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The truth is that a lot of Americans have a very inflated view of what they think that their labor is worth. There are plenty of Americans whose lack of work ethic, absence of real work skills, unreliability, and substance abuse make them not even worth $5/hr. In many areas, rural Colorado is a great example, the patina of a good economy has worn away such that employers no longer have the luxury of paying workers more than those workers can produce in income for the business. That may be the case even in places like Colorado Springs. $10/hour is not much a of a living, but it is all a lot people are worth.
I am very much in favor of essentially closing the US borders to immigration except to those individuals who possess work skills that are either not found or are in very short supply in this country, and I would welcome the day when the several million immigrants who broke the law and entered this country illegally would be summarily deported. That should have happened years ago. That said, the US needs some very serious reform of welfare and unemployment law and rules that currently encourage able-bodied working-age people--often for generations--to do nothing while they are supported by the rest of the taxpayers.
The bottom line: Illegals will work for $8 per hour paid in cash, no benefits no workmans comp needed.
Of course they will. Wouldn't you if you were raised dirt poor in a 3rd world country where the average wage is a dollar or two a day? $8 an hour is like winning the dang lottery compared to that. Why do you think these people risk a fair likelihood of death to get here to find wages they could never dream about back home, to do work most Americans either won't do or consider beneath them? And of course there's no shortage of employers here who love the extra profits they get from illegal labor. If they didn't get hired, they wouldn't risk death to get here. They may be brown and 3rd world uneducated, but they're generally no more stupid than you or I.
As for why $10/hr is a "good wage" in CO Springs and elsewhere, its a death of labor unions thing. No leverage means wages stay down and profits go to top management. I'm no fan of organized labor, but back when they existed they did tend to keep average wages higher (adjusted for inflation) than we see today. Not really my problem, being a self-employed professional with no shortage of business, but interesting from a historical perspective nonetheless.
I think the best solution to employers offering wages that are vastly below the expected for the position is for job searchers to create fake resumes that match those positions and send them in. Let the employer go on a wild goose chase looking for that perfect hire. Some companies are complaining that there is a "shortage" of workers now, despite the high unemployment. They are usually offering 60% of the market rate or less and demanding several years of experience. There is no shortage of labor, or shortage of diamonds. You can buy all the diamonds you want at the market clearing price, and virtually any skill set can be found in the labor market at the free market price. These companies are only complaining that they can not get what they want at the price they wish to pay. That is not a shortage, it is an unwillingness to accept reality.
Yes, it is related to the death of unions. I'm no fan of unions, however, capital largely flows in two ways. To labor and to capital. Yes, capital flows to capital. This is a way of seeing what portion of the businesses net sales (sales minus the cost of the product that was sold) will go to employees and what portion will go to investors. Over the last few decades the previously steady relationship has changed dramatically. As a result, wages (inflation adjusted) are lower than they were 25 years ago, but productivity has doubled. When wages are decreased but workers produce more output through technology, then the business records high levels of profits that are given to the investors.
I've ran my own business. I have nothing against solid profits, but there is a massive disconnect between corporate profits and employee wages. Trickle down theory has been thoroughly smashed to bits by this recession.
The truth is that a lot of Americans have a very inflated view of what they think that their labor is worth.
That's the bullet quote right there. Especially in an environment of global wage arbitrage. No union anywhere is capable of pushing back against the implications of a billion Chinamen working for pennies on the dollar.
The day is rapidly approaching where $10/hr will seem like a long-lost good deal.
Don't buy cars new, and don't buy new houses, buy ones that are within 3x of your income or don't buy at all. I bought my car new in 2000, and still have it.. works fine, I can maintain it alright using a bluetooth OBD reader and the "torque" program.. keep it clean, still looks great.
I'm not defending the ultra conservatives who think there should be no minimum wage and people should make any wage the 'free market' dictates though either... clearly the average person cannot get by the same way people 30+ years ago could by actually manufacturing things... all that is gone...
strong dollar policy, easy credit, everything's been outsourced. The gap between the bottom and the top continues to widen, while our fractional reserve system gets more broken by the week/year.
I'd rather sit on unemployment than work a minimum wage burger flipping job.. to hell with what conservatives might think about that, I'll move to FL and be a bum before I take a slave wage job.. like it or not, somebody has to do these jobs though. I'm lucky to work for 3M, they pay well and the plant I work at makes very high profit margin items. I could support the right woman on one income, one that has a good head on her shoulders.
