Nobel economist Milton Friedman scoffs at the idea of the government stocking a farm system for the likes of Microsoft and Intel. "There is no doubt," he says, "that the [H-1B] program is a benefit to their employers, enabling them to get workers at a lower wage, and to that extent, it is a subsidy."
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This is not coming from a socialistic left wing moon bat, but from a nobel prize winning supporter of corpotopia.
A massive increase in H1B visas and the new and woderful visas for low end labor are poison for wage earners in this country. Both of these visa systems provide the employers with a legalized indentured servitude system in which the worker is held in captivity by the "sponsor" such that (s)he cannot easily change jobs. And such people will, of course, not be allowed to vote. The "benefits" that would normally be paid to the worker are also sidestepped by the employer.
It really isn't the "amnesty" that is important here. It is the creation of a legalized slave ring that will utterly destroy American wages across the board.
We don't actually need immigration reform. What we need is a Social Security administration charged with the responsibility of varifying matches between names, birtdates, and SS numbers. We need employers to be held accountable for contacting SS when an employee is hired and for clearing the legal status of the employee. We need SS to notify employers of any descrepancies and to set a time limit to resolve the descrepancies or face significant fines.
Legalizing current workers is NOT the problem. The enforcement of laws at the employer level is the key whether or not there is an amnesty. If more immigrants are needed they need to come into the country as green card holders, bring their fsmilies, and have the clear intent of becoming US citizens. Immigrants, you see, have the same living expenses and the same concerns about aducation and health care as the rest of us while "guest workers" come here to loot the economy and build their future in their home country.
A path to citizenship that takes more than 3 years is not a path to citizenship. What the "employer class" wants is servile labor with no voting rights.
"I know no safe depository for the ultimate power of society but the people themselves; and if we think them incompetent to exercise this power with a wholesome discretion, ours is not to take it from them, but to educate their discretion." -- Jefferson
Posts: 37 | Location: Everywhere - Port Orchard, Wa. | Registered: 07 January 2007
True. And we are responsible for those already here. Personally, I'm for fast-track citizenship to address the very problems you pointed out...and an immediate crack-down on hirings of new illegal entries. Not just a slap on the wrist for employers breaking the law either. A severe crack-down on them.
These employers have created enormous problems by their actions....and the press, the politicians and even some pulpits attack the illegals!
I suppose if they bring up a falsity in describing the problem, they can call for solutions that are equally false and ineffective.
They do the same in Economics. Bring up an economic theory that supposedly "cures all", and then proceed to break the laws of the theory as quickly as possible. Nonsense. This country socially and economically operates on nonsense. I hope I'm back in my monastery when the day of reckoning occurrs. May even apply for a switch to one at Mt. Athos, Greece. Mt. Athos is self-autonomous from the Greek Gov't.
Retired Monk "Ideology is a disease"
Posts: 3412 | Location: denver co | Registered: 17 April 2007
There is only one needed solution to the "immigration problem", and that is to put an end to all parasite programs which some immigrants might try to benefit from.
These programs are a detrimental cost imposed onto society by whoever takes advantage of them, whether they are citizens or immigrants. It is these programs that are the problem, not the immigrants who might profit from them.
The one we seem to hear about the most is the demand for free health services at hospitals, which are prohibited from turning anyone away who cannot pay.
This practice of forcing hospitals to take on such a costly burden has to be ended. No one is entitled to costly services at someone else's expense.
Once this problem is eliminated, there is no more argument against allowing immigrant workers into the country to fill all the demands of employers, without limit. Only uncompetitive crybaby nativists who lose their jobs would be hurt. The overwhelming vast majority of Americans benefit from the cheap labor of the immigrant workforce.
So, put an end to the welfare parasite programs. Stop requiring hospitals to provide costly services free to the poor.
Instead, require only that they provide the patient with a cot to lie on, rather than throwing the poor fellow out onto the street. Maybe stop the bleeding, if he had an accident.
But no expensive services.
Then, if it is true that too many immigrants use these services, that expense will greatly decrease and become negligible.
Originally posted by freetrader: There is only one needed solution to the "immigration problem", and that is to put an end to all parasite programs which some immigrants might try to benefit from.
