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Page 107 -- Trading minorities, it is argued, come into conflict with business rivals of other ethnic groups. Conflict occurs, not merely because of ordinary business rivalries, but because immigrant minorities are able to undercut their rivals by the use of their own credit institutions, their guild techniques of restraining competition among themselves, and their use of cheap, usually family, labor. Their interests also collide with the interests of those with whom they transact business: consumers, tenants, clients. Finally, because trading minorities have the ability to obtain their own cheap labor, they depress the prospects for labor in the host society. The tractable character of labor in middleman minority firms insures that rising wages in competing businesses would not be accompanied by similar increases for workers of minority firms. A competing firm in the host society that granted a wage increase would find itself priced out of the market. Eventually, workers in host society firms come to identify immigrant businesses and the low wages they pay as the source of the low wages paid in the economy generally
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Donald L. Horowitz