Cold as ICE

BANG! BANG! BANG!

Loud raps shook a cozy home and brought the husband rushing to find two armed ICE officials standing gravely in his door frame with a picture of a woman. “Does this woman live here?” They briskly inquire. They go on to explain that the woman in the picture is registering stolen cars to his address. The husband quickly responds “no.” They request to come in and ask the rest of the household. When the wife looks at the picture and says “no.” The ICE officials verify the wife’s name and detain her for being in the country undocumented although she’s been married to a U.S. citizen since 2006 and applied for political asylum way before then. They deposited her into a white van carrying various others.

Since then this family has diligently been navigating a bureaucratic maze that finds them no closer to attaining asylum or citizenship for her than before. They endure ICE agents staking out their home. The wife endured a chemical burn from a monitoring device ICE has required her to wear around her ankle. Their son cries out in fear for his mother.

I hear people say being here in the U.S. undocumented is a legal violation. Well, our immigration system is a human rights violation.

Approximately 392,862 deportations have occurred within the past year. A record. More deportations than ever before. Can you even imagine the other stories out there? We were told about a few more this eve and are convicted to help.

Most undocumented workers create revenue through taxes for the U.S. Generating billions in revenue for the government. Most are going to through the process of attaining citizenship and pay thousands to navigate the paperwork by hiring an attorney. They can only hope the attorney doesn’t over charge them. They pay thousands to the U.S. government in form and application fees to get through the citizenship process. Not to mention the copies that need to be made for this process (475 pages in one packet) that needs to be duplicated and sent more than once. This process includes shipping fees and more. This social injustice is about economics. What would happen to our economy if mass deportations occurred?

We learned that the undocumented community will need toys during Christmas as well as clothing and food. A few of us have committed to learning the process to navigating the citizenship paperwork to provide a support to the community.

Let me know if you can provide assistance with this issue. It’s the most pressing human rights issue in Utah and YOU can help solve it by working together to call on the Federal Government to FIX this system and by volunteering your time to collect resources for these families. <3

The above is Utah family’s story that a few of us USJ members heard yesterday eve and again, we are convicted to help.

, , ,

  1. #1 by Mike Picardi on October 13, 2010 - 5:27 pm

    how do we help?? how do we stop this??

  2. #2 by Larry Bergan on October 13, 2010 - 5:41 pm

    Walter Mondale and many other politicians here say they wouldn’t have voted and pushed for NAFTA if they knew it was going to make such a mess of things.

    It’s time for them to show compassion for the people caught up in the problem they created. Longtime citizens of this country are also being decimated by laws that were not thought out.

  3. #3 by Whoops! on October 13, 2010 - 6:18 pm

    If our system is a crime then the entire world’s systems are. The US immigration system and process is the most lax in the world, in most nations the minute you are found you are bound over and deported. Locals will report you, and you will go to whence you came.

    Folks coming here without the benefit of the law and legal due immigration process are only now surprised because the laws are actually being enforced which is a response to the political fire storm that would be occurring if nothing were done like the last 30 odd years. The idiocy that passed NAFTA allowed the non enforcement of immigration law which has led to this problem. People are upset, though if any of us were to be in a foreign nation we would see how lax it is here.

    To legally immigrate to Canada even if married requires 50k Canadian dollars in a Canadian account. This is to provide for your needs for the up to 2 years it takes to get their “green card”. Even if you are married to a Canadian. Anchor babies don’t exist there, if you can’t sort things out you take your child with you or leave them with legal resident relatives. That is the law in the progressive paradise of Canada.

  4. #4 by brewski on October 13, 2010 - 7:54 pm

    What would happen to our economy if mass deportations occurred?

    The wage rate for legal residents would rise.

    Can you even imagine the other stories out there?

    Yes, stories about people making the conscious decision to break the laws of another country. People consciously making the decision to buy forged government documents. People consciously making the decision to commit identity fraud. Yes, there are a lot of stories not being told…by you.

    Most undocumented workers create revenue through taxes for the U.S. Generating billions in revenue for the government

    Baloney. The amount of taxes they pay is a small fraction of costs they impose on our school system, our health system, among others.

    They pay thousands to the U.S. government in form and application fees to get through the citizenship process

    What are you talking about? An illegal alien doesn’t apply for citizenship. They apply for legal residency. Do you have any idea what you are talking about or are you just making it up as you go along and hope no one notices?

    Please tell your illegal aliens to go home and then apply for one of the following visa programs that already exist:
    Au pairs
    Border Crossing Card
    Domestic employees or nanny
    Medical treatment, visitors
    NAFTA professional workers: Mexico, Canada
    Students: academic, vocational
    Temporary agricultural workers
    Temporary workers performing other services or labor of a temporary or seasonal nature

    Do not come here and expect us to make exceptions just because if we don’t lefties will call us racists since they can’t think of a better argument for breaking several laws at once.

  5. #5 by Larry Bergan on October 13, 2010 - 11:14 pm

    brewski:

    Why don’t YOU go home? Where’s that? England? Ireland? Germany? Puerto Rico?

    You won’t even tell us whether you’re a boy or a girl!

  6. #6 by Melodia Gutierrez on October 13, 2010 - 11:14 pm

    Oh, Brewski!! I love your response… it is reminiscent of something…. ah, yes, I remember, “battered person syndrome.”

    If you require assistance please tell me, as an individual that promotes social justice it is my great honor to help all in need (whether it’s psychological, physical, monetary etc…) as a result of a broken system.

    In response to your eloquent concerns:
    “The wage for legal residents would rise”
    TRUE! So would the cost of EVERYTHING. Like your $1 burger…. now it will be $5! Like your public education, mass transportation, sidewalks, police… they will start being underpayed and underdeveloped… resulting in revolts and lowered living standards which would cause revolts… I could explain more, but I hope you read between the lines.

    “Making concious decisions to break the law.” Fabulously, insightful response. But understanding genetic predispositions and… *gasp* “evolution” (i’m assuming you’re a creationist=belief in science void of factual evidence) you would know that humans posess a flight or fight component. So do all other animals in the animal kingdom. For example, if a Lion is being attacked and its basic survival sustenance is being threatened the animal will do what it takes to survive. Many of these families find themselves in dire circumstances where their sustenance needs are not being met so they have to do something to survive. So they choose to survive off scraps from another country while in the country.

    “Baloney. The amount of taxes they pay is a small fraction of costs they impose on our school system, our health system, among others.”

    Most of these families do whatever they can to avoid being a burden on anyone. They get to eat. They want to continue to have that opportunity so they remain here and ask neighbors with knowledge of first-aid assistance when their citizen child is suffering from sores as a result of boiling water accidentally spilling on her. Those that do take advantage of the emergency room and the health care industry comprise a minute cost to the taxpayer. The overwhelming cost is from actual US citizens. Cutting the minority out wouldn’t make a dent in saving tax payer money, we’re talking pennies.

    Annnd…. in regards to your brilliant closing post. Overwhelmingly do individuals seek to apply for citizenship in a safe environment.

    The north/south gap is a cause of the migration phenomenon. Most of the world’s resources are concentrated in the northern hemisphere where there is less population. The concentration of individuals in the southern hemisphere must do with less resources than their northern counterpart.

    It is a reflexive action to follow the resources. Can you really blame anyone for attempting to survive? I certainly wouldn’t blame you.

    The real dillemma is why do we continue to view this problem myopically? There is a global issue on our hands, let’s deal with it in a fair an involved manner that doesn’t result in human rights violations. Like, the right to exsist…. OR or you going to argue against that right???

  7. #7 by Melodia Gutierrez on October 13, 2010 - 11:27 pm

    PS. I have friends going through Ph.D. programs and still being denied citizenship. Professionals being denied citizenship… you know actually.. I could list a myriad of factual evidence, however, I think it would be beneficial to you to do the research. Rules: don’t use FOX or anyone who has obviously ever appeared on it.

  8. #8 by Larry Bergan on October 13, 2010 - 11:31 pm

    Melodia:

    I must have beat you by a split second and wondered why my comment was being delayed.

    I love your passion!

    We are all in this survival thing together! None of us are safe and that is something nonames like brewski must finally understand. No amount of money can keep you safe if the underpinnings of society collapse.

  9. #9 by Larry Bergan on October 13, 2010 - 11:35 pm

    I was referring to comments #4 and #5 which were entered in the same minute.

  10. #10 by Uncle Rico on October 14, 2010 - 9:55 am

    Yes, stories about people making the conscious decision to break the laws of [this] country.

    Oh, like Meg Whitman and Lou Dobbs?

  11. #11 by Dwight Sheldon Adams on October 14, 2010 - 10:12 am

    Brewski–

    I wish as concerted an effort were put forth to stop reckless driving—you know, a crime that actually hurts someone. I wish as much rancor surrounded it, and as much political capital was spent on it. Wishful thinking, I suppose, because if someone tries to end a real crime that almost everyone commits at one time or another, it’ll be scoffed at or it will be political suicide. It’s so easy to be angry at a “crime” that’s committed by so few and to ignore the crimes that we all commit out of a far pettier selfishness than that which motivates the minority.

    I personally enjoyed the basic idea of the Deseret News’s recent opinion piece about this. Its basic conclusion was: we hold the law inviolate, but we also believe that the law must be just. We want it obeyed, but we want it also to be obeyable.

    –Dwight

  12. #12 by Dwight Sheldon Adams on October 14, 2010 - 10:25 am

    At the same time, however, we must also recognize that there are a lot of problems associated with illegal immigration (as presently defined). Not every (and possibly not most) illegal immigrant is benign. There are legitimate concerns with our border policy, in particular, although those concerns don’t necessarily regard illegal immigrants as such, but rather criminal immigrants (such as drug traffickers, human traffickers, etc.).

    I would say, then, that illegal immigration is typically a symptom of two things: a law which stares unbudgingly in the face of real need, and lax border control. Each is a disease to the just rule of law. Unfortunately, at present, the innocents who just want a better life (something we are gifted with for very little contribution), who are merely a symptom, are being charged with the disease itself. We need to fix the border so that it’s harder for the wrong ones to get through, but easier for the right ones. And, contrary to historical precedent, the “right ones” isn’t referring only to those who will provide more to our country than they gain. Even the “tired,. . .poor,. . .[the] huddled masses yearning to breathe free/The wretched refuse of [the] teeming shore. . .the homeless, [and the] tempest-tost” deserve a chance for a good life—if any of us deserve the gift of a great one.

    –Dwight

  13. #13 by Richard Warnick on October 14, 2010 - 11:14 am

    Melodia–

    Thanks for reminding us that the Obama administration is deporting more innocent people than the previous administration, at the rate of more than 197,000 a year. Of course, the DHS spin was to emphasize that “about half” of deportees are criminals.

    Immigration authorities deported a record 392,862 immigrants over the last year, Homeland Security Secretary Janet Napolitano said Wednesday.

    About half of those deported — 195,772 — were convicted criminals, also a record, Ms. Napolitano said, and an increase of more than 81,000 deportations of criminals over the final year of George W. Bush’s presidency.

    Almost four years ago, I wrote about the high-profile raid on Hyrum, Utah that made headlines. Now there are even more deportations, but without attracting much media attention.

  14. #14 by brewski on October 14, 2010 - 11:27 am

    Dwight,
    So let’s assume we can keep out th drug traffickers and we can allow in all the ones who just want to work.

