Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
You sneaky dog you. You just tried to change the scenario. I already stated that the workers was earning only five dollars an hour in value for his employer. The fact that you elected to keep him means his value isn't five, but a value greater than ten dollars (the minimim wage in this example). That isn't however the example we're working in.
You still don't grasp the concept of real wages as far as your argument for a race to the bottom goes. If it were true we'd have to restrict not only illegal migrant labour, but all labour. That sounds absurd when you consider it to its extreme.
Your teacher musn't have been fond of his profession. Economics is not utopian. It presumes several things, but it is wise enough to list what assumptions they are. If a reaction doesn't follow a given action an economist re-examines his assumptions to see which one was incorrect.
An elevator worker doesn't produce anything, he's a service employee not production employee. I went in order of your paragraphs. Its not until your second paragraph that the worker is costing more then his production.
My economics professor was in fact very good at what he did. He merely explained in a way for a person to understand that economics is nothing but theory and assumption based on utopian ideas of society. To equate that to Your teacher musn't have been fond of his profession is a complete denial of what economics truly is.
You are limiting real wages when in reality there are many effects on it (basic cause and effect). Your analogy (elevator workers job killed by minimum wage) is a utopian example not a real world one. The job already held would not be effected by the increase in minimum wage. Only the new job offered is. this may not allow for a new hire.
Many IA's make more than minimum wage. Even the farm industry (illegal crop pickers) pays more then minimum wage (State and Federal).
You just proved my point. Its all an ITTT assumption. The incorrect assumption can/may completely change the theory. The assumption that I'm not grasping something you are attempting to explain may very well fall on your attempt at explaining what you are attempting to say. Maybe Heinlein (Fiction writer) is who you are espousing.
Last edited by Liquid Reigns; 08-01-2012 at 12:30 AM..
As for You sneaky dog you. You just tried to change the scenario, I've followed your claims to a T. You started out claiming service worker (elevator worker) and have now changed it to production worker in your minimum wage scenario. The one changing things isn't me, as I am simply pointing out your misconceptions and flaws within the theory you are using. Now, every economic theory has flaws, there are non that are perfect. We can go on, but in reality I simply will not agree to your economic ideals as the "right ones" for the USA.
In simple economic terms, what are the effects of price floors and price ceilings respectively? Surpluses and shortages, anyone?
In the case of employment, you have introduced millions of workers into the supply curve below the market equilibrium giving them a competitive advantage. Even in sectors where they earn more than the price floor they are better off as they are not subject to the regulatory constraints of their legal counterpart.
If I earn $20 and you earn $20, but you have to pay taxes and I don't, I'm better off than you. If I have to pay you $20 or Jose $20, but Jose is illegal and I have zero payroll taxes or other fringe costs, he's cheaper. Maybe 25% cheaper. Maybe more.
If I want to hire a skilled tradesman, I look for a guy who started his craft years ago and progressed. The illegals have made it impossible for young kids to compete in the trades, excluding them from the vital training process which allows them to perfect their craft and earn more money. In 15 years there won't be any skilled Americans - just illegals.
In simple economic terms, what are the effects of price floors and price ceilings respectively? Surpluses and shortages, anyone?
In the case of employment, you have introduced millions of workers into the supply curve below the market equilibrium giving them a competitive advantage. Even in sectors where they earn more than the price floor they are better off as they are not subject to the regulatory constraints of their legal counterpart.
If I earn $20 and you earn $20, but you have to pay taxes and I don't, I'm better off than you. If I have to pay you $20 or Jose $20, but Jose is illegal and I have zero payroll taxes or other fringe costs, he's cheaper. Maybe 25% cheaper. Maybe more.
If I want to hire a skilled tradesman, I look for a guy who started his craft years ago and progressed. The illegals have made it impossible for young kids to compete in the trades, excluding them from the vital training process which allows them to perfect their craft and earn more money. In 15 years there won't be any skilled Americans - just illegals.
These greedy employers pass the social costs of illegal immigrants on to we the taxpayer also. It is a double whammy on the American worker so to speak.
