Sep 23, 2015

Why Corporate Leaders Push for Immigration

via Henry Dampier

The obvious reason is just to enhance their bargaining power against their employees. Increasing the supply of potential employees enhances the relative position of labor’s buy-side. It’s cheaper to bribe politicians to open up the borders than it is to raise the prices that they pay to labor.

Furthermore, corporate leaders only bear some of the costs of increasing immigration and diversity: the state handles those costs. The gangster sons of immigrant fruit-pickers are the government’s problem — not so much the problem of the agribusiness which lobbied to import them.

Much of corporate culture — especially in the era of public companies with mandatory disclosure laws which emerged in the first half of the 20th century — is focused on short term performance. Managers are only temporary. Maintaining and encouraging the growth of a local community requires a long term alignment of incentives which mass-democratic-impersonal business culture discourages severely.

Entitlements and other taxes on labor effectively make buying that labor both more risky and more expensive. This puts employers in a position to which they need to find methods to counteract that political pressure on the labor market — and they need to pursue short term rather than long term solutions to keep their jobs.

Additionally, the artificially high cost of living caused by a perpetually bailed-out, credit-infused, state-supported housing market makes it so that companies have to pay significantly higher wages than was either historically normal or that would need to be paid absent all of those interventions.

The way that these institutions have adapted to these conditions, at least domestically, has been to work with the egalitarian state to push wages back down. There are a few ways to increase the labor supply: put children on the market, hire overseas laborers, push women into the market, improve the profitability of the existing labor force, encourage workers to have more children, invest in capital equipment to reduce reliance on labor, lobby for protection, and socialize some of the labor costs.

In practice, public corporate managers tend to push all of the most effective short term solutions to the hilt. They do this, or they get replaced — whether by another competitor, or another firm.

States, rather than individual corporations, create the competitive conditions under which those corporations live. If a government elects to import enormous numbers of new workers, that’s the new competitive reality to which all companies need to adapt to. If some companies cheat on immigration law and don’t get caught, it puts pressure on companies to either formalize the loophole or to join in on the cheating — because to do otherwise means losing out in terms of competitive positioning. Uneven enforcement of law encourages corrupt behavior.

Inflationary monetary policy also encourages companies to “run as fast as they can” just to stay in place. Because holding cash means effectively losing more than the prevailing interest rate on that cash, it encourages companies to aim to expand always. It’s easier to fuel that expansion when you can import more labor and have other people pay for the training of that labor — namely, your own heavily-taxed workforce.

To end the corrupting pressure which encourages business leaders to forego investment in local communities in favor of importing a new labor force, the sources of those pressures need to be addressed. While it’s a good idea to change the law, just changing the law would not have a magical effect — you’d also have to address the corrupting pressures that encourage the flouting of the law.
So:
  • We have to rethink the entire concept of the ‘public’ company with its mandatory reporting requirements (encouraging quarterly short-termism) and insider trading laws (which encourages reliance on accounting snow rather than real investigation of companies)
  • Limit the extent to which companies can slough labor, training, & education costs onto the state
    • Scrap much of the education system — forcing parents, organized religion, community organizations, and businesses to bear the costs of education/training
  • Limit citizenship and immigration; change who can be a full citizen
  • End the short-termist approach to growing the labor supply (“Lean in” rather than following the only tried-and-true method of producing productive, law-abiding people)
  • Reform banking and the central bank
  • Permit civil society to re-grow
Is any of that likely to happen any time soon in the US? Nope. The US is utterly committed to a program of capital consumption — human, physical, and civilizational. Others will have to learn from the collapse.

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