    Can you tell me, how many good ones are you willing to allow in? 10 million, 100 million, 1 billion? Or do you have no limit? As long as they are willing to come here and not be drug traffickers then let them all in?

    Also, how low are you willing to push wages for supermarket courtesy clerks? I know that this whole supply and demand thing is unfashionable to talk to on this site, but the reality is that if one were to allow in an unlimited number of people from all over the world currently making $1 or so a day, then presumably they would be eager to work for far less than your typical Ogden High or WSU student would be willing to work for. So how low of a wage are you willing to push it before you think it is a problem?

  15. #15 by Dwight Sheldon Adams on October 14, 2010 - 12:11 pm

    Brewski–

    How about you answer your own questions first? I’m sure you don’t believe in closing the borders off completely. Let’s hear some proposals from the active position.

    I know that this whole supply and demand thing is unfashionable to talk to on this site

    We just barely talked about straw-men, Brewski. You know full-well that, while I have argued that supply-and-demand doesn’t conform strictly (or even reliably, at times) to a mathematical model, I have acknowledged and even used the principle in my arguments. (If anything, I’d say that s&d doesn’t obligate behavior or produce a certain result, but it does enable them)

    –Dwight

  16. #16 by Tiller on October 14, 2010 - 12:45 pm

    Don’ t any of you feel like victims Brewski or illegal aliens. Fight or flight has consequences in nature and in our lives, many creatures flee and are eaten up anyway.

    That the outcome is negative to an individual personally does not change the reality of the existent process that is now occurring. It would be nice if I could insinuate myself onto a country that might better serve my interests and give me a better life. It would great to know that I contribute more than I take away, but none of that changes illegality. We prosecute corrupt philanthropists like Madoff, so this point is of no consequence.

    I would immigrate within the constraints that my chosen nation provides and to do that without violating others who are approaching the process through the current laws of the country. It is simple respect.

    As I stated in a reply no one will touch, this is the most lax nation when it comes to immigration policy on Earth. What we see happening now is a return to the laws on the books. It is becoming apparent that even under our Progressive African Prince as Cliff likes to call Obama, that to continue to leave immigration laws unenforced is simply no longer politically tenable. This being the reality the outcome and consequences are obvious, and complaints are not going to change that.

    I have been through this in a country perceived to be far more progressive than America, and let me assure you, complainers of US immigration policy have no simple idea of how this issue plays out in most nations.

    Melodia, I knew the man who was Chief CEO of St. Mary’s hospital in Grand Junction, a rather amazing tertiary hospital. He could not get his visa renewed and he is back in Canada. This is how the law works, and no one is exempt from the process as it stands. No one. Accepting that and going to pick up forms to apply for legal residency is what I suggest. I don’t see any amnesty coming as nice as it would be. It would screw everyone who has applied here legally, really paint them as fools. It undermines the very thing you would like to see improved.

    One thing to remember, as I learned in Canada, the law is there, and despite the pain of being on the wrong side of it, the entire thing isn’t about you. I know this as I was done as your friends are currently being done, and in that progressive paradise, there is no recourse, and of course, no benefits for you until you get legal. That is why there is a 50k requirement to apply, even if you are married to a citizen. You get NOTHING from Canada in the process until it is over. You do if you claim refugee status, which requires you to demonstrate that if you return to country of origin, you will killed for whatever reasons.

    It sucks, I know how people feel, but what we want and get is not the way the winds are blowing.

  17. #17 by brewski on October 14, 2010 - 12:47 pm

    How about you answer your own questions first?

    So you are dodging the questions?

    I’d like to see the border controlled so that no one gets in that we don’t want to get in and that we don’t know has come in. Right now we don’t know who is coming in, how many are coming in, or pretty much anything about them.

    I’d the like the automatic citizenship for babies of tourists, business visitors, legal visitors, legal temporary workers and all illegal aliens ended. I have no expectation that if my wife and I were on vacation, or temporary work assignment, in Belgium, that if we had a baby there that he/she would be granted Belgium citizenship with all the rights inherited thereto.

    I’d like the same immigration laws enforced in the US as the Mexican government does. That is they deport their illegal aliens from Guatamala or Nicaragua when they find them. I don’t think the president of Mexico considers himself racist for advocating his own law.

    I’d like to see the laws regarding the employment of illegal aliens to be enforced. If illegal aliens knew they couldn’t get a job here, they wouldn’t come and the ones who are here would leave on their own accord. No need for any deportations.

    I am willing to have a robust agricultural workers program. But according to NPR:

    About 3 percent work in agriculture; 33 percent have jobs in service industries; and substantial numbers can be found in construction and related occupations (16 percent) and in production, installation and repair (17 percent).

    So when the pro-illegal lobby jumps up and down about “who is going to pick your lettuce?” I will agree with them on that. Just tell the other 97% to leave.

    Here is my perspective. I used to wash dishes, flip hamburgers, make beds and do all the “service” jobs which are now done by a lot of illegal aliens. When I did those jobs when I was 16-21 year old, I made the current equivalent of $14-$17/hour. I was not paid that wage because the employers were nice or because of the statutory minimum wage. I was paid that wage because that was what the market would bear. I contend that one of the main reasons that the market wage for service jobs has declined over the last 30 years is due to the influx of new supply of labor willing to work for less. No, there is no mathematical precision. But as a directional force it is difficult to argue that the supply of illegal aliens has not pushed down wages for these types of jobs.

  18. #18 by brewski on October 14, 2010 - 1:04 pm

    By the way, my mother is a legal immigrant who didn’t come to the US until she was an adult. She met my dad here when she had a temporary visa. They got engaged. Before her visa expired she went home. Then he went to her country to marry her there. Then, she got a permanent visa to cme to the US. Thirteen years later she became a citizen.

    My brother’s wife was born on Korea and came to the US legally and didn’t speak a single word of English.

    My wife’s uncle is from Honduras who came to this country legally.

    So don’t even try to call me a nativist or racist.

  19. #19 by Dwight Sheldon Adams on October 14, 2010 - 1:17 pm

    Brewski–

    Don’t be so touchy. I’m not about to call you a racist. Have I ever?

    And I’m not dodging the question. I just realize (from prior experience) that it’s prudent to dodge a provocation. If I get you to state your position reasonably first, the chances of having a Brewski blow-up are much less.

    Think of it like a can of beer—you don’t want to shake a Brewski until you’ve emptied it out—otherwise it’ll spurt all over you and make a mess.

    That’s all meant in good fun, Brew (though some of it is serious). ;-)

    –Dwight

  20. #20 by Dwight Sheldon Adams on October 14, 2010 - 1:18 pm

    I respect your position on this matter (though I disagree with tidbits). I’ll get to it later. At work, you know.

    –Dwight

  21. #21 by brewski on October 14, 2010 - 2:13 pm

    Think of it like a can of beer—you don’t want to shake a Brewski until you’ve emptied it out—otherwise it’ll spurt all over you and make a mess.

    Thanks for making me laugh out loud. :-)

    Don’t be so touchy. I’m not about to call you a racist. Have I ever?

    Sorry. That wasn’t directed at you as much as other readers/posters who have and probably will.

    And I’m not dodging the question.

    Well, one of of the things I ask people is to take their own positions to their own logical conclusions. Some have stated above that we should let in anyone who wants to work and isn’t a drug dealer. OK. Accepting that, don’t you think that if the US announced anyone who wants to come here and isn’t a drug deal can that there could be about a billion people who would? It isn’t a provocation as much as a follow up question which logically flows from that position.

  22. #22 by Richard Warnick on October 14, 2010 - 2:18 pm

    brewski–

    When the federal minimum wage was $3.35/hour, it was absurdly low and nearly all entry-level jobs paid more. Around $5.50/hour was the norm (as you put it, the equivalent of $14 in 2010). The Reagan-era minimum wage freeze lasted from January 1981 to April 1990.

    Then we had the Bush minimum wage freeze at $5.51/hour from September 1997 to July 2007, which broke Reagan’s record.

    Why blame immigrants for low wages when Congress is clearly at fault for setting absurdly low minimum wage rates?

  23. #23 by brewski on October 14, 2010 - 2:24 pm

    When the federal minimum wage was $3.35/hour, it was absurdly low and nearly all entry-level jobs paid more. Around $5.50/hour was the norm (as you put it, the equivalent of $14 in 2010)

    Q: Why did employers voluntarily pay the equivalent of $14/hour if they didn’t have to?
    A: Supply and Demand

  24. #24 by Richard Warnick on October 14, 2010 - 3:47 pm

    Yeah, because even undocumented immigrant workers wouldn’t take jobs that paid $3.35/hour.

  25. #25 by brewski on October 14, 2010 - 4:55 pm

    Richard,
    Let’s talk apples to apples.
    If the prevailing wage was $14 then, then what has changed to make it well below $14 today?

  26. #26 by Richard Warnick on October 14, 2010 - 5:33 pm

    brewski–

    I don’t agree with your premise. Just as an example, here are groundskeeper salaries:

    An annual salary of $29,120 is equivalent to $14.00/hour. Not much has changed in 30 years, when you adjust for inflation.

  27. #27 by brewski on October 14, 2010 - 5:39 pm

    So you are taking the position that wages for unskilled jobs have not gone down in 30 years?

    I made $14 flipping burgers when I was 16. How many 16 year olds are making $14 at McDonalds now?

  28. #28 by Richard Warnick on October 14, 2010 - 5:41 pm

    brewski–

    I’m going to have dinner and watch Olbermann now. You could look it up yourself.

  29. #29 by brewski on October 14, 2010 - 8:09 pm

    Based on my research, I came up with $8.50/hour. So you are only off by 65%.

    I guess that exlains why you like watching fiction like Olbermann.

  30. #30 by Richard Warnick on October 14, 2010 - 9:24 pm

    OK, my search indicates that the average McDonald’s salary is $34,000 a year, which equates to an hourly wage of $16.35.

    On the same site, if you search for the average McDonald’s salary in Utah, it’s $31,000 or $14.90 an hour. Utah is known as a low-wage state.

    Where did you get your number? Better yet, give a source for your assertion that real wages for non-agricultural entry-level jobs have declined over 30 years because of immigrants. We know wages declined during the Bush administration, however that was due to two recessions.

  31. #31 by brewski on October 14, 2010 - 10:15 pm

    Richard, according to your own source:

    This salary was calculated using the average salary for all jobs with the term “mcdonalds” anywhere in the job listing.

    This of course couldinclude the CEO, lawyers, accountants, regional buyers, managers and pretty much everyone else. In no way does it seem apples to apples to a 16 year old hamburger flipper which is the wage we were comparing.

    My research consisted of asking 2 people I know who work at similar internationally well known fast food hamburger corporations. In other words, apples to apples.

  32. #32 by brewski on October 14, 2010 - 10:24 pm

    Why did workers’ earnings become more unequal during the 1980s and early 1990s? Experts disagree on the exact causes, but five factors are generally cited—technological change, trade liberalization, increased immigration, reduced value of the minimum wage, and declining unionization. Real wages of high-skilled workers increased on average while the real wages of low-skilled workers tended to decline….Immigration has increased significantly since 1965, particularly among less-skilled workers with lower education levels, causing greater competition for unskilled jobs and lower wages for unskilled workers.

    – United States Department of Labor

    http://www.dol.gov/oasam/programs/history/herman/reports/futurework/report/chapter2/main.htm
    See chart 2.2

  33. #33 by Tiller on October 14, 2010 - 10:25 pm

    You two should get a room.

