Current Events — HabitableZone

Current Events » in reply to An accurate statement

One essential problem...

is that everyone likes a bargain, including employers. If I can go buy the same item for a lower price at the big box store than at the Mom & Pop shop, why shouldn't I? Likewise, no employer wants to pay a higher wage than absolutely necessary any more than we like paying a higher price for the things we buy.

Raising the cost of labor like you mentioned in your other post won't be effective. In many places, even hamburger flipper jobs are having to pay significantly higher than the minimum wage to attract workers. That's the market at work - if you can't get workers for one price, you'll have to offer them a higher price. Employing illegal workers undercuts the market, IMO. For one thing, they'll often work for a lower wage than most Americans will accept. Also, many employers will pay them under the table which saves a lot more money because they don't have to pay benefits, social security taxes, unemployment insurance, worker's compensation, etc. The cost of complying with these government mandates can easily drive up the cost of labor by a factor of two or more (not even counting health benefits) of the hourly salary. Also, being illegal, the employees are less likely to complain about substandard treatment. A better policy, IMO, would be to severely punish (as in high fines and even jail time) for employers who knowingly use illegal labor.

Given a chance, the market works better than any form of government regulation. Whenever the price of commodity items increases (and nonskilled labor can be considered a commodity), people start to look for substitutes. Back in the Great Depression of the 1930s, people would gladly work at manual labor jobs like ditch-digging for a dollar a day. However, as the cost of labor increased, employers switched over to machinery like backhoes. While a backhoe isn't cheap, a single backhoe operator can dig as much dirt in a day as dozens of manual laborers for a lower cost. Likewise, automation and mechanization has been used to replace millions of American workers over the past few decades. Up until the early 1960s, many companies used to have large book keeping departments to manually manage their accounting. Computers displaced most of those workers by the end of the 1960s. In fact, up until the mid 1940s, a computer was a person who performed math calculations. Electronic computers replaced all of those workers, too. Auto factories used to employ huge workforces. If memory serves, GM alone employed about half a million people up until the 1970s. Their workforce is considerably smaller now but they're able to produce the same or a greater number of vehicles each year (and with substancially higher quality) using automation. An even more extreme situation happened in the last century in regard to farm labor. According to this source, 41% of the US workforce worked in agriculture. Today, it's less than 2%.

So, what happened to all of those book keepers, auto workers, farm laborers, and the like? Did they just disappear? Nope, they changed jobs. In many cases, they went to better jobs than they had before but some people did lose. In my parents' day, someone could get hired by a factory without much of an education. Especially in unionized factories, they could often make a good living and have pretty good job security. However, if they lost that job (as a few hundred thousand auto workers did in the 1970s and 1980s), finding a similarly well paying job could be difficult.

Globalization has made things even more challenging for American workers. In my wife's native country (the Philippines), people will gladly work in a Nike factory for a few dollars a day. In that country, that's a very good wage. Even with automation and lower shipping costs, no American shoe factory can compete against such low wages and raising the cost of labor won't make it better. In fact, just the opposite will happen. Raising the cost of labor in America will only cause even more factories here to go offshore. We could try to enact tariffs or other trade barriers, but all that will do is force American consumers to pay higher prices for goods. Likewise, we all hope that people living in poverty in other countries can have the opportunity to improve their lives. How can they do that if we erect barriers against the goods they produce? Foreign aid shouldn't be a permanent form of charity.

Kids in school today aren't just competing with the kids across town for job opportunities. Ultimately, they're competing with kids from around the world. I've worked with people from places like Taiwan and India in the computer industry. They were as sharp as they come. For the past several years, many of them have been able to stay in their home countries and do the same jobs they used to do here for a higher wage. Even though they aren't being paid as much in India as they would've been in Indiana, they're still living quite well due to a lower cost of living in their home country. While this has been tough on American computer professionals* in general, it has began to greatly improve the lives of a lot of people around the world. Should the government enact regulation that would stop that?

This post has gotten pretty long-winded and gone beyond the original topic of illegal immigration, but it is related to the general topics of employment here in America. Ultimately, none of us has a fundamental right to a high paying job. We're only worth what someone is willing to pay for our services. If we don't provide value to our employers, then we aren't worth the wage we're getting. Artifically raising labor costs will only make marginally viable companies go under or go offshore.

*Fortunately for me, the work I do can't be outsourced due to security requirements. Sometimes, it pays to live cleanly while being a blood-sucking defense contractor.

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