Capitalists for a Higher Minimum Wage

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In These Times

Capitalists for a Higher Minimum Wage

A Silicon Valley multimillionaire and conservative pundit wants to give his state’s poorest workers a raise. Huh?

Entrepreneur Ron Unz, known for his reactionary views on immigration (along with controversial commentary on race, crime, IQ and social policy), is campaigning for a state ballot measure to lift California’s minimum wage to $12—well above the $10 minimum currently set to take effect in 2016 (and a giant step above the federal wage floor of $7.25).

Some progressives might be puzzled that Unz, who in the late 1990s famously pushed a ballot measure to scrap bilingual education programs in California, has taken on this populist fight, albeit with an odd neo-Fordist air.

Of course, the Right’s resistance to this has never been realistic; empirical research shows that lifting the federal minimum wage could boost earnings for a third of the country's workforce and drive broad economic growth. The opposition is mostly ideological, based on overblown charges that high labor costs will harm employers, along with the business community's general antipathy toward state regulation of wages. 

But some conservatives, including Unz and pundits Phyllis Schlafly and Bill O’Reilly, have come around to seeing a minimum-wage hike as an anti-poverty measure that's good for capitalism—and perhaps more importantly, a market-based alternative to government welfare. Unz’s initiative still contains kernels of his anti-immigration leanings, though not as explicitly as his earlier ballot initiative. He believes that increased wages for American workers would help those who are legally authorized to work while, over time, squeezing out workers who are not.

In an interview with In These Times, Unz explains that more attractive wages in low-wage job sectors (such as washing dishes or stocking supermarket shelves) will draw “legitimate” workers, which will diminish employment opportunities for undocumented immigrants competing in the same job market. He's willing to concede that some of the undocumented will be “grandfathered in” and remain in the workforce at the higher minimum wage, but he argues that the added job competition means that “new illegal immigrants who are just crossing the border, would have a very hard time getting a job at $12 an hour.” So Unz sees the wage boost as a long term deterrent against future migrants “flooding” into the U.S. and snatching up jobs to which “native” workers would otherwise be entitled.

The result, in his view, would be “preventing newly arrived immigrants from gaining their initial foothold in the economy.” Undocumented immigrant job-seekers, discouraged, would have an incentive to return to their home countries, foreigners would have less incentive to migrate in the first place… and then, presto, the border will be naturally enforced by free markets.

Unz elaborates on this higher-wages-tougher-borders theory in a Salon commentary in which he predicts mayhem if immigration reform passes without stronger wage laws. Should the new laws allow more migrants to work legally—by providing work authorization to current undocumented workers or more incoming migrants—he argues, “if nothing is done to improve the wages of their current jobs, these would remain unattractive to legal U.S. residents and act as a magnetic lure for new waves of impoverished border-crossers.”

Actually, Unz says he considers himself “pro-immigrant” in general (though he strongly opposes “open borders” as dangerously liberal social policy). He has toned down the racialized rhetoric invoked in his incendiary 2011 American Conservative essay linking immigration to the “End of White America.”

There is, nonetheless, a layer of truth to Unz’s theory: The epidemic of abuse against undocumented immigrant labor does indeed reflect a tiered economy, in which immigrants who lack work authorization and basic labor protections can be coerced into working the worst, most exploitative jobs.

But progressives, who favor a higher minimum wage yet also champion immigrants’ rights, see Unz’s projections as fundamentally flawed. If the minimum-wage hike brings the intended economic benefits, the U.S. could simply become a more attractive destination for migrants. Research on migration across states shows that among immigrant workers who have settled for a couple of years, a higher state minimum wage in many cases has a “magnet” effect and “a minimum wage increase can induce migration,” and that “undocumented immigrant flows are highly responsive” to such economic factors. In addition, “raising the minimum wage has a positive effect on immigrant wages”—suggesting that migrants benefit from the elevated base pay.

In other words, it’s hard to improve job opportunities for “real American” workers without also enticing more “outsiders” to seek the same opportunities—the two economic fates are linked. Moreover, there is far more to the decision to migrate than demand-and-supply economics. People come to the United States to reunite with family members, to pursue educational opportunities, to escape persecution. It’s a basic, universal, osmotic social impulse, and far from a harmful one: Numerous studies have found that immigrants both boost overall economic growth and have negligible impacts on earnings or employment of native-born workers. Migration has produced American wealth, productivity, innovation, and cultural vibrancy for generations.

Paul Sonn, program director with the advocacy group National Employment Law Project, which “vehemently disagree[s]” with Unz’s past statements on immigration but supports the proposed wage hike for California, says this new appeal to conservatives suggests the influence of the technology and finance sector elites. Unlike brick-and-mortar mega-retailers like Walmart, which rely more on suppressing wages for their massive workforces, Sonn says, the new breed of moguls focus on the macro effects and see a minimum-wage hike as “part of what we need to do to boost the economy by raising consumer spending."

Gordon Mar, executive director of Jobs with Justice San Francisco, says via email that California progressives are cautiously gratified by Unz’s proposal: “Where there's an opening, our side should engage with these new allies on moving the strongest possible minimum wage measures, while protecting against hidden agendas and political opportunism.” Yet Mar suspects that behind the neoliberal minimum-wage evangelism is the “conservative view that a minimum-wage increase is a strategy to reduce public assistance to the working poor,” since higher incomes would reduce the poor's reliance on government benefits like food stamps. He adds, “While we agree that ‘low road’ corporations should be required to offer better wages and benefits so that workers are not forced to rely on public assistance programs, we still very much see the need to restore the social safety net that has been gutted over the years—a goal I'd guess Unz would not support very strongly.”

Still, progressives should carefully examine the populist appeal of Unz's theoretical twinning of immigrant exclusion and increased wages for “American” workers. This message plays on many working-class Americans' underlying anxiety about social and demographic change, which seems to pit the ideal of social inclusion against structures of economic hierarchy and competition.

Unz has part of the equation right: Raising the wage floor brings up the rest of the economy. But he departs from the progressive view in a key respect: A higher wage floor won’t really help workers unless it lifts all equally, built to be as level as it is broad.

Michelle Chen

Michelle Chen is a contributing editor at In These Times. She is a regular contributor to the labor rights blog Working In These Times, Colorlines.com, and Pacifica's WBAI. Her work has also appeared in Common Dreams, Alternet, Ms. Magazine, Newsday, and her old zine, cain.

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