  34. #34 by Richard Warnick on October 14, 2010 - 10:39 pm

    brewski–

    So you cherry-pick one factor out of five cited in your quote. I would cite “reduced value of the minimum wage,” “trade liberalization” (aka outsourcing) and “declining unionization” as the most significant, aside from the obvious macroeconomic factors which aren’t mentioned. Technological change resulted in increased productivity, but the fact that the fruits of productivity weren’t shared with workers isn’t the fault of technology.

    The data I’ve seen point to wage stagnation, which is bad news, but not the declining wages you suggest.

    January 1980 average hourly wage = $ 6.57 (CPI-adjusted $16.49)
    January 2010 average hourly wage = $ 18.90 (CPI-adjusted $17.03)

    As the late Senator Daniel Patrick Moynihan (D-NY) once said, “You’re entitled to your own opinions — but you’re not entitled to your own facts.”

  35. #35 by brewski on October 14, 2010 - 11:03 pm

    I don’t think I ever said it was the only factor.

    It would be a huge step for you to even acknowledge it as one of the factors. But you are like a climate change denier or a birther. You won’t let data get in the way of your preconceived notions.

    The DOL list does not attempt to rank order or to quantity any of those factors

    I would say that “declining unionization” is a symptom and not a cause. Unions have declined because employers have been able to find illegal aliens to hire who can’t unionize. If the illegal aliens weren’t there in the first place, then it would be harder for employers to avoid unions.

    Trade liberalization is a big deal. In other words “China”. But I am not sure what the choice is. If the US were to erect barriers to trade with countries like China, that doesn’t mean that China will go away. It just means that other companies will go there or Chinese companies will emerge and American ones will wither away. The choice isn’t between China or no China. The choice is do we trade with them or not. If not, then beware what you wish for.

    The lesson here is the UK in the 60’s and 70’s where rather than trying to participate in the new post-war world, British business was left in the dust. They tried to hang on to each British job and instead were left with an empty country. Until Thatcher saved them.

    http://pewhispanic.org/files/reports/53.pdf
    See Figure 8.

  36. #36 by brewski on October 14, 2010 - 11:06 pm

    “reduced value of the minimum wage,” makes no sense at all. If I was making more than the minimum wage at 16, then clearly my employer wan’t paying me a wage set by the minimum wage. He was paying me that because that was the market wage. If an employer today is paying more than the minimum wage then he is paying that wage not because of the minimum wage. So in both cases the minmum wage is irrelevant is determining the prevailing wage.

  37. #37 by brewski on October 14, 2010 - 11:09 pm

    The data you show is for all earnings and not low-skilled earnings. The DOL link I posted shows the real wages split by education level. In that you can see that low skilled wages have declined.

    To quote Brewski “If you are going to quote data, you better know what the data is and what it says and how to understand it”.

  38. #38 by Richard Warnick on October 14, 2010 - 11:10 pm

    Looking over the Department of Labor report you cited (from 1998), it appears they were looking at wages plus benefits. I agree that employment benefits have declined along with the decline of unions, especially for entry-level jobs.

    Citing “reduced value of the minimum wage” makes sense, because during the Reagan administration it was frozen at $3.35 for nearly a decade during a period of high inflation. The “ripple effect” of the minimum wage is a big factor in the prevailing wages for low-paid workers.

  39. #39 by brewski on October 14, 2010 - 11:34 pm

    Please cite a refence to the “ripple effect” on why I was paid $5.50 and hour when the minimum wage was $3.25. Please make reference to any data or economic theory using the words supply and demand.

  40. #40 by Richard Warnick on October 14, 2010 - 11:39 pm

    North Carolina State University economist Mike Walden:

    “[P]ast experience shows that when the minimum wage goes up not only do those folks who receive minimum wage get a higher wage, but people in the ranks just above them may also get a higher … wage, because there is this ripple effect to the minimum wage … And studies suggest, therefore, that perhaps another 6 percent of the workforce, or 8.3 million workers, might actually see a rise in their wage rates even though they are not getting the minimum wage because they are at that upper tier just above minimum wage workers.

    So altogether we might expect that about 11 percent, or around 15 million workers, would get the benefits of a higher minimum wage, either directly or indirectly,” he concludes.

  41. #41 by brewski on October 15, 2010 - 8:42 am

    I understand what he is saying, but I don’t think it applies to this case. He is describing when workers are making the minimum wage, and then there is an increase in the minimum wage. But in the timeframe we are discussing, the market wage for the lowest paid jobs (fast food) was already 65% higher than the statutory minimum wage. So if the statutory minimum wage was $3.25 and the market wage was $5.50, increasing the statutory minimum wage to $4.00 would have no effect on the market wage. He is describing when the market wage and the minimum wage are both $3.25 and then the minimum wage is increased to $4.00, that people who might have been making $3.50 might go to $4.25.

    Separately, it is difficult to understand how declining unionization has any affect over time in fast food wages since those are pretty strictly non-union jobs and always have been. I only knew one person at the time who was a member of a union and he worked at a supermarket, so that didn’t affect my wage at all.

    So based on the discussion above, I don’t the mnimum wage has has any affect due to the reasons explained, I don’t think declining unionization has had any effect as explained, so what is left is global trade and immigration which make logical sense. They make sense since both of those are pretty clear and obvious trends in the supply and demand for labor and the increased competition for low skilled jobs which would drive down wages. This is intuitive.

  42. #42 by Richard Warnick on October 15, 2010 - 10:01 am

    Let’s say you have a job that pays two dollars more than the minimum wage. Then Congress gets taken over by Democrats and they raise the minimum wage (the only way it ever happens). If your employer doesn’t give you a better wage, keeping that two-dollar advantage, you’ll probably look for another employer.

    If more entry-level union jobs with benefits such as health care and retirement were available, most workers would prefer those jobs to non-union jobs at the same wage. So yeah, the decline of unions has an effect on the overall job market.

    If you lump together outsourcing and immigrant labor, it’s easy to obfuscate. Offshore outsourcing has been on the rise, while immigration (in particular, undocumented immigration) is in decline.

    Outsourcing example:

    Forrester Research estimated that 3.3 million US jobs and about $136 billion in wages would be moved to overseas countries such as India, China and Russia by 2015.

    Immigration example:

    A new study shows that fewer undocumented immigrants are arriving in the United States and that many others continue to leave in large numbers because of the economy and increased enforcement.

  43. #43 by brewski on October 15, 2010 - 1:31 pm

    Let’s say you have a job that pays two dollars more than the minimum wage. Then Congress gets taken over by Democrats and they raise the minimum wage (the only way it ever happens). If your employer doesn’t give you a better wage, keeping that two-dollar advantage, you’ll probably look for another employer.

    If the market fundamentals of supply and demand for a particular job resulted in a clearing price for that type of job is $7 per hour, and the minimum wage is $5 per hour, and then Congress makes the minimum wage $6 per hour, there is no reason to believe that the market fundamentals of supply and demand have changed at all. So there is no reason to believe that the market wage for that job would change at all. If you could have gotten more somewhere before then that would be no different after. There is no analysis which says that the market clearing price will change for a job above the minimum wage increased just because someone wants it to.

    If more entry-level union jobs with benefits such as health care and retirement were available, most workers would prefer those jobs to non-union jobs at the same wage. So yeah, the decline of unions has an effect on the overall job market.

    If there were a lot of union jobs with high pay and benefits available, then yes it would pull all wages and benefits up. But when I was making $14/hour flipping hamburgers, I only knew of one person in a union. So there were lots of people I knew all flipping burgers all making $14/hour and there was no big supply for union jobs as an alternative. So while if there were I could see that it would be a big help. That just seems like it was the case.

    immigration (in particular, undocumented immigration) is in decline.

    Immigration has been on the rise for the previous 40 years and only declined in the last 3 years due to demand destruction. So there is no reason to believe that the very recent decline in immigration due to a lack of jobs would cause a rise in wages.

    Forrester Research estimated that 3.3 million US jobs and about $136 billion in wages would be moved to overseas countries such as India, China and Russia by 2015.

    Agreed.

  44. #44 by brewski on October 15, 2010 - 1:32 pm

    I screwed up my quotes.

  45. #45 by Dwight Sheldon Adams on October 15, 2010 - 2:18 pm

    Brew, Rich–

    While you guys are on this topic (which I find fascinating), I want to point something out:

    Nothing obligates a manager to pay his employees less than he is able to pay. Many things, however, obligate employees to work for less than the cash-flow their labor produces. Supply-and-demand, while a delightful little mathematical model for human behavior, operates in reality according to choice. Choice dictates how much profit can be given to the workers. Two companies with identical profit can either reinvest in their workers, their company, their owners, or (if they have them) their shareholders. This is choice, and no mathematical model but the model of human greed can fully explain why it is that labor supply must result in lower wages.

    We can talk supply-and-demand til we’re blue in the face but it won’t change the simple facts that supply-and-demand gives employers and producers a range, not a set value, over which prices and wages may be set without throwing the company or product’s commercial viability out of whack.

    There’s no law of nature that says that because illegal immigrants will do the job for less we must hire them for less. It’s an all-too-human law of grasping selfishness and the corrupt law of market competition that turns those gears, when one company can hire illegals at cheap wages to throw the others out of competition unless—of course—they do the same.

    This isn’t to say that it’s reasonable to expect that if people were just nice that everything would work out and everyone would prosper. This is simply to denounce flatly the idea that supply-and-demand controls the market more than choices do—if nothing else the choice to prop up a system that responds so crassly to desperate people in need of work by throwing other people out of work and diminishing wages even in the face of a potential rise in product demand.

    How can we expect anyone to be responsible or lawful when the people with power refuse to be, and aren’t asked to be—when they are permitted (and even lauded for it) to hide behind bogus mathematical models that steal their accountability and their agency?

    That said, Brewski is right, according to the prevailing economic model of the time—illegal immigrants (and legal ones, and any children beyond 2.1/family, and employees in diminishing markets who have to find jobs in unskilled labor) inflate the labor supply relative to demand, and so wages are diminished—I say “are diminished” because the wages are acted upon. They don’t mystically, magically, or through the market itself diminish, but by the choices of those who benefit or survive from their diminishment.

    Dwight Sheldon Adams

  46. #46 by Dwight Sheldon Adams on October 15, 2010 - 2:19 pm

    Long story short—an increase in labor supply empowers market manipulation, which includes wage diminishment.

    –Dwight

  47. #47 by Dwight Sheldon Adams on October 15, 2010 - 2:30 pm

    Note: Supply-and-demand is a real and valuable principle of economics, no matter the system. Even in central planning, the concept is either to determine demand beforehand and make supply to match it, or to predict what demand will emerge and make supply to match it, minimizing waste and maximizing product accessibility in the process.

    This doesn’t mean that the modern practical and conceptual applications of supply-and-demand are either representative of what the phenomena is or sufficiently restricted to merely that which it actually describes. Supply-and-demand works as an observational tool and as a means of measuring total potential for product accessibility at certain levels of output, etc., but as a philosophical justification for certain behaviors or market shifts it tends to be wildly inadequate. It is another excuse along the lines of, “It’s just business,” pushing away accountability for choices that people make for the sake of their own self-benefit—most of which can only be truly justified if one reduces one’s judgment criteria only to axioms of market mentality.

