March 27, 2006 - The American economic engine is hoist on the horns of a dilemma.  On the one hand employment opportunities upon which Middle America once depended have been outsourced serving the false economy of cheap labor in Asia and elsewhere.  On the other hand employment opportunities on which Americans relied as entry points to the dream of economic security are increasingly taken by what the politicians are calling illegal immigrants.  When the politician says, "illegal immigrant" what is usually meant is Mexican and it is usually said in the context of enhancing the punishment of those who are caught crossing the border.  As a practical matter we can't afford effective enforcement of immigration restrictions.  Our land borders are too long and remote and we don't have the wherewithal to provide for effective border security aimed at the desperate men and women who surreptitiously cross them in search of a better tomorrow.  Our economy is too dependent on the underground labor market of coerced employment and substandard pay.  Remove the immigrant worker and the economy would immediately stagnate.

Both labor outsourcing and illegal immigration have their genesis in the same economic disparity between the American labor market and that of our global neighbors.  So long as a Mexican worker can look north to a labor market in which he can earn in one hour even at substandard wage what he can make in a day at home the magnet pulling him north will overcome any program of  enforcement or guest worker scheme.  So long as American manufacturers can multiply their profit on products by making them overseas then America will continue to lose the jobs that created the great American middle class. 

Whether it is fact or an apocryphal story it is said that Henry Ford was under attack by his fellow robber barons for paying his factory workers too much.  He was regarded as a traitor to business.  Asked what he thought he was doing by his overgenerous wages Ford is said to have replied, "Making customers."  That tale contains a truism.  The strength of America 's economy depends upon the strength and growth of its middle class.  Until America 's trade and tax policies are adjusted to remove the encouragement of business to outsource jobs the strength of our middle class customer base will continue to erode.

Jack Kennedy, campaigning for the Presidency wove a catch phrase in his speeches on the economy and the Eisenhower recession.  He said, "A rising tide lifts all boats."   That phrase was as true and effective as was Ford's wage policies.  In it is the seed of the solution to our twin employment problems.  Our employment policies and our trade policies must be designed to equalize the disparity between the wages and benefits available to American workers and those paid by our neighbors and trading partners.  One mechanism to do that is to encourage foreign governments to adopt employment and trading policies designed to raise economic benefits for their workers to match those available in the American labor market.  One way to do that effectively would be to levy tariffs on imports to equalize the labor cost of producing that product with the same product produced in an American factory.  That policy would make access to the American market dependent upon the tide lifting the foreign workers boat providing an incentive for the worker to stay home and ending the encouragement of outsourcing for American industries.