These programs are a detrimental cost imposed onto society by whoever takes advantage of them, whether they are citizens or immigrants. It is these programs that are the problem, not the immigrants who might profit from them.
The one we seem to hear about the most is the demand for free health services at hospitals, which are prohibited from turning anyone away who cannot pay.
This practice of forcing hospitals to take on such a costly burden has to be ended. No one is entitled to costly services at someone else's expense.
Once this problem is eliminated, there is no more argument against allowing immigrant workers into the country to fill all the demands of employers, without limit. Only uncompetitive crybaby nativists who lose their jobs would be hurt. The overwhelming vast majority of Americans benefit from the cheap labor of the immigrant workforce.
So, put an end to the welfare parasite programs. Stop requiring hospitals to provide costly services free to the poor.
Instead, require only that they provide the patient with a cot to lie on, rather than throwing the poor fellow out onto the street. Maybe stop the bleeding, if he had an accident.
But no expensive services.
Then, if it is true that too many immigrants use these services, that expense will greatly decrease and become negligible.
Wow! One contradiction after another.
First you say illegals come here for free social programs (most of which they are denied) then say how we all benefit from their "WORK".
Everyone benefits from emergency fast, immediate treatment from a hospital if severly injured. The rich and the poor. Just as the rich and the poor are both prohibited from sleeping under bridges.
If you think it proper to turn people away with highly communicable diseases, then shut down the "free" NY TB clinics. The patients aren't "bleeding" You'll quickly fill the hospitals with paying patients from a TB epidimic.
Only the cry-baby Americans who can't compete with the illegal immigrants would be hurt...so lets send buses down to the border and bring in more, I suppose, since, like you said, everyone else benefits from the cheaper labor.
Better yet, ship all the Americans to Mexico and make a population exchange. American business will have really cheap labor, and we can export everything we make to mars because no one here will be able to buy what they produce...just like Mexico.
Great plan. Great ideas. Dab center in a thought process that is contradictory or leads to solutions damaging to the country, damaging to the American wage earner (which most people are), and great for a short-term boon to business...which then collapses because it no longer has a market for its products.
You can't imitate Mexico and expect a different result.
Just who is the cry-baby? Everytime business is asked to pay a decent wage, they cry their eyes out, wring their hands, seek Congressional protection and appeal to the Supreme Court. Then they give themselves a million dollar bonus for their efforts.
Retired Monk "Ideology is a disease"
Posts: 3412 | Location: denver co | Registered: 17 April 2007
Guest Workers are an employer subsidy and a direct assault on the middle class.
All cheap labor benefits the U.S. economy, whether the workers are foreign or native-born.
A "subsidy" has to be something that imposes a cost onto the country, which pays for the benefit to the one subsidized. Immigrant workers or low-paid workers of any kind do not impose a cost but a net benefit onto the rest of us.
The only "assault" is on a few uncompetitive workers who, instead of improving themselves and taking advantage of all the opportunities in this country to compete in the marketplace, go whining to the politicians to protect their jobs so they can continue to be uncompetitive and overpaid.
The only "assault" is on those citizens who are the lowest and most vile of Americans and without whom our country would be better off.
quote:
Nobel economist Milton Friedman scoffs at the idea of the government stocking a farm system for the likes of Microsoft and Intel.
The government should not run special programs for particular companies, but should allow all immigrant workers into the country, no matter who wants to employ them and no matter what category of workers they are or what their income or skill level. To set up special programs for favored companies is a subsidy, no matter what the purpose is.
quote:
"There is no doubt," he says, "that the [H-1B] program is a benefit to their employers, enabling them to get workers at a lower wage, and to that extent, it is a subsidy."
Only in the sense that there are not also similar programs for all other companies, so that all employers have the same access to cheaper immigrant labor as the H-1B employers.
To end this program or restrict it is not the proper solution. Rather, what we need is for this program to expanded to allow ALL employers to hire ALL the immigrant workers they need.
quote:
A massive increase in H1B visas and the new and woderful visas for low end labor are poison for wage earners in this country.
All consumers are made better off by the increased competition among wage-earners. Even most wage-earners are made better off.