    I begrudge no one who, for reasons which may be described in supply-and-demand terms, must choose between himself and his employee and chooses himself. This is a sad reality of a poorly-integrated society, and we all may face it with no more desire or intent to do harm to others than a person in that position possesses. But when we are given the opportunity to look at our system and decide whether it’s the best, and we begin to use supply-and-demand to justify the impoverishment of an entire class of people despite the overwhelming productive potential of our labor force and natural resources, the model changes from an observational tool to a bad excuse—a distraction from the real problems at best, a rhetorical and ideological trap for the benefit of the already overly-powerful at worst.

  48. #48 by Richard Warnick on October 15, 2010 - 3:33 pm

    Dwight–

    The latest estimate (PDF) from the Bureau of Labor Statistics tells us that the U.S. labor force totals 154,158,000. The latest Pew Hispanic Center estimate of the undocumented immigrant population is approximately 11,100,000.

    Assuming, for the sake of argument, that ALL undocumented immigrants are part of the labor force (i.e. not too young, too old, infirm or in jail) then they represent AT MOST just 7.2 percent of workers. I would guess the actual figure is less than 5 percent.

    To say that the wages of undocumented workers are a drag on everyone else’s wages is a tail wagging the dog theory.

    Now, one thing we haven’t discussed is the fact the some industries are heavily reliant on immigrants, and often harbor undocumented immigrants. The meat-packing industry, for example. There you will find at least anecdotal evidence of declining wages.

  49. #49 by brewski on October 15, 2010 - 4:00 pm

    Richard.

    If there were 154MM bushels of wheat, and the current market-clearing price at current demand was $5/bushel, and then if you dropped an additional 7.7 million bushels of new wheat on the market, one could easily expect the new market-clearing price for wheat to drop. That is how markets work.

    The amount of how much the new market price compares to the old market price is dependent on the elasticity [slope] of the demand curve. But for argument’s sake, lets assume that a 5% increase in the supply of wheat results in a 5% decrease in the price of wheat. Not an unreasonable assumption.

    But in your example you are taking the whole labor force (154MM) and comparing it to the size of the illegal labor force (let’s assume it is 7.7MM). This is not apples to apples since illegal aliens are largely entering just the unskilled portion of the labor market. The unskilled labor market is about 1/3 of the total, so lets call it 50MM for round numbers. So adding 7.7MM of new supply into the market is really 15.4% of the previous supply. So we can assume that a 15.4% increase in new supply could result in a 15.4% drop in wages. Not an unreasonable conclusion.

    The 1990 Census revealed that 25 percent of foreign-born adults who were 25 years and older less than a ninth-grade education (compared with only 10percent of native-born adults). Moreover,42 percent of the foreign-born adult population did not have the equivalent of a high school diploma (compared to 23 percent of the native-born adult population). Thus, it is the low-skilled, low wage sector of the nation’s major urban labor markets that are the most impacted by immigrant job-seekers. Not only do low-skilled immigrants compete with each other for whatever opportunities exist at the bottom of the nation’s job hierarchy, but they also compete with the low skilled native-born workers. Indeed, when the National Research Council (NRC) calculated in 1997that immigration provides a net “benefit” to the U.S. economy of from $1 to 10 billion a year, the “benefit” was based largely on the result of the wage suppression of the wages of low-skilled workers whose wages are lower than they would have otherwise been. This, of course, is only a “benefit” that an economist can appreciate. It is certainly no “benefit” to low-skilled workers who are already at the bottom of the nation’s income distribution. It is an artificially imposed hardship imposed by government policy on native-born low-skilledworkers. The only actual wage “benefit” in this process is received by the immigrant workers themselves who typically earn considerably more at the bottom of the U.S. wage scale than they would have earned in his/her homeland. Lows killed native-born workers lose; low-skilled foreign-workers benefit. Whose interests are U.S. policymakers supposed to protect?

    – “Immigration Policy and the Plight of Unskilled Workers” Vernon M. Briggs Jr. Congressional Research Service, Cornell University Industrial and Labor Relations School

  50. #50 by brewski on October 15, 2010 - 4:23 pm

    Dwight,
    If you were shopping for a used car and someone offered to sell his car to you for $3,000, would you say “no, no, no. That wouldn’t be fair. I want to pay you $4,000″?

  51. #51 by Richard Warnick on October 15, 2010 - 4:31 pm

    “Immigration Policy and the Plight of Unskilled Workers” is not an objective source, but congressional testimony from a House Judiciary subcommittee hearing held in March 1999.

    Vernon M. Briggs, Jr. is currently on the board of directors of the innocently-named Center for Immigration Studies. What is it really?

    I checked it out on SourceWatch:

    WARNING: This center is actually a think tank directly connected to the anti-immigration advocacy group FAIR (Federation for American Immigration Reform) and is aligned with the conservative magazine National Review. CIS has also been critiqued as being part of a network of anti-immigrant groups that cater to a white supremacist constituency.

    If you watched Rachel Maddow on MSNBC, you would know all about FAIR and their connection to the Arizona “papers please” law.

  52. #52 by Tiller on October 15, 2010 - 5:55 pm

    The way the winds are blowing in supposed progressive paradise.

    http://www.guardian.co.uk/uk/2010/oct/14/deportation-escorting-security-firms

  53. #53 by brewski on October 15, 2010 - 6:39 pm

    Richard,
    Sometimes people with a strong point of view have that point of view because they have done the analysis and they come to a conclusion. Sometimes that conclusion is correct. Sort of like scientists study the data and come to the conclusion that people are causing global warming. You wouldn’t just dismiss some congressional testimony of some anti-global warming advocate as “not an objective source since this guy is ‘liked’ to those radical environmentalist groups” would you? So rather than dodge the substance of what he says, you just cast him aside as not being objective.

    Nevertheless, it is still difficult to make the argument that you can increase the supply of unskilled labor by 15.4% and that would not cause the price of unskilled labor to go down. That is the case you are making and it defies any kind of economic analysis.

  54. #54 by brewski on October 15, 2010 - 6:47 pm

    Vernon Briggs Jr.:
    He attended the University of Maryland where he majored in economics and was elected president of the student government association during his senior year. Upon graduation in 1959, he undertook graduate studies in labor economics at Michigan State University where he received an M.A. degree in 1960 and a Ph.D. degree in 1965.

    In addition to the extensive publications of his research, he has served as a member of the National Council on Employment Policy as well as on the Board of Directors of the Corporation for Public and Private Ventures (Philadelphia) and the Center for Immigration Studies (Washington D.C.).

    He has also served on the editorial boards of such professional journals as the Industrial and Labor Relations Review, the Journal of Human Resources, The Texas Business Review, and the Journal of Economic Issues.

    Yeah, sounds like some hack. We should all trust Rachel Maddow:
    Maddow earned a degree in public policy from Stanford University in 1994. In 2001, she earned a Doctorate in Philosophy (DPhil) in politics from Oxford University.

    So from what I can tell, Maddow has no education in economics whatsoever. I guess she knows “public policy” and “politics” whatever the hell those are.

  55. #55 by Richard Warnick on October 16, 2010 - 11:49 am

    Um, congressional testimony is by definition advocacy, not objective research.

    The immigration issue is a human rights issue that’s often cloaked in economics because the anti-immigration side doesn’t want to look like racists.

  56. #56 by brewski on October 16, 2010 - 2:17 pm

    Umm, if a scientist testified before congress that humans are causing global warming, does that make it not true?

    The immigration issue is an economics issue and the pro-illegal alien side doesn’t want to discuss economics so they just shout “racist” since they don’t have anything else.

  57. #57 by Richard Warnick on October 16, 2010 - 3:47 pm

    If a scientist testified before Congress on global warming, I’d want to see the research his testimony was based on.

    If a policy is objectively racist (e.g. Arizona’s “papers please” law) then I’ll call it racist. If an interest group (e.g. FAIR) is racist, same thing.

  58. #58 by brewski on October 16, 2010 - 6:09 pm

    If a policy is objectively racist (e.g. Arizona’s “papers please” law) then I’ll call it racist. If an interest group (e.g. FAIR) is racist, same thing.

    If my grandmother had wheels, she’d be a tram.

    So I guess you think the current Federal immigration laws are racist, and that Mexico’s immigration laws are racist, and most of the world’s immigration laws are racist. By your definition, the only non-racist immigration policy any country can have, including Mexico’s, is to let in everyone.

    I take it you have completely conceded the obvious supply and demand effect on prices since you left that analysis alone and only told me what Rachel Maddow thought of economists who apply basic economic analysis to employment phenomena. So you have fallen back to the tried and true “racist” charge.

    DSA, if you are reading, this is what I mean when I accuse the left of being intellectually weak and resorting to ad hominem and “racist” bomb throwing.

  59. #59 by Dwight Sheldon Adams on October 17, 2010 - 7:07 am

    Dwight,
    If you were shopping for a used car and someone offered to sell his car to you for $3,000, would you say “no, no, no. That wouldn’t be fair. I want to pay you $4,000??

    Actually, I’ve behaved in this way before. Never with something as expensive as a car—mainly because I’ve never bought something as expensive as a car. I have, however, attempted to haggle a fair price on a car. The incentive to drive the price as low as I could push it just wasn’t in me (“fair” not being defined by the maximization of benefit to myself). Oh well. I guess I broke economics.

    I’ve also endeavored in a few instances to provide product to individuals at a price significantly lower than market value—in a few cases, products which exceed the value of a $4,000 car by quite a bit. Unfortunately, I hadn’t the capital to back up my good will. Perhaps the mechanisms of our market emerge not prior to their application, but because those who obtain the most are willing to apply it to the continuance of the market; that is, if I was willing to buy low and sell high, I would have more resources with which to further the operations of a market in which buying low and selling high was the central stock trading mechanism (as one example). Not being willing to buy low and sell high, I have little power to alter the motivations of those around me. Again, this is not because the market dictates that you must buy low and sell high, but because it empowers that choice. It’s a question of social responsibility, not of market necessities. Those who have none force the rest of us to have none or else to become their perpetual economic thralls.

    Resources empower people to make choices. If I was desperate enough for a car to buy one right now, and I had the money to spend $4,000 without severely impeding my ability to survive and provide for my little family, I would like to think I would pay the $4,000—or at least that I would pay somewhere between his offer and my valuation of the car. I recognize, though, that I would likely accept his valuation of the car without thinking about it (or in part because of the desperation that living in a volatile market creates for people like me on the low-wage end of the spectrum).

    Your illustration of the car is, of course, not an apples-to-apples comparison to wages, employment, etc. People generally don’t go to employers and request a certain wage (although employers do coyly request that you post your ideal wage on your resume, no doubt in some cases to see if you’ll underbid what they value your work at). On top of that, the purchase of a single item (in particular, a used one) is far different from the management of a business which employs other individuals. The transaction is swift and terminal. Employment, on the other hand, is long-term and involved.

    To bring the two examples closer together, let’s suppose that the person selling me the car was someone I knew. I was aware of their circumstances, of their great need for money very soon for a vital purpose, of their unwillingness to give up the car but need for a different one (or just for the cash). In such an instance, I would be more akin to the employer, to whose decisions the livelihood of his workers is bound—this in particular in the unskilled labor market where need tends to be greater relative to pay. In such a case, I may wish to pay a little more for the car than I would expect to pay under other circumstances. It may be a dent to my pocketbook, but hey—I’m not going to lose my house because I keep a little less of the money. It’s my choice to make and I’ve made it.

