I don't get Paul Krugman

In today's NYT, Krugman says a guest worker program is a bad idea:

Meanwhile, the bill creates a guest worker program, which is exactly what we don’t want to do. Yes, it would raise the income of the guest workers themselves, and in narrow financial terms guest workers are a good deal for the host nation — because they don’t bring their families, they impose few costs on taxpayers. But it formally creates exactly the kind of apartheid system we want to avoid.

I must say that this leaves me confused. Krugman is the author of the justly famous "In Praise of Cheap Labor," which, correctly in my view, chastised opponents of globalization for not understanding that the poor working conditions and low wages they see in developing nations would be only worse in the absence of the trade and outsourcing the critics rile against. But now he is against a guest worker program because the labor conditions for these workers may not be up to some high standard which these guest workers would never hope to reach in their home countries?

What am I missing?

Comments

[alex]

Dani Rodrik: "What am I missing?"

Having recently acquired the ability to read Paul Krugman's mind, I'll take a stab at this.

Krugman's "In Praise of Cheap Labor" is about the US importing things from countries that have labor conditions that are deplorable by US standards. It is not about tolerating such conditions in the US.

What's the difference? Krugman opines that in very poor countries at (hopefully) the start of a development curve, there is a practical choice between bad labor conditions in exporting industries or even worse conditions without those industries.

The US, by contrast, is not a poor country. There is no reason it need tolerate such conditions for anyone working within its borders.

But, you might object, guest workers will not have such deplorable conditions. Yes, but they will have conditions worse than what American workers (LPRs, native-born and naturalized citizens) have. This leads to resentment by Americans who see employers benefiting from the cheap labor, and (since rumors of the death of tribalism are greatly exaggerated) an "us" vs. "them" mentality between Americans and the guest workers.

This sort of two tier system is the antithesis of the American ideal of immigration, which seeks to make the foreign-born in the US part of "us". This ideal is not something to be tampered with lightly, as it's the basis of one of the world's most successful traditions of immigration.

[Paul S]

I think Krugman's use of the word "apartheid" is telling. Guest worker programs are a win-win situation for first-generation workers (as you point out) but a raw deal for their kids, who would culturally be "American" but legally be "Mexican."

Occasionally you see legislation proposals to deny citizen status to "Anchor Babies" (citizen children of illegal immigrants); I wonder if such an arrangement is in no small measure responsible for America's relative cultural peace with immigrants. Undocumented parents essentially endure legal limbo to ensure the American Dream for their children. It's an unjust system, but unlike much economic behavior these days the next generation inherits the benefits, not the costs.

Look to France for an instruction on how not to treat your second-generation "guest" workers. That's a pretty good immigration policy guideline: "Don't do what France does."

[Will]

"but a raw deal for their kids"

Their kids, if born here, would be American even under this guest worker program, no?

[Idaho_Spud]

What you may be missing (since I too am unable to read Prof. Krugman's mind) may be the intentional development of millions of electorally disenfranchised poverty-level workers. They will have the right to work and little else.

I am sure business-friendly pols are salivating at the thought of importing Central American wage arbitrage legally, and diffusing it throughout the nation. Note that further immigration will be "skills" based, ensuring that wage depression moves further up the professional ladder.

The left probably believes they will later be able to obtain voting rights for these poverty level second-class citizens, thus the bi-partisan support for such an essentially un-American two-tier system of citizenship.

What would you expect to happen to a "guest worker" if they get uppity on the job? Looks like congress has found the perfect employees for business, haven't they?

[Ryan]

http://commentisfree.guardian.co.uk/matthew_yglesias/2007/05/guest_worker_program.html

matt yglesias has an interesting take on the potential political ramifications of a guest worker program. It's only a few paragraphs and certainly worth a read.

[Melvin]

"Yes, it would raise the income of the guest workers themselves, and in narrow financial terms guest workers are a good deal for the host nation — because they don’t bring their families, they impose few costs on taxpayers. But it formally creates exactly the kind of apartheid system we want to avoid."

I think that's all there is to it. Krugman is arguing that, economically speaking, it's a win-win situation for both guest workers and US businesses; politically speaking, not so much, as it denies a potentially large share of the labour force the ability to be involved in the political process.

Now to me the question is wether you believe that political considerations should at times override economic considerations or not. I think they do, but hey, I'm nowhere close to having a PhD.

[p]

Not to be so dismal but I guess the question becomes which is better: to be a fully franchised citizen of a less developed country or a disenfranchised citizen of the US?

[happyjuggler0]

"Not to be so dismal but I guess the question becomes which is better: to be a fully franchised citizen of a less developed country or a disenfranchised citizen of the US?"

p (or is it pk?),

Those of us who don't think it is the government's job to play God think the answer to that question is easy. Let the citizen in question be free to choose.

[happyjuggler0]

By the way, could someone tell me what is so horrible about an immigrant not being able to vote in their (temporary?) country of choice?

The reason I ask is that seems to be the only applicable disenfranchisement for legal immigrants.

They can leave when they want.

They can call the police whenever someone does, or tries to do, or threatens to do, something to them that is illegal to perpetrate upon a born-in-the-USA American.