It's not related to the death of unions, if they do not die the companies simply go bankrupt or shut down, like the makers of Twinkees did, the automakers, etc. It has to do with the 'strong dollar' policy making our currency uncompetitive, along with the corresponding rise of low interest rates and 'easy credit' .... smart nations keep their currencies strong and thus keep a strong manufacturing base.. and even then with the fractional reserve system as it's set up it's just a game of musical chairs.. we launder each other's debt... as time goes on something must give, probably high inflation, to deflate the value of that debt... if not that, liquidation and wealth transfer. We also have out of control health care costs and perscription drug costs that show no sign of declining. $10k for simple routine medical procedures? No problem!
I respect your opinion, and agree that the strong dollar policy is related to the trade issues we have. However, American companies hit record profit levels last year, while wages were down dramatically. There is a logical disconnect in stating that the companies are going bankrupt during record profits. Indeed, the ones that are dealing with heavily unionized labor are less likely to have record profits. However, if those profits are only occurring at the businesses that are not unionized, then the record profit is a function of employees being paid less, rather than of businesses being efficient. Reducing the flow of capital to labor to increase the flow of capital to capital is the present situation and the antithesis of organized labor.
It's just amazing to me...in college economics, they'll tell you that the market will naturally and efficiently balance itself out. But yet the market we've got in America today is like an out of control vehicle on an icy slope, over-correcting in first one direction, then another.
I've seen unions inflate wages to rates that were harmful to business and more importantly not realistically competitive with the given industry. Back to the car analogy, if you're speeding past every other car on the road, you need to slow down, they don't need to speed up to keep up with you. I saw a transit authority run into the ground during the years of "easy credit" doing all of this improvement while paying union employees vastly more than their output justified in their positions in liberal Washington state. Then it got to be 2008 and the sky fell and it all blew up in their faces. They were forced to let people go...people who had been with the company and whose lifestyles had adjusted to this high rate of pay, over a decade or more. And they were trying to be optimistic about finding another job, but no one else in that area was gonna pay them $24/hour to do data entry or answer phones. It was unrealistic.
What must be addressed in that situation is rights versus entitlements. A union that stands up for a "fair" wage--compared to national averages for a given industry--and prevents employer abuse, is doing a positive thing. A union that tries to strong-arm a business for every dime they can bleed out of them, even to the point where they drive the business to the brink of bankruptcy or beyond isn't doing anyone any favors. One must find the realistic balancing point too, to determine what really is a livable wage for a low income person. I support minimum wage, but let's have economists look at real costs for what a person or a family really NEEDS...because beyond that place, when you have people who make poor choices and then cry about how they can't afford this and that when they spent the money they had on stupid things, that's not my problem or yours. Everyone who works full time should be able to survive. Not necessarily survive with ski passes, cable TV, pets that need fed, and a myriad of other luxuries that are not necessary to survival. There is the disconnect. And frankly, McDonald's jobs aren't supposed to be enough to support a family of 5 people. They're supposed to be enough to support a savings account for a teenager, or a supplemental or temporary income for a single adult, like a first job for a college student. They are "entry level" for a reason. People with sense are theoretically supposed to develop themselves to do better than that, and if you have failed to do so, then maybe you don't deserve to make $20/hour.
But heaven forbid we teach Americans not to spend their money hand over fist. Heaven forbid we not see the food stamp Mama walking out of Walmart with her flatscreen after getting her refund anticipation loan. Because somewhere, somehow, we got swindled into thinking that spending money we don't have is good for the economy.
Here's a little math, because I'm OCD about my budget and I really know where every penny goes and how much I really NEED.
My family consists of 2 adults and 2 teenage-ish kids, and a cat.
We have a mortgage. It's about $1200/month.
We have a car payment. $217
We have student loans. $240
We have credit cards, and utilities, and living expenses. I won't go into details there.
I know precisely what we have "extra" every month, which assuming I have no travel or holidays or extra expenditures planned, goes into paying off our debt. So I took this number, multiplied by 12, and subtracted from what we actually make.
We need $64,000/year to maintain our normal lifestyle and pay all of our bills on time. With 2 working adults, this is no problem, and we make somewhat more than this.
However, if we made less, as we have in the past, I would not have got the cat. We might not have cable TV. We could live in cheaper housing and save hundreds per month. In my world, it seems we have PLENTY. Considerably more than what we need, enough to afford most of what we want, and still make great progress to paying off debts we ran up in our younger days. So it boggles my brain when I hear people talk like if they aren't bringing down six figures, they're in the poorhouse. Has everyone lost their minds??
Sorry for the novel...but it's sometimes hard for me to really make this point. I think the reason the rich get richer and the poor get poorer is at least as much due to delusional thinking and irresponsible spending, as it is to corporate 1%'er greed and corruption.
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