Got what? LOL!!
You are correct.....nothing is that simple, and yes, Congress is the problem.
You nailed it!
Laurie
I would normally agree with you onthis subject. The market should provide the price for labor. However, we have a border that is flooding the nation with labor that is driving the price for labor down. This really is more to the point of why the market price is so low.
I do agree with you though...
Congress should let the markets provide the price for labor, but it should also control the influx of immigration destroying the American labor market price.
Thor:
Do you ever get tired of being right? LOL!!
Laurie
Normally, I'd agree with you also, Thor. However, your generalization that our border trouble "is flooding the nation with labor that is driving the price for labor down" is overbroad.
It isn't just driving the price for labor down; it is driving down the price for labor in certain jobs, involving certain skills. The labor market isn't a market for labor in the abstract, any more than a farmers' market is a market for vegetables in the abstract. A farmers' market is a market for specific vegetables, the prices for which are independent of other vegetables.
For various reasons, tomatoes may cost more than peppers. The lower cost of the peppers does nothing to the price of the tomatoes. So the price of labor in one industry (say, e.g., construction) may go up or down in a manner which is independent of the price for labor in the farming or hospitality industries. The reason is that much work in the construction industry requires a bit more skill than that required by, say, a restaurant, a skill level which commands a higher wage than the hospitality industry does.
The problem, for the legal resident/citizen is that the illegal is accustomed to a lower standard of living. He may therefore be better able to provide labor of equal or better quality than the legal resident/citizen at a lower price. If the legal resident/citizen isn't willing to lower his standard of living, that is not the fault of the illegal laborer.
My problem witht the illegal is not that he may work at a lower price than the legal, thereby upsetting the price of labor in certain areas. My problem is that the illegal is illegal. I have little respect, or patience for law-breakers. But it isn't the illegal's fault if a legal resident can't or won't lower his standard of living.
And none of this, of course, is fixed by Congress setting a minimum wage. This is where, in the end, you and I both agree: if Congress really cared about American laborers (both legal residents and citizens) then they would fix that darn border. Because in the end, while there may be many good reasons for Americans to lower their standards of living, doing so because lawmakers won't protect a border is not one of them.
Yes I agree it is true that illegals do not diretly shift demand curves for labor at every level, but it does shift the curve at the lower levels. While the effects of immigrant labor on the consumer may be good, when taken only from the perspective of the cost of the labor and that produced, it nevertheless lowers the market rate for labor at the minimum scale (to be honest it is not just illegal immigration that harms the market rate...but all immigration of unskilled laborers). I do not fault the illegal as some evil person trying to drive the market down...I fault the national policy of letting them in...and thusly driving down the market price for labor...harming the nations citizens that would otherwise be benefited from that higher market price. (and thus the crux of the real issue: who do we want to benefit.)
Labor of the type that is involved with the minimum wage and the professions directly effected by it are effected directly by supply and demand of labor (generally unskilled labor). If the supply of labor (for that curve) is increased (such as we have with our immigration problem) and demand is not increased at the same rate...we end up with a shift in the curve. While it may be argued that the market price may still be higher than the minimum wage (as if the minimum wage some how holds down the market rate)...I cannot agree. If such were the case it would be so with the minimum wage.
To be honest however I am a believer in markets but not under all conditions. I believe markets, in general, provide the best results for a nation, but this is not always the case...such as the situation we have now (with immigration). I guess I also have to state that I do not see the problem of illegal immigration as simply the illegals being illegal...there is much more to the problem of a ever increasing flood of third world people crossing our nations borders (labor prices being only one of them).
IE. I would find it fair to tell people that the market must determine the price for labor...but would also require that we then dont go and flood that same labor market with low cost labor.
San Antonio is just one example of such. The low wage market is flooded (and is almost entirely immigrants)...in virtually every industry...pay rates at the lower skilled end are down at minimum levels (not comparable even to much of the nation not having such immigration influx...as of yet).
Would making the minimum rate higher solve this problem? No probably not. It would give the workers slightly higher wages, and may increase price slightly (but the reality is that prices also are a function of supply and demand for most industrys...and not so much a function of the cost of labor...nor would it decrease the labor supply in that there is still a flood that isnt going anywhere...possibly leading to some increase in unemployment). Would severly limiting immigration solve this problem? Yes I belive it would have a significant impact in increasing the rate for labor (at the lower end). Unemployment would generally dry up, and labor costs would drive upward. (price would also likely drive upward but not necssarily as a direct correlation of labor costs....if labor shifted enough it may shift the price curves but again..price is a function of supply and demand.)
