Despite decades-old laws blocking employment of unauthorised labour, estimates say 8 million of the US’ 12 million illegal aliens are unlawfully employed, and this within a foreign-born population approaching 50 million – most of whom also work in unskilled positions and com­pete against blue-collar Americans for jobs. One group that should be paying close attention to what lies beyond the headlines of these and other tangential issues is the Chinese government.

Allegations of labour-market manipulation in the US have been levelled against the meatpacking and agri­cultural industries for years, by the likes of activist Cesar Chavez, elected politicians Romano Mazzoli and Lamar Smith (a Democrat and a Republican, respectively), the AFL-CIO union (in its post-war days at least) and advocacy groups Farmworker Justice and Numbers USA. Unlike goods manufacturers, meat producers and growers can’t out­source their production to cheaper labour markets, being inextricably tied to the land, livestock and local water sources. What they can do, however, is insource.

Amid the ongoing Sino-US public-relations battles, it would not be surprising if China or other countries raised this issue, but conversely it was the US that used this argu­ment against China. The mainland has volleyed claims of hypocrisy against the US with regards to agricultural subsidies, however, not specifically in the area of cheap, imported agricultural labour.

The US Trade Representative’s (USTR) latest annual report to Congress on China’s World Trade Organisation compliance expressed “great concern” that “China does not adhere to certain internationally recognised labour stand­ards, including the freedom of association and the right to bargain collectively”. Likewise, the Congressional-Execu­tive Commission on China says in its latest report that the country also imposes “restrictions on workers’ rights to freely establish and join independent trade unions”.

Certainly, workers in China may be able to organise only under the monolithic All-China Federation of Trade Unions, but such pro-worker sentiments seem insincere when levelled by the US. Despite the down-home flag waving and salt-of-the-earth veneration, US unionisation rights and collective bargaining opportunities have been lacking for many years, owing in part to the constant supply of legal and illegal migrant labour flooding its unskilled and semi-skilled job markets.

Entire sections of America’s biggest export industries, including agriculture and meatpacking – both hit by China’s retaliatory tariffs – have seen their workforces dominated by unauthorised migrants for decades. When Nicholson saw the news of the ICE raid on Koch Foods, he clearly saw an opportunity to return to this segment of the market at a wage closer to traditional US worker expectations. Labour-market manipulations have allowed these industries in particular to operate with artificially low costs and artifi­cially high profits. The only difference between this type of subsidy and others more widely known – such as the tens of billions of dollars in direct annual payments to small and industrial farms, and the meat industry – is that it might actually be bigger.

Reflecting on the ability of US agribusiness to evade labour-market discipline, Chavez biographer Miriam Pawel wrote, “a surplus of labour enabled growers to treat workers as little more than interchangeable parts, cheaper and easier to replace than machines”. What big farms really wanted, as top unionists told a presidential commission in the 1950s, was “to gain an advantage and control over the labour market [and] set up a paternalism that borders on involuntary servitude and slavery”.

The effects of immigration on the American labour force were once far more openly discussed. As far back as Booker T. Washington, in the late 1800s, and W.E.B. DuBois and the New Republic in the 1920s, unskilled immigration was discussed and, specifically, its negative effect on African-American workers. Later, Chavez railed against illegal “wetback” labourers from Mexico, whom southwestern growers used to break his farmworker strikes. Each understood – just as Eddie Nicholson appar­ently did when he decided to return to meatpacking – that tight labour markets mean more negotiating power and better conditions for workers.

Former president Barack Obama acknowledged this, too. In The Audacity of Hope (2006), he wrote that the “huge influx of mostly low-skill workers” in America “threaten[ed] to depress further the wages of blue-collar Americans and put strains on an already overburdened safety net”. And during Obama’s first term, vice-president Joe Biden’s chief economic adviser, Jared Bernstein, told a reporter, “Employers are very quick to raise the spectre of a labour shortage, but often it’s another way of saying they can’t find the workers they want at the price they’re paying [...] they are unwilling to meet the price signal the market is sending, so they seek help in the form of a spigot like immigration.”

China does not do this. Yes, the supply of labour in China has traditionally been ample, but the same can be said of America, with its chronically underemployed black popu­lation and generally high fertility rates – not to mention its easy access to the capital markets for making investments in long-term labour-saving technologies, such as fruit-picking machines.

