This Has All Happened Before…
America, like every country, has an absolute right to close its borders to all outsiders and to remove all non-citizens. That is, by definition, what it means to be a sovereign state. America has that right. That’s the easy question to answer. The harder question to answer is what is in the best interest of American citizens? And, of course, what action represents American values?
But first, Econ 101. Trade works. Trade creates wealth. Without question. There should be absolutely no debate regarding this topic among anyone willing to pick up a history book, an economics book, or watch a few hours of youtube from professors on the subject. Do what you do well and trade with other people for the things they do well. You make more money from selling your goods, and the goods you buy are cheaper because the people you are buying them from do what they do well. Your purchasing power goes up with trade on the back of cheap imported goods and plentiful local jobs.
Typically, for America, this means we trade with countries where labor is cheap and capital and skilled labor are rare. If the cost of making a shirt is in the labor, we are never going to make shirt cheaper than those making $2/hr in Southeast Asia. Likewise, as foreign countries move up the skills ladder to a developed nation, they will go from making shirts, to assembling phones, to assembling complex engines. The only way the US can compete with these countries locally is to remove the cost of labor from our production process; also called automation.
In short, while manufacturing may come back to the US, manufacturing jobs are never coming back to the US. The only way they come back is by creating import tariffs so that, instead of buying your $5 shirt from China, you buy a $10 shirt from the US. This causes inflation, decreasing purchasing power, etc. And, of course, the other country retaliates with tariffs as well, so there is a diminished ability to export goods where the US does have a competitive advantage. The extreme tariff theory has been tried at least three times in US history, most recently during the Great Depression, and each time leads to disastrous results.
What about the goods that are labor intensive you can’t ship across an ocean? Unskilled location fixed labor, for lack of a better term. By that, I mean work where the thing being done has to be done on the spot it is used. Picking fruit, for example. In that case, you bring the cheap labor to you. Its more common name is immigration.
Let’s assume the immigrants who come to US are coming here to make money. Let’s also assume they are generally unskilled because, if they were skilled, they would be able to find a high paying job back home. A doctor or engineer in Mexico stays in Mexico. People don’t leave home because they want to, they leave because they have to. That means the people who come to the US from Mexico are unskilled and unable to find good work in Mexico, by definition.
This works out well us. The US needs unskilled, cheap labor, and other countries have an excess of unskilled, cheap labor. The solution is simple, we import the labor we need. All of it. As much as we need. And, just like the first example, both groups specialize and trade, to the benefit of both. But now the trade is cheap grapes (instead of shirts) in exchange for engineering work. In short, your purchasing power goes up at the grocery store.
And, when we have more cheap labor than cheap labor jobs, people quit applying to come into the country. But, of course, the US does not have a “guest worker” program. There is no easy, legal, way to come to the US to work and go home with your money.
So, because we have no legal way to get into the country, we have illegal immigration. We have illegal immigration to fill the spread between the cheap labor we have, and the cheap labor we need. This leads to a group of 2nd class residents who live in the shadows. People who work in the US because we need them, but that are afforded no rights.
And what do you get when you have a group of people in your country that have no rights, are forced to live in hidden housing, are forced to drive away from a car accident, are unable to tell the police when they have been attacked, and are unable to see a doctor when they are injured? A group that cannot, by definition, integrate into society. What do you get when you have a group of cherry-picked low education, low skill workers that you cannot speak to? You get prejudice from the majority group against the minority group.
You don’t get prejudice all the time though. During good times it is live and let live. But, during bad times you get scapegoating. It changes names, but not ideology. It is called “Nativists” in the 1830’s. The “Know Nothings” in the 1850’s. Isolationists in the 1930’s. And let’s just say it, you get Nazi-ism during the 1930’s and 1940’s. I am not saying if you believe illegal immigrants are the problem you are a Nazi. I am saying if you think illegal immigrants are the problem, you are taking part in a long and relatively predicable historical linage of scapegoating during hard economic times.
But what are you scapegoating for? By almost every measure America is thriving. Crime is the lowest it has historically been in decades. Unemployment is the lowest it has been in years. And while terrorism makes the news daily, in America, you are more likely to be killed by a toddler with a gun (or a lawnmower) then by a terrorist.
So what’s the problem that causes the need for scapegoating today? It’s simple. While everyone says we are rich, you don’t feel rich, do you? And you are right. The middle class in America is shrinking. Purchasing power is stagnant. Education costs are such that you must mortgage more and more of your future income via student loans in order to have a chance at success.
The term you are looking for is income inequality. In 1928, just before the Great Depression, the top 1% of families received 23.9% of all pretax income, while the bottom 90% received 50.7%. By 1944 the top 1%’s share was down to 11.3%, while the bottom 90% were receiving 67.5%. That level would remain more or less constant from 1945-1970; the days when America was “great.” Today though, once again, the top 1% receives 22.5% of all pretax income, while the bottom 90%’s share is 49.6%.
And what was the highest tax rate during the good times? 90% was the highest marginal tax rate for individuals, with an effective tax rate of 40% for companies. Today it is 39.6% for individuals, with an effective tax rate of less than 20% for companies.
Both history and Battlestar Galactica tell us “…this has happened before, and it will happen again.” And it is true. Income inequality has happened before. Protectionism and high tariffs have happened before. Xenophobia and scapegoating have happened before. Prejudice has happened before. Our most embarrassing moments in American history are riddled with everything that has started to happen again. The Alien and Sedition Acts, Jim Crow, lynching, segregation, Japanese internment camps, the KKK, the Trail of Tears. They are all things that, in retrospect, we wish we had not done as a nation. They are things that make us look back at history and say, “I wish we were a better people.”
And now is that time again. Now is the time to be a “better people.” Now is the time to learn from history and to treat immigrants with respect. To treat diversity with respect. To treat different religions with respect. To treat Americans with respect. To see the larger historical context and, for once, to be wise enough to learn from it. Now is the time to be a better people than our checkered history. Now is the time to call on the better angels of our nature. And now is the time to be the city upon a hill.
Kolby Granville is an attorney, teacher and member of the Tempe City Council. He holds three degrees from ASU: a B.A. in Secondary Education, a M.Ed. in Educational Media, and a Juris Doctorate.
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