Wage-earner Joe is made better off by having wage-earners Harry and Jane and Tom and Pete etc. compete harder for their income. We are all made better off by the other guy having to compete. The vast increased competition in the market puts downward pressure on prices which benefits us each individually, and this added benefit outweighs the harm on each individual of having to compete harder.
quote:
Both of these visa systems provide the employers with a legalized indentured servitude system in which the worker is held in captivity by the "sponsor" such that (s)he cannot easily change jobs.
This is a restriction on the program which should be ended. The program should be expanded, not restricted. The workers should have full freedom to change jobs and remain as guest workers in order to cause even more competition among wage-earners. Whatever restricts the competition or limits it makes us all worse off.
quote:
The "benefits" that would normally be paid to the worker are also sidestepped by the employer.
This is good. Just another form of lower labor cost, which is good for society. All of us benefit when the cost of production is reduced, including the labor cost.
quote:
It really isn't the "amnesty" that is important here. It is the creation of a legalized slave ring . . .
As usual, you are lock-step in line with the Marxist dogma that cheap labor is the same as slavery. As a typical left-wing fanatic you cannot recognize that a fundamental component of slavery is denial of free choice to the slave.
Why can't left-wing wackos understand that it is impossible to be a slave worker if you have the freedom to quit the job? If you are free to go to the foreman and say, "It's not enough compensation -- I quit!" and to walk out the door, YOU ARE NOT A SLAVE, no matter how low the wage is. Even if it is one panny a day.
You are not talking about slaves here -- you're talking about whining crybabies who think the employer is OBLIGATED to keep them and pay them a higher wage even though there are other job-seekers who are willing and able do the same job for less. Our country is better off if that employer is left free to hire that cheaper labor and let the crybabies go.
quote:
. . . that will utterly destroy American wages across the board.
It will lower the incomes only of those wage-earners who are uncometitive and are being paid more than is necessary to get the job done and are thus driving up the labor cost which all of us must pay in the form of higher prices.
Again, it is only the uncompetitive crybabies who are adversely affected by the increased competition in the labor market.
quote:
We need employers to be held accountable for contacting SS when an employee is hired and for clearing the legal status of the employee. We need SS to notify employers of any descrepancies and to set a time limit to resolve the descrepancies or face significant fines.
No, there is no purpose served by the above. Rather, the employers should simply pay the withholding taxes required, and if certain workers are found to have false SS numbers, then SS should notify them that they will not be entitled to any future SS benefits unless they individually make the effort to correct the discrepancies.
This would mean that SS would take in contributions without ever needing to pay benefits to those workers later. At that point it is the worker's responsibility to take the corrective measures to ensure that s/he will receive any legitimate SS benefits later.
quote:
Legalizing current workers is NOT the problem.
It would be better if the current 'illegal" workers and those coming in the future would be legalized, so the current process of having this cheap labor could continue in a legal fashion and they would not have to continue sneaking in illegaly.
quote:
The enforcement of laws at the employer level is the key whether or not there is an amnesty.
No, the laws need to be changed, so the employers can easily obtain the cheap labor with a minimum of red tape. The employers should be left free to carry on their business, not be made responsible for enforcing bad laws.
quote:
If more immigrants are needed they need to come into the country as green card holders, bring their fsmilies, and have the clear intent of becoming US citizens.
As long as the green cards are easy to obtain and don't require a long waiting period, it is OK to require a "green" card (or it could be changed to red or purple or mediumaquamarine or hotpink).
But no, they should not be required to bring their families or eventually become US citizens. Why impose unnecessary conditions? The cheap labor is good for the US economy, whether they stay permanently or have families here or not. Those are their own personal choices to make, not something to be imposed on them.
quote:
Immigrants, you see, have the same living expenses and the same concerns about aducation and health care as the rest of us while "guest workers" come here to loot the economy and build their future in their home country.
Only a xenophobe would use the term "loot". They are making our economy better, because all increased competition in the economy is good for all of us. How is that worker not making our economy better in the same way that a native-born citizen worker is making it better?
What is wrong with them wanting to build their future in their home country? How does that hurt America? They can do both -- they can support their families back home and eventually return there, making all of them better off, and at the same contribute to the U.S. economy by their work here, however long they stay here and work. It is their choice how long they stay and what they plan for their future. Their work here is still a benefit to the U.S. regardless of those other choices.
quote:
What the "employer class" wants is servile labor with no voting rights.