    Compare that to the companies we’ve been discussing. Many companies make what I would label obscene profits, relative to the need of the beneficiaries. It’s possible to pay the people a little more, and on the lower-end of the wage scale, it’s probably even a good idea, or maybe even a moral obligation. There’d be a little smaller pot of gold at the end of the quarter. But so what? It’s still a pot of gold!

    Anyway, there are other reasons why it’s not an apples-to-apples comparison (such as the fact that it doesn’t approach the effect on the car’s price if it’s placed in a competitive market), but the bottom-line is: If I didn’t offer him the $4,000 (supposing I perceived that to be its actual value), would that choice have been made by the market—or by me?

    Richard–

    Come now, of course illegal immigrants affect wages. They affect unemployment rates, too. Acknowledging this is not the same as saying that we should kick them all out of the country.

    Still, following Brewski’s numbers, the decline in wages has been significantly higher than the proposed drag on wages. It seems, therefore, that the immigration issue (even if its harm is maximized) isn’t our chief wage-depression problem.

    Dwight Sheldon Adams

  60. #60 by brewski on October 17, 2010 - 12:01 pm

    DSA,
    I appreciate your discussion. It is clear that you get how markets work and how it is made of up people making decisions and how they behave in a marketplace of choices.

    Your discussion could be described as “positive” economics [that is, how things “should” work], while my description is “normative” economics [that is how things “do” work, like it or not].

    I good question for McDonald’s shareholders, is are you willing to accept a lower profit and a lower dividend so that the company could pay a higher wage to its unskilled employees. Keep in mind the owners of McDonalds include TIAA-CREF [university employee retirement plans] and the Bill and Melinda Gates Foundation.

    So if we polled the professors at WSU and asked them “will you accept a lower retirement income so that McDonald’s can pay their unskilled employees more?” my guess is that the answer would be no for the most part.

    Also, I do not think nor did I state that immigration is the only factor pushing wages lower for unskilled workers. But if accept the back-of-the-envelope number of a 15% decline in wages attributed just to illegal immigration, I would call that a pretty large effect. Separately there would be legal immigration, global trade, and the other factors discussed above.

    The ironic part of course is that, as a generalization, those who favor more of an open-border policy also bemoan the decline in wages for unskilled workers. Well, this is a bit like wanting lower gasoline prices and for people to drive less. You can want them all you want, but in both cases they are forces pushing in opposite directions of your stated goals.

  61. #61 by Dwight Sheldon Adams on October 17, 2010 - 12:55 pm

    Brewski–

    So if we polled the professors at WSU and asked them “will you accept a lower retirement income so that McDonald’s can pay their unskilled employees more?” my guess is that the answer would be no for the most part.

    Interesting. As for me, my feelings are that if we were to start a serious cultural/political/social dialogue about how we conduct business not as a market but as a complex body of interacting choices and their consequences, we might find more cooperation in straightening up our labor, wage, and price problems than you expect. We’re all separated one step (or two or three or four) from the consequences of our actions by brokers, price setters, middle-men, and all of the other things that influence the choices that are available to us. When my purchase of a can of soup at the store has no apparent connection to the income of the courtesy clerk who shoves it in a bag, how can I be expected to make a wise (that is, a human as opposed to a market) decision about what that can of soup is actually worth—and that’s without even mentioning the miners, the chemical plants, the farmers, the ranchers, the food processors, the commercial artists, and the transportation that also gets payed by what I’m willing to spend on my lunch.

    We are intimately connected with the economic fate of everyone around us, but we’re just never asked or even encouraged to inquire about HOW. Give a child a first-hand experience about what happens when he tosses his plastic bottle in the river and you just may change the fate of industries and ecosystems. There’s a lot of power in just knowing, and even more in both knowing and facing social and moral expectations that you act upon that knowledge.

    I’ve just begun reading “Freakonomics.” It’s pretty interesting, although I have some qualms with breaking down everything into a question of incentives (it seems to lend itself to removing moral incentives in place of the much easier to manage economic incentives). But as long as social and moral incentives exist, it seems reasonable to me that they can easily replace many of our economic incentives. There are also pain incentives, of course, such as that which encourages compliance with government mandate. I’d like to avoid those if possible. But there’s still a lot of power in knowing and being a part of a group that also knows.

    A friend of mine proposed some time back that the solution to income inequality and insufficient charity funds would be to publicize all people’s earnings in an easy-to-search database. People would then be encouraged to 1) lower their pay if it far exceeds that of their neighbors or immediate community; and 2) give more to charity in order to justify their higher pay. I doubted this would work, by and large. Although I think that the social benefits would be substantial in some cases, there’s too much of a disconnect between the individuals affected—many overcompensated people would just call their critics jerks and that would be the end of it.

    In a group where decisions directly affect each other, however, I think this kind of transparency would help. Consider the professors at WSU: If they were discussing their retirement income, you could count on a few ~objective analyses to promote a socially-responsible choice, and then you could count on social pressure to mitigate between the maximum amount available and the minimum amount that’s acceptable. If presented in terms of a whole-society choice (e.g. “If everyone who affects the use of profits at McDonald’s votes this way, then X will result”), I think that you could rely on enough people genuinely wanting to be socially responsible and enough others wanting to not appear to be socially irresponsible that some real good could come of it.

    Back to “Freakonomics,” something I didn’t appreciate was their description of morality as the way we’d like the world to work and economics as the way the world actually works. This is reminiscent of your “positive” and “normative” economics statement.

    I don’t appreciate this because it neglects that morality itself is a question of incentives just as much as economics is. The motivations tend to follow the altruism pattern, however: do good for its own sake. If we take the definition and restate it realistically, then morality is the perfect state of social interaction as a product of individual choice, while economics represents the great variety of choice that exists between the antithesis to morality and morality. Economics declares nothing, but gives us the tools whereby we may measure the reasons for what was done.

    Proactively speaking, I side with those who say that economics is a human science before it is anything else: that observation is the form of the science, but the betterment of man is its function. It does have a definite function, or at least we may give it one, and it should not be wholly pragmatic. Ultimately, human beings are moral beings, whatever our individual conceptualization of “morality” is. The greatest loss we will face in terms of our humanity is when we reduce all human action down to economic behavior—when we give all of society a free pass to base all of their behaviors on economic incentives, when we try to quantify all cause-and-effect chains and eschew concept and belief from the cocktail with which we make our decisions. When all things may be perceived in terms of numbers, they will be—at least by the powerful, because numbers are the path of least resistance and of no responsbility. People are no longer free to choose when the numbers are all given to them and the ideas are taken away, and I worry that what many might call “normative” economics is merely a way for people to excuse themselves from having to choose when one choice is right and the other is self-benefiting. It’s the birthplace of “It’s just business,” of mass, faceless layoffs, of outsourcing, of outcompeting your fellows by hiring illegals, and so forth. It’s taking pills before the big game to enhance your performance.

    We can accept that, right now, this is the framework in which we have to operate. We can choose our course of action according to the rubric which has been forced upon us, and that rubric demands at least some deportation or a better control of our non-native work force. I don’t mind that, and I don’t fault anyone for their frustration over the issue. But I believe in expecting the best but planning for the worst, and for that perspective to have any force whatsoever one must do the work. In economic terms, this means we have to stop leaning on the crutch of arguments that assert the ages-old excuse for doing nothing, “That’s just the way things work.” People who live their lives that way in the very face of their own choices get nothing. Where choice exists, we need an awareness of that choice and the will to hold people to a higher standard than strict numbers-and-incentives science can demand. We need to hold people to a human standard.

    I apologize if I implied that you said that immigration was the only factor pushing wages lower for unskilled workers. I was simply saying that 15% is a relatively small portion of the actual wage decline (using numbers you’ve given and that I’ve experienced), and that this indicates that there are other concerns as well, and more significant ones, on the whole—i.e. that we shouldn’t use immigration as a scapegoat for lower wages, but acknowledge the role it has played.

    I agree with your final paragraph, but I want to point out that I’m wary of the use of the word “forces” (which I assume you use to mean “market forces”). It implies a lack of action or choice.

    I appreciate your comments, and thank you for your civility.

    Dwight Sheldon Adams

  62. #62 by Richard Warnick on October 17, 2010 - 3:03 pm

    Dwight–

    My position is that the effect of undocumented workers on overall job availability and wages is slight, and concentrated in a few industries.

    Brewski is trying to scapegoat immigrants for overall unemployment and wage stagnation. I don’t think that’s correct, and it’s part of the fear-mongering campaign being conducted by the right-wing.

    Let’s be realistic. Since when have Republicans genuinely cared about the wage structure for entry-level workers? I think I already pointed to the decade-long minimum wage freezes under Reagan and Bush.

  63. #63 by brewski on October 17, 2010 - 7:17 pm

    Brewski is trying to scapegoat immigrants for overall unemployment and wage stagnation. I don’t think that’s correct, and it’s part of the fear-mongering campaign being conducted by the right-wing.

    I never mentioned the word “unemployment”. I never mentioned fear. It isn’t about right winf or left wing. It is about data and supply and demand. I am sorry if the result is an inconventient truth.

    Since when have Republicans genuinely cared about the wage structure for entry-level workers?

    I never claimed they did. I am not defending or making any claim about Republicans on this issue. In fact, I think they have been awful since their corporate interests love illegal aliens who work for cheap. This has not been a discussion about partisan crap. This is about reality on the ground. On data. On analysis.

  64. #64 by Richard Warnick on October 17, 2010 - 8:33 pm

    brewski–

    It’s hard to know what your viewpoint is. You appeared to be blaming immigrants, but now you seem to do a 180 and blame employers.

  65. #65 by brewski on October 17, 2010 - 9:09 pm

    I haven’t use the word “blame” once. In normative economics there is no such thing as “blame”. It just is. As a matter of simple observation and data, if you dump 15% more supply of anything on any market, the price will go down. That is not a statement of “blame”. It just is.

    Also, employers are profit-maximizing entities. In fact, if they didn’t, their shareholders, such as TIAA-CREF would fire the current management and replace them with someone who will. Again, it isn’t blame. I just is.

    I don’t live in a world of personal rivalries, blame games and finger pointing. I live in a world of utility-maximizing behavior. I don’t like it or not like it. It just is.

  66. #66 by Richard Warnick on October 17, 2010 - 10:33 pm

    brewski–

    I hope it hasn’t escaped your notice that employers of undocumented workers are breaking federal law with complete impunity. It’s not only the laws of economics at work here.

  67. #67 by brewski on October 18, 2010 - 6:42 am

    I hope it hasn’t escaped your notice that employers of undocumented workers are breaking federal law with complete impunity.

    It has not escaped my notice. Why would you say it has?

  68. #68 by Dwight Sheldon Adams on October 18, 2010 - 9:00 am

    Richard–

    Don’t confuse economic behavior with moral behavior or public policy. As Brewski has pointed out, he’s not talking about how things should be, but how they are.

    To explain it simply, human beings respond to incentives. The greatest disagreement between, say, the open-borders guys and the closed-borders guys is one of preferred incentives. In the former, it’s preferred that incentives be moral (altruistic) and social. In the latter, that they be legal and economic.

    This is partially because the perceptive model of each side of the discussion. On the one hand, I can easily recognize that the economic incentives to come here are greater than the legal incentives to not (lax enforcement). I can also understand that companies, being provided proper incentive to hire illegals and depress wages for the industry they’re hiring for, will do just that. As a matter of economic and legal incentives, illegals will come and wages will be depressed in certain areas.