They have full access to all US labor law protection regarding safety, or wages, or threats, or fraud etc.

There is no apartheid except voting. If they don't like not being able to vote they don't have to come here. Voting is irrational anyway so no great loss.

[R Mutt]

This seems to me more of a social and ethical issue than an economic one.

It's a very bad idea for a state to create what is in effect a legally enforced class system, with full citizens and second-class citizens. It's all very well to say it doesn't matter because they are here temporarily: if you take a look around the world you'll see plenty of cases where the temporary population has become permanent.

This could create huge social tensions between the Freemen and the Serf class; the Freemen seeing the Serfs taking their jobs, the Serfs at the mercy of their employers, and forced to tolerate abuse with their reduced rights.

[Idaho_Spud]

R. Mutt - exactly. Free marketers without a moral compass have no problem with this... obviously.

[Dani Rodrik]

I still don't get it. If as some people say, this is going to be terrible for the foreign workers themselves, why not let THEM decide this (as happyjuggler0 says). If you are worrying about U.S. workers, aren't they still better off competing with workers operating under the same legal environment compared to competing with the same workers under much worse labor conditions abroad? And if it is the potential of social tensions that is worrying you, why assume that this will necessarily be the case? Why not give it a try ? And remember, the counterfactual is not less immigration--it is more immigration but under no legal cover.

[Idaho_Spud]

Dani, I can see that you don't get it.

What we are discussing is intentionally creating a two-tier society among working-class people.

We are tilting the playing field against native workers by bringing in third-world 'guests'. These guests may or may not have the right to collective bargaining, and certainly will not have voting rights.

As I mentioned above, what becomes of a guest worker who incurs the wrath of his employer - perhaps by trying to increase his bargaining power by organizing? Deportation?

This does not sound like a balanced approach to marketing one's labor skills. In fact, I see it as a thinly-disguised attempt at undermining the unbalanced labor market we currently have - but maybe you see it differently.

What will become of these guest workers if (with the same legal and labor conditions natives enjoy) they are uncompetitive with native-born? Deportation? Government assistance? What happens to the workers they displace? Government assistance?

I am not saying we should not do this, but I am exceedingly skeptical of the benefits, both to guest workers and to native workers.

The same can be said for my ambivalence about free trade. I am quite certain free trade has benefitted a few people quite a bit, and a lot of people very little, if at all.

*sigh* But apparetnly that's the goal of government these days.

[alex]

happyjuggler0: "By the way, could someone tell me what is so horrible about an immigrant not being able to vote in their (temporary?) country of choice? ... There is no apartheid except voting.

For (legal) immigrants, that's true. But the topic here is guest workers, who, by definition, are not immigrants.

[wjd123]

If I'm a Spainard living in England, I can vote in the local elections there because I'm also a EU citizen.

What is so hard about the idea that people that live in a community should have some say in how it is run?

[wjd123]

Throughout Central and South America the poor in democratic nations are throwing out free trade governments. Am I to believe that they just can't understand how much better free trade has made their lives. Is there some economic reason we can't have a free trade system that actually empowers the poor so they can make their lives better.

Such a system would be international governments with the power to enforce sanctions when national governments don't live up to accepted conditions for trade. For instance nations that accept the principle of free association would be afforded greater access to the markets of all those members making up a particular international government. A corporation that wanted to leave a country whose workers had unionized for a country where workers couldn't associate would have access to members markets reduced.

The political body which makes the call should be the international one and not the national one. If workers find that the international government affords them more rights and protects their rights that is where their loyalties will go.

Workers know whether their lives are getting better. They don't need economist to tell them. They will know where they have leverage, and they will use it to their advantage.

Both Rodrik and Krugman are wrong about standards being used as a condition of trade. We have our economic morality, laws and regulations, effecting how business is done. Let free trade throw us into an amoral world and soon our own economic morality will be hollowed out. We need a free trade system that is an ally to standards.

The reason I said international governments instead of an international government is because not all nations could live up to the same standards even if they wanted to. However, a system of interlocking trade agreements between international governments could be used to encourage governments toward higher standards.

By belonging to an international government whose members can meet standards the opportunity to raise standards is also a political possibility. For instance, the EU laws protecting woman against discrimination in the work place are stricter than any of its member nations.

[Doug K]

The problem is not that the guest worker's lot will be improved: the problem is that the US worker's lot will be degraded. A large pool of indentured labor is awfully nice for employers, not so grand if you're competing with those workers for your paycheck.

Name one country where a guest worker program has been successful ?
I can't.. France and Germany are having significant problems from creating an underclass of guest workers, just as the US will if this nonsense becomes law.

happyjuggler0 has a Panglossian view:
"They can call the police whenever someone does, or tries to do, or threatens to do, something to them that is illegal to perpetrate upon a born-in-the-USA American.

They have full access to all US labor law protection regarding safety, or wages, or threats, or fraud etc."

Not true. Under the current H1-B program, visa holders are effectively indentured to the employing company. The results of this are predictable: lower wages for H1-B workers, and no possibility of protest. There is no money for enforcing existing labor law, and no interest in it either. As a H1-B worker I know this to be true.

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