Today, only in exceptional cases does China allow foreign workers to permanently immigrate. It also works hard to keep out unauthorised workers from Vietnam and North Korea. In fact, China’s overall North Korea policy is very much based on concerns over labour-market dyna­mics. It rightly fears what could happen to wages in its northeastern provinces should some sort of social upheaval mean they became inundated with North Korean labourers.

For this reason, at least in part, many segments of China’s labour market appear stronger than some of those in America; unlike in the US, trends are going against Chinese employers and in favour of workers. In its allega­tions against China, however, the USTR fails to recognise the country’s pro-worker immigration-labour dynamic, probably because America’s own situation creates such an artificial and pro-employer drag on US domestic workers.

One indicator of this strength in China is blue-collar wage growth. While wages in the US have been stagnant, and in some areas in decline, for decades, in certain Chinese cities, lower-skilled wages have shot up by a factor of four. One reason for this is China’s concern for labour-market dynamics, especially the threat to social stability caused by stagnant wages and widening wealth disparities. Instead of subsidising large employers by importing workers from poor neighbouring countries, the Chinese government pushes employers to innovate and become more productive. It forces the economy towards more long-term considerations.

It also mirrors Japan’s approach to its economy follow­ing the war, which Beijing has famously studied and to a large extent copied, most notably in the area of monetary policy. Back in the 1960s, Japan’s fast-developing textile industry pressed the government for foreign labour imports but was rebuffed. The industry, like many others as the economy developed, was forced to automate and focus on less labour-intensive, higher-margin synthetic products and move the relatively unskilled production abroad. This was geared toward approaching the economy as something that serves the nation, not the other way around.

Taking an industry-first, worker-last approach in the US has had noticeable consequences. The meatpacking industry is a stark example. Today, average wages in that industry are just over US$13 an hour, and unionisation rates are about 20 per cent. In the early 1980s, by contrast, average wages reached nearly US$30 an hour (adjusted for inflation), and almost half of the industry was unionised. What explains these changes, at least in part, is the increase in unauthorised workers, who today account for about a quarter of the industry’s workforce – meat processors also use considerable legal guest-worker labour and immigrant labour in general. It’s a textbook example of what Marxists call the “reserve army of labour” in capitalist societies (or at least, unregulated and borderless ones).

Before the 80s, meat producers provided lower-middle-class jobs to Americans (disproportionately African-Americans). In testimony to the US Commis­sion on Civil Rights on the effects of immigration, Yale Univer­sity econo­mist Gerald Jaynes stated that, by the late 80s, the industry had experienced a “sharp decrease in workers’ health and safety accompanied by the collapse of the unions”. Under such conditions, he added, “it is true that meat­packing plants have difficulties attracting native workers”.

The meatpacking industry’s built-in dependence on foreign labour, however, pales in comparison to that of big agriculture. The insourcing of foreign labour in agri­culture goes back more than a century. In 1917, union leaders such as Samuel Gompers pushed Congress to install some of the first federal standards imposed on immigrants, including a literacy exam to reduce the number of unskilled workers, and a head tax to ensure financial independence. Both measures were almost immediately struck down by the newly industrialised and organised agricultural industry.

In a subsequent letter to Congress arguing his case, Gompers decried the chief employers of immigrant labour, describing them as those “who prefer a rapidly revolving labour supply at low wages to a regular supply of American wage earners at fair wages”.

Eventually, the Immigration Acts of 1921 and 1924 placed quotas on green card issuance proportional to each country’s share of the US foreign-born population. But, in a major concession to agribusiness lobbies, Mexico remained exempt from the quota system. As historians Linda and Theo Majka have written, that exemption “insured a vast amount of Mexican workers” for US farmers and helped “keep labour costs at a low level”.

Big agriculture got another major reprieve in 1942. Intended as a temporary wartime measure, the Franklin D. Roosevelt administration created a special guest-worker programme for Mexican bracero (manual) labour. While there may have been a genuine worker shortage in the US during the war (though the AFL-CIO disagreed), the “temporary” programme would run for another 22 years.