I note that some on this board who are defending these lawbreakers (both the employer and illegal immigrant) have the audacity to say that the American worker should just move over and give those jobs to illegal immigrants and learn a new trade or claim that the reason that the American worker can't find a job is because they are lazy. That kind of attitude and false claim I hope isn't coming from an American citizen themself.
Another economic factor that's often overlooked is the impact of rents.
I'm willing to stipulate that, on average, an undocumented worker will earn less than a citizen or immigrant with a work visa. And because of that I'm willing to stipulate that they can afford less rent.
However, I would point out this:
Even after the bubble bursting, real estate is one of the most highly-leveraged investments there is. An investor in a small apartment building can use a very small amount of cash flow to fund the movement of hundreds of thousands of dollars in capital between a seller and a buyer. He can then use that leverage to greatly enhance his cash flow as a percentage of what he actually invested himself.
i i
Even low-rent places create quite a lot of monetary activity, and wealth that can be further leveraged into demand. So, when the bubble burst and then undocumented workers went home, that added to the impact of deleveraging on the economy. If you have hundreds of thousands of units going empty, not only do you lose the sales tax from the people who lived in them and the sale of items they bought - everyone has to buy a certain amount of things - but you lost cash flow for highly-leveraged real estate. As small-time real estate investors lost people to rent their units, they lose their invested capital. Banks lost money, too. Property taxes went uncollected. Property values got pushed even lower, which decreased the leverage people had which, in turn, reduced the returns on their investments.
In a highly-leveraged environment, it only takes a small movement to wipe out the original capital and to suddenly make things financially untenable. In some ways, the economy was addicted to several things - to debt, to the contribution of hundreds of thousands of undocumented individuals, etc, etc - and when you go cold turkey with an addiction, all sorts of bad things, unintended things happen. Why drug addiction, going cold turkey from some drugs can be fatal, and so regardless your opinion on undocumented workers, it's best to be careful what you wish for when it comes to how fast we change the system.
Another economic factor that's often overlooked is the impact of rents.
I'm willing to stipulate that, on average, an undocumented worker will earn less than a citizen or immigrant with a work visa. And because of that I'm willing to stipulate that they can afford less rent.
However, I would point out this:
Even after the bubble bursting, real estate is one of the most highly-leveraged investments there is. An investor in a small apartment building can use a very small amount of cash flow to fund the movement of hundreds of thousands of dollars in capital between a seller and a buyer. He can then use that leverage to greatly enhance his cash flow as a percentage of what he actually invested himself.
i i
Even low-rent places create quite a lot of monetary activity, and wealth that can be further leveraged into demand. So, when the bubble burst and then undocumented workers went home, that added to the impact of deleveraging on the economy. If you have hundreds of thousands of units going empty, not only do you lose the sales tax from the people who lived in them and the sale of items they bought - everyone has to buy a certain amount of things - but you lost cash flow for highly-leveraged real estate. As small-time real estate investors lost people to rent their units, they lose their invested capital. Banks lost money, too. Property taxes went uncollected. Property values got pushed even lower, which decreased the leverage people had which, in turn, reduced the returns on their investments.
In a highly-leveraged environment, it only takes a small movement to wipe out the original capital and to suddenly make things financially untenable. In some ways, the economy was addicted to several things - to debt, to the contribution of hundreds of thousands of undocumented individuals, etc, etc - and when you go cold turkey with an addiction, all sorts of bad things, unintended things happen. Why drug addiction, going cold turkey from some drugs can be fatal, and so regardless your opinion on undocumented workers, it's best to be careful what you wish for when it comes to how fast we change the system.
I think we should worry more about Americans losing their homes and rental units. Why would neighborhoods vacated by illegals be more important than neighborhoods vacated by citizens -- such as Detroit?
One quarter of houses in Mexico sit empty -- but you don't see the Mexican government concerned at all by the loss of so many of it's people. It would seem that if the illegals were of any benefit, their own country would want them back -- and it does not. It's now in the process of razing those houses.
So some slum lords would suffer --- too bad.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
