Employers Believe They Are Entitled To A Large Pool Of Cheap, Disposable Workers

The Executive Class Has Always Believed That Unskilled Labor Deserves To Be Low-Paid & Disposable

Image by hangela from Pixabay

By David Grace (Amazon PageDavid Grace Website)


Many employers think they are entitled to a pool of starvation-wage workers.

When that pool got shallow in the 1960s, American executives pivoted from a policy of bringing cheap, foreign labor to the job to bringing the job to cheap, foreign labor.

Now that the market is forcing an increase in wages, employers are demanding some kind of action to keep wages low rather than see them increase in response to a fictitious “labor shortage.”

Historical Perspective

European Nobility Built Its Wealth On The Backs Of Peasants

In the centuries prior to the founding of the United State, the aristocracy built their wealth on the backs of serfs and impoverished peasants.

Southern Planters Were The New American Nobility

In America’s early days, except for the Southern plantations, we were mostly an agricultural economy composed of small shops and farms operated by family labor.

But in the south, the plantation owners, like the European nobility before them, expected to have free or almost free labor. That’s why they chose slavery as a business model rather than a sharecropper model or a paid-farm-hand model.

See my column: Southerners Fought A War For Slavery Because Slavery Made Them Much More Money

Plantation Slaves Were Just Serfs By Another Name

A plantation of 500 to 1,000 acres was not uncommon, and at 1 worker for every two acres, workforces of 250 to 500 people were needed. These plantations were America’s first, large business organizations, and they were founded on the principle of employing the ultimate in cheap labor — slaves.

Southern plantation slavery was merely a transplantation of the European Noble-serf/peasant business model to America’s plantation agriculture with the plantation owners standing in for the English and French dukes and earls.

Other Large Employers Also Demanded Cheap Workers

The Railroads Imported Chinese Almost-Slaves

But plantations weren’t the only large 19th century American business operations.

Like the plantation owners who imported African slaves to make them rich, the railroad barons imported Chinese almost-slaves for the same reason.

When large American companies, Union Pacific, Southern Pacific, arose, they had no interest in hiring American workers at a decent salary. No, they, like the European nobles and American plantation owners before them, believed that they had a God-given right to operate their businesses with massively cheap labor.

The thought of hiring Americans at a living wage never entered their minds. They would cost far too much.

To them, unskilled workers were merely organic tools to be bought as cheaply as possible from wherever available and thrown away when broken or no longer needed, and they found them abroad.

Factory Owners Demanded Desperate, Uneducated, Powerless, Cheap & Disposable Laborers

Like the Africans who began as slaves and then were kept powerless through denial of education and segregation, the Chinese were kept powerless by segregation and the Alien Land Laws that prohibited Asians from owning property.

Blacks were also, of course, forced to remain a powerless underclass by laws preventing them from obtaining a good education, restrictive deed covenants preventing whites from selling land to them, and bank and insurance company redlining practices that largely prevented them from buying and owning land.

In these ways Chinese and Black Americans were maintained as an underclass pool of cheap labor without the money, education, ability to accumulate capital or advancement that at least might have freed some of them from perpetual membership in the underclass, cheap-labor pool, which is exactly what employers wanted.

In the West, Mexicans were used, and are still being used, as a cheap agricultural labor pool, but their use has spilled over into other areas of unskilled labor — gardening, hotel worker, restaurant and cleaning labor.

White Workers Were Threatened With Losing Their Jobs To Blacks

An additional benefit of having an impoverished, uneducated, powerless underclass pool of unskilled black, brown and Asian workers was that they could be used as a threat to keep the poor, white workers in line.

  • “Don’t demand too much,” the poor whites were told, “or we’ll bring in black people to take your jobs.”
  • “Sure, we’re paying you crap wages, but at least your life is better than those blacks.”
  • “Watch out that those blacks don’t get uppity and come in here and take your job.”

Two problems, control of poor whites and continued access to cheap labor, were solved with one stone.

When The Chinese & Blacks Weren’t Enough, Impoverished Europeans Were Imported

As America increasingly industrialized, American business demanded even more cheap labor, so they brought in waves of immigrants. Irish, Scots, Italians, Poles, Russians and Germans were admitted to staff the mines, mills and factories with cheap, powerless, brute labor.

Factory owners, like the nobles, plantation owners, and railroad barons before them, demanded cheap, disposable, labor and the segregated, uneducated blacks and poverty-stricken, segregated Chinese, were followed by waves of Irish, Italian, Mexican and other impoverished foreigners who, without the language fluency, training, or job skills, had to work cheap or die.

The business owners never seriously considered hiring Americans to staff their factories because that would have required competing for workers which would have resulted in having to pay much higher wages.

Vulnerable immigrants, especially those who didn’t speak English or had no papers, could always be forced to work for less.

Wherever and whenever there were insufficient or insufficiently cheap masses of immigrant labor, companies happily employed children as young as nine or ten years old to work ten hour shifts in their factories and mines because their impoverished parents could be cheaply bribed to send their children into the mines, the mills and the factories to supplement the starvation wages those same factory owners were paying them.

The Pool Of Cheap Workers Ran Low After WW II

When those sources of cheap labor — children, slaves, blacks, Chinese and impoverished Europeans — finally ran low after WW II, American business owners found themselves in an unhappy situation. Their vast pools of cheap labor had begun to dry up.

Post WW II demand for manufactured products was high. Unions and the law of supply and demand had begun to reduce their pool of poor, desperate, exploitable and CHEAP labor.

