Sunday, September 24, 2006

Globalization – Lowest Common Denominator

Remember your elementary mathematics? Finding the lowest common denominator was one of the skills you learned. You will soon be applying that skill to that 21st century darling of economists called Globalization. The word sounds innocent enough or perhaps even mildly exciting. It sounds like the sort of concept-in-a-word that you are supposed to embrace as being cardinal self-evident truth. All heads nod in agreement at the cocktail party.

In reality, if you are a native born American with many working years ahead of you, globalization will become a very frightening word. Globalization means that you cannot hide from your competitors, not at night, not on weekends. You can never rest because someone, somewhere is willing to sleep fewer hours and work harder than you in order to scratch out a tenuous living.

You have been taught by the *think tank crowd* of the past decade that your job as an American is to work smarter, not harder. They said some anonymous Asian would do the hard work while you’d do the thinking. They lied. You have to do both. Soon you will have to do both for a minimum of 12 hours per day just to keep from losing your home, your car and your way of life.

Your company is finding ways to eliminate you as you read this. Your company’s duty to its shareholders is to get you outsourced before their competitor figures out how to do the same. Oh, and unfortunately, those hard working Asians and Indians are just as smart as you. They don’t need you to do the thinking. They need you to either work for less or get out of the way.

With each passing year you will have to accept less and less in take home pay. The Globe demands it. You cannot make ever higher income through ‘smarts’ while ever more smart foreigners working harder and living six to a home compete for your job.

Ask any Mexican working in your yard what he thinks his chances are of ever making more money then you pay him under the table today. If you heard him say pretty good (because you read and understand Spanish) just go down to the convenience store and pick up a fresh Mexican. Never pay more for yard work, just find a newly arrived Mexican. You will soon be that Mexican on the global stage.

Your health coverage will vanish. The rest of the world toils without health coverage, therefore so must you. Globalization abhors a differential. The pain in America will become unbearable within 10 years. Mortgage defaults will skyrocket. Civil unrest could well collapse America. America will learn that there never was such a thing as working smarter, not harder. That was just a flippant, arrogant concept of the 90’s. America will learn that you have to work as hard as that Mexican in your yard. I can almost hear the wailing and gnashing of teeth. You’ll be so sorry you helped all those Mexicans just looking for a better life because you’ll be wondering whatever happened to your better life.

Just thank American multi-nationals in collusion with your political party. That’s right, both Democrats and Republicans sold you out. That’s because you’ve never met a poor politician. All politicians are watching their bottom lines, not yours. They never cared about you, they just wanted your vote, now they are rich and you are not. Game over.

Please post your thoughts on how we might get out of this mess.

Friday, September 22, 2006

Minimum Wage – Swindling the Poor

Increasing the minimum wage is dangerous. It is but a brief injection of spending power into the economy. At best, raising the minimum wage improves the marginal wage earner’s lot for perhaps a month or so. The cost of goods and services quickly increases to absorb the newly created cash injection.

Raising the minimum wage, like the predictable annual COLA, simply fuels inflation. Within a few months inflationary tendencies triggered by increasing the minimum wage wipe out the temporary working class gain. Ironically, increasing the annual rate of inflation benefits the richer borrowing classes while punishing the lower class marginal wage earner. The people who should fear minimum wage increases the most are the minimum wage earners themselves and the fixed income retired.

Wednesday, September 20, 2006

Illegal Immigration and Minimum Wage

Until we stop the breathtaking flow of illegal immigrants into America there is no point in talking about the Minimum Wage. Wages are always undercut by immigration. Immigrants, illegal or otherwise are always willing to work for less money than native born Americans. Whenever you increase the labor supply for any given skill set, people of that skill set see their wages decrease.

Oddly, the majority of Mexican immigrants proudly proclaim that they want the border between Mexico and America to be open, without restriction. Yet I wonder why a Mexican laborer would really want a steady stream of cheaper illegal laborers coming into America. Every new illegal laborer suppresses the wage potential of the laborer who arrived here the year before. We can only hope that the Mexicans who are already here in America soon wise up and demand the border be sealed. The sooner the border is closed, the sooner they can see their own incomes rise.

After America’s borders are brought under control, then we can discuss raising the minimum wage. Although in truth if the labor supply is tightened through immigration control, wages will begin to rise on their own. If we want to build a stronger, healthier, better paid America we need to significantly slow immigrant population growth.

Tuesday, September 19, 2006

Great Depression II

Most economists tell us that another great depression cannot possibly happen in America. They say that 'modern' state-of-the-art Government will be able to save us from this deadly downward spiral through interest rate reductions and tax relief. However, powerful counter forces are at work. American wages, adjusted for inflation, have been in decline since 1997. The economic principal of Globalization will not accept an America where our workers take home ever fatter paychecks relative to the rest of the world. The ultimate capitalistic goal of Globalization is to bring all wages in line with the lowest common denominator worldwide. The playing field has traditionally been tilted in America's favor, but that is changing rapidly.

