Author Topic: US government running out of money  (Read 6628 times)

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Offline Goober5000

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Re: US government running out of money
Except it's wrong IMO to assume that removing (illegal) immigrants would result in a labour deficit, because illegals work in illegal jobs that only exist because they can take advantage of their workers illegal status. i.e. those jobs only exist because of a cheap, disposable and illegal labour market, and if that labour source disappears then there is no reason to assume those employers wouldn't too (because they would be built around profiting from said illegal labour, not around paying wages and meeting legal H&S rule, etc). If they only exist to make money by exploiting illegal workers, how eager would they really be to legitimise and have a 'proper' business model of proper wages and health and safety observance, etc?

Most of those jobs aren't illegal per se - take, for example, construction, cleaning, house-sitting, etc.  They're only illegal if they employ illegal workers.  Take away the workers and you have two choices: hire legitimate workers or do without.  Some (those whose labor demand thresholds are too low) would do without, but some (those whose thresholds are high enough) would hire legitimate workers.  This can be demonstrated on a standard supply-demand graph.

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To me it's a sticking plaster to just go 'get rid of illegal workers and everyone can get well-paid jobs' (which seems to be a common assumption made, usually when you have the likes of the Daily Mail railing against illegal immigrants in their pseudo-racist editorial stories), because how many employers that hire illegals do so because it's cheap, easy, and liability free rather than because they can afford proper workers but don't want to pay?

How many of these employers are genuine honest businesses that simply can't afford legal (usually low skilled) workers, and are 'forced' to take illegal immigrants? And how many exist simply and only to take advantage, not as legitimate companies? I'd say the latter is higher than the former, myself - and these companies only exist because they provide a service that's cheap. Make them legit - assuming they'd want to - and they become too expensive for their customers and go out of business anyways.

They employ illegal immigrants because it's the cheapest option available.  If that weren't an option, they'd have to find some alternative, and the market would adjust to accommodate it.

You know, you're doing the same thing as on Sectorgame - dancing around the implications instead of confronting the central point.


 

Offline aldo_14

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Re: US government running out of money
Except it's wrong IMO to assume that removing (illegal) immigrants would result in a labour deficit, because illegals work in illegal jobs that only exist because they can take advantage of their workers illegal status. i.e. those jobs only exist because of a cheap, disposable and illegal labour market, and if that labour source disappears then there is no reason to assume those employers wouldn't too (because they would be built around profiting from said illegal labour, not around paying wages and meeting legal H&S rule, etc). If they only exist to make money by exploiting illegal workers, how eager would they really be to legitimise and have a 'proper' business model of proper wages and health and safety observance, etc?

Most of those jobs aren't illegal per se - take, for example, construction, cleaning, house-sitting, etc.  They're only illegal if they employ illegal workers.  Take away the workers and you have two choices: hire legitimate workers or do without.  Some (those whose labor demand thresholds are too low) would do without, but some (those whose thresholds are high enough) would hire legitimate workers.  This can be demonstrated on a standard supply-demand graph.

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To me it's a sticking plaster to just go 'get rid of illegal workers and everyone can get well-paid jobs' (which seems to be a common assumption made, usually when you have the likes of the Daily Mail railing against illegal immigrants in their pseudo-racist editorial stories), because how many employers that hire illegals do so because it's cheap, easy, and liability free rather than because they can afford proper workers but don't want to pay?

How many of these employers are genuine honest businesses that simply can't afford legal (usually low skilled) workers, and are 'forced' to take illegal immigrants? And how many exist simply and only to take advantage, not as legitimate companies? I'd say the latter is higher than the former, myself - and these companies only exist because they provide a service that's cheap. Make them legit - assuming they'd want to - and they become too expensive for their customers and go out of business anyways.

They employ illegal immigrants because it's the cheapest option available.  If that weren't an option, they'd have to find some alternative, and the market would adjust to accommodate it.

You know, you're doing the same thing as on Sectorgame - dancing around the implications instead of confronting the central point.



I think the central point is wrong, and I've said so.  These employers exist because they can make easy money through illegal immigrant employees, not for any other purpose.  Their sole reason for existing is the black labour market; that's the reason they're not legit companies.  Even if the industry exists in a legit capacity, there will be a group of 'providers' (so to speak) and customers who only exist because they can do it cheap and on the side; even subcontractors to large, legit, companies who only survive by cheap contract bidding based on the use of illegal labour.  Same as with any black market.

Now, you seem to me to be making a big assumption that it would automatically entail that demand would be sufficiently high to legitimise those jobs, rather than illegal hirers simply vanishing away for more lucrative (and probably illegal) markets; my whole point has been that that's not necessarily true; how many companies using illegal labour do so whilst being able to use legal? 

There's a side issue, of course, as in how many people would do those jobs in the first place - particularly in any first world country with a decent education system, where those types of unskilled labour are sidelined (and even skilled trades like plumbers, electricians, etc end up being short of people despite good pay).  Especially as there's another question as to how many companies that would legitimise, are actually using illegals because they can't get legal workers to pick crops, etc, at the legal minimum wage they can afford?

Not sure what the hell you're on about with regards to Sectorgame, though. 

Although aren't the implications the central point here?  I mean, if you want to advocate it, isn't it just a wee bit important to consider the consequences and ramifications?

 

Offline Goober5000

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Re: US government running out of money
In both debates, the central point is true, or not true, regardless of its implications.  Arguing that X shouldn't be true "because it implies Y, which I don't like" has no bearing on the truth or falsity of either X or Y.

As far as supply and demand is concerned, it's a law that has been demonstrated to hold true over a variety of situations and circumstances.  You don't have to understand how it works, only that it does.  The value of any model is its ability to predict, and this one is pretty accurate at predicting.