    (This, of course, does not paint the whole picture; other elements are certainly responsible for wage depreciation, most notably the reduction of wages to their minimum acceptable level, which is also perpetually and strongly incentivized)

    On the other hand, are we to simply stand by and let corporations lower wages when higher wages are possible to maintain, without any criticism of them? Are we to allow our knowledge of their economic incentives cloud our ability to make assertions and judgments regarding their moral and social responsibilities?

    Of course not. In a world that operates by those principles, murder is only “wrong” because you’ll go to jail—and then only if you get caught. And while some people do behave as if that were the moral truth, we generally have better human sensibilities than to allow that perspective to dominate society’s operations or its ultimate fate.

    So, I prefer that we reintroduce the concept of moral and social responsibility into the workplace, both for the workers and the employers. Profit maximization is a cop-out from social responsibility—like for the parents who began picking their kids up late from day-care after a financial incentive (a charge added to their bill) was provided, because the financial incentive was less than the social/moral one had been. Too many of our moral/social incentives have been replaced by economic and legal cop-outs.

    But those are two different sides to the same reality. We have to accept market behavior (such as an oversimplified approach to labor supply-and-demand), but only as long as market behavior is the social standard. Proper social, moral, and even legal pressures can make a change.

    Dwight Sheldon Adams

  69. #69 by Richard Warnick on October 18, 2010 - 12:59 pm

    There are lots of illegal things I could do for my own personal benefit, and if the police came around asking questions I could tell them, “I’m a profit-maximizing entity, and therefore above the law.”

  70. #70 by Dwight Sheldon Adams on October 18, 2010 - 1:02 pm

    Richard–

    More to the point, “I’m a profit-maximizing entity, and therefore should not be subject to the same laws as individuals.”

    And a variety of other statements that currently apply to corporations and market entities, despite that they are run by humans. This is particularly true of social and moral pressures. Businesses are supposedly amoral entities, and are therefore immune to moral judgments regarding their decisions. After all, “It’s just business.”

    –Dwight

  71. #71 by brewski on October 18, 2010 - 1:30 pm

    There are lots of illegal things I could do for my own personal benefit, and if the police came around asking questions I could tell them, “I’m a profit-maximizing entity, and therefore above the law.”

    That is pretty much the implicit argument made by illegal aliens. It’s pretty much, I’m trying to make a better life so it isn’t a crime for me to enter a foreign country illegally, buy forged government documents illegally, work illegally, steal someone else’s identity illegally. So those who say that the pro-illegal alien is the “moral” choice, have chosen the position that illegal aliens are above the law.

  72. #72 by Richard Warnick on October 18, 2010 - 1:47 pm

    What goes around comes around, brewski. If wealthy business people can be amoral (to use Dwight’s euphemism) whenever they want, then there is no basis for telling us common folk to toe the line.

    For example, strategic default on an “underwater” home mortgage is morally no different from what corporate executives do every day.

    Of course, when you go so far as to break the law I don’t think the judge will accept the defense: “Your honor, I’m amoral so it’s OK for me.”

  73. #73 by Tiller on October 18, 2010 - 1:54 pm

    Except for that fact that corporate executives have found a way to have the taxpayer bail them out, the very tax payer who will in time, be kicked out of his house, by authorities paid for with taxes from his wages. Common folks do not have the same influence and ways and means until they coalesce in common cause.

  74. #74 by Dwight Sheldon Adams on October 18, 2010 - 2:35 pm

    Tiller (Glenn)–

    Well-spoken. Beyond the bailouts and corporate benefits (another euphemism), and even after coalescing, it’s going to take some real education to get us where we need to be.

    Seems a bit hopeless, really. But we’re in it for the long haul whether we want to be or not—unless, of course, we ourselves can be some of the select few who join the “elite.”

    Brewski–

    I don’t think there’s anyone here who’s “pro-illegal alien,” especially not anyone who is also pro-forgery and pro-identity theft. Being in favor of taking away the incentives for such behaviors is not the same as excusing the behaviors. And amnesty, however far it stretches, should never stretch so far as to forgive identity theft.

    Also, this is an issue of degrees. The “profit-maximizing entity” you’re referring to is maximizing profit by obtaining a modest, livable standard of living. The entities we’re referring to are excusing firing workers in the same year they buy a yacht. It’s like comparing someone who used a few sheets from someone else’s book to wipe their butt when the paper was out with someone who smeared the excess on the seat and walls.

    I’m no less disgusted (and frequently more disgusted) by the actions of corporate leaders and their congressional pups.

    The “moral” choice is to provide strong moral and social incentives that aren’t overpowered by the economic ones. Someone’s market behavior will clearly be in favor of illegality when they’re standing in line for a decade—strangely enough, most of us don’t have that kind of time to wait for a job.

    Put another way, I’m somehow not as bothered by a homeless man digging for food in a dumpster as I would be by a CEO doing the same. Again, degrees. In this case, relative degrees.

    –Dwight

  75. #75 by brewski on October 18, 2010 - 3:56 pm

    What goes around comes around, brewski.

    So Richard, you are saying that illegal aliens are the moral equivalent of bailed out CEO’s?

  76. #76 by brewski on October 18, 2010 - 4:09 pm

    The biggest lie which is repeated over and over on this issue by employers and by others is that “Americans won’t do that kind of work anymore”. This is total bullshit. What they mean and won’t say is that Americans won’t work for $8/hour for a job that used to pay $14/hour. So when they advertise for $8/hour they shrug their shoulders and proclaim that “Americans don’t want to do that kind of work anymore.”

    I think it was DSA who hit on a key point. Let’s say you own a Quiznos and want to pay all your employees $14/hour. The problem with that is your labor costs are going to be 75% higher than the guy on the next block who is paying $8/hour. So he will always be able to underprice you and your you out of business. So even if you want to pay $14/hour because it is moral, you can’t because of the competitve environment. Unless you can convince all your customers to pay more for their sandwiches since you are the moral employer. Good luck with that.

    So there are pretty much two choices. Remove the excess supply of labor so that the market-clearing wage rises on its own back to $14. Or make the minimum wage $14 by fiat. Both would make sandwiches more expensive. Both could result in there being fewer sandwich shops overall and lower levels of total employment. The first would make legal workers willing to take those jobs that they wouldn’t at $8, so the employers would presumably prefer to hire the legal workers than the illegal ones at the same price. The second way would increase the rate of unemployment.

  77. #77 by Richard Warnick on October 18, 2010 - 4:31 pm

    I’m saying that when the wealthy and powerful get away with breaking the law in the name of free market economics, then it’s hard to fault the rest of us for following suit.

    Costco treats their employees well, and has low prices. Walmart/Sam’s Club treats their employees badly and also offers low prices. I go to Costco.

    It’s a very old and tired argument to claim that raising the minimum wage causes unemployment. If it were true, then states with the highest minimum wages would have the highest unemployment rates– but they don’t!

  78. #78 by brewski on October 18, 2010 - 4:43 pm

    I’m saying that when the wealthy and powerful get away with breaking the law in the name of free market economics

    Who says that? Can you cite me a reference?

    Costco treats their employees well, and has low prices. Walmart/Sam’s Club treats their employees badly and also offers low prices.

    Do you have data that shows that Costco pays their employees better than Sam’s Club? If so, wouldn’t all Sam’s Club employees be lining up for jobs at Costco?

    It’s a very old and tired argument to claim that raising the minimum wage causes unemployment.

    Minimum wages cause unemployment only if that minimum wage is above the market-clearing wage for the lowest skilled employees. If the minimum wage is at or below the market-clearing wage for the lowest skilled employees, then it is irrelevant.

    If it were true, then states with the highest minimum wages would have the highest unemployment rates– but they don’t!

    Wrong.
    The states with the highest minimum wages also have the highest market-clearing wages, so those high minimum wages don’t come into effect. Those states have the highest market-clearing wages due to high relative demand for low-skilled employees relative to the supply, so of course they will have low unemployment.

    Really Richard, you need to learn this stuff.

  79. #79 by Richard Warnick on October 18, 2010 - 7:17 pm

    brewski–

    I believe you said that employers who hired undocumented workers were “profit-maximizing entities” with no choice but to obey the demands of the marketplace, and undeserving of any blame for breaking the law.

    Imagine if bank robbers made the same argument. Oh, wait, here’s Willie Sutton:

    “Go where the money is…and go there often.”

    From Consumer Reports (2007):

    Costco’s average hourly wage is $17.25, employees contribute 10 percent of their health insurance premiums, and the turnover rate is 17 percent. The average hourly wage for full-time Wal-Mart workers is $10.11. A spokeswoman said the hourly pay at Sam’s Club isn’t necessarily the same, though she wouldn’t say what it is. Citing company policy, she also declined to reveal employees’ share of health-care costs and the turnover rate.

    If you read consumer blogs, you will learn that most people think Costco offers superior customer service. It’s possible that Costco is able to hire more selectively, and/or employees with more job satisfaction treat customers better. Although Sam’s Club refused to provide data, how much you want to bet their employee turnover is higher than Costco?

    Republicans always say raising the minimum wage causes unemployment. In fact, some of this year’s GOP candidates are talking about plans to LOWER minimum wage rates. When they aren’t proposing to shoot immigrants at the border (the only good scapegoat is a dead scapegoat?).

    Two-thirds of Americans support raising the minimum wage to at least $10 an hour.

  80. #80 by brewski on October 18, 2010 - 10:10 pm

    Richard,
    I agree that it sound like Costco sounds like an excellent store and an excellent employer. Now if I just had a place to put 72 mega rolls of toilet paper.

    I believe you said that employers who hired undocumented workers were “profit-maximizing entities” with no choice but to obey the demands of the marketplace, and undeserving of any blame for breaking the law.

    Are you trying to be funny by wildly misquoting me? You know I did not say ” undeserving of any blame for breaking the law.” My use of the word “blame” was in response to your assertion that I was “blaming” immigrants for lowering wages. I was stating that I was not “blaming” them since an oversupply of any item would cause the price to go down. That is a truism. I do “blame” them for breaking the law and I do “blame” employers for breaking the law too. Although I do know a few employers who tell me they can’t tell the difference between forged ID’s and real ID’s presented to them by their employees. So what’s an honest employer to do?

    Republicans always say raising the minimum wage causes unemployment. In fact, some of this year’s GOP candidates are talking about plans to LOWER minimum wage rates. When they aren’t proposing to shoot immigrants at the border (the only good scapegoat is a dead scapegoat?).

    And your point is what as it relates to anything I have written? Is this the part where you mention Beck, Rush, GWB, and the KKK?

    Two-thirds of Americans support raising the minimum wage to at least $10 an hour.

    You mean just like the 68% of Americans who want stricter enforcement of illegal immigration laws?

    “Do you think immigration reform should primarily move in the direction of integrating illegal immigrants into American society, or in the direction of stricter enforcement of laws against illegal immigration?”
    Integrating 24%
    Stricter Enforcement 68%
    Unsure 9%

    – Gallup

  81. #81 by brewski on October 18, 2010 - 10:49 pm

    Minimum wage laws set legal minimums for the hourly wages paid to certain groups of workers. In the United States, amendments to the Fair Labor Standards Act have increased the federal minimum wage from $.25 per hour in 1938 to $5.15 in 1997.1 Minimum wage laws were invented in Australia and New Zealand with the purpose of guaranteeing a minimum standard of living for unskilled workers. Most noneconomists believe that minimum wage laws protect workers from exploitation by employers and reduce poverty. Most economists believe that minimum wage laws cause unnecessary hardship for the very people they are supposed to help.

