Wednesday, April 11, 2007

Global Temp Agencies

I am no fan of most government immigration policies as anyone who reads this site probably knows. Obivously, building a wall is one of the worst solutions around: Mexico's demographics are changing and the initial shock of NAFTA is reaching its equilibrium point (that is, its low point). In such a scenario, wall-building will be an expensive process that gets a few contractors a lot of money for a decades-long process. Xenophobia will be reinforced and human rights will continue to suffer.

The only worse solution to government control of the border is privatizing the immigration process. Now this is already starting to happen in the policing of the border, but today's topic is not police state methods or the prison-industrial complex supported by the taxpayer. Rather, let's take a brief look at a proposal that came up in the WSJ yesterday:

Free Markets Need Free People, by Gordon H. Hanson, Commentary, WSJ: If there is one point of consensus in the fraught politics of immigration, it is that illegal immigration is bad. Yesterday, President Bush voiced his support for tough enforcement at the U.S.-Mexico border and called on Congress to resolve the status of the 12 million illegal immigrants now in the country. Last week, Rep. Tom Tancredo (R., Colo.) entered the presidential race, promising to make resentment of illegal immigrants a major campaign issue. And yet, from a purely economic perspective, illegal immigration is arguably preferable to legal immigration. Because Congress and the president refuse to see this, further reform this year could make a bad situation worse.

Illegal immigration is persistent because it has a strong economic rationale. Low-skilled workers are increasingly scarce in the U.S. while they are still abundant in Mexico, Central America and elsewhere. ...[I]mpeding illegal immigration, without creating other avenues for legal entry, would conflict with market forces that push labor from low-wage countries to the high-wage U.S. labor market. ...

Illegal immigration responds to economic signals in ways that legal immigration does not. Illegal migrants tend to arrive in larger numbers when the U.S. economy is booming and move to regions where job growth is strong. Legal immigration, in contrast, is subject to bureaucratic delays... The lengthy visa application process requires employers to plan their hiring far in advance. Once here, guest workers cannot easily move between jobs, limiting their benefit to the U.S. economy. ...

Congress should redesign temporary immigration from the ground up. Successful reform would have to mimic current beneficial aspects of illegal immigration. Employers would have to be able to hire the types of workers they desire, when they desire. One way to achieve this would be for the Department of Homeland Security to sanction the creation of global temp agencies...

Matching foreign workers to U.S. employers efficiently would require flexibility in the number of guest workers admitted -- and one way to make the number of visas sensitive to market signals would be to auction the right to hire a guest worker to U.S. employers. The auction price for visas that clears the market would reflect the supply of and demand for foreign guest workers. An increase in the auction price signals the need to expand the number of visas; a decline in the price indicates that the number of visas could be reduced. [...] (h/t Economist's View)

The article has some interesting points, and does indeed point to the shortcomings (human and economic) of current immigration. Of course, the author, seemingly compassionate about the fate of workers, is actually taking an overall neoliberal perspective in which access to labor resources becomes even more of a commodity than it currently is. Flows of human capital could be increased or decreased through a bureaucratic decision rather than passing through the messy political world. Adjusting the immigration algorithms to fit their needs, meat-packing, farming, and construction companies could increase immigration more or less at will in order to undercut current labor prices. While increased legality would bring some benefits to the immigrant worker, he or she would still maintain a second class status and lend further power to the corporations to be "flexible" (to hire and fire at will).

One question to be asked is how have temp agencies helped you, the worker? I went to the Bureau of Labor Statistics this morning and looked up the information on "employment services." Here is a graph of this industry's employment numbers since 1959:

Now, I haven't adjusted this for population or anything in making this graph, but to my eyes the chart is clear enough already. Beginning in the 70s with Nixon's liberalization of monetary policy, combined with decreased social spending, temp agencies have blossomed. Meanwhile, unionization dropped and income disparity has risen dramatically to levels unseen since the Gilded Age.

(I should say that I found employment through a temp agency once, and I will not deny that they offer some benefits to workers and employers seeking to find each other. While that may seem fine and dandy, what it means, ultimately, is that the relationship between employer and employee is mediated, creating further distance and less responsibility. While the job-seeker may very well be in search of a permanent position, the employer is more than likely using temp agencies to avoid long-term relationships and the social and economics bonds that such relationships create.)

What could motivate a move to privatize the border? Profits? Hmmm. Here's an article that recently appeared in Business Week:

One of the dominant themes emerging from Davos this year is the power of demographics. Population isn't exactly destiny, but it's a huge determinant in how nations, economies, and companies fare. And the demographics often reveal trends that, on the surface at least, contradict the general appearance of a nation's prosperity.

Take the case of Russia. Under President Vladimir Putin, Russia is harnessing its oil and gas reserves to reclaim its status as a power with which to contend. But at a dinner presentation on Wednesday night, demographer Nicholas Eberstadt painted a starkly different picture. Russia's mortality rate is catastrophic, its birth rate abysmal. There will come a time in the not-too-distant future when Russia's depleted population will threaten the Kremlin's neo-imperialist designs.

So how do companies respond to these deep, slow-moving shifts? A talk with some of the top brass of Manpower (MAN) of Milwaukee is very revealing. In 2005, Manpower's network of temp services and human resources operations put 5 million people to work around the globe. With more than $17 billion in revenue, it ranks with Swiss-based Adecco (ADO) as the world-class provider of workers to the top corporations on the planet. Manpower's studies of global workforce trends are some of the best available. [Business Week]

Given that access to cheap labor is one of the fundamental goals of globalization, as evidenced by the policies discussed at Davos and the WTO, none of this is surprising. The question is, do we want to give up a lot of our political power to yet another corporation that will then pull the strings of immigration policy? As much as I despise people like Tancredo, at least I can fight to beat him at the ballot box. Having a voice in privatized immigration will be even harder.

The growth of temp agencies seems to be correlated with a lot of things I don't like: stagnant salaries, a weak NBLR, the breaking of social bonds between employer and employee, income disparity and overall precarity for the average laborer. Do we really want these companies, who are already global players, actually determing flows of human capital? As poorly as our democracy treats workers, do we want to give up the little power democratic representation gives us?