Attached is the graph used in Wikipedia.  It's used for goods, not labor, but it applies equally well to either scenario.  The addition of illegal immigrants is reflected in the shift from S0 to S1.  The supply curve shifts right, causing price of labor (wages) to fall.  Removal of the illegal immigrants would be a shift left from S1 back to S0, thus causing the price (wages) to rise.

[attachment deleted by admin]

 

Offline Ace

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Re: US government running out of money
You know, you're doing the same thing as on Sectorgame - dancing around the implications instead of confronting the central point.

I'm glad I'm not one of the admins at Sectorgame or I'd be really pissed at whatever that comment is supposed to mean...
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Offline karajorma

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Re: US government running out of money
In both debates, the central point is true, or not true, regardless of its implications.  Arguing that X shouldn't be true "because it implies Y, which I don't like" has no bearing on the truth or falsity of either X or Y.

I think we all understand the concept of supply and demand. What we challenge is your simplistic assumption that it applies to the labour market in the linear fashion you describe.

As I said before no one is going to pay $100 and hour for someone to clean toilets. They'll simply clean them themselves or have a dirty toilet. Your linear graph predicts that if you got rid of everyone willing to do the job for less someone would eventually start paying $100 and that's simply not true for fairly obvious reasons.

Aldo is completely correct in saying that many of the businesses that work using illegal immigrants simply wouldn't function without them. That's nothing to do with skirting around the issue. That is the central issue. If no company exists any more who is supposed to pay the higher wages you claim would be paid?
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Offline Goober5000

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Re: US government running out of money
I think we all understand the concept of supply and demand. What we challenge is your simplistic assumption that it applies to the labour market in the linear fashion you describe.

Okay, I get what you're saying.  It is pretty simplistic - the market is imperfect, and the graph is probably curved, but I think it holds based on the available evidence.

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As I said before no one is going to pay $100 and hour for someone to clean toilets. They'll simply clean them themselves or have a dirty toilet. Your linear graph predicts that if you got rid of everyone willing to do the job for less someone would eventually start paying $100 and that's simply not true for fairly obvious reasons.

I think they would, though... but you'd have to eliminate a lot of the toilet-cleaning population for that.  If you only had one person in the entire US who was skilled at cleaning toilets, he'd be in high demand.

It's the same reasons brain surgeons get paid so much.  If every other person was a brain surgeon, a hospital can feel free to hire any of them, and the asking salary would be very low.  Since brain surgeons are a comparatively high part of the population, they command a high salary.

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Aldo is completely correct in saying that many of the businesses that work using illegal immigrants simply wouldn't function without them. That's nothing to do with skirting around the issue. That is the central issue. If no company exists any more who is supposed to pay the higher wages you claim would be paid?

According to the supply-demand model, some companies indeed would do without the extra labor, but some would pay the higher wages.

 

Offline karajorma

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Re: US government running out of money
I think they would, though... but you'd have to eliminate a lot of the toilet-cleaning population for that.  If you only had one person in the entire US who was skilled at cleaning toilets, he'd be in high demand.

That's only by changing the level of skill involved. Cleaning toilets will always be an unskilled job. The supply-demand curve only works if the supply can't be surplanted by something else. You're assuming that just because no one wants to clean toilets they'll pay a much higher rate for someone else to do it but that simply isn't true. I'll pay someone a pound to squegee my windows but I wouldn't pay them £20. I'd just do it myself.

You mention brain surgeons and completely ignore the fact that it is a skilled job. Brain surgery commands a high price because you can't just take a chainsaw to your friends head and do it yourself.
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Offline NGTM-1R

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Re: US government running out of money
It all basically comes down to the view held by Congress that they can't run out of money, they print the money.

Yes, I am quite serious. Most of them really do think that. Most of them are also completely fiancially secure and always have been and always will be, come hell or high water, so convincing them different is a well-nigh impossible task.
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Offline aldo_14

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Re: US government running out of money
It's the same reasons brain surgeons get paid so much.  If every other person was a brain surgeon, a hospital can feel free to hire any of them, and the asking salary would be very low.  Since brain surgeons are a comparatively high part of the population, they command a high salary.

Brain surgeons are a necessity, though.  The problem I think with that supply-demand curve is assuming demand is linear; I don't think that's true - demand varies with cost as much as cost varies with demand; prices rise with increasing demand but demand lowers with increasing price, and on top of that there is the profit (make vs sale cost), which affects how much the provider/s want to make something.  i.e. if you only has one toilet cleaner in the country, as kara mentioned, then people would simply do it themselves as the effort has a reduced tangible cost compared to hiring the £20 per hour cleaner.

So demand would also be affected by quality; the more skill a job requires, the more demand there is due to the cost to the potential employee in learning that skill, and hence there results in both a reduced level of suitable workers and also a greater salary expectation by the potential workers.  I do not think this applies in the same way to the unskilled jobs that illegal immigrants do (partially because you can't as easily check references, but also because it's a mass-numbers, min cost market),  that many of these industries can't sustain themselves without using unlawfully cheap labour to produce cheap goods.  Like, for example, how many of the customers buying these illegally picked cheap crops would simply switch to cheaper foreign sources rather than pay an increased (by many times) fee for the same product picked by legal workers? (and how many of these illegal producers would not just move themselves to other countries?)

EDIT


Another supply-demand curve from wikipedia, showing demand D1 and D2 with relation to price and quantity.  This doesn't cover, it appears, when a products' price becomes greater than its perceived worth.
« Last Edit: March 14, 2006, 02:37:57 pm by aldo_14 »