workers to be used as a secondary labor market. They were brought into the country on temporary visas that defined them as “arms” rather than people (bracero comes from the Spanish word brazo, or arm) and treated essentially as indentured servants of the businesses that hired them. In the northeast, a similar recruitment program brought Puerto Ricans—who, like African Americans, were citizens, but second-class citizens—to work in the farms and fields.
In the 1960s, the formal system of racial segregation in the United States was dismantled, and a new wave of government programs ranging from affirmative action to food stamps tried to redress the results of centuries of legally enforced racial inequality and exclusion. The Voting Rights Act, moreover, acknowledged that blacks had been excluded by administrative means from full citizenship. The bracero program was also tacitly acknowledged to be a violation of people’s rights. According to a former U.S. commissioner of immigration, “its failings could no longer be reconciled with civil rights-era sensibilities about how people should be treated in a democratic society.”7
There was a difference, though, between African Americans, who were slowly, tortuously, accorded the rights of citizenship, and immigrants. For some immigrants, rights also slowly expanded, and opportunities for citizenship opened. Explicit racial exclusion of blacks from citizenship was dismantled through a series of steps beginning with the Fourteenth Amendment in 1868 and continuing through the Voting Rights Act in 1965. Along the way, the racial barriers to Asian citizenship were dismantled as well, on a slightly different schedule.
But the imposition of numerical quotas on Mexico and other Western Hemisphere countries for the first time, also in 1965, led to a huge rise in the numbers of “illegal immigrants” who did not have access to this expansion of rights. And the new wave of globalization of labor, begun by Operation Bootstrap in Puerto Rico in the 1940s and 50s and expanded with the Border Industrialization Program in Mexico in 1965, created new mechanisms for corporations to have access to workers who were excluded from democratic rights. Both of these U.S.-designed programs created privileged industrial export zones and invited U.S. factories to relocate in them.
But people of color who were citizens were still subject to social barriers, and people of color who were immigrants faced new structures, like the national quotas still in place today, that shut them out. Many new post-1965 immigrants from Latin America and Asia were as definitively excluded from citizenship, or from the rights of citizenship, as previous generations of people of color had been. The category of immigrants classed as “illegal” mushroomed because of the way the law was designed, and because of the increasing economic demand for immigrant workers.
The 1965 law dismantled the national origins quotas, which were by then universally seen as discriminatory. In their place, it created a uniform quota system of 20,000 per country for the Eastern Hemisphere, and a 150,000 ceiling for the Western Hemisphere—that is, Canada, the Caribbean, and Latin America. (This was changed in 1976 to implement the 20,000-per-country quota for Western Hemisphere countries as well.) Preference went to family members of people already in the United States.
The family preference system reinforced the phenomenon of chain migration from poor countries. It was based on the humanitarian idea of family reunification, but its implications went far beyond that. It meant that immigration became structured by circles of relationships with individuals in the United States. It meant that countries with strong recent histories of immigration, like Mexico, quickly overflowed their quotas, because lots of Mexicans had family members in the United States and could take advantage of the priority given to close relatives of people (legally) in the United States. In contrast, countries without a large presence, like Paraguay, scarcely filled their quotas.
The uniform quota system also embodied its own forms of discrimination. Huge countries like China and India had the same quota as tiny countries—so a would-be immigrant from, say, Oman, had a much higher chance of receiving a visa than one from a more populous country. And different sets of historical factors (which will be discussed below) meant that the “demand” for visas in some countries was very low, while in others it was very high. So some countries never reached their limits, meaning that it was very easy for their citizens to obtain visas.
For other countries, there were far more than 20,000 applicants. This meant that if you didn’t fall into a preference category, that is, if you didn’t have family members in the United States or particular job skills, your chances of getting a visa were virtually nil. Even for people with close relatives who were citizens or permanent residents of the United States, the wait could be years or even decades.
