Ddebate immigration policy
Barkan, Joanne
You are about to read the account of a wrestling match between Richard Rothstein's "Immigration Dilemmas" (Dissent, Fall 1993) and me. The struggle began when I came upon the following passage...
...there was, for example, some wage drift...
...Inefficient firms either shaped up or went under, and productive firms had more surplus to invest, thereby boosting the efficiency (and growth) of the entire economy...
...Not an easy sell...
...The Swedish model showed signs of strain before the 1991 elections...
...liere are more recent figures: by the end of 1992, about 499,000 foreign nationals were living in Sweden...
...Birdsall and Sabot estimate that reducing the gap between the richest and poorest households by a third could add .7 percent to per-capita income growth year after year—a significant jump because the increase in most countries is less than 2 percent a year...
...rather if we want a job done (say, broccoli picking) and if higher wages raise the price of broccoli, then high productivity in other areas of the economy must compensate...
...step up union organizing and enforce the minimum wage so that immigrants will contribute more taxes to the broader community and consume fewer welfare benefits...
...No one could...
...As long as the Swedish model functioned, middleclass life didn't depend on a huge wage gap...
...Back to housecleaning...
...What we had was important as a sign of equality in society...
...The redistribution was, of course, part of a larger system called the "Swedish model," designed to create greater equality and full employment...
...Those who dream of cities Many thanks to David Belkin for letting me think aloud to him for hours...
...That would be stupid...
...they provide personal services on the cheap so the middle classes can work and play...
...From the 1950s through the early 1970s, many suburbs showed rapid economic growth although their core cities declined...
...Unemployment stayed low...
...For several decades, the model worked well—which isn't to say that it ran perfectly...
...Foreign nationals are also more likely to have irregular working hours and to do shift work...
...Many Social Democratic voters punished their party for the regressive tax reform and other tactical errors...
...The government used tax policy both to pay the welfare bill and to channel profits into investment...
...Fortunately, tidying up in Sweden was less of a hassle than it is here...
...By the time I finished thinking through the place of immigrants in an equality/fullemployment model, I'd also concluded that Rothstein's article is a hard-nosed and intelligent analysis of immigration in an extremely unequal society that lives off its weakest workers...
...His comments were extremely helpful, but he's not responsible for what I've done with them...
...The second reason leftists must argue for SUMMER • 1994 • 409 Arguments greater equality is because it's the basis for social justice and meaningful democracy...
...Why not link a tough-minded analysis of the present to serious thinking about equality and growth...
...Hedborg wasn't pleased...
...I saw no run-down buildings...
...Only 16 percent of the foreign nationals living in Sweden come from other Nordic countries, and the proportion of nonEuropeans is greater than that of Europeans...
...On January 8, 1994, the New York Times reported a new departure...
...I'm sad that a value has been lost...
...Average unemployment in 1992 for all Swedish citizens was 6 percent...
...when a city declines, it pulls the suburbs down with it...
...Can't leftists think of a radical solution for the future that begins to construct greater equality now...
...Of course, this does nothing to close the income gap because the middle classes and the wealthy are moving up even faster...
...I decided to tackle Rothstein first on housecleaning...
...The Social Democrats had done poorly in the recent elections, and the conservatives were taking over the government...
...His position reminded me of a conversation I had in Stockholm in 1991 with Anna Hedborg, then deputy minister of social 406 • DISSENT Arguments services in the Social Democratic government...
...The Social Democrats, with their message of solidarity, have moved up quickly (48.7 percent in the same poll...
...In 1991, the New Democracy party, with its anti-immigrant rhetoric, won 6.7 percent of the vote...
...He suggests some important reforms at the end of his article because, among other reasons, they would "encourage more honorable and responsible treatment of immigrants...
...The Social Democrats are expected to take back the government...
...I don't want to dwell on this issue of "tone...
...The last kronor earned (in the highest bracket) were taxed at a rate of about 75 percent...
...It seems likely that transferring resources to poor people in a developed (but less dynamic) country would produce a similar, if smaller, effect...
...The equality/full-employment model functioned well enough and long enough in Sweden to show that middle-class life can continue without poorly educated, low-wage workers (native or foreign born...
...Maybe the middle classes can survive and even prosper without low-wage immigrants—not by getting rid of the immigrants, but by narrowing the wage gap...
...Workers who lost their jobs could depend on finding new ones through the government's labor-market policies...
...It seems that a new version of the equality/full-employment model must be structured on a larger regional scale...
...Like most advanced economies, it came under the tremendous pressures of "globalization" during the 1980s...
...The left practically always fudges this issue by claiming that taxing the rich and squeezing profits will do the job...
...Yet by arguing almost exclusively that our economy can't survive without exploiting immigrants, Rothstein stops short of what could, or should, be said...
...The struggle began when I came upon the following passage in Rothstein's essay: American upper-middle-class life is dependent on immigrant workers performing tasks at wages no established resident would consider...
