Thursday, July 02, 2009

Who's Oppressing Whom?

This story (update: link corrected) on PRI's "The World" says that Spanish police have found sweatshops in Barcelona and "freed" more than 300 Chinese immigrants working in them. The immigrants, however, are now protesting the loss of their jobs.

The reporter somewhat incredulously explains that the workers are apparently comparing their conditions in Barcelona to those back home, and finding the new conditions better, voluntarily accepting them. As with any voluntary exchange, both sides are made better off.

Clearly, then, preventing this workers from working at the agreed-upon wage is making them worse off. Why wouldn't they just take jobs at the legal minimum wage rate? Spains unemployment rate is around 17%, and expected to go higher. Chances are good that they would not be able to find jobs at the legal minum rate, because they are not productive enough to justify such a wage rate.

We do not get such protests over the minimum wage in the U.S.; partly this is because it is increased by relatively small increments, so that the unemployment increases that result are small. If we went to a $40/hour minimum wage, I suspect there would be a large number of people laid off, and protests as well.

I take slight issue with the arguments advanced by the Spanish economist in the piece; he suggests that Spain will have to move to a twelve-hour work day, and take other actions to "remain competitive". Countries don't actually compete like that, though, as Paul Krugman has argued in his better works, like Pop Internationalism. A simpler policy would be to simply let people work as much or as little as they like, rather than imposing some official number of hours. If they really want to work less, then companies will find it too expensive to ask them to work more. If they want to work more, let them! A competitive labor market can deal with these matters pretty easily. Different people may well end up working different amounts.

So who is doing the oppressing here? Is it the sweatshop operators, whose employees want to go back to work, or the Spanish government, which wants to prevent workers from working on terms they find acceptable? Is it right for some people to dictate the terms at which others may work, even if it throws these others out of work?