One problem at the root of the new quota system is that it dealt with countries, rather than with people. At the same time that it claimed to end discrimination based on national origin, it still made national origin the decisive factor in determining whether an individual could receive permission to come to the United States or not. By treating all countries equally, it treated people unequally. A person’s chances of getting permission to come to the United States no longer depended on his or her race—now it depended on how large his or her country of origin was, and on how many others in that country wanted to come.
Furthermore, the 1965 law ignored the long-standing economic integration, and in particular the labor migration, between Mexico and the United States. Migrant networks and systems that had roots even older than the bracero program didn’t disappear when the program ended, and the jobs Mexican migrants had filled, mostly in seasonal agricultural work, didn’t vanish either. Because it placed such a low cap on Mexico at the same time that the bracero program ended, the law vastly increased the numbers of “illegal” migrants. Abolishing the bracero program without creating any other legal mechanism to allow Mexicans to work in the United States turned people who had formerly worked legally into “illegal immigrants.” One hundred years after slavery was ended, continuing legal distinctions among people ensured that secondary labor market employers would have an ample supply of workers—workers who could not turn to the law to protect their rights in the workplace.
The structures of exclusion were compounded by the global inequalities that made immigrants, as people who had a dual frame of reference (the home country and the United States), more likely to accept, rather than challenge, their exclusion.
Domestic reforms of the 1960s may have extended full legal citizenship to African Americans, but structural inequalities, and the secondary labor market, persisted. By the 1970s an economic assault on the poor of all races began to unravel the social safety network established in the previous decades. And the connection of rights to citizenship was reinforced. Growing numbers of Latin American and Asian immigrants created a new pool of noncitizens who could be treated as workers without rights.
The unraveling of the social safety network, combined with deindustrialization, severely undermined the primary sector of the labor market. But as the primary labor force was contracting the secondary labor force was expanding. As women entered the workforce in larger numbers and people had to work longer hours to support a middle-class lifestyle, many of the services connected to the reproduction of the labor force moved out of the home and into the private sector. Fast food, child care, elder care, and home health care became rapid-growth sectors. These were jobs that could not be moved abroad. But if workers without social and economic rights might be recruited, they could provide a low-wage labor force.
Economist Nancy Folbre calls this aspect of the economy the “invisible heart”—as opposed to the “invisible hand” that classical economists argue governs the marketplace. The paid world of work and business, she explains, couldn’t exist without the unpaid, invisible network of care provided mostly by women. The economic shifts that began in the 1970s both demanded more working hours outside the home and cut back on public services and benefits, creating what Barbara Ehrenreich and Arlie Hochschild have termed a “care deficit” in the first world.8 Much of the new wave of immigrants that began after 1965 moved in to fill this care deficit.
The changing economy created other secondary-sector jobs too. New systems of subcontracting enabled some jobs to slip from the regulated to the unregulated sector. Factories threatened to close unless unionized workers gave up their gains of the past fifty years to compete with low-cost workers abroad. U.S. cities tried to woo in industries by offering them exemptions from the regulations and taxes that had been part of the redistributive model of the mid-twentieth century. So conditions in the primary sector of the workforce deteriorated at the same time that jobs were being lost to outsourcing.
Some of these changes chipped away at the social and economic rights that workers had attained through decades of struggle and legislation. Prisons and security also became growing employers as larger portions of the population were pushed into economic hopelessness.
There were some moves that stripped African Americans of political rights, too. Criminalization of drug use and draconian sentencing laws and patterns contributed to the astonishing statistic that in 2003 nearly one-fourth of African American men in their thirties had prison records—while only slightly over 10 percent had college degrees.9 Over five million Americans are legally disenfranchised because of felony convictions, including 13 percent of African American men.10 While still technically citizens, they are deprived of one of the essential rights of citizenship in the United States: the right to vote. (Other U.S. citizens also have restricted voting rights: Puerto Ricans on the island can’t vote in presidential elections and have no representation in Congress; citizens living in Washington D.C. could not vote in presidential elections until 1964, and still have no representation in Congress.)
