This
article provides an interesting example of issues raised by protectionism, describing a summer guest-worker
program in the US, under
which young foreigners take short-term jobs in
the US
at the expense of higher unemployment among young Americans. A particular example given is lifeguards at swimming
pools. Employers admit a number of reasons for preferring guest workers to
hiring more Americans, such as cheaper labor (no need to pay high taxes), greater
availability during the season, lower demands posed by the workers, and a shortage of Americans willing to work as
lifeguards etc.
Protectionism
here is expressed by a visa policy that restricts foreign workers from competing in the
labor market. Thus, guest-worker programs are the easing of protectionism. This style of protectionism is very common and therefore
often overlooked; indeed
the very existence of nation-states aims at giving a group of people
(the nationals of a particular state) various advantages over foreigners,
particularly, in access to the domestic labor market. While many countries
practice visa-free regimes for tourist visits, working invariably requires
obtaining a visa. Even within the European Union employers are encouraged to
prefer domestic workers.
Getting back to the situation at
hand, there are four different groups of actors involved: the
companies/employers, consumers of services (i.e. those who are using swimming pools), domestic workers, and foreign workers. Companies
and the two types of workers are engaged via the labor market.
Economically, the outcome of hiring is most efficient if the domestic and
foreign workers have equal access to the labor market so companies can employ the maximum number of workers under the most profitable conditions and provide cheaper
and higher quality services to their consumers.
Socially the economically efficient outcome is not necessarily the best. One might, for example, see higher social value in
ensuring maximum domestic employment while disregarding foreigners. Tightening
visa requirements may force companies to put more effort in finding domestic
labor, and to offer better salaries/work conditions/employment periods in order
to hire a sufficient number. The downside of
this outcome is that it will hit negatively at the domestic producer (i.e. the
companies/swimming pools), as well as at the domestic consumer, who will have
to pay a higher price for using a swimming
pool, or be at greater risk of drowning due to the shortage of lifeguards, or
face the closure of some pools due to their economic inefficiency or lack of
lifeguards.
What I find
most interesting is how this simple case raises uncomfortable questions regarding
the traditional “right vs. left” political views as they exist in the US and Europe.
In particular, the moderate “left” (represented, for example, by
Barack Obama and Franรงois Hollande) advocates government involvement to improve market
outcomes, along with more compassion towards foreign workers (i.e. potential
immigrants). Here, government interference
(i.e. tightening visa rules) would improve the market outcome domestically, but
hit immigrants.
Conversely, the
moderate “right” (Mitt Romney and Nicholas Sarkozy) would find it hard to
reconcile a pro-free-market position with its tougher views on immigration.
In this light
it is not surprising that the positions of nationalists
(such as Marine LePen) and Communist-like movements (Jean-Luc Melenchon)
are often so similar and isolationist: the right sees
protectionism as a way to hit hard against disliked immigrants, whereas the left sees protecting
domestic workers as a convenient justification for striking “the rich” (i.e.
the companies).