They want to get their product to market at the lowest cost of production, which is also good for consumers. They couldn't care less whether the workers vote or not.
And, of course, they want honest workers who are paid what they're really worth, not a playpen of entitlement-demanding native-born uncompetitive U.S. crybabies to be babysitted.
All cheap labor benefits the U.S. economy, whether the workers are foreign or native-born.
The vast increased competition in the market puts downward pressure on prices which benefits us each individually, and this added benefit outweighs the harm on each individual of having to compete harder.
Just another form of lower labor cost, which is good for society. All of us benefit when the cost of production is reduced, including the labor cost.
You are not talking about slaves here -- you're talking about whining crybabies who think the employer is OBLIGATED to keep them and pay them a higher wage even though there are other job-seekers who are willing and able do the same job for less. Our country is better off if that employer is left free to hire that cheaper labor and let the crybabies go.
It will lower the incomes only of those wage-earners who are uncometitive and are being paid more than is necessary to get the job done and are thus driving up the labor cost which all of us must pay in the form of higher prices.
Again, it is only the uncompetitive crybabies who are adversely affected by the increased competition in the labor market.
The cheap labor is good for the US economy, whether they stay permanently or have families here or not. Those are their own personal choices to make, not something to be imposed on them.
They are making our economy better, because all increased competition in the economy is good for all of us.
What is wrong with them wanting to build their future in their home country? How does that hurt America? They can do both -- they can support their families back home and eventually return there, making all of them better off, and at the same contribute to the U.S. economy by their work here, however long they stay here and work. It is their choice how long they stay and what they plan for their future. Their work here is still a benefit to the U.S. regardless of those other choices.
Freetrader, first I'd like to see some references to back up your various points on economics and immigration issues.
Second, I'll point you to a reference, the labor theory of value (LTV), described by, amongst others, David Ricardo (English political economist, 1772-1823) in his work Principles of Political Economy and Taxation. He and others describe values of commodities as tied to the total labor cost, but then show how "prices" are not based on this. Costs and prices are different. Prices, it turns out, are tied to what the market will bear.
This contradicts your argument for cheap labor resulting in a price benefit to all of us. Cheap labor actually results in increased profits for the producer, the corporation.
Very, very loosely:
Price - Costs = (+/-) Profits
So the net benefit of cheap immigrant labor is to the companies, not to the public at large. You can see this in a larger perspective by looking beyond just immigrant labor. Even cheaper labor can often be found overseas, commonly in China and India. There the labor forces provide no direct stimulus to the U.S. economy because they spend money in their own local economy. But the benefits of their cheap labor efforts are realized by their employers, often U.S. (nominally) corporations, who sell the products of that cheap labor in the U.S. market at prices much higher (because the market will supposedly bear it here) than the labor costs. At no point in this process is a benefit realized by the U.S. people at large, or you could say by the true domestic U.S. market. Especially when you consider the growing tide of U.S. companies moving more and more of their operations and equities offshore, so that when that company profits, those profits don't trickle down to employees based in the U.S.
That's the state of affairs, starting from a documented economic standpoint. Even marginal value theory, which differs from LVT, doesn't support labor cost reductions resulting in price reductions.
You also made the following statement:
quote:
The only "assault" is on those citizens who are the lowest and most vile of Americans and without whom our country would be better off.
Why would you use the term "vile"? Is such a qualitative, mean-spirited word needed here? And based on your entire post, my interpretation is that you are saying that those who are not competitive in labor are "vile"? Not sure how that kind of descriptive language is helpful in any kind of meaningful, mature way.
I registered at this site so I could thank Thom for writing two very enlightening articles on illegal immigration last year. This thread appears to be a good place to say it.
Some of the posters hear are off the mark with their comments, and would benefit from reading these articles.
I've been saying for a long time that the concept of "illegal immigration" is a corporate (and corporate media) framing of the issue. It should rightly be called corporate insourcing of law-wage replacement workers. Corporate insourcing and corporate outsourcing (sending American facilities and jobs to foreign countries) are two sides of the same Globalism coin, and both are hurting America's middle class and our economy as a whole.
