$15 minimum wage, Illegal immigration and Automation...

a reply to: pavil

What do you mean by "jobs"? Individuals working for others? Business owners? Drug dealers? Entrepreneurs in the new economy who make their money from blogs, vlogs, freelance graphic design, youtube channels, etc? There will always be forms of unemployment, regardless of what some economists may insist.

Also, let's assume for a second that automation is somehow able to replace all work. It can't, but let's just assume that it can. What would be the point in our current "work or starve" economic model if automation could produce everything humans want & need without human intervention? If there were no workers, then no one would have any money to buy those products anyway. And if no one needed to work, then what's the problem?

a reply to: crayzeed

So what's the solution?

originally posted by: enlightenedservant
a reply to: Edumakated

In other words, you're just going to ignore everything I said in my post? LOL

Aren't these your words:

When we have more jobs than workers, companies will still find cheap labor forces to fill those gaps

Please explain how having more jobs than workers lowers wages. You are claiming that companies will still find cheap labor forces to fill those gaps. The forces of supply and demand will still cause wages to increase in a scenario where a company cannot fill its worker's needs. Yes, some companies will look for alternative sources, but at the macro level, wages will rise when there are more jobs than workers.

This is why you have situations like in the Dakotas where oil workers were making six figures. Why you have computer developers making good money. Companies have needs and they can't find enough workers, so they have to increase wages to attract employees.

a reply to: seasonal
OOPs, sorry, but you get my gist what HAS to happen. For a healthy country you have to have a healthy population not just a healthy few. And just who said that any company has to make a profit year after year. It could still be a successful company breaking even.

originally posted by: seasonal
a reply to: pavil

I doesn't matter if wages stay the same or go up, the automation is going to happen because it is more profitable.

If I understand your post/thread you say there is a direct correlation or ratio to wages VS labor supply. I think it is not as simple as that.

Not really my point. It's more how do we deal with automation. The Illegal immigrant workforce is simply an accelerant to this whole problem of how will society adjust to not enough jobs for the legal workforce, let alone the illegal. I don't have the answer and neither does anyone else it seems.

a reply to: Edumakated

My bad. You read one line in my post and then ignored the examples I listed that prove my point about there being cheaper forms of labor out there. If you would've read my link, it goes into the various industries that have started using cheap prison labor to fill those jobs. From that link (HERE):

Most convicted inmates either work for nothing or for pennies at menial tasks that seem unlikely to boost their job prospects. At the federal level, the Bureau of Prisons operates a programme known as Federal Prison Industries that pays inmates roughly $0.90 an hour to produce everything from mattresses, spectacles,road signs and body armour for other government agencies, earning $500m in sales in fiscal 2016. Prisoners have produced official seals for the Department of Defence and Department of State, a bureau spokesman confirmed. In many prisons, the hourly wage is less than the cost of a chocolate bar at the commissary, yet the waiting list remains long—the programme still pays much more than the $0.12-0.40 earned for an hour of kitchen work.

Similar schemes exist at the state level as well, making the market of 61,000 captive labourers worth well over $1bn. California’s programme expects to generate $232m in sales this year, much of it from construction and textiles, though $10m is also expected from meat-cutting. In Idaho, prisoners roast potatoes. In Kentucky, they sell $1m worth of cattle.

Critics have spent years directing their anger towards private prisons, by pointing out the moral hazard created when profiting from punishment. Jeff Sessions, the attorney-general, caused a stir last month when he cancelled an Obama-era directive to phase out federal contracting with private prison companies, which expect bumper earnings under Donald Trump. The share price for CoreCivic, the rebranded name of the Corrections Corporation of America, shot up by 43% in a single day after Mr Trump was elected, in anticipation of lucrative contracts to run immigration detention centres.

So yeah, many companies in theory would increase wages to fill unfilled positions. But many companies will also simply find cheaper labor sources, such as prisoners, unpaid internships, etc. Now, do you care to show some proof that those Dakota oil workers are the norm and not an exception to the rule? (And that's assuming that companies in the Dakotas still don't use illegal labor, unpaid internships to fill other positions, prison labor for some other jobs, etc.)

originally posted by: theantediluvian
a reply to: pavil

The "they're taking our jobs meme" relies heavily on people not understanding how economies work at the most basic level. People participate in the economy as both laborers and consumers. More people means more demand for goods and services which in turn creates more demand for labor to produce these goods and perform these services.