    The reason is simple: although minimum wage laws can set wages, they cannot guarantee jobs. In practice they often price low-skilled workers out of the labor market. Employers typically are not willing to pay a worker more than the value of the additional product that he produces. This means that an unskilled youth who produces $4.00 worth of goods in an hour will have a very difficult time finding a job if he must, by law, be paid $5.15 an hour. As Princeton economist David F. Bradford wrote, “The minimum wage law can be described as saying to the potential worker: ‘Unless you can find a job paying at least the minimum wage, you may not accept employment.’”

    Several decades of studies using aggregate time-series data from a variety of countries have found that minimum wage laws reduce employment. At current U.S. wage levels, estimates of job losses suggest that a 10 percent in crease in the minimum wage would decrease employment of low-skilled workers by 1 or 2 percent. The job losses for black U.S. teenagers have been found to be even greater, presumably because, on average, they have fewer skills. As liberal economist Paul A. Samuelson wrote in 1973, “What good does it do a black youth to know that an employer must pay him $2.00 per hour if the fact that he must be paid that amount is what keeps him from getting a job?”

    In a 1997 response to a request from the Irish National Minimum Wage Commission, economists for the Organization for Economic Cooperation and Development (OECD) summarized economic research results on the minimum wage: “If the wage floor set by statutory minimum wages is too high, this may have detrimental effects on employment, especially among young people.” This agreement over the general effect of minimum wages is long-standing.

    According to a 1978 article in American Economic Review, 90 percent of the economists surveyed agreed that the minimum wage increases unemployment among low-skilled workers.

    In addition to making jobs hard to find, minimum wage laws may also harm workers by changing how they are compensated. Fringe benefits—such as paid vacation, free room and board, inexpensive insurance, subsidized child care, and on-the-job training—are an important part of the total compensation package for many low-wage workers. When minimum wages rise, employers can control total compensation costs by cutting benefits. In extreme cases, employers convert low-wage full-time jobs with benefits to high-wage part-time jobs with no benefits and fewer hours. David Neumark and William Wascher found that a 10 percent increase in minimum wages decreased on-the-job training for young people by 1.5–1.8 percent. Since on-the-job training is the way most people build their salable skills, these findings suggest that minimum wage laws also reduce future opportunities for the unskilled.

    A particularly graphic example of benefits reduction occurred in 1990, when the U.S. Department of Labor ordered the Salvation Army to pay the minimum wage to voluntary participants in its work therapy programs. In exchange for processing donated goods, the programs provided participants, many of whom were homeless alcoholics and drug addicts, with a small weekly stipend and up to ninety days of food, shelter, and counseling. The Salvation Army said that the expense of complying with the minimum wage order would force it to close the programs. Ignoring both the fact that the beneficiaries of the program could leave to take higher-paying jobs at any time and the cash value of the food, shelter, and supervision, the Labor Department insisted that it was protecting workers’ rights by enforcing the minimum wage. After a public outcry, the Labor Department backed down. Its Wage and Hour Division Field Operations Handbook now contains a special section on minimum wage enforcement and the Salvation Army.

    Minimum wage increases make unskilled workers more expensive relative to all other factors of production. If skilled workers make fifteen dollars an hour and unskilled workers make three dollars an hour, skilled workers are five times as expensive as the unskilled. Imposing a minimum wage of five dollars an hour makes skilled workers relatively more attractive by making them only three times as expensive as unskilled workers. This explains why unions, whose members have historically been highly skilled and seldom hold minimum wage jobs, invariably support legislation increasing minimum wages.

    Many employers in the U.S. construction industry have found it less expensive to hire unskilled workers at low wages and train them on the job. By accepting lower wages in return for training, unskilled workers increase their expected future income. With high minimum wages like those specified for government construction by the Davis-Bacon Act, the cost of wages and training for the unskilled may rise enough to make employers prefer more productive union members. In effect, higher minimum wages reduce the competition faced by union members while leaving the unskilled unemployed. Of course, employers may also respond to minimum wage laws by decreasing overall employment, substituting machines for people, moving production abroad, or shutting down labor-intensive businesses.

    An analysis using payroll records from a sample of restaurants showed that “the minimum-wage increase led to a decline in employment in New Jersey fast food restaurants relative to the Pennsylvania control group.

    – The Concise Encyclopedia of Economics

  82. #82 by Richard Warnick on October 19, 2010 - 9:13 am

    brewski–

    Let me get this straight. YOU say that unless the minimum wage is set higher than it ever has been set in practice, it has no effect on the availability of jobs, and no ripple effect.

    Yet your source, published by the right-wing Liberty Fund, moans piteously about the alleged bad consequences of minimum wage rates as low as $2 an hour!

  83. #83 by cav on October 19, 2010 - 10:50 am

    Liberty Fund…an updated argument FOR slavery.

  84. #84 by Dwight Sheldon Adams on October 19, 2010 - 12:23 pm

    The Concise Encyclopedia of Economics is badly biased if it only contains this article about the minimum wage, which is clearly dismissive of other ideas and evidence. You can find more diversity of ideas on the Wikipedia page on the subject.

    Kind of makes me question the Concise Encyclopedia’s veracity.

    But again, it’s an analysis from the point of view of “What happens if we change one part of the mechanism but leave the rest the same?” (“the rest” referring to the supposed fundamentals) It takes its own analytical baseline for granted. That’s fine in a discussion about what happens in the present system when we change a cog, but not in a discussion questioning the present system.

    –Dwight

  85. #85 by Dwight Sheldon Adams on October 19, 2010 - 12:27 pm

    Richard–

    Correction: the Liberty Fund (and Independence Institute) moan about the alleged bad effects of minimum wages as low as $2 an hour back when they were $2 and hour and that wage was substantial. It would be the equivalent of arguing against a $9/hour minimum wage today.

    –Dwight

  86. #86 by Richard Warnick on October 19, 2010 - 12:34 pm

    Dwight–

    True enough, the inflation calculator says that $2.00 in 1973 would equate to $9.55 in 2009.

    The actual minimum wage in 1973 was $1.60. And gas was 39 cents a gallon. Paul A. Samuelson died last year. Samuelson’s comment originally appeared in the 1970 edition of his widely-read textbook on economics, when the minimum wage was $1.45 an hour.

    I tend to be suspicious whenever rich people try to claim they know what’s best for low-income people. It’s totally a “let ‘em cake” attitude to say it’s better to have a full-time job that doesn’t pay enough to live on than to have no job at all.

  87. #87 by brewski on October 19, 2010 - 2:18 pm

    Yes, the source has a very clear market orientation and their explanations on other things I have read have all been very textbook market economics.

    YOU say that unless the minimum wage is set higher than it ever has been set in practice, it has no effect on the availability of jobs, and no ripple effect.

    I am saying that a minimum wage has no effect if it is at or below the current market-clearing price for the lowest type of unskilled work.

    And it isn’t all that hard to imagine how a minimum wage might kill some jobs.

    Let’s say the minimum wage today was set at $10/hour. Then a kid shows up and offers to mow my lawn for $8/hour. I value my leisure time at $9/hour. So I am willing to pay him $9 and he is willing to accept $8. Yet our transaction can’t happen because some do-gooders declared that I have to pay him $10 or not hire him at all. So given the choice between $10, which is above my indifference point of $9, then I will choose not to hire him at all.

    How is he better off making nothing when we already know he would have been happy with $8?

  88. #88 by Richard Warnick on October 19, 2010 - 2:51 pm

    brewski–

    I probably should keep quiet about this, since you’re willing to fork over $9/hour, but the standard minimum wage does not apply to a teenager who mows your lawn. There is a “youth minimum wage” of $4.25 an hour (PDF). Also, the Fair Labor Standards Act (FLSA) does not even cover domestic employees who work 8 hours per week or less.

    I ran across this article about Santa Fe, New Mexico’s living wage ordinance, enacted in 2004. It didn’t wipe out the city’s business sector, right-wing economists to the contrary notwithstanding. Excuse me, I meant market oriented economists.

  89. #89 by brewski on October 19, 2010 - 11:31 pm

    Richard,
    Replace kid with 18 year old.
    Replace my my lawn with work in my sandwich shop.
    The illustration is the same.

    SANTA FE — For the Martinez family, this state capital’s new $9.50-an-hour minimum wage — the nation’s highest — has been a blessing and a curse.
    Housekeeper Di Martinez, 24, is making about $160 more a month. That has helped her contribute more to the $780 rent on a two-bedroom, 650-square-foot house she shares with four friends and her brother, Marcelo.

    Yet dishwasher Marcelo Martinez’s take-home pay hasn’t gone up at all. In some weeks, it has actually dropped after his boss cut back on offering overtime because of the higher hourly pay.

    First of all, no one said it would “wipe out the city’s business sector”. What they said was that it would move those certain types of the lowest skilled jobs outside of the city limits. So your straw man is dishonest.

    Also, as you can see, Mr. Martinez’s employer has cut back his hours. In economics we call this the downward sloping demand curve. Something you are apparently not familiar with.

  90. #90 by Richard Warnick on October 20, 2010 - 12:22 am

    brewski–

    The “youth minimum wage” is applicable to anybody old enough to work and under age 20, if you can find somebody willing to take it.

    Probably some people in Santa Fe lost their jobs, too, but not many because the reporter could not find one example.

    I took Economics, in fact we used Samuelson’s textbook. Also, when I was a libertarian I read some Milton Friedman and Hayek. I’ve since realized that rich people are not to be trusted with anyone else’s well-being.

  91. #91 by Dwight Sheldon Adams on October 20, 2010 - 8:58 am

    Just something kind of verbally funny:

    There’s a problem with proving the veracity of statistics used to prove the veracity of those statistics which are used to prove the veracity of the statistics used to prove their veracity.

    More simply: There’s a problem with using statistics to prove their own veracity. I think this is a relevant truth in this discussion.

    –Dwight

  92. #92 by brewski on October 20, 2010 - 9:14 am

    Probably some people in Santa Fe lost their jobs, too, but not many because the reporter could not find one example.

    It is difficult to identify people not hired or businesses not started.

    I took Economics

    You must be joking. This coming from the person who said that higher taxes will spur more business hiring and spending.

    I’ve since realized that rich people are not to be trusted with anyone else’s well-being.

    Why would you trust anyone with anyone else’s well being? Since you took economics you know that we all act in our own self-interest. So no one should ever “trust” someone else to look out for them. Bizarre thing for you to say.

  93. #93 by brewski on October 20, 2010 - 9:22 am

    Businesses mentioned various labor cost-saving strategies, including reducing new hires for seasonal or part-time work; paying overtime for veteran and trusted employees; and reducing staff size through attrition over time. Some businesses consolidated staffing to rely on fewer part-time employees and more on full-time
    employees. Other businesses did the opposite and have increased reliance on parttime
    workers. Some businesses said that they stopped hiring teens or untrained
    workers:

    I eliminated hiring entry level workers when the wages were higher than entry level wages

    Some employers extended the employment time needed to qualify for benefits (e.g.,
    12 months instead of 6 months).

    One business described a need to channel profit-sharing funds into satisfying the
    $8.50 minimum wage rates. Previously, employees were rewarded through sharing
    the net profits. Now, the minimum wage-earners wage is supplemented by the net
    profits to raise it to the required level, therefore leaving less net profits to share as a
    bonus for all the employees. This has led to a change in morale among the workers.

