Thursday, April 20, 2006

Dean Baker On Low Wage Jobs

Hat tip to Steve Sailer for point out Dean Baker's blog, 'Beat the Press'.
Steve has linked to a post of Baker's entitled 'Immigrants and “Low Wage” Jobs'. Baker writes,
"Immigration has been one of the tools that have been used to depress wages for less-skilled workers over the last quarter century. Many of the “low-wage” jobs that cannot be filled today, such as jobs in construction and meat-packing, were not “low-wage” jobs thirty years ago. Thirty years ago, these were often high-paying union jobs that plenty of native born workers would have been happy to fill. These jobs have become hard to fill because the wages in these jobs have drifted down towards a minimum wage that is 30 percent lower than its 1970s level.
In response to this logic, the “low wage” job crew claims that if the wages in these jobs rose, then businesses couldn’t afford to hire the workers. It’s time for more econ 101. Businesses that can’t make money paying the prevailing prices go out of business – that is how a market economy works. Labor goes from less productive to more productive uses. This is why we don’t still have 20 percent of our workforce in agriculture."
I explored a similar theme in a post called 'Scotland's Human Subsidy', based on the deficiencies of the migrants working in Scotland's tourist sector. I wrote then that,
"Because the business owners are not prepared to pay a living wage; or because they run their businesses so poorly; or because they have started businesses in already saturated markets; the migrants have acted as a form of subsidy to enable them to continue trading when they are to all intents and purposes insolvent.

You can get away with anything in the UK now if you say you run a business. Private enterprise is the cornerstone of a free economy - but businesses have no votes. The right of business to pursue profit should never clash with the right of citizens to enjoy the amenity of their country unmolested.

That is what corporate calls for immigration ultimately aim to do - to dilute the value of the citizen's rights.

If a business cannot trade on equal terms with all others in a free market, it should go under. That is the law of the market. No business has a divine right to stay in business.

And business owners should most certanly not receive what Paul Craig Roberts might describe as a human subsidy; which in the case of Scotland's overpopulated hospitality industry, a sector apparently so vital that without it we risk sinking into the North Sea, has proved about as useful a solution as putting a Band-Aid on a gunshot wound."
That some businesses might go under without a subsidy from migration labour is not society's problem. That they can only operate with it most certainly stores up problems for the future.


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