There is an “immigration reform bill” on the horizon, or so it would seem. I thought I would discuss how labor markets function in the modern world so that we could see our predicament with some perspective.
The most obvious thing to know is that capital (money) will chase the cheapest labor. Now, true enough, this is for unskilled labor. If it costs fifty cents an hour to assemble in China or elsewhere in South East Asia, then companies go there to assemble. That’s pretty easy to understand.
Some people would argue that minimum wage at 7.50 or at 10 dollars an hour is too high, and that such an arrangement is killing our ability to compete or hire domestically. This is poppycock. You see, Americans are not unskilled workers. In our country we even take on help around the house at about the 10 dollar an hour range that we pay to immigrants who are willing to perform these duties at a price that we would not. Agriculture is also used to occupying about the lowest skilled labor, but even this requires some training and stamina that stuffing microcircuits onto a board probably does not. Ask Apple.
The issue for getting Americans hired is to get their education and skill set aligned with the needs of the companies producing goods and services. There are some companies that hire out their “service” departments again to areas in India and beyond, but you’ll notice that those who do so can not charge as much for real and better more immediate service as offered here domestically. If you want to charge good money for services, you need an good well trained American worker.
One idea is to intern before one leaves their educational institution. This may help. In the meantime, much of the artificial wealth that was allowed to be created by a real estate and bank’s robbery of the public, the size of which has still not been comprehended by the unsuspecting taxpayer, has left its dirty fingers in everything except your blue chip stocks in your 401k which is busy saving up cash earnings from abroad in your retirement account. Thank goodness for small favors. Investing in the rest of the world has become more “profitable” for the moment.
Unfortunately, foreign currencies are also printed in a basement just like they do here, and while they invest in infrastructure and so on, they have borrowed to do so. The Chinese are spending several dollars to create a dollar of wealth, and the rest is borrowed. They have a couple of billion people, but many are earning dirt wages. Sadly, American barons of industry see this, and they want very much to create a two tiered class system right here in America. While the few at the top are accumulating most of the wealth, educational expertise is not being supported by industry, and a huge unskilled labor force is left to battle for jobs that companies can hire elsewhere in the world for much less.
We have to ask ourselves if accepting a turning of America into the Mexico of 1950 is ok with us or not. In Mexico, a two class system is the norm. It is becoming so more and more here. How many of my readers have a principal home under water? You are making Wells Fargo very rich at your expense. The problem isn’t that you are paying too much taxes, the problem is that you and your children will never be employable at a home buying range, and you will never have access to capital unless you are from…. the already privileged class. That is exactly life in Mexico today. Returning to land owners and renters as a class distinction should scare us in this country. That shouldn’t be the rule. It should be the exception.
As we work out our “immigration reform” bill, I hope that we will remember that labor unions made the middle class of this country the envy of the world at one time, and created a dream that every man woman and child could harness a home and a picket fence with hard work. When will that become true again? A lower minimum wage and less education is a ticket to failure. Build more schools and less jails and watch the middle class grow again.
I am co-authoring a new book on tuition free education by the most prominent company in existence today in the field, founded right here in this beautiful valley. That is one possible key to the new world. It also allows for the inevitability of a combined world economy without prejudice. There are solutions. Let’s just open our eyes to mutual gain.