Automation is one part of what Keynes called "technological unemployment." Computerization is another major contributor. But it's not simply a robot or a computer replacing a job — though those are the most direct and obvious examples — all those minor innovations that make jobs easier, that improve efficiency, also reduce the demand for labor to achieve the same output.

Free markets are environments where companies, like biological organisms, evolve in competition. One of the fundamental pressures is of course profit. In other words, they're driven to evolve in ways that generate more profit. This can be achieved through increasing prices or lowering costs. The biggest cost is usually human labor.

Here's the reality.

Removing cheap labor by itself has fairly predictable results. If the cost of labor goes up, the cost of producing a product goes up and so the price of the product will go up to maintain profits. Then you've got to account for the competition from imported goods from places where they have cheap labor. To stay competitive with the imported goods, producers then have to cut costs so they can bring prices down while staying profitable. How is this done? You can only get so much labor from a single laborer, so producers will turn toward things like automation to decrease the labor requirements.

Alternatively, the government can intervene to tip the scales.

How might they go about this? They can artificially increase the cost and therefore, the price of imported goods, through tariffs. That can of course go horribly wrong because trading partners react by increasing their own tariffs on what they import from us. Another way in which this is done is through subsidization, something a number of sectors already rely heavily on, particularly agriculture.

What isn't going to happen is that jobs that are being done by illegals are going to become good paying jobs. That's not to say that we should allow companies to exploit illegal immigrants for cheap labor but it should be understood that in solving that problem, we'll be facing a slew of others. It should also be understood that cheap labor from illegal immigrants is actually forestalling automation, not adding to it, in terms of technological unemployment.

Good points but how can you be a consumer with out being employed on the macro scale? If 30% of jobs were to go away, that's 30% less income to purchase goods for the sake of example. One can't be for unlimited immigration when jobs will be decreasing, it's an bleak situation, even taking illegals out of the situation.

We all can point out the problems, I'd like to hear solutions. People without money (jobs) can't purchase much without some form of intervention by government or industry. I'm sure Big business would love to have 100% automation.......tilll the money to purchase dries up. It's in their own. Selfish interest to find a solution.

a reply to: crayzeed
Eat the rich
No, seriously, eat the rich.
No, not really but with a little salt and vinegar, well,,,,
No, not seriously,

But just how myopic can those corporate leaders be? An old argument for so much profit was that that money was needed for R+D, for innovation for the future. While I still can see that being the case somewhat, how is it that the corporations are still working on their old paradigm of ''bottom line'' and short term profit.

Can't these people see that their profits are in jeopardy if this whole ball of wax goes belly up? Maybe not. Maybe they are so wedded to the old system that they cannot see beyond their short term noses. And that would be another major illness of the present system. That people of that mentality and short nearsightedness have been the most successful.

originally posted by: TerryMcGuire
a reply to: seasonal

I agree, and alot of the BLM, SJW and the like could be a result of the crap prospects a very good percentage of the young adults are facing.

That above is an understated aspect of the condition of our youth today in my thinking. Certainly it is only one aspect but for me it is a predominant part of it. I hold closely to the thought that this young generation can see more easily then previous generations that the future is grim for not only the lazy but for the ambitious as well. And while I do not condone many of the manifestations of their freaking out over their future, I can understand and sympathize with it. And I think you are right in that gen Xers can not only see that the American Dream is not going to happen for them but also that that dream is the carrot for the horse.

There are so many issues that we have allowed to get out of control by can kicking.

And that is also part of the problem. For too long the problems of the present have been bandaged rather than cured, the and solutions have been at best temporarily restorative rather than preventative.

And the ''kicking the can'' concept goes so much further. So much of the economy is based on a kicking the can concept. Credit. When we run out of money to ''consume'' we place the onus on the future for payment. Borrowing should be an action of emergency rather than a foundation for an economy.

What a depressing subject. And I agree with your post.

a reply to: crayzeed

Our economy is not set up to care--er, about anything other than $$$$. Everyone going out for their own self interest is what are econ is about. That worked for the last 150 years but it seems things are about to get interesting.

If the future is robot filled, things will change or it will get messy. And I think it is already starting, just starting to get messy.

For a healthy country you have to have a healthy population not just a healthy few. And just who said that any company has to make a profit year after year. It could still be a successful company breaking even.

The only #'s that are of concern are next quarters increase in profits. And last quarters profits are this quarters losses. Sad but true.
I have worked for large corps and it seems like someone would see that unlimited growth is a impossibility. But it is what they are rewarded for-so we will have to hit the skids before this is corrected.

