Immigration & Wage Suppression (1 Viewer)

[unlawflcombatnt]

The biggest problem created by uncontrolled illegal immigration is wage suppression. According to economics professor George Borjas, immigration reduces the average annual earnings of U.S.-born men by an estimated $1,700, or roughly 4%. (See Yahoo News story: Illegal Workers Have Mixed Impact.) If that reduction is applied to the roughly 135 million employed Americans, that reduces aggregate annual worker income by $230 billion, or $0.23 trillion. That's roughly 2% of our $12 trillion GDP. That's a loss in consumer spending of $230 billion (less taxes). Given that our entire GDP growth in 2005 was $384 billion, this is a significant amount. Considering that consumer spending is approximately 70% of GDP, that makes the "growth" in consumer spending around $269 billion.

Again, the loss of that $230 billion is no small amount. And it is also $230 billion less money that could have been taxed, costing the Federal government anywhere between $36-55 billion per year. (Increasing the taxable income of a single taxpayer making $35,000/year by $1700 increases Federal income tax by $413. Increasing taxable income of a married taxpayer filing making $35,000/year by $1700 increases Federal income tax by $267. Multiplying these numbers by 135 million amounts to $55.7 billion and $36 billion, respectively.)

Right-wingers will argue that this wage suppression is offset by business profits, and that these profits fuel investment. But investment capital is OVER-abundant at present. Increasing this excess even further will not result in more capital investment. It will result in higher CEO salaries, further overinvestment in the stock market, and further investment in foreign production facilities, the latter of which puts even further downward pressure on American wages.

Furthermore, business profits don't fuel consumer spending. And consumer spending is the engine that drives our economy, not investment. Without consumer spending, there are no returns on investment. And if no returns are anticipated on investment, no investment takes place.

The immigration-fueled reduction in wages does NOT help our economy. It hurts it. It reduces aggregate consumer income and the consumer spending it finances. The reduction in consumer spending reduces consumer production demand, further reducing demand for the labor to provide that production. The reduction in labor demand drives down employment and wages. The resultant labor demand reduction further reduces aggregate consumer income and further reduces consumer purchasing power.

As consumer buying power declines, so do investment opportunities, since those opportunities are created by consumer demand for production. Thus the increased profits resulting from reduction in labor costs create even more excess capital, while reducing investment opportunities still further.

Does anyone really think that wage suppression is "good" for the economy? Doesn't someone have to purchase the goods produced for business to profit? Won't reducing consumer income also reduce consumer goods purchasing? Won't a decline in consumer goods purchasing reduce business revenues and reduce potential profits? Once again, is immigration-fueled reduction in worker/consumer income really "good" for the economy?

unlawflcombatnt

EconomicPopulistCommentary

Economic Patriot Forum

______________________
Capitalism cannot function without consumer income. The benefits of capital investment are limited by consumers' ability to buy the products of capital investment.

There must be balance between the "means of consumption" and the "means of production."

 

[Iriemon]

The biggest problem created by uncontrolled illegal immigration is wage suppression. According to economics professor George Borjas, immigration reduces the average annual earnings of U.S.-born men by an estimated $1,700, or roughly 4%.

...

Whenever you hear the cons (like the Pres) saying that we need to let foreign labor in to work the jobs that "Americans don't want," what they really mean is that Americans don't want to work for $5.15, and businesses and the wealthy don't want to pay decent wages for the labor.

Someone made a post earlier about who wants to pick veggies? A lot of people would be willing to do it for $20 an hours.

By bringing cheap foreign labor in, businesses can pay rock bottom for the labor, and don't have to pay a decent wage that they'd have to pay to get Americans to do the work.

Having said that, there is probably going to be a problem meeting labor demands in the country over the next few decades, as boomers age and leave the workforce.

 

[70s_guy]

The one senator really on top of this is Byron Dorgan, North Dakota Democrat. He delivered a long detailed terrific rant including quotes from the Borjas analysis against immigration legislation that will let in more foreigners with green cards, blue cards, H1-B's H-etcs. Basically condemning the pro-business Republicans and pro-illegal alien Democrats alike. None of them could refute what he related thus as someone that stands alone much like Repulbican Tancredo, most in both political parties prefer to ignore him and instead butt heads with less controversial immigration issues.

Thanks Byron for standing up for Americans!
...David

 

[unlawflcombatnt]

The one senator really on top of this is Byron Dorgan, North Dakota Democrat. He delivered a long detailed terrific rant including quotes from the Borjas analysis against immigration legislation that will let in more foreigners with green cards, blue cards, H1-B's H-etcs. Basically condemning the pro-business Republicans and pro-illegal alien Democrats alike. None of them could refute what he related thus as someone that stands alone much like Repulbican Tancredo, most in both political parties prefer to ignore him and instead butt heads with less controversial immigration issues.

