"Money On My Mind" is a monthly column by Jay Mandle. The views expressed here are those of the author, (not necessarily those of Democracy Matters or Common Cause), and are meant to stimulate discussion.

December 2006
By Jay Mandle

It is easy to see how our donor-driven political process stifles debate. With private financing of campaigns, the only candidates with a chance of victory are themselves rich or able to obtain funding from affluent private contributors. What this means is that the country’s political dialogue, with very rare exceptions, is confined to policies acceptable to wealthy donors. Policies that do not receive the approval of political funders almost never receive serious political consideration.

Even in the best of times this cramped political dialogue impairs our ability to seek out solutions to problems. But this handicap is most glaring when there is a need to address structural flaws that require radical reforms. Because we consider only a limited range of possible policy alternatives, the likelihood of our successfully dealing with such problems is correspondingly low. But even worse, it increases the likelihood of scapegoating. As people become frustrated with their inability to relieve the pressures they are experiencing, they are tempted to identify innocent and defenseless individuals as the source of their problems.

Just such a drama seems to be playing out in the United States today. Though the economy has grown in recent years, almost all of the resulting increased income has gone to those at the top of the income distribution. With the resulting growth of income inequality all but entirely neglected by the Congress, an increasingly angry mood in the country has mistakenly identified “illegal immigration” as the root of the problem and the limiting of immigration as its solution.

In fact immigration from Mexico – legal or otherwise – has played little or no role in the growth of inequality.1 Rather, its source is the technological changes of the last twenty-five years. Globally, those advances have allowed rapid economic growth to occur in mega-countries such as India and China. The low wages that prevail there have squeezed out U.S. workers in industries that compete with their imports. Those same technological changes have reduced the demand for manual laborers here. This too has undermined worker incomes.

Neither of these pressures is likely to let up. Technological change will continue to reduce the need for assembly-line workers and those same technologies will continue to facilitate the spread of economic development to poor nations. Indeed, it would be wrong to try to impede the adoption of those new technologies. American consumers – that is the vast majority of us – have benefited from lower prices and greater availability of products, and in the newly growing countries economic growth has resulted in dramatic reductions in poverty.

The technologies of the information age and globalization are causing a massive transformation in the kinds of jobs available to Americans. Already most occupations in the United States involve the supplying of a service from an office rather than a manufactured commodity from a factory. But as we have learned recently, even service jobs can be outsourced – as in the case of call centers. In the future, the service jobs that will be most secure – and therefore the ones that American should prepare for - will be those that have to be personally delivered.2

The problem is that we have not adopted the policies needed to make it easier for the labor force to achieve the transition from old occupational patterns to new ones. To accomplish this shift, we will have to redesign our educational system to equip workers for these new jobs. But much more than educational reform will be needed. Because the transition will be difficult, the government will also have to provide supportive programs and services. The public sector at all levels will have to undertake policies that at the moment are simply unimaginable. For example, transitional public sector jobs with adequate compensation will have to be created. That in turn will require something which under the current political regime is unthinkable: taxing high income households far more than we do at present.

How far we are from adopting such policies and how easy it is to fall into scapegoating immigrants is illustrated by the reader response to The Nation’s publication of several articles that sympathetically portrayed the plight of undocumented Mexican migrants and noted the rise of a dangerous nativist backlash. In reply to those articles, the magazine received what it described as an “avalanche of furious mail.” Of the sixteen letters printed on the subject, fourteen were hostile to the “illegal migrants.” Typical was a letter whose author, as he put it, wanted to be “able to visit an emergency room without having half the people there not only unable to speak English but also not able to pay their bill.”3

In almost every case, these letters were written in the name of defending American workers from the economic pressures they have been exposed to in recent years. But this makes their hostility to immigrants all the more tragic. For the fact is that building a high wall between Mexico and the United States will accomplish almost nothing to reverse the painful economic trends of recent years. The anti-immigrant sentiment that the letters contain is suggestive of the kind of xenophobia that historically has been a destructive presence in the American experience.

Attacking the desire of people living in Mexico to improve their lot by coming to the United States is of no help at all in assisting American workers to adjust to the new world of advanced technology and globalization. What we need to do is widen our political discussion so that we can at least consider the kinds of policies and programs needed to get on with that project. For that debate to occur we will need candidates running for office who are not censored by wealthy special interests. 

1. The study that Lou Dobbs cites in claiming that illegal migration from Mexico has caused wage losses in the United States actually reports that though this potentially could be the case, “the evidence on local labor markets shows only a weak relationship between native wages and the number of immigrants…,” James P. Smith and Barry Edmonston (eds.) The New Americans: Economic Demographic and Fiscal Effects of Immigration (Washington DC: The National Academies Press, 1997), p. 236. See Lou Dobbs, War on the Middle Class, New York: Viking, 2006) p. 135.
2. Alan S. Blinder, “Outsourcing: Bigger Than You Thought,” The American Prospect, November 2006, p. 45.
3. The original articles appeared in the August 24/September 4, 2006 issue of The Nation and the letters in response were published in the November 13, 2006 edition.