Can't these people see that their profits are in jeopardy if this whole ball of wax goes belly up? Maybe not. Maybe they are so wedded to the old system that they cannot see beyond their short term noses. And that would be another major illness of the present system. That people of that mentality and short nearsightedness have been the most successful.

a reply to: TerryMcGuire

a reply to: Edumakated

The technological advances do lead to better standards of living. Even those at the lower end of the income scale live better than the upper class did decades ago. In fact, if we are being honest, there isn't a huge delta in standard of living between rich and poor except at the very margins at least here in America and other first world western countries.

Yes and no. Do poor people today live better than poor people of 100 years ago? Without a doubt. But how much of that is owing to advances in technology vs the advent of social welfare programs? I think it's mostly the latter.

The poorest in America have cars, clothing, TVs, cell phones, air conditioning, etc.

This reminds me of the "reports" by Rector and Sheffield who up until a few years ago, pretty much considered a refrigerator to be a luxury item. It's an observation that doesn't account for things like changes in what is or isn't a necessity. There was a time when a car was a luxury item. Now it's a necessity for most people and one for which there is no alternative. There was a time when a cellphone was a luxury item but for a lot of people, it's how they access the Internet — something that's only existed for a few decades and yet, something a lot of people would consider a necessity. There was a time when air conditioning was a luxury item and then again, there was a time when heat waves killed a lot more people than they still kill today.

And as I said above, it's not the case that technological advances have simply made these things more readily available, we're redistributing wealth to the bottom so that people who couldn't afford them otherwise, can.

I think the issue right now though is that it is becoming harder and harder to stay competitive in terms of employment. The penalties for not being educated, criminal records, having kids out of wedlock, and other decisions can have far more of a negative impact on someone's earning prospects today than in the past.

It used to be you could be a goofball in high school. not go to college. Sooner or later, you'd mature and you could get a job at a plant driving widgets and make a decent wage. It isn't like that anymore.

Yes and no here as well. I don't think the average factory worker of a couple generations ago was a "goof ball in high school" who simply fell into a decent job regardless of his efforts at self-sabotage. But certainly, the availability of good paying blue collar jobs is a difference.

We shifted from an agrarian society, to an industrial one. The class of people who were involved in low-skilled agricultural jobs moved to low-skilled blue collar jobs. And now we're in an era of deindustrialization. I believe what's happening is that we're effectively phasing out a whole class of worker. What are the chances that people who 200 years ago would have been farmers and 50 years ago, assembly line workers, are suitable for highly skilled jobs today, regardless of access to college?

Sure, *some* of them will be suited for that sort of work but has the aptitude of the average working class person increased such that a person with an IQ of 90 can go to college and become a network engineer?

originally posted by: seasonal
a reply to: crayzeed

Our economy is not set up to care--er, about anything other than $$$$. Everyone going out for their own self interest is what are econ is about. That worked for the last 150 years but it seems things are about to get interesting.

If the future is robot filled, things will change or it will get messy. And I think it is already starting, just starting to get messy.

For a healthy country you have to have a healthy population not just a healthy few. And just who said that any company has to make a profit year after year. It could still be a successful company breaking even.

....just wait till the robots organize and want "fair pay".


You can't run most businesses without some profit, especially in an inflationary environment. Even without inflation, buildings and equipment break down and eventually need replacement. You can't increase wages without budgeting for it. The status quo cant be maintained without a level of profit. Now you can contend that wage discrepancies in a company could be more evenly distributed but if you stay still in an economy, you are actually falling behind.

I know....pretty fun topic to discuss when there's no easy answers from any side.

a reply to: pavil

Profit is what is left after the bills are paid.

originally posted by: theantediluvian
a reply to: Edumakated

The technological advances do lead to better standards of living. Even those at the lower end of the income scale live better than the upper class did decades ago. In fact, if we are being honest, there isn't a huge delta in standard of living between rich and poor except at the very margins at least here in America and other first world western countries.

Yes and no. Do poor people today live better than poor people of 100 years ago? Without a doubt. But how much of that is owing to advances in technology vs the advent of social welfare programs? I think it's mostly the latter.

The poorest in America have cars, clothing, TVs, cell phones, air conditioning, etc.

