All Roads of
Regulation Lead to Isolationism – Common Thread between Illegal
Immigration and Our Trade Deficit with China
June 13th 2006
Is there a link between the problems of illegal immigration and the
trade deficit? Illegal immigrants come to this country because they can
make as much in one hour as they can in one day in their home country.
Manufacturers can make products overseas because the cost of labor is
less. The answer to the question is obvious: Wages are higher in this
country compared to other countries.
So why are wages so high in this country? It is not because we lack
regulations, that is for sure. The Federal government passes over 1000
bills (laws and regulations) per year. The state of California passes
roughly the same number ever year as well. The good thing about the high
wages is that it makes it easier to buy goods from other countries. The
bad thing about high wages is that it makes it harder for American
companies to sell overseas.
The high cost of our labor has prompted some Americans to call other
countries salary levels, “slave wages”. So how can China and India
bring the cost of goods higher? Regulation is the answer.
American businesses are burdened with many regulations that overseas
companies are not burdened with. Businesses in the US must withhold
income tax, pay half of an employees SSI, pay workman’s comp and
unemployment insurance, comply with collective bargaining laws and
regulations placed on them at the state and local level. All of this is
added to the cost of labor.
So what is the solution to this problem? Many isolationists promote the
idea of tariffs and / or bans on imported goods from counties that are
more competitive than the US. This is an effort to prevent Americans
from purchasing imported goods. Their solution, in essence, is a
regulation to fix problems caused by other regulations.
Comment on this article at our Forum
The problem is not that China pays to little, but American companies pay
too much and have become uncompetitive. There are other problems
associated with high wages as well. High wages fuel an even higher cost
of living. It fuels illegal immigration as well.
China was once a communist country. Communism is the ultimate
regulation. Their system did not work, so they experimented with free
enterprise in one province of their country. Freedom worked, so they
expanded it most of their country.
Some isolationists are advocating building a great wall here in America
to separate the countries of Mexico and the US. This will not solve our
“high wage problem” though. In fact, it could drive wages still higher
making us even less competitive.
We have two choices as I see it. We can either remove regulations so we
can become more competitive, or we can isolate ourselves from countries
that have fewer regulations. We can either become more isolated like
North Korea, or a Freedom zone similar to Hong Kong.
Keywords and misspellings: politics poletics
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