Wage Rules Are Delaying Immigration Reform

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The LA Times summarizes one of the disputes that’s delaying the Gang of 8 from producing a draft immigration bill:

One rough patch this week was a disagreement over how much immigrants should be paid under a proposed new visa category for entry-level jobs such as dishwashers, housekeepers and janitors. Negotiators for the AFL-CIO and the U.S. Chamber of Commerce […] couldn’t agree whether foreign workers should be paid the same wages as Americans.

The chamber argued that foreign workers should be subject to federal minimum wage law and that they should not be paid more than Americans. The AFL-CIO wanted the minimum wage for different job categories to be indexed off the median wage, saying that would produce more competitive wages for American workers.

I get why the AFL-CIO is doing this. They’re afraid that higher immigration quotas will increase the supply of low-wage workers and therefore reduce overall pay in low-wage industries. So they want a complicated system designed to insure that immigrant workers will be paid as much as existing workers.

But I’m having a hard time taking the union’s side of this. First, simpler is better. If you want to create a complicated new set of wage rules for the private sector, you’d better have a really good reason. I’m not sure what it is in this case, since the bulk of the evidence suggests that immigrants don’t compete for the same jobs as native workers. Second, the politics of this is just impossible. The AFL-CIO wants members of Congress to vote for a bill that mandates higher wages for immigrants than for U.S. citizens? The attack ads practically write themselves.

If you think that higher immigration quotas will drive down wages in low-paid industries, that’s a good reason to oppose immigration reform. But if you’re basically in favor of immigration reform, trying to micromanage the wage effects seems (a) impractical and (b) politically toxic. It would encourage massive cheating and game playing, increase paperwork and enforcement, and be wildly unpopular. I just don’t see how this works.

But maybe I’m missing something. Comments?

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