Sunday, April 02, 2006

Overpaying for low skilled jobs is not the solution.

P6 today has a blog regarding today's immigration discussion.

Here's a quote:
I sense your cynicism. "This Black partisan," you say to yourself, "is trying to foment internecine strife in the White Race." Nope. As I said, this is me anticipating your anger and making clear Black people are not the legitimate target of your anger. You see, just like you are getting set up, so are Black folks...but I don't like the contours of the plan so far. You see, now that your income and employment levels approach the level you associate with Black folks, others are already lobbying on your behalf. And their suggestions look remarkably like those Black folks have said were needed for decades.
The essence of P6's case seems to be that the various races and immigrants are in competition with each other over jobs. That hard working Mexicans will diminsh wages for white people the same way that wages have earlier been diminished for black people.

The problem is, you can't find where this has happened.

Oh, you can find where international competition has reduced pay for native born Americans of all races; don't look any further than the auto industry.

And you can find individual counter cases, like with any generalization. Some white guy who used to make $20/hr as a drywaller now can only make $15.

But what you can't find is that working white people or working black people are worse off than they were 25 years ago. It's just not true. Need proof? Home ownership is at an all time high despite the fact that real estate prices are also at an all time high, and construction codes are far more stringent than they historically were. Now could that have occurred while working people were becoming worse off? Not a chance.

So on the whole, we find that people working in America are not directly competitive with one another. Every instance of a person working and receiving a paycheck creates wealth in America, and the more wealth there is in America the better off Americans are. It does spread around. No, not equally, nor always fairly, but it spreads around in a way which results in working people buying their own house.

The '50s was an era when the US had a commanding portion of the world's manufacturing capacity. Manufacturing jobs paid extraordinarily well. Semi-skilled people did extraordinarily well. Some people came to believe that this mode was normal, and deviation was going in the wrong direction. They see foreign competition as eroding that vision. And they see Mexicans as being foreign competition.

But check out what has really occurred. Again, we are more wealthy in the 00's than they were in the '50s. Not only can we not go back there, we wouldn't want to if we could. So what happened to that semiskilled workforce? Not really a shocker, they became more highly skilled. And they make more money. Check out daily life as it intersects your path, and see what people do, people who, if they had been born 50 years earlier, might have built cars.

In short, overpaying for a low skilled job is not the solution, period. Creation of high paid, high skill jobs works, and working people of all skills being fully employed maximizes such job creation. The more Mexicans operating shovels and hammers in America, the more highly paid jobs will exist for people who can speak English well and are willing to develop the necessary skill.

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