By Simon Grey, on November 7th, 2011
The only significant impact that immigrants have on the labor market is to increase the supply of labor, which tends to put downward pressure on wages. Everything else equal, the only way an immigrant will be hired over a native worker is if he is willing to accept lower wages. In order to maximize profits, business owners look to pay the lowest wage possible without affecting marginal productivity. If an immigrant is willing to work for less, and he is productive enough, it only makes sense to choose the lower-cost labor. Billions of people the world over make this same decision on a daily basis while shopping for goods and services — it’s called bargain hunting.
Here’s the problem: the government mandates a minimum wage for citizens. The government requires that people be paid a certain amount of money per hour, and the government also mandates payroll taxes, some of which the employer must match. Toss in regulatory compliance for employers, and the cost of employment has a somewhat high floor.
Now, illegal immigrants, who can offer their labor under the table, are more than able to compete with this price because employers don’t have to pay them a minimum wage. Citizens are prevented by law from competing with illegal labor on price. As such, increasing the size of the labor market will have the adverse effect of causing citizens to be in a position where they will lose their jobs because they are forced to keep their wages high.
The proper solution to this problem, then, is the deregulation of the labor market. Allowing an increase in the labor market without allowing citizens to compete on price is cruel and unjust, and therefore migrant workers should be prevented from coming to the United States until the federal government has removed the fetters binding American labor.
By Simon Grey, on September 23rd, 2011
“Of jobs created in Texas since 2007, 81 percent were taken by newly arrived immigrant workers (legal and illegal),” says the report from the Center for Immigration Studies, a group that advocates reduced levels of both legal and illegal immigration. The report estimates that about 40 percent of the new jobs were taken by illegal immigrants, while 40 percent were taken by legal immigrants. The vast majority of both groups, legal and illegal, were not American citizens. (Hat tip: Vox Day.)
Native-born Americans filled just 20 percent of the new jobs in Texas, the report says, even though “the native born accounted for 69 percent of the growth in Texas’ working-age population.” “Thus, even though natives made up most of the growth in potential workers, most of the job growth went to immigrants,” the report concludes.
If you want to fix the unemployment mess America currently faces, do four things:
One, round up all illegal immigrants and guest workers and deport them. I am unable to comprehend how a government that claims to represent the interests of its people even tolerates any foreign workers when the unemployment rate is hovering around 16%. Why is this allowed when citizens are jobless and looking for work? Citizens should be given preference when it comes to domestic policy, and labor is no exception.
Two, deregulate labor. Get rid of the minimum wage, the minimum age, and mandatory overtime pay laws. Price floors always, without fail, create a surplus. Again, labor is no exception.
Three, get rid of government-sponsored welfare, unemployment compensation, and all other forms of paying people to not work. This will give the currently unemployed a very powerful incentive to find and/or create a job. Note, however, that one should not end the dole without first having eliminated minimum wage.
Four, get rid of payroll taxes. Milton Friedman’s monstrously stupid idea to have taxes withheld from one’s paycheck places compliance costs on businesses that they do not face when hiring illegal workers.This, in turn, makes it more difficult for legal workers to compete with illegal workers. As such, ending payroll taxes will reduce the costs of employment, and make it easier for citizens to compete for jobs.
By Simon Grey, on August 11th, 2011
What caused the 1992 L.A. riot? While this question has no definitive answer, the evidence presented in this paper does suggest that South Central L.A. had some characteristics that made it more likely than other cities to explode into a large scale riot. Our empirical results suggest that the ethnic diversity of South Central L.A., the high unemployment rates of young black men in that area, and the sheer size of Los Angeles all help explain the 1992 riot. [Emphasis added. HT: Chuck.]
One of the effects of free trade has been to increase unemployment in manufacturing industries. Jobs in these industries are generally low-skill, and the proper domain of younger males, at least given the labor market value of young males (hint: it’s really low since young males tend to lack intellectual capital, i.e. skills). So, since there are fewer jobs available to young men as a result of free trade, and since young men without jobs are more prone to rioting, it would appear that free trade has a probable role in setting the stage for future riots.
Of course, it is entirely possible to avoid this possibility. The government can either impose wage parity tariffs on all imports, which would have the effect of ensuring that any imported product would have the cost of minimum wage labor factored in, or the government can stop making illegal for young males to compete with foreign labor and production on price, which means eliminating minimum wage laws. It is absolutely ludicrous for the government to have policies that hamstring domestic labor and favor foreign labor. Something has to give eventually, and let’s hope it doesn’t take a large number of unemployed males rioting in the streets to convince the government to set a pro-domestic labor policy.*
* While I’m on the subject, I’d just like to note just how completely horrible it is that the government’s current economic policy is in the worst possible interest of the citizens it claims to represent. Free trade only benefits domestic consumers because it enables them to buy goods at lower prices than they normally would. Of course, the general price of goods wouldn’t otherwise be high in the first place if the stupid government hadn’t set policies that drove up the price of goods in the first place. Between inflation, minimum wage, asinine “corporate” taxation, and incredibly cumbersome regulation, the government has managed to concoct a perfect storm of skyrocketing prices.
The only thing that obfuscates this fact is the presence of foreign trade, which the government welcomes because it helps keep consumers from knowing the true cost of government interference. Of course, this charade can’t be kept up forever because foreign labor will eventually become more productive, leading to increased demand, leading further to increased prices (wages). As this happens, the buying power of foreign labor will increase, relatively speaking, and drive up the price of goods on a broad, international level, meaning that Americans will eventually pay more for goods anyway. By the time this happens, though, the American economy will have been so hamstrung as to become permanently crippled.
And that’s why I hate the American government and the politicians and bureaucrats that run it. They are fools, every last one of them. They, and I mean this literally, deserve to rot in the bowels of hell for all eternity for the fraud, deceit, and destruction that they have practiced against the American people.
By Russ Nelson, on September 14th, 2010
The proper version of “ignorance is bliss” is actually “WHEN ignorance is bliss,” and it should be followed by “’tis folly to be wise.” That’s the short version of public choice economics, which points out that your vote counts for very little, and consequently justifies very little investment in making a quality vote. They call that “rational ignorance.”
Some economists go even further and say that because your vote counts for so little, you can vote emotionally rather than rationally. You can vote for a minimum wage because it makes you feel good, rather than voting against a minimum wage because it actually prices the worst workers (who need the most help) out of the market.
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