Large employers were, for the first time, forced to pay a living wage. The 1950s and 1960s were generally a period of prosperity for hourly workers and their increased pay was highly resented by employers.

With the increased wages, hourly workers were buying homes and cars and sending their children to college, but all the business executives could see was smaller profits.

If You Can’t Import Cheap Labor To The Job, Export The Job To Cheap Labor

To get more money businesses needed to cut costs. They had to find another source of cheap labor. And then the executive classes realized that if they couldn’t bring cheap labor to the factory they could bring the factory to the cheap labor.

Over the 70s and 80s we saw a massive shipment of American manufacturing to cheap-labor countries in Asia and to Mexico, not because the American-based companies were unprofitable but because the corporations realized that they could make even more money by substituting extremely cheap foreign labor for American workers.

Cut Costs By Classifying Workers As Independent Contractors

Now American employers are adopting other techniques to pay low wages: classifying employees as independent contractors or calling them salaried employees who are exempt from overtime rules.

Pretending that employees are independent contractors brings employers many benefits:

  • The workers became personally liable for all the costs of providing their services:



>>>transportation, and


  • The employers are relieved of any obligation to provide

>>>medical coverage for on-the-job injuries,

>>>pay for any damage to the worker’s tools or equipment,

>>>pay for overtime work,

>>>pay sick leave or vacation pay,

>>>provide medical insurance, or

>>>pay any other fringe benefits.

The bottom line is that large American employers have ALWAYS believed that

  • They have a right to have a pool of desperate, impoverished workers who will perform their repetitive, backbreaking, tedious, painful, jobs at starvation wages AND that
  • Unskilled workers’ labor has a low value and that they DESERVE a very low wage

New Demands For Cheap Labor

Now, today, with formerly cheap workers demanding a living wage, not a high wage but just a wage high enough to do what the 1950s and 1960s workers could do, buy a house and educate their children, American employers are demanding that the current shallow pool of desperately cheap labor be refilled, this time with

  • More foreign workers through increases in the H1B visa program,
  • Reclassifying employees as independent contractors
  • Reclassifying employees from hourly to salaried to avoid any obligation to pay overtime
  • The employment of convict labor in American factories**

** “During a recent industry conference, a Waste Management Services executive discussed hiring immigrants to fill commercial driver’s license positions, and other executives suggested using prison or work release programs to address perceived labor shortages in the sanitation, waste and recycling industry.”

It’s Still The Same Old Idea — Employers Deserve To Have Access To A Large Pool Of Cheap, Disposable Workers

The business-owning class has always thought, and still believes today, that it is their right to have constant, perpetual access to a large pool of almost free, use-up-and-throw-away labor and that unskilled workers deserve only low pay.

I use the word “access” because American employers think they deserve to have a “heads I win, tails you lose” flexibility where

  • They can instantly fire workers when business is slow — “I don’t need you any more. Goodbye. If you lose your home, get sick and have no medical care, starve or die is not my problem” — and
  • When business is strong, have a ready supply of workers so desperate that they will accept any job, no matter how disagreeable, at any price, no matter how low.

The Free Market Is Only Good When Labor Prices Are Low

The other way that American employers play the “heads I win, tails you lose” game is their attitude to “the market.”

  • They flood the market with desperate foreign workers to drive down the price of labor, and then they justify their low pay with the claim that they are only obeying the law of supply and demand, free-market pricing.
  • When the supply of labor declines to the point where workers can demand a living wage, then the law of supply and demand and market pricing are seen as a terrible idea and, claiming that there is a labor shortage, they demand that the supply of labor be increased in order to drive down the price.

In other words, the free market is great when they can manipulate it to yield a very low price for labor, but the free market is terrible when it yields a higher price for labor. Then “something must be done” to alleviate the “labor shortage” that’s causing wages to rise.

The Insult Of The “Labor Surcharge Fee”

Have you gone into a restaurant, checked the prices, gotten your check and seen a surprise charge at the bottom of the bill:

“Because of new minimum wage regulations, a $2 surcharge has been added to your bill”?

Does the owner EVER put a line at the bottom of any check:

  • “Because I had an expensive HVAC repair, a $2 surcharge has been added to your bill” or
  • “Because my property taxes [or insurance or utility bills] have gone up, a $2 surcharge has been added to your bill”?

Of course not.

Every business owner evaluates their costs and sets their prices so as to make a profit. Yet, some restaurant owners HATE their employees so much, are so convinced that their employees don’t deserve their pay, that they feel compelled to tell the customer:

  • I’m adding a special, extra charge to your bill because the government has forced me to pay my ungrateful, overpaid workers a higher wage.”

This is yet another example how much employers hate, disrespect and do not value unskilled labor.

This Is Why Business People Hate The Minimum Wage

The imposition of any minimum wage, leastwise a living-wage minimum wage, is a direct threat to their belief that they are entitled to cheap, disposable, workers who don’t deserve their pay, and that’s why for the business owners, a living-wage minimum wage is both hated and feared in equal measure.

The Theory That Business Is Entitled To Cheap Labor

Large employers believe that they always were and are now today still ENTITLED to access to a large pool of desperate, impoverished, vulnerable, uncomplaining extremely cheap, low-skilled labor that only deserves to be paid a starvation wage, and they will go to any lengths to avoid paying a living wage, including promoting the lie that any inability to hire workers at starvation wages means that there is a labor shortage.

Nothing’s changed.

— David Grace (Amazon PageDavid Grace Website)

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David Grace

David Grace

Graduate of Stanford University & U.C. Berkeley Law School. Author of 16 novels and over 400 Medium columns on Economics, Politics, Law, Humor & Satire.