A new report shows that comprehensive immigration reform would help American workers and the U.S. economy. Reform that offers a path to citizenship for currently unauthorized workers and enforces workers’ rights would raise the “wage floor” for the entire U.S. economy and increase the total gross domestic product (GDP) by at least $1.5 trillion over the next decade, the report says.

“Raising the Floor for American Workers,” by the Center for American Progress and the Immigration Policy Center, says finding a pathway to citizenship for the millions of undocumented workers is a much better alternative in this economic crisis than expanding guest worker programs or mass deportation.

The temporary worker program only generates an annual increase of 0.44 percent in the nation’s GDP or $792 billion over 10 years. It also leads to declining wages for newly legalized immigrant workers, the report says.

Mass deportation would reduce U.S. GDP by 1.46 percent annually or $2.6 trillion, not including the actual cost of deportation, the report adds. Wages would rise for less-skilled native-born workers, while wages for higher-skilled natives would drop. The deportations would lead to widespread job loss as well.

History bears out these findings, according to the report. The 1986 Immigration Reform and Control Act, which provided opportunities for citizenship, was enacted during an economic recession characterized by high unemployment. Yet it helped raise wages and spurred increases in educational, home and small-business investments by newly legalized immigrants.

Raúl Hinojosa-Ojeda, director of the North American Integration and Development Center at the University of California, Los Angeles, and the report’s author, says:

This is a compelling economic reason to move away from the current “vicious cycle” where enforcement-only policies perpetuate unauthorized migration and exert downward pressure on already low wages, and toward a “virtuous cycle” of worker empowerment in which legal status and labor rights exert upward pressure on wages.

Click here to read the full report.

*This post originally appeared in AFL-CIO blog on January 11, 2009. Reprinted with permission from the author.

About the Author: James Parks had his first encounter with unions at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He saw firsthand how companies pull out all the stops to prevent workers from forming a union. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. He has also been a seminary student, drug counselor, community organizer, event planner, adjunct college professor and county bureaucrat. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections. Author photo by Joe Kekeris

Photo by Martin Gardlin

A recent Time magazine poll found that 71% of Americans who responded want the government to place limits on the executive compensation at firms that received bailout money. Yet accomplishing this task selectively is impossible to do.

The government did appoint a czar of executive compensation for these corporations, but he approved a $7-million salary/$3.5-million bonus plan for the head of AIG, 80% of which is now owned by taxpayers. Few workers, executives included, would agree to work for less than the going rate. Executives are simply used to earning millions of dollars, and there is little that either the czar or shareholders can do about it unless Congress limits all executive compensation. But the chance of such legislation passing is slim.

Why is limiting executive compensation so difficult? Because executives have a seemingly unassailable argument — market forces — that University of Chicago professor Steven Kaplan defended in an October debate: “Market forces govern CEO compensation. CEOs are paid what they are worth.”

Of course, market forces are cited not only to justify outsized compensation for executives but also poverty wages for workers. Textbooks claim that minimum wage laws and union wages create unemployment. Just what are these market forces, and should we let them determine executive compensation and wages?

When British economists David Ricardo and Adam Smith examined this question 200 years ago, they concluded that what a person earns is determined not by what the person has produced but by that person’s bargaining power. Why? Because production is typically carried out by teams of workers, managers and machines, and the contribution of each member cannot be separated from that of the rest. A driver and a bus, for example, generate $100,000 of income a year. The driver is paid $25,000. Is this because the driver had transported 10 of the passengers without the bus while the bus had transported 30 of the passengers without the driver? The driver’s pay is so small only because the driver is so weak at the bargaining table.

It was Smith who explained that the bargaining power of each party is determined by the laws that the government passes and the way that it enforces them, and that, as a rule, the government sides with employers against employees. He was particularly concerned with anti-unionization laws. Had he witnessed the largesse that boards of directors are permitted to offer executives, and the government’s behavior toward executives in the current crisis, he probably would have added that the government also sides with executives against shareholders and taxpayers.

Despite the logic of Ricardo and Smith’s explanation that it is power, not productivity, that determines what people earn, the notion that people earn what they “deserve” persists. It dates to the Haymarket riot of 1886 in Chicago — in which police and labor protesters clashed and several policemen and demonstrators were killed — and the labor unrest that followed. Concerned about this unrest, John Bates Clark, a Columbia University professor, warned in an 1899 book: “The indictment that hangs over society is that of ‘exploiting labor.’ If this charge were proved, every right-minded man should become a socialist.”

It was thus with a clear political agenda that Clark took it upon himself to prove that the charge of exploitation of workers was dead wrong. Clark’s “proof” was to ignore the fact that production is carried out by teams and that individual contributions cannot be measured. He simply declared that the contribution of each individual worker and each machine could be measured, and that the earnings of either workers and executives or machines are simply the values of these contributions.

In this view, if the government were to raise wages by law, employers would have no choice but to fire workers, because no employer can pay out more than the worker puts in. And if the government were to set limits on executive compensation, the bright and the talented would choose to work less or limit the level of their performance.

Evidence that Clark’s theory is wrong — that production is carried out by teams and that astronomical compensation is not a requirement for good performance — can be found everywhere. In 1941, Wassily Leontief, a Nobel Prize-winning economist, tried to alert economists to the fallacy of Clark’s theory. But Leontief, like Ricardo and Smith, was ignored. And Clark’s tale that earnings are determined by productivity alone is still being taught around the globe.

Corporate executives take a different approach: picking the argument that suits them. When it comes to their workers’ wages, Clark’s theory rules: The wage of each worker is equal to the value of his or her product, and raising wages will cause unemployment. When it comes to the executives’ own compensation, however, they hide behind the idea that an individual’s contribution can’t be measured. So even when the corporations they run lose big and their stocks decline, they still collect millions in pay. Executive compensation is now so large that executives’ work effort no longer has any relation to the level of their compensation.

