minimum wage and H2B visas

Economics Economics Questions
1

If the government is artificially inflating wages by raising minimum wages what is it doing by granting business a certain number of H2B visas (temporary 9 month work visas)? Usually what happens when these businesses apply for that certain type of visa, they have to prove that they were unable to find an American or permanent resident to work the job. Often times, business owners will run adds in news papers, for example searching for landscapers at a rate of 12/hr. The market rate for a landscaper is 16/hr in that specific region. Now these business owners are unable to find labor at 12/hr, turning around to the State Department and applying to “import” labor. The importet labor will be paid 12/hr.

The way I see it, in a free market society, the market would determine the wage rate for landscapers. If I own a landscap business and am looking for help at 12/hr but cannot find anybody, I will have to raise the wage until I get someone who wants to work.

By importing labor from foreign countries to work at an artificially “deflated” wage, I am essentially disturbing “self regulating” wage market.

Playing devil’s advocate for a moment though, shouldn’t I be able to import labor from foreign countries at a lower wage?

2

First, going off topic a little: The primary affect of a minimum wage is not to raise the overall wage rate. The primary effect is to cause unemployment by prohibiting people from buying & selling certain types of labor at the market rate. Of course, it has the side effect of raising the average wage, but this is achieved by eliminating the lower end of the wage range from the data set.

Back on topic: The question you pose is based on the (false) assumption that the market for labor ends at the national border.

The state intervenes in the free market by restricting residents of a certain geographic area from purchasing the labor services of residents of a different geographic area. Then the state grants a relative handful of exemptions to this prohibition in form of visas.

The state is the one disturbing the wage market, not the employers who hire foreign labor.