A nation that started out with high wages that now steadily descend while its productivity is steadily on the increase is a nation in peril of slipping into depression. America currently fits this description. Real wages have been falling for almost a decade while productivity has steadily improved to an all time high. We are now producing the greatest amount of goods and services ever seen per man-hour worked. Yet the American worker has not reaped any financial benefit of her awesome productivity. The only so-called improvement in our standard of living has come from steadily cheaper goods from China. Falling wages and ever decreasing prices could mean that depression is in our future.

I don't believe that America's standard of living should be measured through Wal-Mart inventory availability and smiley faced "roll-back" pricing. I want American productivity gains to translate into higher wages for Born in America workers. Only through higher real wages can our standard of living truly improve. With higher real wages comes the personal freedom of choice to buy what you want, when and from where you want. Wal-Mart's Chinese inventory should not define the state of American happiness. What's in your wallet? Less real money.

Saturday, September 09, 2006

Minimum Wage Pandering

Maintaining slave wages. Recently congress has wrestled with increasing the minimum wage by $1.50 to $6.65 per hour. The last increase in minimum wage was in 1996 (increased by 90 cents to the current $5.15 per hour). The American labor market is vastly different then it was ten years ago. In 1996 the number of illegal workers from Central America and Mexico was barely noticeable. Here in Annapolis, white and black teenagers still worked the fast food joints and they still did much of the yard work. Suburban Americans have become seemingly wealthy over the past decade, their children are no longer required to work, parents are more than happy to provide for their every need, real or imagined. Children are coddled, not worked.

Politicians pandering to poor white and black Americans are obscene. Neither republican nor democrat really wants to increase the minimum wage. They know that the only way to drive up labor rates in a meaningful way is to tighten the labor supply. I know this first hand. By 2000 I had to pay white teens an ever increasing amount to do my yard work. This was because their parents gave them pretty much anything they wanted, sporting gear, generous allowance and so on. I had to offer ever greater amounts to get my gutters cleaned or my lawn mowed. Ten years later most of my neighbors use slave labor from south of the border and I just let my lawn go to seed.

Our borders are open precisely because most republicans are unwilling to pay one dime more for labor then they can possibly get away with. Most Democratic Party pollsters believe that 3 out of 4 Mexicans and Central Americans will, after yet another round of fool hardy amnesty, become voters in support of the democratic party. It is a win win situation for democrats and republicans and signals the utter demise of America.

Open borders allow for unlimited labor pool growth. Unlimited labor is wonderful thing for owners, operators and homeowners. Any unlimited resource always declines in value. Hence, unlimited labor keeps a permanent lid on America's labor costs. It is a perfect time to be a middle class American, for the time being you still make a comparatively good wage, while your unskilled slave workforce competes their way down to the wage cellar. You get a greener lawn, cheaper housing and even cheaper meals at your favorite chain restaurants. What's not to like, not since the Roman Empire have so many lived so well.

Forget about raising the minimum wage for the unskilled. Close and fence the border, thus tightening the unskilled labor supply. That's how to improve the wages of honest, legal American citizens and improve national security at the same time. Don't hold your breath.

Slave Gardens

Remember when building a rock garden was an enjoyable pass time for the infatuated American homeowner? Well times have changed. Thanks to cheap Mexican labor, now you can have your entire yard bulldozed, hillocks piled high, massive boulders positioned, ponds excavated, ornate Mexican fountains installed all for a couple of thousand dollars and you'll never have to leave your easy chair. Better still, if your tastes change, it is cheap enough that you can do it all over again next summer!

The last time that the average American could afford to do this was 1859, in America's deep south. Now, amazingly, the average American homeowner can assume the role of an 1800's era plantation owner. Better yet, you don't even have to feed your slaves! Go down to the convenience store, get three competing crews of illegal aliens to give you a fixed price, then pick the cheapest crew to complete your personal Tara. How they can afford to eat or fend for themselves is not your problem. If they should become weak, sick or injured you can always hire a new illegal Mexican crew. In the old days, if you had slaves, your investment could be ruined if you overworked them. Just like if you ran your horse too hard. Thank goodness those backward days are behind us. The modern American Wage Slave will do whatever it takes to please you, even if it means living 6 families to a house. Plus you can sleep tight at night knowing that you gave them a chance for a better life.

Mexican Grass is Always Greener

I must say that my neighbor's grass really is greener than mine. My neighbor has his lawn maintained by illegal Mexican and Central American landscaping crews. Gosh, it really is pretty. He boasted that he gets all his flower beds tended and his grass fertilized and trimmed like a billiard table twice a week for $30. He says it sure beats trying to find a white suburban teen willing to do the same work for less than $100.