Wednesday, April 6, 2016

Wages not raised by uneducated immigrants in de-unionized US -- Social Security Trust Fund II (that's two)? -- Prisoner's Dilemma explains de-unionized labor's race-to-the-bottom

Economists Mette Foged and Giovanni Peri have issued a paper reporting that sprinkling some uneducated immigrants around (more or less randomly) in Denmark actually raised the wages of uneducated natives.  The positive outcome seems down to some immigrants having skills that complemented rather than completely replaced natives', to some natives moving up to better paying office jobs and to some uneducated natives (re?)entering the workforce (possibly for newly improved wages?).

Not very helpful over here.

The Danish labor market is unionized -- with centralized bargaining even -- while the American is on the very opposite end of spectrum. American born taxi drivers (me for 28 years) used to earn $800-900/wk up to a couple of decades ago -- now probably more like $400-500/wk for 60 grueling hours -- American born wont work for such. Ditto for fast food -- at $10/wk, Chicago's labor still all Mexican and Indian.

100,000 out of my guesstimate 200,000 Chicago gang-age minority males are in street gangs, I presume because they wont slave for $400/wk. Fed min was $440 half of today's per capita income ago (1968).

Sociological point: both our "gangs" would work for half of today's taxi or low skill wages if only it were 100 years ago and if only we understood that was the best the economy could share with us -- and we'd be happy. Beautiful thing about collective bargaining is that it makes you know you have squeezed all there is to squeeze out of the consumer/economy.

With collective bargaining disappeared from the US and with immigrants sociologically willing to work-for-less, a "market clearance" gap opens into which our de-unionized natives fall -- out of sight of the data by definition because they not looking for work.
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The Social Security Trust Fund should -- as in is supposed to -- run down/run out -- why else did we save it up all that "cash" if not to pay it back out  to the generation who "saved" it?  Before it runs out -- quick! -- we ought start a new Trust Fund for the following generation -- and we need to do it in time for the new FICA money used to buy the  new Trust Fund II (that's "two") bonds can be used to cash out the old Trust Fund I bonds -- continuing to "guarantee" the next generation of Social Security retirees will get theirs (or whatever phony purpose Trust Fund I is supposed to fulfill).  :-)
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Reading Sandwichman today I realized that the "Prisoner's Dilemma" can be used to explain why the ability of un-organized labor to "just go down the road" to offer their services does not constitute effective bargaining power in the labor market.

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