...In addition, the public sector is hiring fewer new workers...
...I assume Rothstein has in mind a constant flow of new immigrants into the system and then up the economic ladder...
...The reform agenda begins with the policies suggested by Rothsteinlaborlaw reform, more union organizing, and enforcement of workplace rules and the minimum wage...
...After studying the Asian "miracles," economists Nancy Birdsall and Richard Sabot concluded that, with the right policies, equality is not only a corollary of economic growth, it may even stimulate growth...
...The European Union looks like the new playing field to some Swedish Social Democrats...
...For two reasons: First, narrowing the wage gap and redistributing wealth looks like the only way to improve immigrants' lives significantly...
...He describes the economic niches they fill but not what it's like to be inside...
...To grapple with Rothstein's claim that middle-class life can't exist without low-wage immigrant labor, I'll add a few anecdotal words about how people in Sweden lived...
...In 1989, when the economy was still booming, foreign residents counted for almost 10 percent of the population...
...Take, for example, the following two analyses: First, orthodox economic thinking has long maintained that inequality is a necessary byproduct of economic growth in developing countries...
...More specifically, if resources are transferred to poor people, they use those resources to better themselves economically and to help their children...
...The guardians of the model couldn't figure out how to maintain an idiosyncratic national system in a world of hyper-mobile capital...
...Without tight fiscal policy, prices would rise, and employers would bid up wages in an inflationary spiral (wage drift...
...Swedes in 1991 could still depend on the following: fifteen months paid parental leave (to be used by either parent all at once or anytime over eight years), sixty days of sick-child leave per child each year with compensation, the regular workday shortened by two hours for parents with children under the age of eight, high quality public day-care centers for which parents paid about 15 percent of the fees (in 1991, 48 percent of all children under six attended public day care), government subsidized in-home services for elderly and disabled persons, and a minimum of five weeks paid vacation per year...
...Middle and working classes all prospered...
...The wage differentials that make hiring maids possible shouldn't exist...
...Whenever I visited socialists in France or Brazil, they all had maids, and I used to be proud to say, 'We don't have that in Sweden.' I'm not critical of individuals...
...for foreign nationals the figure was 13 percent...
...Rothstein is correct—immigrants take the grubby jobs that no one else in the United States will touch...
...While I spoke to Hedborg, she was packing up her ministry office...
...The resulting law reshaped the tax system in a regressive direction, slashing marginal tax rates...
...But since then the party has plummeted (2.2 percent in an April 1994 poll...
...The recession hit foreign workers harder because they work in the sectors most sensitive to swings in the economy (manufacturing, trade, hotels, and restaurants...
...None of this could function without the government's imposing a restrictive fiscal policy to hold down demand in a fullemployment economy...
...But equality-plusgrowth requires both redistributing some wealth away from the middle classes and favoring low-income workers...
...Elections are scheduled for September 1994...
...He might argue: swabbing out hotel toilets for minimum wage is no way to spend a life, but if you can do it for a year or a few years and move on to a better paying job or give your kids a boost up the ladder, then the system is unequal but not static...
...Unfortunately there was a political backlash against immigrants, something Swedes hadn't experienced before...
...The minority Social Democratic government opted to compromise with the Liberal party, which had moved to the right on economic policy...
...In the 1970s, the government stopped labor immigration (except from the common labor market with Nordic countries), but refugees began pouring into Sweden in ever larger numbers...
...But perhaps this kind of evidence adds up over time, shapes the public debate, changes some minds...
...Rothstein isn't writing an article to rally the masses against oppression...
...Who knows—we might find a way for the middle classes to survive without poorly educated, low-wage immigrants to clean house...
...It's the only way to reinsert the concept of social justice into the immigration debate...
...On lovely waterfront property in the archipelago, the government set up mobile vacation homes for workers who didn't have their own...
...In 1990, the Swedish Parliament passed a major tax reform...
...Before I return to Rothstein's article, let me give a brief note on how immigrants in Sweden have fared recently...
...population...
...According to Anna Hedborg in our 1991 conversation, many people (including some of her Social Democratic friends) began hiring housecleaners for the first time...
...So we need to share resources regionally...
...As opposed to feeding off them, the middle classes contributed to their support through progressive taxation and the solidaristic wage policy...
...In 1991, Sweden slid into the serious recession that engulfed all of Western Europe...
...they keep marginal industries alive by accepting low wages and bad working conditions...
...We don't want to price them out of the market for the jobs they do...
...This has become a myth...
...High productivity combined with pay equity allowed wages to rise overall but helped the lower-paid workers most...
...In short, the government redistributed Anna Hedborg's tax money in the form of public services and benefits that she and everyone else in society used...
...This benefits the entire economy, including the middle classes...
...Down a long road are progressive tax reforms and a labor movement strong enough to win (and radical enough to want) an investmentoriented wage policy that redistributes wealth...
...So far, Sweden still guarantees, not so much a safety net, as a stable base from which to build or rebuild a decent life...
