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The Profitability Of Inequality

By David Bacon

In the history of U.S. immigration, a long list of policies have sought to produce unequal status for different groups of people, such as the Chinese Exclusion Act, the Alien Land Act, anti-miscegenation laws, Public Law 78 and the Bracero Program. They all created an unequal status based on race and national origin and shared the central purpose of providing a labor supply at a price employers wanted to pay.

The roots of this inequality lie in slavery. The current concept of the "illegal" person has its roots in the Black Codes, used to define who could be enslaved and who couldn't. When the U.S. Constitution was adopted, a slave only counted as three-fifths of a person. Today, calling someone an "illegal" doesn't refer to an illegal act. It's the status of the person that is illegal, which justifies their exclusion from normal rights and social benefits. Illegality is a social category.

Illegality creates an inexpensive system. So-called illegal workers produce wealth, but receive a smaller share in return -- a source of profit for those who employ them. Inequality is profitable. In 1994 the labor of undocumented workers pumped $45,000 per person into the California economy, according to the North American Integration and Development Center at UCLA. Assuming almost all were working at close to the minimum wage, each received only a small part of the value he or she produced: about $8840 each. The average manufacturing wage at the time produced an annual income more than twice that. Who gets the additional value?

Companies depend, not just on the workers in the factories and fields, but on the communities from where they come. If those communities stop sending workers, the labor supply dries up and work stops. Yet no company pays for a single school or clinic, or even any taxes in those communities. Workers pay for it all through the money they send home.

In the tiny Mexican and Guatemalan towns that now provide workers, free-market and free-trade policies exert pressure to cut the government budget for social services. That budget in Guatemala's Santa Eulalia, for instance, does not provide any healthcare system for the town's residents. In public schools parents and teachers must buy the paper, pencils, books and other materials (an important cause of the teachers' strike in Oaxaca). If a road needs repair, residents can't expect a government repair crew to fix it.

The cost of all these services is now borne by workers themselves, in the form of remittance payments sent back from jobs in Nebraska slaughterhouses, California fields or New York office buildings. Former Mexican President Vicente Fox boasted that in 2005 his country's citizens working in the U.S. sent back $18 billion. Some estimate that in 2006 that figure reached $25 billion. At the same time, the public funds which used to pay for schools and public works leave Mexico in debt payments to foreign banks. Remittances, as large as they are, cannot make up for this outflow. According to a report to the Mexican Chamber of Deputies, remittances accounted for an average of 1.19% of the gross domestic product between1996 and 2000, and 2.14% between 2001 and 2006. Debt payments accounted for 3% annually. By partially meeting unmet, and unfunded, social needs, remittances are indirectly subsidizing banks.

At the same time, companies dependent on this immigrant stream gain greater flexibility in adjusting for the highs and lows of market demand. The global production system has grown very flexible in accommodating economic booms and busts. Its employment system is based on the use of contractors, which is replacing the system in which workers were directly employed by the businesses using their labor. Today's pine tree planters don't work directly for Kimberly Clark or the paper companies, but for labor recruiters. They appear when trees need to be planted, thinned or harvested. When the work is over, they are sent away. The paper corporations control labor costs indirectly through the price they pay for harvested trees or wood pulp, and through the contracts signed with labor contractors. This has been the employment model in the garment and janitorial industries and in agriculture for decades. Displaced migrant workers are the backbone of this system. Its guiding principle is that immigration policy and enforcement should direct immigrants to industries when their labor is needed, and remove them when it's not.

As these conditions are established they expand to other industries. In the 1970s, production workers in Silicon Valley electronic plants worked directly for big manufacturers. Today women working on the line assembling printers for Hewlett Packard work for Manpower, a temporary employment agency with an office in the plant itself. Sometimes they do the same job they did when they worked for HP directly, but now without healthcare or other benefits. They get a lower wage and can be terminated at any time. Most are women from the Philippines, Mexico and the countries of Latin America and the Asian Pacific rim.

Guest worker and employment-based visa programs were created to accommodate these labor needs. When demand is high, employers recruit workers. When demand falls, those workers not only have to leave their jobs, but the country entirely. Disabled guest workers injured because of high line speed on the killing floor can't stay in the community around the plant, making demands for treatment. They have to go back to hometowns where there is virtually no medical care at all. The employer doesn't have to provide compensation for those forced out of the country.

Today we hear both employers and the Department of Homeland Security call for relaxing the requirements on guest worker visas. Although there are minimum wage and housing requirements, the Southern Poverty Law Center report "Close to Slavery," documents the fact that the requirements are generally ignored. Simply putting more labor protections on paper won't change the reality for workers. "These workers don't have labor rights or benefits," Dominguez charges. "It's like slavery. If workers don't get paid or they're cheated, they can't do anything."

Excerpted from David Bacon's Illegal People: How Globalization Creates Migration and Criminalizes Immigrants

For two decades, award-winning photojournalist David Bacon has documented the connections between labor, migration and the global economy. Bacon spent thirty years as a labor organizer and immigrant rights activist. His articles appear in The Nation, The American Prospect, The Los Angeles Times, and The San Francisco Chronicle. He hosts a weekly radio show on KPFA-FM in
Berkeley, CA.

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