Thanks Byron for standing up for Americans!
...David

I heard Dorgan myself, and he was excellent. He's excellent on immigration, and excellent on his economics positions. Too bad he isn't running for president. I'd vote for him in a flash.

 

[danarhea]

I heard Dorgan myself, and he was excellent. He's excellent on immigration, and excellent on his economics positions. Too bad he isn't running for president. I'd vote for him in a flash.

If you want to hear a really honest opinion, read Pat Buchanan's book, The Death of the West. Democrats are talking about the problem now, but when Clinton was in office, they didnt give a crap. Buchanan had it nailed down long ago. In his 2000 presidential run, his platform on immigration was to put a wall on the Mexican border and man it with troops. Anyone coming across would be immediately deported, and anyone coming across with weapons would be immediately blown away. Its one of the reasons I voted for him in 2000 instead of Bush or Gore.

Democrats are making it an issue now that Bush is screwing the whole thing up, but what the Dems fail to mention is the fact that, under Clinton, it was the same as under Bush. The Dems didnt mind it then. Why are they complaining now? Oh, thats right. They need an issue for the upcoming elections. Kind of dishonest of them, isnt it?

Many of the onerous things Bush is doing, he is doing because Bill Clinton opened the door for him.

 

[jamesrage]

Whenever you hear the cons (like the Pres) saying that we need to let foreign labor in to work the jobs that "Americans don't want," what they really mean is that Americans don't want to work for $5.15, and businesses and the wealthy don't want to pay decent wages for the labor.

Someone made a post earlier about who wants to pick veggies? A lot of people would be willing to do it for $20 an hours.

By bringing cheap foreign labor in, businesses can pay rock bottom for the labor, and don't have to pay a decent wage that they'd have to pay to get Americans to do the work.

Having said that, there is probably going to be a problem meeting labor demands in the country over the next few decades, as boomers age and leave the workforce.

You are correct.It is false to say that illegal aliens are doing the jobs that Americans will not do when in reality the illegal aliens are doing te jobs for wages that Americans are not willing to work for.These days businesses have to compete for employees besides just competing for customers.If these businesses can not honestly compete with other businesses for employees then they have no business being in business in the fisrt place.

 

[Gill]

Someone made a post earlier about who wants to pick veggies? A lot of people would be willing to do it for $20 an hours.

I'm sure a lot of people would... the question is, will the public pay $8 a pound for tomatoes.

 

[ALiberalModerate]

I'm sure a lot of people would... the question is, will the public pay $8 a pound for tomatoes.

Our agricultural sector is the closest industry we have to communism in the United States. The way it is now with all the government involvement, its impossible to predict what the prices of tomatoes would be if you didn't have illegals harvesting them. Something tells me though that if we dropped some of the Depression era government involvement in agriculture and coupled that with stiff penalties for using undocumented labor, that competition in the free market would prevent us from having to pay 8 bucks a pound for tomatoes.

 

[Gill]

Our agricultural sector is the closest industry we have to communism in the United States. The way it is now with all the government involvement, its impossible to predict what the prices of tomatoes would be if you didn't have illegals harvesting them. Something tells me though that if we dropped some of the Depression era government involvement in agriculture and coupled that with stiff penalties for using undocumented labor, that competition in the free market would prevent us from having to pay 8 bucks a pound for tomatoes.

I assume you are talking about farm subsidies and I agree with you. Unfortunately, farm subsidies are sacred cows and politicians of both parties defend them like a mother grizzly bear with cubs.

 

[jamesrage]

I'm sure a lot of people would... the question is, will the public pay $8 a pound for tomatoes.

If people start getting paid fair wages then they will more than likely to be able to afford $8 a pound for tomatoes.

 

[Scarecrow Akhbar]

$8 a pound for tomatos? Okay, let's get real, here. The left and the right both profit from scaring the public and lying to them about what we'd do without our invading labor force. Restaurants couldn't operate, farms wouldn't be able to get the crops in, all that nonsense.

Let's say the cost of bussing tables and washing dishes would go up from $6 an hour to $12 an hour. A busy restaurant could have a couple of busboys and a couple of dishwashers (human) in the back. They'd have a machine to wash the dishes. So we're talking an increase in wages of $24 an hour, what the heck with all the damn taxes, let's say it costs the restauranteur $50 bucks an hour to go legal.