In 1947, the administration of Harry Truman created a commission to study the programme’s effects on the US labour market. Following three years of research and testimony from interested parties, including growers and the AFL-CIO, it concluded “alien labour has depressed farm wages and, therefore, has been detrimental to domestic labour”. Regarding the motivations of growers who wanted to keep thebracerotap on, the commission could not have been more direct: the agriculture industry simply “do[es] not wish to work with free labour”, the report stated, with employers instead preferring “a feudal type of rural economy and the relationship of the overlord to a subservient class”.

While China undoubtedly allows a domestic economic situation that places heavy deference on the corporate sphere, often to the detriment of working people, the situation would be far worse were it to allow foreign labourers from its struggling neighbours to pour over its borders. Its central trade adversary, however, does.

Despite Trump’s rhetoric on curbing unskilled immi­gration and aiding US workers, his administration has worked at least as hard as any other to keep the “immigration spigot” open for the agriculture industry. During his campaign, US agribusinesses feared they might lose a sizeable portion of their workforce. But after Trump was elected, industry lobbyists quickly latched onto Secre­tary of Agriculture Sonny Perdue, who along with Trump’s son-in-law, Jared Kushner, has been pushing the president to ignore the administration’s “Hire American” executive order and increase visas as an insurance measure. Mean­while, unlawful and asylum entries have gone up, not down.

Under the H-2A visa programme – the sister H-2B pro­gramme is for non-agricultural labour – workers cannot unionise, have little in the way of benefits and are paid a mere US$10 an hour in most states. While low given the strenuous work required in many farm jobs, these wages are enough to attract workers from Mexico, where the average hourly wage is a mere US$2.43.

With a workforce that today consists of 12 to 16 per cent guest-workers and, according to some estimates, a whopping 70 per cent un­authorised aliens, the agricultural industry could have the most artificially low labour costs in the country.

Importantly, since the H-2A programme has no annual cap (it’s one of the few visa categories that does not), it can expand more or less according to farmer demand. This is why, during the past two decades, H-2A visa issuance has increased by about 1,000 per cent. Last year are record 200,000 visas were issued. And because the Homeland Security Department is unable to track visa holders return­ing through land ports of entry, many are believed to over­stay and join the seemingly ever-increasing unauthorised population.

With his recent immigration proposal, the president reneged on an earlier commitment to require employers to use the federal E-Verify system to ensure workers were authorised. Speaking about dropping E-Verify, Trump stated it would have been “a very tough thing to ask a farmer to go through”, before acknowledging, “in a certain way, I speak against myself, but you also have to have a world of some practicality”.

In other words, the use of unauthorised labour in the US agricultural industry is so pervasive that it seems insur­mount­able. But such hypocrisy from the US, not only in the realm of labour but also with regards to the rule of law (on which the country so often prides itself), cannot go on forever. Just a line or two from Beijing’s communications team on migration-subsidies would likely force the issue onto the media centre stage and take much air out of the White House’s bloviations over China’s trade policies. It would at least give the USTR pause the next time it prepared a volley of subsidy allegations against China.

Moreover, besides its lack of work on E-Verify, the Trump administration is currently working on a package of H-2A proposals that reportedly resembles what former president George W. Bush pushed through in 2008, which included dropping prevailing-wage standards, expanding the list of allowable industries under the programme, apply­ing the “temporary” visa to year-round jobs, decreas­ing protections against US worker displacement, and curbing provisions on liveable worker housing.

Obama reversed much of the Bush-era changes, but these parts of the programme are perennial targets for the agribusiness lobby. In essence, the administration’s broad push essen­tially functions as a way to keep the industry from increas­ing wages and benefits to attract US workers or investing in long-term labour-saving technologies.

In addition to the most recent administration proposal, the USTR has worked to ensure similar programmes stay in place. Last year, the USTR frustrated internal efforts from the Department of Homeland Security and Congress to reform the “Trade Nafta” or “TN” visa programme.

Although not widely known, the TN programme opens up a range of skilled and semi-skilled US job markets to Mexican and Canadian workers and offers even fewer protections against US worker displacement than the highly controversial H-1B “skilled worker” visas. It has been a source of consternation for some members of Congress, including Senator Chuck Grassley, who feel not only that the programme hurts US workers but that visa programmes should be formed directly by Congress, not by treaty negotiators.

However misperceived labour markets in these two countries are, the US immigration system should be recog­nised for what it is: a subsidy for select American employ­ers, those who prefer the continued smokescreen of ICE breaking down doors and deporting illegals for show.