Thom calls the problem "illegal employers," which is another way of saying the same thing.
Progressives who smear opponents of scoff-law corporations as "nativists" or "racists" are buying into the corporate framing of the issue.
Thanks Thom.
Posts: 2 | Location: U.S. | Registered: 17 June 2007
Originally posted by Naturally: I registered at this site so I could thank Thom for writing two very enlightening articles on illegal immigration last year. This thread appears to be a good place to say it.
Some of the posters hear are off the mark with their comments, and would benefit from reading these articles.
I've been saying for a long time that the concept of "illegal immigration" is a corporate (and corporate media) framing of the issue. It should rightly be called corporate insourcing of law-wage replacement workers. Corporate insourcing and corporate outsourcing (sending American facilities and jobs to foreign countries) are two sides of the same Globalism coin, and both are hurting America's middle class and our economy as a whole.
Thom calls the problem "illegal employers," which is another way of saying the same thing.
Progressives who smear opponents of scoff-law corporations as "nativists" or "racists" are buying into the corporate framing of the issue.
Thanks Thom.
You make some good points there Naturally. I like that phrase, "corporate insourcing of low-wage replacement workers." Nice. And good way of putting it that that is the flip side to outsourcing on the corporate globalist coin. I'm going to steal those phrases and use them myself, thank you.
Your large point is about framing, and that's been a frequent topic lately on Thom's national show. How we frame each issue is so important because sometimes a debate or fight is won or lost long before the actual debate or fight, but just in the framing.
You're welcome to use those phrases, stark. "Low-wage replacement workers" has been used by Senator Byron Dorgan many times in the Senate.
Neither am I the first person to point out that corporate insourcing and corporate outsourcing are two sides of the same Globalism coin. In the debate on "immigration reform" on June 4, 2007, Dorgan said,
"I would love to see a long discussion on the floor of this Senate about international trade and the $830 billion trade deficit, and the American companies being given a tax break . . . American companies who shut their manufacturing plant, fire all their workers, and ship their jobs to China or Bangladesh or Sri Lanka or Indonesia. They actually get a tax break for doing it. I have tried four times to shut it down. I have been unsuccessful. In fact, it is the same coin, just the reverse side. Shipping American jobs overseas is the reverse side of the coin of bringing cheap labor through the back door. That is a fact."
Another framing issue underlying this debate is the concept of "reform." They say they are debating "immigration reform." It's lucky they aren't considering rape reform, as they would surely push a bill requiring all girls aged 15 and over to be served liquor in bars for free. The new law, in a "grand compromise," would also increase enforcement of current rape laws, but the enforcement provisions would be subject to a "signing statement" by Bush saying they are "advisory" only, and Congress would not fund the supposed increased enforcement anyway. (Hey, since rape is an inevitable force of nature--like corporate insourcing--we may as well legalize it, right?)
It galls me that corporate politicians and corporate media are trying to trick the public with this "reform" framing. Still, according to a recent Rasmussen poll, only 26% of Americans are in favor of Senate's amnesty/temporary worker bill.
I recommend the two articles written by Thom Hartmann which I mentioned earlier, for many more insights into this issue.
Posts: 2 | Location: U.S. | Registered: 17 June 2007
[Ricardo] and others describe values of commodities as tied to the total labor cost, but then show how "prices" are not based on this.
Prices are impacted by cost of production. When a cost of production increases, such as labor cost, this puts upward pressure on the prices.
I doubt that you have read or understand what Ricardo wrote. Nothing he said disproves the principle that the cost of production does affect the prices. As the production cost increases it causes the price to increase, and when it goes down, so does the price, all else being equal.
Just because there is another factor impacting price, i.e., market demand, does not somehow prove that labor cost and other costs do not also impact the price. Obviously all costs have an impact on price.
quote:
Costs and prices are different. Prices, it turns out, are tied to what the market will bear.
They are also tied to cost of production. When that cost goes down, price goes down (all else being equal), and when the production cost goes up, price goes up. This is not to say that price is "based on" the cost of production. Fundamentally it is based on supply and demand. And the supply is impacted by the cost of production. When the cost goes up, it restricts supply or makes it more difficult to produce the same output.
quote:
This contradicts your argument for cheap labor resulting in a price benefit to all of us.