If 100% of that cost was passed on to the 100 diners he had in for lunch, that's a whopping fifty cents per meal. Calamity! Yeah, right, most people wouldn't notice. And...since restaurants have to be competitive, it's very likely that the full costs wouldn't be passed on, as restaurants jockey prices to lure customers in.

A maid in a hotel can do four rooms in an hour, say. If wages bumped up six bucks an hour, that would mean the hotel would have to charge the guest a dollar fifty more. Yeah, that'll bring travel to a dead halt in this country. :roll:

And produce? The cost of food at the groceries is the stack up of growing costs+farmer's margin+shipping costs+shipper's margin+warehousing costs+warehouseman's margin+retail costs+retailer's margin. And you find out that it costs the farmer about a dime to pick a head of lettuce, and the remaining buck eighty is all the middleman costs. So if market wages were paid to ag workers, the price of food would rise almost negligibly.

But...the presence of the invading forces in this country corrupt the political system, add expense to the load of services the taxpayer is forced to support, increases crime, and decreases the quality of life for all Americans.

 

[ALiberalModerate]

$8 a pound for tomatos? Okay, let's get real, here. The left and the right both profit from scaring the public and lying to them about what we'd do without our invading labor force. Restaurants couldn't operate, farms wouldn't be able to get the crops in, all that nonsense.

Let's say the cost of bussing tables and washing dishes would go up from $6 an hour to $12 an hour. A busy restaurant could have a couple of busboys and a couple of dishwashers (human) in the back. They'd have a machine to wash the dishes. So we're talking an increase in wages of $24 an hour, what the heck with all the damn taxes, let's say it costs the restauranteur $50 bucks an hour to go legal.

If 100% of that cost was passed on to the 100 diners he had in for lunch, that's a whopping fifty cents per meal. Calamity! Yeah, right, most people wouldn't notice. And...since restaurants have to be competitive, it's very likely that the full costs wouldn't be passed on, as restaurants jockey prices to lure customers in.

A maid in a hotel can do four rooms in an hour, say. If wages bumped up six bucks an hour, that would mean the hotel would have to charge the guest a dollar fifty more. Yeah, that'll bring travel to a dead halt in this country. :roll:

And produce? The cost of food at the groceries is the stack up of growing costs+farmer's margin+shipping costs+shipper's margin+warehousing costs+warehouseman's margin+retail costs+retailer's margin. And you find out that it costs the farmer about a dime to pick a head of lettuce, and the remaining buck eighty is all the middleman costs. So if market wages were paid to ag workers, the price of food would rise almost negligibly.

But...the presence of the invading forces in this country corrupt the political system, add expense to the load of services the taxpayer is forced to support, increases crime, and decreases the quality of life for all Americans.

I agree. Of course, you should remember your analogy next time you rail against environmental mandates.

 

[Gill]

And produce? The cost of food at the groceries is the stack up of growing costs+farmer's margin+shipping costs+shipper's margin+warehousing costs+warehouseman's margin+retail costs+retailer's margin. And you find out that it costs the farmer about a dime to pick a head of lettuce, and the remaining buck eighty is all the middleman costs. So if market wages were paid to ag workers, the price of food would rise almost negligibly.

Ahh, but you forget to increase the wages throughout the whole chain, NOT just at the farmer's end.

 

[Scarecrow Akhbar]

I agree. Of course, you should remember your analogy next time you rail against environmental mandates.

I'm sorry, but I have to ask you to explain this and it's relation to what I posted.

BBL

 

[Scarecrow Akhbar]

Ahh, but you forget to increase the wages throughout the whole chain, NOT just at the farmer's end.

You mean the teamsters union and the warehouse union and the grocery clerks unions? They're not working for low illegal wages now, there's no good reason they should be paid more. They're overpaid now, as it is.

 

[ALiberalModerate]

I'm sorry, but I have to ask you to explain this and it's relation to what I posted.

BBL

Most people who are either Republican or ultra-libertarian will everytime an environmental mandate is proposed like reduced emissions or efficiency improvements or anything along those lines, make the argument that those mandates will result in higher prices. So basically, the same argument you made against illegal labor is the same argument that could be made if say, coal power plants were mandated to reduce carbon emissions.

 

[Scarecrow Akhbar]

Most people who are either Republican or ultra-libertarian will everytime an environmental mandate is proposed like reduced emissions or efficiency improvements or anything along those lines, make the argument that those mandates will result in higher prices. So basically, the same argument you made against illegal labor is the same argument that could be made if say, coal power plants were mandated to reduce carbon emissions.

