Thursday, February 19, 2009

Ignorance of economics pollutes everything.

A couple of simple points.

Throughout the last decade we have heard about the relative decrease in buying power for those further down on the economic ladder, i.e. "Poor getting poorer" specifically, and families in general. Also "... decreased standard of living..." starts to make an appearance. In the end, much of it is really just simple supply and demand.

- If you have (X) jobs that need to be filled at (a) price and you have (X+Y) people wanting that job, then you can probably offer a lower (a-b) or conduct a selective hire at the Y pay scale. This is what happens in good times with high immigration. With both skilled and unskilled workers. Wages are depressed, efficiencies are avoided, and profits are increased to owners/stockholders. The theory also holds that it keeps inflation in check - but if wage growth is kept below inflation - then wages are not the inflationary trigger, and real purchasing power is lost. Often in such situations, workers will incur additional dept than see their purchasing power and standard of living decrease. Sound familiar?

- If however there are only (X-Y) people who want that job, you have to offer a higher (a+b) pay scale in order to attract more interest in that job. That is what happens in a healthy system. Wages tend to keep pace with inflation, and businesses invest in efficiency generating mechanisms via labor substitution technology and processes. Labor efficiencies (AKA productivity) are then spread to the workers through higher wages, and owners through increased share price and/or dividends.

- In a business market in decline, you have negative job creation and wage suppression. Too many people chasing too few if any jobs. Higher trained people take lower paying jobs from lower trained/skilled people. That generates resentment from all. Standards of living fall. The lower skill sets, where most immigrants come into the labor market, are squeezed worse. The expected results take place.
Foreign workers are taking a greater share of British jobs than ever, it emerged last night.
They now hold more than 3.8million jobs - 13 per cent of the total. In 1997, when Labour came to power, people born outside the UK held only two million jobs, 7.5 per cent of the workforce.

The figures are an acute embarrassment for Gordon Brown, who was under renewed attack last night over his promise to deliver 'British jobs for British workers'. Tories said there 'cannot be anyone left in Britain' who believes the 2007 pledge.

Most damagingly, two-thirds of the foreign workers were born outside the EU - in countries whose citizens need permits to work here.

The figures were compiled in the wake of angry wildcat strikes across the UK over the number of jobs going to people from overseas.

They were sparked by protests at the Lindsey oil refinery in Lincolnshire, where Italian and Portuguese workers took all the jobs on a lucrative new contract.
Of course, the anointed will blame the workers calling them all sorts of names and such - doesn't matter if it is accurate or not. Easy for them, as they have nice gov'munt paychecks or are of the higher skill sets that are not impacted by labor surplus and/or layoffs. It isn't easy for some to accept - but it is what it is.

Things look different when you have no job and have to face your wife every morning asking for money for food - and kids who want new shoes - and you feel like someone castrated you over every breakfast. The gov'munt that you voted for to represent you defends others who are not citizens. It gets ugly fast. Always has. The larger the problem - the harder it is to fix. In good times, it isn't that painful to do - if you can avoid the charms of political donors and the fear of being called a racist.

Nativism and attacks against foreigners in times of economic trouble have plauged all cultures throughout history. This should not be a shock to anyone. One would hope that governments would take steps in good times and bad to make sure that the facts on the ground - i.e. uncontrolled immigration and policies that put non-citizens/protected-classes at a level above citizens - do not take root and fester. When you do that - and lie about it - you create situations where the worst tendencies of human nature are fed, find justification, and grow.

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