...But he justifies many of the changes in terms of how they would benefit or placate natives: enforce labor standards in industries where natives work so employers will have less reason to hire immigrants...
...But relative to what went on in other industrial nations, it looked terrific...
...Put schematically, broccoli can cost more if other things cost less because of rising productivity...
...Yet by analyzing immigration narrowly from this point of view, he ends up presenting substantial inequality as a necessity...
...During times of economic expansion, immigrants often move up the ladder more quickly...
...So Sweden has had immigrants...
...Comparative studies throughout the 1980s showed that Sweden had one of the highest living standards in the world along with one of the highest levels of equality and democracy...
...Second, studies in the United States reveal an altered relationship between suburbs and cities...
...In this argument, immigrants are "simply" our lowest-paid workers, and all the standard reasons—moral and economic—for justice and equity apply...
...It can't be done, .. . Maybe it can be done, I thought...
...Equality must include a real payoff for the middle classes...
...For the last thirty years, anyone who didn't want to hear good news about Sweden chanted, "Sweden is a homogeneous society, so everything there is different...
...Suburbanites who tax themselves to help their center cities would be helping themselves...
...Thus foreign-born residents counted for over 10 percent of the population of 8.7 million...
...The cost of living was high for all Swedish residents, but people were comfortable, and everyone seemed to travel during vacations...
...One statistic says it all: when the overall health of children in the bottom 10 percent of income was compared to the health of children in the top 10 percent, no difference could be found...
...The gap between average wages in the highest paying industry and the lowest paying industry shrank to only 12 percent by 1976 as against 30 percent in 1960 and much more before the war...
...include illegal immigrants in the national health plan so taxpayers won't have to finance their care ina public emergency rooms...
...410 • DISSENT...
...He seems to be addressing the middle classes, trying to persuade them that they need low-wage immigrants...
...It wasn't true...
...In centralized negotiations, labor and employers agreed upon a solidaristic wage policy, which meant equal pay for equal work nationwide...
...Making an argument that goes beyond Richard Rothstein's is not just worth a try...
...Making the argument for equality only on moral grounds goes nowhere in the United States...
...But in a society where the wage gap has narrowed and where the government provides high-quality services and benefits to citizens and foreign residents, you can't really talk about low-wage immigrants as we do in the United States...
...Most American journalists reported that Swedes had tired of their cradle-to-grave welfare system and wanted something less boring to stimulate their atrophied entrepreneurial muscles...
...According to Hedborg, middle-class Swedes— including professionals like herself in the highest income bracket—didn't hire housecleaners before the 1990 tax reform because the progressive tax system made it too expensive...
...Immigrants might have worked at the lower end of the narrow wage scale, but they could live decently...
...The left should pick up where Rothstein stops and push the argument for greater equality...
...In the 1960s, a major wave of SUMMER • 1994 • 407 Arguments immigration brought workers from Yugoslavia, Turkey, Greece, and Finland...
...The hotels and restaurants had both workers and customers...
...Immigrant wages for housecleaning, lawn mowing, child care, and even carwashing make work outside the home feasible for people who could otherwise not afford it...
...It won't...
...Significant equality requires broader redistribution...
...in Germany, the figure is 8.2 percent...
...Polls showed that the vast majority of Swedes wanted benefits and services to continue, but some swallowed the conservatives' line that if you cut taxes and privatized services, the economy would boom...
...In the late 1980s, it was taken for granted that most everyone, including workers, had either a small boat (you'd see them sailing up and down the waterways in Stockholm at the end of the work day) or a cabin in the country (those I visited were pleasant, but not lavish...
...Despite all this, the difference in income 408 • DISSENT Arguments between foreign nationals and Swedes is comparatively small...
...The system worked like this: Some 85 percent of the work force belonged to unions...
...Another 431,000 immigrants had become naturalized citizens...
...The United States has become so dislocated a society, so lopsided with inequality, that a major overhaul for productive investment and redistribution is required...
...We need efficiency and growth overall so that we generate jobs and so that society can decide if and when it prefers to spend income on some labor-intensive production (classical opera, health care, broccoli picking...
...Rothstein mentions that foreign-born residents are 8.5 percent of the U.S...
...They need to believe that equality promotes economic growth and that poverty in society undermines their own economic progress...
...To start, he sounds too little concerned with the circumstances of many immigrants' lives — poverty, hazardous work conditions, and backbreaking labor...
...Now, suburban residents around healthy cities do better economically than those around sick cities...
...In the context of the immigration debate, Rothstein has explained why we need immigrants (he's also argued convincingly that we can't—like it or not—keep them out...
...Modern airports, safe streets, and wellmaintained hospitals would serve us all...
...As a result, the gap between upper and lower wage-earners narrowed, and deputy ministers ran their own vacuums...
...Information can't hurt...
...without poorly educated, low-wage immigrants should be required to describe what middle-class and even lower-middle-class-life would be like without them...
Vol. 41 • July 1994 • No. 3