No, cheap labor does result in price benefit to all consumers. Nothing in Ricardo contradicts this. Market demand also affects price. Price is determined by both supply and demand, not by only one to the exclusion of the other.
quote:
Cheap labor actually results in increased profits for the producer, the corporation.
Yes, and also lower prices to consumers, also increased profits for the mom-and-pop stores, which generally pay lower wages and benefits than the corporations. To say that only corporations benefit from cheap labor is petty nonsense.
quote:
So the benefit of cheap immigrant labor is to the companies, not to the public at large.
No, the benefit is to everyone. Stop making up stories. Don't be so obsessed with hating corporations. We all benefit from cheap labor, we all exploit it when we shop for lower prices to stretch our dollar as far as it will go. To condemn this as evil and whine that only corporations do it is so silly and childish -- Grow up! You want to bash corporations? There's plenty to criticize them about legitimately, or some of them, without making up this crybaby nonsense.
quote:
You can see this in a larger perspective by looking beyond just immigrant labor. Even cheaper labor can often be found overseas, commonly in China and India.
ALL cheap labor benefits consumers, whether it is immigrant cheap labor or domestic cheap labor or foreign cheap labor in Asia or elsewhere.
quote:
There the labor forces provide no direct stimulus to the U.S. economy because they spend money in their own local economy. But the benefits of their cheap labor efforts are realized by their employers, often U.S. (nominally) corporations, who sell the products of that cheap labor in the U.S. market at prices much higher (because the market will supposedly bear it here) than the labor costs.
Of course they sell the products at the highest prices they can get, but the reality is that these prices are lower than they would be if the company did not enjoy the cost savings from the cheap labor. Every time the cost of production is reduced, it enables the producer to increase production, resulting in greater supply and thus lower prices than they would otherwise charge.
Their profit is increased by lowering the price as a result of the cost savings. If they did not lower the price, they would not be able to move the extra product that resulted from the lower production cost. And their competitors do this also, so any company that does not lower its price in this way loses some business to its competitors.
quote:
At no point in this process is a benefit realized by the U.S. people at large, or you could say by the true domestic U.S. market.
False! Again, ALL consumers benefit from the lower prices caused by cheap labor, i.e., by any cheap labor, whether domestic or foreign. The prices are lower than they would be if the labor had been more expensive. ALL costs of production are passed on to the consumers -- higher costs lead to higher prices, lower costs to lower prices. This is not changed by the fact that market demand is also a factor that influences price.
If it is not true that higher cost of production causes higher price and lower cost causes lower price, but that price is dictated by pure market demand alone, then you must assume that if the price of a barrel of oil suddenly goes up to $500, the price of gas at the pump will remain unchanged, because the companies are already charging the maximum that the market will bear.
But the truth is that if the price per barrel goes up, the gas price is driven up, and if the price per barrel goes down, it drives the price down. If the price per barrel goes up to only $100, the increased price for gas will be less than if the price per barrel goes up to $500.
None of this says that there is no other factor that influences prices. Changing demand and changes in alternatives to gas will also affect the price of gas. One factor will drive the price up while another drives it downward. So to say that lower cost means lower price does not mean you will always see an actual drop in the price being charged for a product as a result of a particular cost that went down, because there are other factors at work also. But the lower cost of production results in a lower price than would otherwise have been the case.
So to sum up, WE ALL benefit from cheap labor as consumers. You need to stop denying this and face the reality that you are a beneficiary of cheap labor, and when the cost of labor goes up, you pay higher prices as a result, just as you do when ANY cost of production goes up.
No economic guru has ever proved otherwise. If you think they did, you are probably misinterpreting or distorting what they said. Or you are blindly regurgitating a distortion or misinterpretation fed to you by ThomH and slurped up by you uncritically.
[Ricardo] and others describe values of commodities as tied to the total labor cost, but then show how "prices" are not based on this.
Prices are impacted by cost of production. When a cost of production increases, such as labor cost, this puts upward pressure on the prices.
I doubt that you have read or understand what Ricardo wrote. Nothing he said disproves the principle that the cost of production does affect the prices. As the production cost increases it causes the price to increase, and when it goes down, so does the price, all else being equal.