    Now they feel they are getting less of a bonus. They used to get excited about it.

    – University of New Mexico, Bureau of Business and Economic Research

    Richard, so tell me, what is it like to get proven wrong several times a day?

  94. #94 by Richard Warnick on October 20, 2010 - 9:38 am

    brewski–

    I never said that going to a living wage was cost-free, or that some businesses wouldn’t retaliate against their employees by cutting benefits.

    Realistically, in the real world, it is too much to ask someone to work full time for less than a living wage. Anyway, most employers offer very little in the way of benefits.

    Don’t give me the lawn-mowing teenagers again, or kids with lemonade stands. We’ve covered that.

    When I took courses on Economics, I guess you were studying Reaganomics.

  95. #95 by Dwight Sheldon Adams on October 20, 2010 - 10:49 am

    This is partially a valuation problem (which the Austrian school isn’t helping with one bit!). The subjective system of valuations, while descriptively the only one that exists, is nevertheless approached with theoretical ignorance. When citing Von Mises or subjective valuation, one rarely asks: What tools are used to determine valuations? Ignorance is key in maintaining poor valuations. In terms of social design, the argument against a living wage (legally or not) can be summed up as: People who make less than a living wage are not necessary to society; hence their inability to get by even with a full-time contribution.

    Of course, we know this is not the case, because what CEO could thrive without his low-level grunts? None could, of course, and many of them couldn’t even survive if made to compete in that market.

    So while we may transform human beings into numbers and move them around the board like checker-pieces, doing so makes for ineffective social policy, and there is no economic policy which is not also social policy, and no economic choice which is not also a social choice.

    It is “too much to ask someone to work full time for less than a living wage,” depending on what you define a “living wage” as, and it’s negligent of their place in society as well. No one who works 8 hours to make something that people buy should have that time valued so little that he can’t get by. If people had a more full awareness of the time and effort it takes to make their food and clothes, they would probably be willing to pay more for them—such an awareness including practical experience and the knowledge that, in the absence of the others who do such things for us, we would have to do them ourselves.

    In the case where charging an appropriate price (and reducing the income of the owners) would make the product unsellable, well, it should be unsellable, and the human effort can be diverted to industries that are productive. And what if no labor is needed? Well, unless we’re in a famine, we can still find ways to organize labor and get the jobs done that need to get done to get people what they need to survive. The average consumer can learn to live without or to pay the price instead of encouraging businesses to force others to live without in order to prop up the artificially-deflated value of the worker’s labor.

    You know, with a little dose of reality, people might actually work more towards a better reality. Instead, we rely on “normative economics,” which only describe what is when what is is defined by normative economics and the self-reaffirming perspective that they are, in fact, normative rather than a contrived, manipulated, and perpetuated product of artifice.

    Once again, defining statistics’ success by their own measure; like defining the success of an economic system by its own measure. “It does what it does” comes to equal “It does what it should,” without any justification for the transformation from descriptivism to prescriptivism.

    Dwight Sheldon Adams

  96. #96 by Tiller on October 20, 2010 - 11:09 am

    None of this really touches the fundamental fantastic underpinnings of the entire system.

    “The process of money creation is so simple, the mind is repulsed”
    -J.K. Galbraith

    No one wishes to believe it really all boils down to a fantasy you have accepted. Those with the means of compulsion, through either brainwashing, or force, make the “money” from the ether.

    Money is money is money, and not a social policy Dwight. Social policies are derived by what people do with the money. How their behavior is led by incentives, and that is done by telling tales, an getting believers.

    So goes the religion of Mammon.

  97. #97 by brewski on October 20, 2010 - 11:10 am

    Richard,
    Go start a business whose employees are among the lowest skilled. Lowest skilled means perhaps can’t speak English, have no customer service ability, perhaps can’t read or write. Then pay them your living wage of $10.50 an hour. Then handle all of their I-9 forms and verify that their documents aren’t forged. Then pay for their health care, pension plan, workers compensation insurance, employer portion of payroll taxes. Then give them a month of paid vacation. Then make enough profit for yourself and to compensate you for the capital that you have risked yourself as well as your own time and effort and your own living wage. Then come back to me and tell me how that went.

  98. #98 by Tiller on October 20, 2010 - 11:13 am

    “Give me control of a nation’s money and I care not who makes her laws”.

    Mayer Amschel Rothschild

    Maybe you could call that the Law of Money.

  99. #99 by Dwight Sheldon Adams on October 20, 2010 - 12:08 pm

    Brewski–

    Why would you trust anyone with anyone else’s well being? Since you took economics you know that we all act in our own self-interest. So no one should ever “trust” someone else to look out for them.

    Unfortunately, we’re all required to trust others with our well-being and we’re all required to be trustworthy with others’ well-being. I guess, once again, we broke economics.

    And while it’s true that we all act in our own self-interest, that assertion never addresses the most vital follow-up question: What is our self-interest? Aside from a few obvious answers (self preservation, reproduction, etc.), this question seems a bit neglected. What’s the self-interest in charity? What’s the self-interest in encouraging inflation through your business practices? What’s the self-interest in dying for your country?

    If you neglect the noble and the pro-social, you will come to the conclusion that no one should ever trust anyone else with their own well-being; which, in the context of reality, means we’re all doomed.

    Tiller (Glenn)–

    Money is money is money, and not a social policy Dwight. Social policies are derived by what people do with the money.

    I don’t think I said anything that disagrees with this statement (see my above statements about economic choice). But this is true. Social policy, social choices, the state of society, all are manipulated by and even originate in the use of money. Money is power—and too much money is too much power.

    John Kenneth Galbraith is one of my favorite economists, mainly because he had the guts to say to all of the others that the mathematical models they were using were sorely uninformed—that, even if they were conceptually true, they were mathematically far less useful than economists like to pretend.

    Largely we have the Federal Reserve to blame for the ease of the creation of money, but in its absence there would no doubt be plenty of other objects of money-manipulation disdain. Fact is, participating in a currency system alters the state of the currency system and deepens dependency upon it. We’re all culpable. But at least some of us want to change that.

    Economics is the tale. It seems like everyone is a believer in one way or another, or at least pretending to be—if you live in a theocracy and the priest threatens to execute you if you don’t take the sacrament, you take the sacrament.

    The religion of Mammon, indeed.

    The at-times abstruse power of the wealthy is well-evidenced by history. I’ve heard so many say that money isn’t power, as if having enormous income and assets only allows you to buy more toys, but otherwise you’re just like any other citizen—one vote, one voice. We know this isn’t the case, and thanks to a few open voices in history and today, we know that the wealthy know it, too. I was chided once for my speech, which implied somehow that our modern system was much like aristocratic feudalism.

    I thanked the accuser for elucidating my point in such eloquent terms. ;-)

    Dwight Sheldon Adams

  100. #100 by Richard Warnick on October 20, 2010 - 12:27 pm

    brewski–

    I’m looking for a job myself. Are you starting a business?

  101. #101 by Tiller on October 20, 2010 - 1:17 pm

    In review of history, we could direct ourselves to Mao’s statements,

    “power comes from the end of a gun”.

    It would be hard to argue with the man while our military is in so many nations overseas on their own military bases, while at the same time spending more than the rest of the world combined each year than the rest of the world.

    There is no escaping the implications of what we have become. Like it or not.

    So in that we are having a tough time relegating more monies to the social benefit of our people, and driving our country through expansive militarism, we resemble the fascism of Rome. Citizenship through service, with an oligarchy ruling for its own benefit. Then the rafts of plebes and slaves. Those who want more control over spending on social benefit are much like the vassal states of Rome that tried to break free. Some did, some didn’t.

    Is that our future? No matter what anyone says of the Tea Party it looks just like the first one, moneybags John Hancock sponsored that, yarded the masses in the effort to help the upper classes to come free from their upper, upper classes of British masters.

    Even then for Rome those elements by the end didn’t understand the goose was cooked, until Rome itself was sacked by marauders late on. If we deficit spend, what wealth is left, how can money not represent wealth and not do anything positive? The decay of our cities and the huge sums of money that still are not keeping up are signs of the disparity between the numbers and the reality.

    The solution to these things in historical terms are not happy, but they are solutions in the absence of any consensus. Even then consensus don’t not guarantee and success. Cooperate? Fight? Stand still? Pray? Whatever will be will be, and all of us are currently making it. Be not deceived we hope.

  102. #102 by Tiller on October 20, 2010 - 1:24 pm

    As always missing the edit feature.

  103. #103 by brewski on October 20, 2010 - 2:22 pm

    Richard,
    I was going to, but Obama convinced me not to.

  104. #104 by brewski on October 20, 2010 - 7:03 pm

    What is our self-interest?….
    If you neglect the noble and the pro-social, you will come to the conclusion that no one should ever trust anyone else with their own well-being; which, in the context of reality, means we’re all doomed.

    Acting in your self interest does not mean being anti-social or ignoble. One can easily understand charity and noble behavior as being self-interested. Self interest does not mean selfish.

    To not trust others only means that I won’t put my future well being in the hands of others. If I want to sell my labor at a higher price, I need to improve my skills. If I am not happy with my current employer then it is up to me to look for a better one. So, people acting in their self interest results in socially desirable behavior. This idea that acting in one’s self-interest is a perversion of understanding behavioral economics.

  105. #105 by Dwight Sheldon Adams on October 20, 2010 - 7:29 pm

    Brewski–

    What I was trying to say was that the pro-social and noble are part of our self-interest. I argue in favor of an expanded sense of self in which self-interest requires a greater commitment to the well-being of others.

    While I agree with the idea of self-reliance and self-betterment for self-benefit, I certainly think it can be taken too far. Taken to the extreme of total self-reliance, it can become a solipsist’s argument at best, a condemnation of the reasonable “failures” of others at worst—and it can rob you totally of any empathy or sympathy for the plight of the genuinely unfortunate or downtrodden. Some people (such as soldiers on the battlefield and starving children) must trust their well-being to other people or die.

    It’s strange, though, that you speak of seeking a better employer as a means of taking your future into your own hands. Doesn’t the very concept of an employer constitute a subjugation of one’s fate to the whims and rule of another? Even in a market of many options, if all of those options require employment, one must be at the mercy of others for one’s sustenance. Even if more than employment is an option, the intense integration of our economic state still puts you at the mercy of others. You have to trust that people will follow through if you are to survive.

    If I want to sell my labor at a higher price, I need to improve my skills.

    . . .or find a means of making people aware of the actual value of your skills. Again, your argument makes the point that those who are paid poorly are not significant or necessary for the functioning of society. If anything, we are suffering from a valuation crisis, not a skill crisis or a labor oversupply crisis. The tail’s wagging the dog. As has been pointed out by economists in the minimum wage debate, necessary markets such as clothing and food continue to see roughly constant demand even when their prices go up. People don’t stop buying clothes because we begin to value the clothes-makers more—they just come to value their clothes more. For necessities, valuation can be controlled at the producer or the consumer stage, to varying effect.

    Glenn–

    I’m not so sure I’d say that the current Tea Party looks “just like” the old one. Except for a few common sentiments and that the old TPers were seen as ruffians and weren’t supported by the majority of the colonists.

    Other than that, I appreciate the historical perspective. Are we headed for a choice between revolution and national impotence? Dunno. Interesting to think about, though.

    –Dwight

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