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Amaros -> RE: Legally Illegal? (3/31/2006 10:45:09 AM)
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quote:
The excess flow of illegal immigrants is a troublesome issue. They depress the bottom level of wages, depressing all wages in the process. Their illegal actions harm the neediest and most vulnerable of our nation: the poor. If you were a poor, relatively uneducated person living in an area with high numbers of illegal immigrants and a high cost of living, how would you feel? If you had to earn minimum wage doing back breaking work instead of two to five dollars an hour more, how would feel? Farm workers up towards my way make more than farm workers in Southern California. It's considerably more expensive to live in Southern California, but the wages are notably lower.
Precisely why republican representitives stall on the issue - driving down wages is very desireable to business interests, whom republicans represent. It's all very ironic, there is a conflict of interest here between the goals and policies of the republian party and the xenophobia they foster among their political supporters, the republican rank and file.
In short, immigrant labor keeps the economy afloat - population growth is tied directly to economic growth: production requires labor, and is what is considered a "variable cost", i.e., on can control it to some degree as opposed to "fixed costs", such as lease or ownership of the physical location where the business is located, utilities, warehousing and shipping costs, etc.
The economic boom of the Ninties was the result of productivity increases due to computerization - this reduced the number of employees firms requred to function, and lowered variable labor costs, while at the same time creating new busines opportunities that simple didn't exist previously - economic growth is primarily the result of infrastructure - infrastructure creates opportunities, i.e., without interstate highway systems, comunications networks, etc., the type and quantity of business opportunities that are even possible would be severely constrained, the lower limit of economic growth, while at the same time, the amount of available labor and its associated costs impose an upper limit on the amount of economic growth possible.
In the late Ninties this upper limit was reached, excessive growth outstripped the number of worker available to fill the new positions being created, what is called a "tight" labor market - the result is greater competition for available workers, and a subsequent rise in compensation levels through the actions of supply and demand.
This condition is inimical to historical republican policy: when variable costs rise, the money has to come from somewhere - either prices must rise, or it has to come from profit margins, executive compensation, stock dividends, etc., neither of which is a desireable option from a business standpoint - raising prices is called inflation, and inflation leads to demand for higher wages, in what is called an "inflationary spiral" and inflation is as bad for creditrs as it is good for debtors.
This is key to understanding republican economic policy: inflation erodes capital by reducing debt - i.e., if the value of the dollar falls, an inflationary dollar, this means that the value of outstanding debt is also falling, as well as the value of capital assets, whether money, real estate, etc.
Good, if you owe money, as money you borrow at higher value can be repaid with money of lesser value, and is basially like a windfall, provided your wages keep pace with the inflation. The generation that was in the process of buying property during the inflationary spiral triggered by the Kennedy tax cuts which culminated in the late seventies, the so called Carter recession, which was actually the result of the fed cutting back on the money supply to get that inflation under control (and it was out of control at that point) - that generation made out like bandits: my parents began buying a house in the early Sixties for about 10K, when thy were making 10K, give or take, between them - by the early Eighties, they were each making in excess of 15 to 20K each, but the house still cost 10K, with monthly payments of around $100, and by the mid Eighties, the house was worth between 60 and 80K
Meanwhile, the bank was only making $100 a month on a house now worth 70K. An extreme example, but now perhaps you understand why republicans brag about low inflation from tight monetary policy - what they aren't telling you, is that this mostly good only for creditors, while keeping inflation to a slow and steady creep reduces the value of wages without leading to urgent wage demands. For similar reasons, the middle class got minimal tax breaks - the Kennedy tax breaks tiggered the inflationary spiral of the Sixties and Seventies through a sudden increase in demand, "demand pull" inflation, they won't do that again.
In fact, as a historical point, faced with the tight labor market of the late Ninties (a third of High School seniors held full time jobs, a ridiculous metric, indicating the extreme tightness of the market), Alan Greenspan raised interest rates, and triggered a recession, citing inflationary fears, where as in reality, our reliance on imports makes consumer inflation unlikely - wages can rise without causing an excessive rise in consumer prices (CPI) under these conditions.
It's also ironic that tight monetary policy is also the culprit behind the trade deficit to begin with - a strong dollar means that foreign goods are relatively cheaper, while domestic goods pay a monatary penalty on the international market.
It was the strong dollar of the eighties that led to the farm crisis: the strong dollar killed the agricultural export market, while banks foreclosed on farm loans - the result was a windfall for agribusiness who could buy up the foreclosed properties for pennies on the dollar - recently as you may know, agribussiness was rewarded with record breaking (and treaty breaking) subsidies, whereas family farms were denied loan extensions n the Eighties.
What does this all have to do with immigration?
First off, republians prefer slow growth with low inflation over any sort of inflation at all, and they prefer the loosest labor markets possible, a buyers market.
Thus, they will dither about tightening the border on the one hand, and resist amnesty proposals on the other: a steady stream of illegal labor who can be employed at below market prices keep consumer inflation, and hence wage demands under control, whereas amnesty or another such scheme would require busineses that depend on illegal labor (which to be fair, most Amerians don't want to work at, mosty construction and agriculture) to comply to federal and state compensation and labor laws. A mild stream of petty crimes is small price to pay for this cozy situation.
Ideally, amnesty is best idea, anyone refusing to legalize under these conditions would be someone to look at closer, and it wouldn't undermine wages.
Hey, you elected them, you oughta at least know who they actually represent.
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