Just because there is another factor impacting price, i.e., market demand, does not somehow prove that labor cost and other costs do not also impact the price. Obviously all costs have an impact on price.
quote:
Costs and prices are different. Prices, it turns out, are tied to what the market will bear.
They are also tied to cost of production. When that cost goes down, price goes down (all else being equal), and when the production cost goes up, price goes up. This is not to say that price is "based on" the cost of production. Fundamentally it is based on supply and demand. And the supply is impacted by the cost of production. When the cost goes up, it restricts supply or makes it more difficult to produce the same output.
quote:
This contradicts your argument for cheap labor resulting in a price benefit to all of us.
No, cheap labor does result in price benefit to all consumers. Nothing in Ricardo contradicts this. Market demand also affects price. Price is determined by both supply and demand, not by only one to the exclusion of the other.
quote:
Cheap labor actually results in increased profits for the producer, the corporation.
Yes, and also lower prices to consumers, also increased profits for the mom-and-pop stores, which generally pay lower wages and benefits than the corporations. To say that only corporations benefit from cheap labor is petty nonsense.
quote:
So the benefit of cheap immigrant labor is to the companies, not to the public at large.
No, the benefit is to everyone. Stop making up stories. Don't be so obsessed with hating corporations. We all benefit from cheap labor, we all exploit it when we shop for lower prices to stretch our dollar as far as it will go. To condemn this as evil and whine that only corporations do it is so silly and childish -- Grow up! You want to bash corporations? There's plenty to criticize them about legitimately, or some of them, without making up this crybaby nonsense.
quote:
You can see this in a larger perspective by looking beyond just immigrant labor. Even cheaper labor can often be found overseas, commonly in China and India.
ALL cheap labor benefits consumers, whether it is immigrant cheap labor or domestic cheap labor or foreign cheap labor in Asia or elsewhere.
quote:
There the labor forces provide no direct stimulus to the U.S. economy because they spend money in their own local economy. But the benefits of their cheap labor efforts are realized by their employers, often U.S. (nominally) corporations, who sell the products of that cheap labor in the U.S. market at prices much higher (because the market will supposedly bear it here) than the labor costs.
Of course they sell the products at the highest prices they can get, but the reality is that these prices are lower than they would be if the company did not enjoy the cost savings from the cheap labor. Every time the cost of production is reduced, it enables the producer to increase production, resulting in greater supply and thus lower prices than they would otherwise charge.
Their profit is increased by lowering the price as a result of the cost savings. If they did not lower the price, they would not be able to move the extra product that resulted from the lower production cost. And their competitors do this also, so any company that does not lower its price in this way loses some business to its competitors.
quote:
At no point in this process is a benefit realized by the U.S. people at large, or you could say by the true domestic U.S. market.
False! Again, ALL consumers benefit from the lower prices caused by cheap labor, i.e., by any cheap labor, whether domestic or foreign. The prices are lower than they would be if the labor had been more expensive. ALL costs of production are passed on to the consumers -- higher costs lead to higher prices, lower costs to lower prices. This is not changed by the fact that market demand is also a factor that influences price.
If it is not true that higher cost of production causes higher price and lower cost causes lower price, but that price is dictated by pure market demand alone, then you must assume that if the price of a barrel of oil suddenly goes up to $500, the price of gas at the pump will remain unchanged, because the companies are already charging the maximum that the market will bear.
But the truth is that if the price per barrel goes up, the gas price is driven up, and if the price per barrel goes down, it drives the price down. If the price per barrel goes up to only $100, the increased price for gas will be less than if the price per barrel goes up to $500.
None of this says that there is no other factor that influences prices. Changing demand and changes in alternatives to gas will also affect the price of gas. One factor will drive the price up while another drives it downward. So to say that lower cost means lower price does not mean you will always see an actual drop in the price being charged for a product as a result of a particular cost that went down, because there are other factors at work also. But the lower cost of production results in a lower price than would otherwise have been the case.
So to sum up, WE ALL benefit from cheap labor as consumers. You need to stop denying this and face the reality that you are a beneficiary of cheap labor, and when the cost of labor goes up, you pay higher prices as a result, just as you do when ANY cost of production goes up.