The question is the goal-
If the goal is for all Americans to have a standard of living that is decent (considered acceptable by any civilized indusrial nation) than we need to do one of these actions (limiting immigration being the better of the two choices IMHO). If the goal is cheaper cost of labor than, obviously, we should leave it all alone.
Thor:
I can safely stipulate to all that you say here. The reason is that we agree about the effect on the labor market of illegal immigrants (and unskilled immigrants). These do lower the price for labor in certain sectors, but mostly the hospitality industry. But my specific issue is with the minimum wage.
My argument is that a federally-mandated minimum wage does't solve problems. If immigration is the source of the problem, then fixing immigration is the solution. Raising the minimum wage only increases the dollar figures we're talking about, especially when inflation gets taken into account. Acounting for inflation, the minimum wage never really changes. Todays's minimum wage just about purchases what 1983's minimum wage purchased.
You seem to be saying that, until we get immigration fixed, we need to have a federally-mandated minimum. But that, to me, is worse than slapping a band-aid on a suching chest wound. No matter what happens with immigration, once a minimum wage is fixed by Congress it's locked in, not adjusting with inflation and increases in cost of living--which varies not just state to state but even city to city within a state.
I continue to think that even taking illegal immigration into account the market does a better job than Congress.
Finally, you write: “I would find it fair to tell people that the market must determine the price for labor...but would also require that we then dont go and flood that same labor market with low cost labor.”
Given that, would you also say that you find it fair to tell people that the market must determine the price for automobiles but that we should also require that we then don’t go and flood that same auto market with low cost automobiles?
Sorry I was delayed in responding. I am in a battle with the flu and it was winning....seems like I have it by the ear now.
I generally agree to an extent that even when taking immigration into account the markets do a better job than congress. Congress's job should not be regulating the market prices for labor (in that they dont know what they are doing...and such things effect a great deal more than simply some guys pay check).
On the Auto senario:
If it is American autos flooding the market it would be in the best interest of the nation and the market to let the market adjust itself.
If it is foreign autos flooding the market it would not be in the best interest of the nation (and the nations markets) to allow such a flood to put their own suppliers in peril. However, what was done with the Japanese-American car clash from the 70's and 80's is an example of a solution where a solution was arrived at without congress directly regulating the problem. The Japanese were approached with the problem and threat of tarrifs, and they decided to limit the supply of their auomobiles themselves. They discovered (through supply-demand economics) that they could actually supply the market with fewer of the same automobiles...and in doing so the price for those automobiles increases....gaining the Japanese more profit than they made when they were flooding the markets (hense the reason the Japanese automobiles are not the inexpensive cars of the 70's and 80's). This however while cooperative, and benefitial to all involved (except perhaps to the consumer...at least in the direct price of a auto) was still a adjustment in the market that ceased the flood of low cost auto's, and thus saved the US auto industry.
I am not sure a market solution exists for the low wage labor market and the immigration problem. To fix this problem through regulation one could attack it from regulation of the minimum wage (which would cause other market problems...abeit likely relatively small problems), or through regulation (and enforcement) of immigration, limiting the supply of labor (which would arguably have many benefits...including the raise in the market price for low cost labor). I definetly favor congress doing the later...congress should leave the markets alone (when possible) and do what they are there to do (protect our borders). If they would do that...there would be no need for a minimum wage, and social services would function more to the manner they were designed to function.
Thor:
A summary of my position would amount to this: And market solution to the minimum wage problem is superior to a Congressional solution to the minimum wage problem. As I've explained to "mortalez", the vast majority of people are not employed by monster corporations; they are employed by small businesses. Simply telling a business owner to pay $7.25 per hour doesn't mean that the business owner just magically has $7.25 per hour to pay. I'm not looking for the "problem free," the "fail safe," or the "fool proof," solution to the problem. I'm looking for the "least attended by difficulty" solution. So, in the end, I think we are largely in agreement: it would help matters tremendously if Congress would do two things: (1) secure the freaking borders already; (2) stop trying to curry favor with, and buy votes from, the illegal, the innumerate and the economically illiterate.
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