Adam Smith got it right: The remedy for the rule of power is the rule of law. We need new laws to check the unfair distribution of the fruits of our labor. One such law could set a maximum ratio at any given company between the highest executive compensation and the lowest worker’s wage. Another could set a minimum ratio for the division of income between labor and shareholders. Still another could raise the minimum wage and tie it to the median wage, which would make the minimum wage a consistent living wage.

Overpaid executives take more than their fair share and leave too little for the rest of us, threatening our health — and that of society.

Moshe Adler teaches economics at Columbia University and is the author of “Economics for the Rest of Us: Debunking the Science That Makes Life Dismal.”

*This article originally appeared in The L.A. Times on January 4, 2009. Reprinted with permission from the author.

About the Author: Moshe Adler teaches economics in the department of urban planning at Columbia University and is the author of the just published book: “Economics for the Rest of Us: Debunking the Science that Makes Life Dismal.”

If we have Mother’s Day to celebrate mothers, Father’s Day to celebrate fathers, and Valentine’s Day to celebrate lovers, it makes eminent sense to have a day—Labor Day—to celebrate the nation’s workers. Far too often the accomplishments of the nation’s workers—whether it’s producing the food we eat or protecting us from hurricanes—are ignored, instead of honored. Labor Day should be a day in which the nation dedicates itself to the proposition that its workers—indeed every worker—deserves respect and fair treatment.

The two main themes of my book, The Big Squeeze: Tough Times for the American Worker, are that America’s workers are being squeezed economically and treated with less and less respect. This declining respect has taken several disturbing forms. First, many companies and managers treat their workers with a shocking callousness. A Wal-Mart cashier in Kansas City told me that managers were so stingy about bathroom breaks that some cashiers ended up soiling themselves. A computer engineer was laid off while his eight-year-old was visiting on Take Your Daughter to Work Day. Corporate managers told Myra Bronstein, a software engineer in Seattle, that as long as the company did well and she worked hard—she put in many 14-hour days—she would have a job. But one day the company suddenly fired Bronstein and 17 other engineers, telling them that if they wanted any severance pay, they had to spend the next four weeks training the workers from India who would be replacing them. “We felt sucker-punched,” Bronstein told me. I remember a janitor in Houston—who made $5.25 an hour after a decade on the job—telling me, “They treat us worse than animals.”

Another sign of diminished respect is the way many managers cheat employees out of wages. Managers at Wal-Mart, Pep Boys and Family Dollar admitted to me that they secretly erased hours from workers’ time records because of fierce pressures from above to minimize costs. At many stores and restaurants, managers strong-arm employees into working off the clock, threatening to write them up unless they work several hours unpaid. It’s galling that many of these victims of wage theft earn less than $10 an hour and are barely scraping by. The growing number of lawsuits over wage theft underlines that something is badly broken in the nation’s workplaces.

This declining respect has also translated into a worse economic deal for millions of workers. During the economic expansion that began in November 2001, corporate profits soared and productivity per worker rose more than 15 percent. Nonetheless, hourly wages have actually slid since then, after inflation, while median income for working-age households has fallen by $2,000 this decade. At the same time, health and pension benefits are deteriorating and job security shriveling. That the nation’s corporations have not shared their increased prosperity, profits and productivity with their workers also shows that something is broken.

In The Big Squeeze, I write of other ways that companies show little respect for their employees. Workers have a right to unionize, but many corporations (and their union-busting consultants) flout the law to keep out unions, by, for example, firing the workers who lead organizing drives. And some companies, most notably FedEx Ground, insist that workers are independent contractors even as judges and labor officials say the companies maintain such tight control over everything these workers do that it’s a sham to call them independent contractors.

To put it crudely, many companies seem to treat their workers like chumps—to be squeezed on wages, pushed to the limit and discarded when no longer needed.

What this nation needs is a movement to revalorize its workers—and what better day to launch such a movement than Labor Day. Plain and simple, revalorization would mean treating workers with a newfound respect, to start treating them as if they and their concerns matter. For too many years, the American worker has not been part of the conversation. For too long, the nation’s workers are viewed as Bud drinkers, NASCAR fans, Oprah watchers, members of the ownership society, but not as workers qua workers. For too long, the nation’s politicians, news media and public discourse have largely ignored the struggling worker (except every four years when presidential candidates descend on factories in Iowa, Ohio and Pennsylvania, with TV cameras in tow). All this has made it easier for corporations to continue squeezing workers ever so quietly and for many political leaders to ignore workers’ problems (while cozying up to corporate donors).

Fortunately the nation has begun paying more attention to workers in recent months because of the economic downturn and the presidential campaign. Here’s hoping that after the next president is inaugurated on Jan 20, the nation’s beleaguered workers will not again be ignored and forgotten.

Labor Day should be a day to help push the nation’s workers—and their problems—onto center stage.

About the Author: Steven Greenhouse has been covering labor and workplace issues for The New York Times since October 1995. He joined the Times in 1983 as a business reporter, covering steel and other basic industries. He then spent two-and-a-half years as Midwestern business correspondent based in Chicago and then five years as the paper’s European economics correspondent, based in Paris. He then spent four years in Washington D.C. for the Times, covering economics and foreign affairs.

He has a bachelor’s degree from Wesleyan University in Connecticut and a master’s degree from the Columbia University Graduate School of Journalism. He also has a J.D. from the New York University School of Law.

For more information on his book, The Big Squeeze: Tough Times for the American Worker, see the Web site stevengreenhouse.com.