No economic guru has ever proved otherwise. If you think they did, you are probably misinterpreting or distorting what they said. Or you are blindly regurgitating a distortion or misinterpretation fed to you by ThomH and slurped up by you uncritically.
Try this one on if you want to see how balance of payments, outsourcing and pricing work:
When $1 U.S. = 1 Euro converted to dollars:
$40 barrel of oil = $40. or 40 Euros.
$1 now = 60 cents vs. the Euro.
$75 barrel of oil = $75 U.s. = 45 Euros.
U.S. oil price increase nearly 90%. Euro increase 13%
The rapid price of oil increase is the declining dollar...not huge increases in oil prices worldwide
Your economy works really well on paper. Ride the dollar down to 30 cents vs. the Euro, and you'll see a doubling of gas prices from today along with every other imported item.
A country's currency has a relationship to what it actually produces in relationship to the amount of currency it prints. The less we produce, the less the underlying value. The less the underlying value, the less the currency is worth.
We are bankrupting ourselves for a short-term gain.
Canadians take charter buses to the U.S. for bargain shopping. Even their money now buys more dollars than it used to. We've become to Canada what Mexico is to the U.S. The poor neighbor south of the border with a worthless currency.
Our currency continues to decline.
Retired Monk "Ideology is a disease"
Posts: 3412 | Location: denver co | Registered: 17 April 2007
We have been printing dollars like drunken sailors to sell to foreign countries so they can buy oil. That has kept our dollar artificially high. These dollars are now coming home and they do not represent anything. No product. When a currency does not represent a product it has no value. All that printing is what will cause the dollar to really go into the crapper. The Chinese/Japanese and the EU own all our paper (Fannie Mae's/Freddie Macs) Anyone getting a mortgage does so courtesy of China. It's such an incredible mess, it's mindboggling...and the masses continue to live as if everything is copecetic.
Posts: 863 | Location: West Palm Beach, FL | Registered: 21 June 2007
U.S. oil price increase nearly 90%. Euro increase 13%
The rapid price of oil increase is the declining dollar...not huge increases in oil prices worldwide
Your economy works really well on paper. Ride the dollar down to 30 cents vs. the Euro, and you'll see a doubling of gas prices from today along with every other imported item.
A country's currency has a relationship to what it actually produces in relationship to the amount of currency it prints. The less we produce, the less the underlying value. The less the underlying value, the less the currency is worth.
We are bankrupting ourselves for a short-term gain. . . . .
Our currency continues to decline.
Gerry:
quote:
We have been printing dollars like drunken sailors to sell to foreign countries so they can buy oil. That has kept our dollar artificially high. These dollars are now coming home and they do not represent anything. No product. When a currency does not represent a product it has no value. All that printing is what will cause the dollar to really go into the crapper. The Chinese/Japanese and the EU own all our paper (Fannie Mae's/Freddie Macs) Anyone getting a mortgage does so courtesy of China. It's such an incredible mess, it's mindboggling...and the masses continue to live as if everything is copecetic.
The above economic theories may have merit. But they do not disprove either of the following:
1) Cheap labor, whether foreign or domestic, is good for the U.S. economy, and it is therefore beneficial that we have an immigrant labor force coming into the U.S. to do jobs at low wages.
2) Buying cheap foreign imports is good for consumers and does no damage whatever to the U.S. economy or to low-paid workers abroad, but rather benefits Americans as well as foreigners.
Whatever else you want to say about going into debt etc. may be accurate. Just don't blame the buyers of foreign imports or those who hire cheap labor for the country's problems.
If there is something wrong with America, it is too much defaulted debt and overconsumption and corporate welfare and welfare to uncompetitive farmers and whining wage-earners who believe they are entitled to the American Dream without having to earn it in the competitive marketplace. These villains are the ones driving the government to record deficits, not those who buy cheap foreign imports or hire "illegal aliens" in order to save on cost.
And no one is doing the U.S. economy a favor by preferring a U.S.-made product over a foreign-made product if the foreign product is a better deal.
And neither will it do anything but harm to the U.S. to chase out all the illegal alien workers and replace them with Americans who have to be paid twice as much.
