Sunday, January 14, 2007

Will an increase in the minimum wage torpedo American Industry?

As the BBC article linked below points out, about one in ten American workers subsists on minimum wage and for those who support themselves or even families, it's a tough struggle.

Opponents of minimum wage increases typically argue that increases in minimum wage rates have the effect of reducing employment opportunities, i.e. "if you increase the minimum wage, we'll be forced to hire less and maybe even fire".

Sorry, I don't buy it. And here's an example of why I don't: for many many years, we've been subjected to the mantra that illegals who work in the U.S. are only doing the jobs that Americans won't do. The subtext has always been that Americans won't subject themselves to basic manual jobs. But, looking at the aftermath of the recent raids on illegals (Raids in six states may be largest ever), it is fairly apparent that this is untrue. Americans won't do the jobs that illegals come here to do? Tell that to the citizens who showed up to fill the vacancies created by the illegals who were apprehended in the "Swift" raids (the investigation that lead to the raids was prompted by widespread identity theft involving the social security numbers of american citizens). The truth in this and similar situations is more likely this:

1. U.S. industry benefits greatly from the labor provided by illegal aliens.

2. The labor provided by illegal aliens drives down labor rates.

3. The corresponding effect of this is that jobs that were previously within reach of certain segments of American society are no longer within reach, not due to the choices made by Americans, but, rather, by American industry.

So, when it comes to issues like "raising the minimum wage", consider the source and follow the money trail.


Illegal immigration lowers wages?

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