Immigrants, however, have no political rights to begin with. If we frame our discussion by talking about countries and nationalities, it may seem logical that people should have rights only in the country where they are citizens. But if we frame the discussion by talking about workers and their rights, we see a different pattern. For centuries, the United States and other industrialized countries have institutionalized inequalities by granting rights to some people but not to others. People without rights may be slaves, they may be colonial subjects, they may be racial and ethnic minorities, or they may be immigrants, or they may be people in or subject to another country. In all cases, though, governments have made sure that there are people without rights to fulfill business’s need for cheap workers and high profits. When one group of workers has gained rights, historically, businesses—with government help—have simply looked elsewhere to define or create a new group of rightless workers.
Exclusionary citizenship has allowed the United States to maintain a fiction of equal rights while also making sure that employers have access to workers without rights. From the very founding of the country, the idea that “all men are created equal” coexisted with the fact of slavery, and the exclusion of large numbers of people physically present in the United States from the rights of citizenship. This contradiction continues to characterize U.S. law and society: many people who are physically present here are still excluded from the rights and privileges of citizenship. Keeping some people outside of the bounds of equality and citizenship served employers’ need for cheap labor in the past, and continues to do so today.
So let’s return to the original question: do immigrants compete with low-skilled workers for low-paying jobs? Yes. But the reason that this competition exists is because too many people are deprived of rights. The proposals for immigration reform that are circulating today do nothing to expand the rights of those currently excluded—in fact they do just the opposite. Further restrictions on immigration will not lower the numbers of immigrants—as long as the demand for labor is there, history has shown that immigrants will keep coming. And further restrictions will only compound the problem of immigrants’ lack of rights. The answer to the low-wage problem is not to restrict the rights of people at the bottom even more (through deportations, criminalizations, etc.) but to challenge the accord between business and government that promotes the low-wage, high-profit model.
When historians look at the evolution of workers’ rights in the United States, they often point out that the institution of slavery, and the subsequent dispossession and disenfranchisement of African Americans there, put the South far behind the North in the growth of labor organizing and the gains in workers’ rights. White workers in the South may have clung to their status of legal and racial superiority, but in fact the entrenched racial inequalities undermined the socioeconomic status of poor whites as well. It is hard to organize unions when there are lots of even poorer people eager for your job, and it’s hard to organize for social justice when you’re focused on preserving your slight advantage over those below you.
It’s important to understand, though, that it wasn’t the presence of African Americans—or the fact that they were African American—that made it hard for poor whites to bring about social change. It was the institutions of slavery and racial exclusion, the disenfranchisement and dispossession of African Americans, combined with white racism, that prevented poor southern whites—as well as blacks—from achieving social justice and equality. Likewise, it is not the presence of immigrants that lowers the wages and living standards of citizens—it is the fact that immigrants are deprived of rights, combined with anti-immigrant racism, that creates the obstacles to improving the lives of poor people.
Decisions and policies made by governments and by corporations are the main factors that determine wage levels. Global—and local—inequalities allow economies to sustain a low-wage, secondary-sector labor market. Both immigrants and poor people in general, inside and outside the deindustrializing countries like the United States, are the common victims of the lavish lifestyles of the wealthy and the profits of corporations.
If we look back at history, the greatest challenges to the low-wage, high-profit model have come through federal legislation and social movements, including labor organizing. When governments offer businesses freedom from regulation and deprive workers of rights, low wages and high profits flourish, and democracy suffers. Whether the excuse is race, or economic status, or nationality, a portion of the U.S. population has always been disenfranchised. Business may benefit from this system, but the population as a whole does not. Expanding democratic rights downward benefits everyone, especially those at the lower end. The contradiction between the rights of immigrants and the rights of citizens who are poor is more apparent than real.