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To: shortstop
And "one entry accounting" economic illiteracy strikes again.

The worker can walk by the lettuce picking job if it pays less than $10 an hour, sure. But the housewife can walk by the $5 head of lettuce at the supermarket, too. If the housewife demands $2 heads of lettuce, the lettuce rots, nobody wants it, there is no $10 an hour job.

Workers half what their actual efforts are worth, in a welfare state economy. Because the cost to the employer is half again the nominal wage (for employer side taxes and mandatory insurance of this and that stripe), and the worker pays a third of the nominal part to the government. All productive people are producing twice what they are given, to support the unproductive ones. But this is just as true for families with kids, people with medical problems, old people, etc. Whether legal citizens or not.

No activity is performed in such a society unless the worker's efforts add real value, to twice the extent of what he demands in return for his work. Increasing what he demands does not increase what he receives. It just prevents the job being done at all, as soon as the amount demanded passes the line, half what it is worth to the end consumer (with all other costs along the way included).

The economic thing that can increase what he receives is not any state of his demand for compensation or unwillingness to do this or that job for less. But only what the real value of his effort is, to others - end consumers. If he doubles that his wage can double. If he just doubles his demand, it isn't bargaining any more, it is a deal breaker, and there simply is no deal. The work does not exist to do, because it fails to add more value than it costs, with the massive overhead of a welfare society wedged between one and the other.

The only other thing that can increase real effective wages, is a reduction in the size of that welfare and tax wedge. If the government and unproductive people take only a third instead of half, pay for the productive can go up. The way you do that is reduce government spending.

It doesn't much matter, spending on who or what. You and I can agree or disagree about which things are worthy or not, but whatever mix we hit on has some overall size and cost. And that overall size determines the width of the wedge, between what consumers think our efforts are worth, and what we actually get.

The reason to oppose illegal immigration is because it is illegal, disorderly, spreads scoff law behavior in other respects, acts as a barrier to assilimation, etc. Not because it skins the rest of us, any more than the welfare state in general does. There is every reason to disallow welfare payments of any kind to illegals. There is also good economic reason to shrink the welfare state wherever possible.

But not because men can increase their pay simply by refusing to work for less. That does not increase their pay, it just results in less being done overall.

27 posted on 06/03/2005 7:12:33 AM PDT by JasonC
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To: JasonC
But the housewife can walk by the $5 head of lettuce at the supermarket, too.

I keep hearing about this mythical $5 lettuce but I've never seen anything to substantiate the claim that produce prices would skyrocket if farm wages were increased. IMHO, the end-of-season manual labor almost has to be one of the smaller components of total production cost.

Do you happen to have a link that says otherwise?

54 posted on 06/03/2005 8:13:03 AM PDT by Bob
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To: JasonC
And "one entry accounting" economic illiteracy strikes again.

The worker can walk by the lettuce picking job if it pays less than $10 an hour, sure. But the housewife can walk by the $5 head of lettuce at the supermarket, too. If the housewife demands $2 heads of lettuce, the lettuce rots, nobody wants it, there is no $10 an hour job.

Correct me if I'm wrong - it seems as though you are saying that the cost of a head of lettuce will go up to $5, right? Talk about bad economics.

If they pick, on a conservative estimate, 800 heads of lettuce in an 8 hour day and they get paid $4/hr that means it costs 4 cents per head to pay them to pick it. If they raise the pay to $10/hr the cost beomse 10 cents. How does that translate into an increase from $2 to $5 at the supermarket?

At the same time, won't the increase in wages bring in better workers, increase the motivation to work harder, etc. Isn't that the true capitalist way? Or does it only work when the employer benefits?

117 posted on 06/03/2005 7:26:18 PM PDT by raybbr
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