Monday, February 9, 2009

Guest Commentary: Some Personal Observations From a Global Perspective by Robert Gittleson

Here is some guest commentary from long-time ImmigrationProf blog reader Robert Gittleson:

Some Personal Observations From a Global Perspective

Having just returned from about 10 days in Europe, I wanted to offer a few personal observations about the social, economic and political realities that we are experiencing, from an international perspective. It was somewhat eye opening to note that upon our arrival in Nice, France, we were warned not to go out on Saturday night, particularly to the market area, as for three Saturdays in a row, they had experienced rioting by pro-Palestinian sympathizers in that area of town. We did not go near that area on Saturday night. We did observe some political protests at the French embassy in Monaco, but decided not to check it out to see what it was all about.

In London, there were immigration related strikes/work stoppages, stemming from a situation regarding the Total Oil Company, an Italian oil company that was expanding their British operations. They had announced that they were hiring 200 additional workers in England, but were intending to fill all of the jobs with lower cost Italian and Portuguese workers. While it is important to note that the hiring of workers from one EU country to work in another EU country as guest workers is legal, in these extremely difficult financial times, the issue of protectionism has become a top concern. In the end, the strikes were settled by an agreement to hire 100 of the workers locally, and 100 as guest workers. However, my understanding of the fine print is that the 100 local jobs might actually be filled by any legal worker, so it is quite possible that many of the 100 local hire jobs might still go to guest workers.

Protectionism is very much on the minds of Europeans. They are particularly concerned about the U.S. stimulus package, as they see on the news that there were some protectionist components in the initial draft of the stimulus package. While they were discussing the probability that Europe would be excluded from the protectionist issues, it was still an item of global economic concern. I might add that the overwhelming sentiment of Europeans that we discussed politics with, was that they were extremely grateful and hopeful because Obama won the election, (actually, 100% of the people that I discussed this with seemed to feel this way).

I came away with the impression that we have been living in an economic fool’s paradise here in the United States. I say that, because I now have a better understanding of what the dollar is actually worth in the real world, and it’s not much. I sense that we are putting undue pressure on our need for cheaper and cheaper economic imports, so that we do not feel the very real fact that our dollar is only worth about 65 - 70 cents around the world. Here at home, our real wages have not only dropped in real terms against the dollar so far this decade, but when one factors in the fact that in addition to that lowering of our dollar income, we have lost some 33% on the true value of our wages due to the decline in the value of the dollar, we start to understand why we are continuing to experience huge trade deficits to countries like China, where we can still get a little bang for our buck. That issue has everything to do with our undocumented worker problem from a supply and demand perspective. We have needed these lower skilled but high yield workers to compete for some share of the domestic, as well as the import market. We should not lose sight of that part of the immigration equation. I might also ad that there is a very distinct difference between the guest worker issue in England, and our internal undocumented worker issue here at home. While the protectionist sentiment might be the same, this is a matter of apples and oranges. In England, they don’t want new domestic jobs to go to foreigners. At home, our undocumented workers are already trained and productive at their existing jobs, not to mention that as de-facto Americans, these immigrants have just as much of a stake in our domestic economy as due the rest of us.

While I must admit to a sense of “sticker shock” at the costs of goods and services in Europe, I can report a couple of positive notes. While we were there, the value of the dollar did start to increase against the Euro, albeit marginally. This was primarily due to the fact that the markets sense that the lower interest rates in the U.S., as well as England, (which just lowered their rates to 1% - compared to the rest of Europe, which has so far stayed pat at 2%), should allow the U.S. to start to gain some economic momentum. Additionally, I observed that when I compare our domestic real estate prices to the real cost of property in Europe, I realize that the real estate values here in the U.S. seem like a bargain, (and remember that I live in Los Angeles, one of the more costly domestic markets).

While the businesses in Europe are just as depressed and frightened as the businesses here at home, perhaps there is a chance that we are at or near the bottom. I certainly hope that is the case.

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