| | In Post 10, I commented on the following statement by Jack Lord (evidently the late Jack Lord, since I understand that he has left the forum): Illegal immigrants lower wages massively, they have no right to come here and should be sent back. Period. and argued against it on the grounds that while illegal immigrants lower nominal wages, they do not lower real wages, but raise them to a small degree.
Unfortunately, I overlooked his claim that they lower (nominal) wages "massively," which is also not true.
Let's say that the going wage for unskilled American workers is $7.00 an hour. For purposes of illustration, assume that this is the market-clearing wage, not one that is set by a minimum-wage law. Assume further that illegal immigrants are willing to work for $4.00 an hour, so that there is a fairly large $3.00 disparity between the wages of the American workers and those of immigrant workers. Finally, assume that illegal immigrants increase the supply of unskilled labor by 10%.
In a free labor market, employers who were paying American workers $7.00 an hour would then have an incentive to replace them with immigrant workers who were willing to work for $4.00 an hour. In order to attract the lower paid workers, employers would make them an offer of somewhat more than $4.00 an hour, say $4.50. Other employers seeing the savings in cost would, in turn, offer these workers wages that were even higher than $4.50 but still below the $7.00 that they were currently paying their American workers. Simultaneously, of course, the American workers would have to be willing to work for lower wages in order to keep their jobs. The result of this process of competition for the cheaper immigrant labor would be to raise its wages and to lower the wages of American workers until the two groups leveled out at equality.
Assuming that illegal immigrants increased the supply of unskilled workers by 10%, there would be 10 American workers for every illegal immigrant. Since, at the start of this process, 10 American workers would be making $7.00 an hour for every illegal immigrant making $4.00 an hour, the average wage would be $6.73 an hour [(10 × $7) + (1 × $4) = $74 ÷ 11 = $6.73], which is what it would be for either American or immigrant workers, once this process of competition had brought about an equality of income.
Observe that the unskilled American workers, being a much larger percentage of the workforce, would lose far less from this process of competition than the illegal immigrants would gain from it. The American worker's wage would fall by only $0.27 an hour (from $7.00 to $6.73), whereas the illegal immigrant's wage would rise by $2.73 an hour (from $4.00 to $6.73).
It may be objected that the illegal immigrants would be willing to work for far less than $4.00 an hour and that they might even be willing to settle for $1.00 an hour. So, let's substitute $1.00 an hour into our equation for $4.00 an hour, and see what difference it makes: [(10 × $7) + (1 × $1) = $71 ÷ 11 = $6.45]. As one can see, there is not much of a difference, because the number of illegal immigrants is such a small proportion of the total number of unskilled workers. So, even if we assume that the immigrant workers at the start of this process were making only $1.00 an hour, the wages of the average unskilled American worker would fall by only $0.55 an hour while the wages of the average illegal immigrant would rise by $5.45 an hour.
Therefore, to say as Jack Lord does that "Illegal immigrants lower [nominal] wages massively," is a proposterous exaggeration. Besides, what is important is not nominal wages, but real wages, and immigrant labor actually raises real wages for Americans by lowering prices more than it lowers nominal wages.
- Bill
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Matters of law and economics are ever so dismal. So I won't argue my point here at length, but just assert it. There is no "right" to lie, except in self defense. This does not mean that all lies need be criminalized. But the entire idea that government regulation would be unnecessary because bad businesses would be put out of commission by word of mouth belies the idea that reputation is dispensable. It's one or the other. I also believe that the paparazzi should be liable to criminal charges for photographing celebrities going about private matters, and should be liable to triple damages for any profits gained thereby. For example, when Princess Diana was holding a news conference or attending an award ceremony, she would have been fair game, given that she herself would have been seeking the publicity. But when just walking down the street, committing no crime and seeking no attention, her image would be her own property. To say that such an image would not be property is belied by the very fact that the paparazzi could sell it. What can be sold is property ipso facto. There would be exceptions allowing one to publish and sell photographs in which a person's presence was incidental, such as a crowd standing around a burning building. Criminal and inherently public acts and so on would be able to be published. There would be technical matters to work out. But I don't see how minarchist capitalism would work without some sort of libel laws. And if images can be sold, they are property.
They Also Say That Bumble Bees Can't Fly