What's a "ultra-libertarian"? There's libertarians, and there's people with ideological flaws.

The proper libertarian view on the environment is that one person can't damage another person's property without his consent. That being the case, regulations protecting the property of others from pollution are generally a good thing, as are laws regulating forestry and other non-polluting acts that may harm watersheds and other common factors in the environment that can harm the value of a man's property due to actions sometimes miles away.

As for the invaders, Americans are currently enjoying lower prices as a result of the exploitation of laborers who cannot demand equal protection under the law. Returning law and sanity to America's workforce is the only way to re-establish justice and end the exploitation. That clearly will have a higher value to any real libertarian than mere pecuniary considerations.

And you shouldn't confuse Republicans with any form of libertarian. Libertarians aren't socialists.

 

[Stinger]

If people start getting paid fair wages then they will more than likely to be able to afford $8 a pound for tomatoes.

And the rest of us who now make a "fair wage", where do we get the money to pay for the increase in our food bills?

The fact is about 65% of farm workers are Americans and not illegal aliens. Americans will work those. The best way to get them to work those jobs is to stop giving them other peoples money not to work. But then THEY have to be willing to show up to work and be a good employee too.

 

[jamesrage]

And the rest of us who now make a "fair wage", where do we get the money to pay for the increase in our food bills?

Live within your means.

The fact is about 65% of farm workers are Americans and not illegal aliens.

If that is true then deporting every illegal will not raise vegatable prices up that much.

 

[Gill]

Live within your means.

Yeah Stinger, what's wrong with you. Food is a luxury.

 

[jamesrage]

Yeah Stinger, what's wrong with you. Food is a luxury.

I beleave most of the claims of the cost of food seriously rise if we deport and or force every illegal to leave is just hoopla by the greedy business men who want to pay slave wages and the piece of **** globalist who want to use the illegal alien menace as a way of pushing globalism.

 

[Scarecrow Akhbar]

Yeah Stinger, what's wrong with you. Food is a luxury.

Think of it as an incentive for people to become more useful to society so they can produce more and give back to the community. That should satisy the socialists.

Or you can look at it as a means of weeding out the less fit.

 

[unlawflcombatnt]

Wages & Hoopla

I beleave most of the claims of the cost of food seriously rise if we deport and or force every illegal to leave is just hoopla by the greedy business men who want to pay slave wages and the piece of **** globalist who want to use the illegal alien menace as a way of pushing globalism.

Jamesrage,

I completely agree with you about the nonsensical claims about food costs rising. The prices won't rise any if consumers won't pay the price.

Regarding wages, they have again declined in both hourly and weekly terms for the month of March. Hourly wages declined 0.24 % in March. Weekly wages declined 0.27%. Below is a copy of hourly and weekly real wages from the U.S. Bureau of Labor Statistics.

Below are links to both weekly and hourly real wages.

BLS-WeeklyWages

BLS-HourlyWages



unlawflcombatnt

EconomicPopulistCommentary

Economic Patriot Forum

_________________
The economy needs balance between the "means of production" & "means of consumption."

 

[Gill]

Re: Wages & Hoopla

Jamesrage,

I completely agree with you about the nonsensical claims about food costs rising. The prices won't rise any if consumers won't pay the price.

Regarding wages, they have again declined in both hourly and weekly terms for the month of March. Hourly wages declined 0.24 % in March. Weekly wages declined 0.27%. Below is a copy of hourly and weekly real wages from the U.S. Bureau of Labor Statistics.

Below are links to both weekly and hourly real wages.

BLS-WeeklyWages

BLS-HourlyWages



unlawflcombatnt

EconomicPopulistCommentary

Economic Patriot Forum

_________________
The economy needs balance between the "means of production" & "means of consumption."

Interesting. I note that wages are considerably higher now than during the so called "boom" of the 1990's.

 

[unlawflcombatnt]

Re: Wages & Hoopla

Interesting. I note that wages are considerably higher now than during the so called "boom" of the 1990's.

Wages are not "considerably" higher now than they were when Bush took office. Earnings in real 1982 dollars were $274.39/week in December of 2000. In March of 2006, weekly earnings were $276.33. That's a total 5-year increase of only 0.7% (not to mention the 1.3% decline since December of 2002.)

Furthermore, in the 5 years from January 1996 through December 2000, weekly wages rose from $256.06 to $274.39, or 7.2%. Again, contrast this with less than 1% under Bush. What's worse, the wage increases are due exclusively to increases in the high income categories. An overwhelming majority of Americans have seen their real wages decline since Bush first took office.