Immigrant Workers: Masters of Arbitrage

18 Dec

Americans don’t fully understand the Immigrant Worker. They don’t have the full picture on why he does what he does for what he earns. Rather than being  masters of the hard, dirty work no one wants, they are instead the Masters of Arbitrage.

I’m not sure how economists define arbitrage, but to me it is a method for taking advantage of differing prices in different markets. If gold, for example, is selling at $900 an ounce in Botswana and $1,500 in New York, the smart American investor runs off to Botswana, buys as much gold as he can, then rushes home to sell it for a high profit.

For the arbitrage of the Immigrant Worker, home is the key.

Americans can’t pick tomatoes all day then go “home” to turn their pay into profit. Immigrant Workers can. From their perspective, this is what makes the situation tolerable. If Immigrant Workers are in a position to return home or to support a family there, our minimum wage is like buying $900 gold and selling it in a $1,500 market.

If they were paid the equivalent of what they would earn in their home country, chances are they would not be here.

I’ve heard stories of Immigrant Workers spending six months on jobs in the states and then returning home for six months to live a comfortable life, sometime not even working while there.

None of this justifies the poor treatment or exploitation of Immigrant Workers. It just helps to understand why they put up with what they do.

Things begin to change, however, when the workers truly begin a life here and want to stay. From a market perspective, arbitrage opportunities diminish and they are forced to find better jobs or perhaps become entrepreneurs.

When a guy mows lawns all day for minimum wage, it doesn’t take him long to figure out he can make much more once he saves enough to buy a mower and truck.

If I speak the truth, then a whole new class of small businesses is set to emerge.

These new entrepreneurs will buy houses and furniture and take vacations and send their kids to college, moving things up another rung.

I’m sure many will disagree, but if there is to be economic growth anytime soon in this country, it is likely to come from the people we once classified as Immigrant Workers … the one-time Masters of Arbitrage transformed into an economic engine.

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