This reminds me of the "reports" by Rector and Sheffield who up until a few years ago, pretty much considered a refrigerator to be a luxury item. It's an observation that doesn't account for things like changes in what is or isn't a necessity. There was a time when a car was a luxury item. Now it's a necessity for most people and one for which there is no alternative. There was a time when a cellphone was a luxury item but for a lot of people, it's how they access the Internet — something that's only existed for a few decades and yet, something a lot of people would consider a necessity. There was a time when air conditioning was a luxury item and then again, there was a time when heat waves killed a lot more people than they still kill today.

And as I said above, it's not the case that technological advances have simply made these things more readily available, we're redistributing wealth to the bottom so that people who couldn't afford them otherwise, can.

I think the issue right now though is that it is becoming harder and harder to stay competitive in terms of employment. The penalties for not being educated, criminal records, having kids out of wedlock, and other decisions can have far more of a negative impact on someone's earning prospects today than in the past.

It used to be you could be a goofball in high school. not go to college. Sooner or later, you'd mature and you could get a job at a plant driving widgets and make a decent wage. It isn't like that anymore.

Yes and no here as well. I don't think the average factory worker of a couple generations ago was a "goof ball in high school" who simply fell into a decent job regardless of his efforts at self-sabotage. But certainly, the availability of good paying blue collar jobs is a difference.

We shifted from an agrarian society, to an industrial one. The class of people who were involved in low-skilled agricultural jobs moved to low-skilled blue collar jobs. And now we're in an era of deindustrialization. I believe what's happening is that we're effectively phasing out a whole class of worker. What are the chances that people who 200 years ago would have been farmers and 50 years ago, assembly line workers, are suitable for highly skilled jobs today, regardless of access to college?

Sure, *some* of them will be suited for that sort of work but has the aptitude of the average working class person increased such that a person with an IQ of 90 can go to college and become a network engineer?

It is advances in technology which has allowed for all manner of products from clothing to electronics to be bought extremely cheap. These items improve over time and the cost continues to go down so that anyone can afford them even with a meager income. It has nothing to do with social welfare.

Yes, some things are a necessity, but everyone still has these items except in the most extreme circumstances. Refrigerators at one point were a luxury and now are a given. Cars were a luxury and now a given. Cell phones were a luxury and now a given. Televisions were a luxury and now in every room, no matter how poor someone claims to be.

I am not arguing that being poor in America is easy, but it isn't remotely the same thing as being poor in say South America. America's poor by most measures is part of the 1% globally.

originally posted by: enlightenedservant
a reply to: pavil

Automation, illegal immigration, and raising the minimum wage aren't as related as you're implying. "Illegal immigration" kids who were illegally brought here, etc. That has nothing to do with automation or minimum wage laws.

Most illegal immigrant workers (undocumented workers) still work in agriculture, yard work, house work, construction, the sex trade, etc. Coincidentally, minimum wage laws typically exclude agricultural labor. And yard work, house work, independent construction work, and the sex trade are typically negotiated "under the table", meaning that minimum wage laws have nothing to do with them either. And good luck automating any of these professions.

As for raising the minimum wage, that comes in response to the massive productivity increases American workers have achieved over the last 40 years or so. Yet wages have been largely stagnant in that time period, with the excess profits from that increased production going to ownership, stop holders, upper management, etc. So the push for minimum wage increases is actually about the workers regaining the same purchasing power and compensation as they previously did (when adjusted for inflation). And that doesn't even include the massive cost of living increases that have happened in the last 30-40 years.

Also, one of the dirty secrets of capitalism is that it needs cheap labor to reach its potential. So of course many businesses and some entire industries love undocumented workers. They can pay them lower wages, give them fewer or no benefits, force them to work longer hours, and then just report them to the govt if the workers start demanding too much in return. It went from slave labor, to sharecroppers & child labor, to poor immigrant labor, to automation. And if possible, companies would probably move on to making their customers do the actual labor while still having to pay for the end product.

Wal-Mart already gets customers to do the actual labor with self check out including scanning and bagging.

Everytime a customer uses a kiosk or ATM they are doing the labor of the business.

originally posted by: pavil
One thing I find confusing is how, in an age where jobs are being replaced by automation and brick and mortar stores are dropping like flies, that people can support Illegal immigration and at the same time a $15 min wage.

Studies have told us the wave of automation will take away many jobs. So in the future there will be less jobs and more people looking for jobs. In this kind of environment, how can we arrive at a $15 wage with the added illegal workers in our system? The law of supply and demand will have a downward effect on wages and add in automation and illegal Immigration and a $15 min wage becomes a pipe dream.

I don't see how in today's world one can be for illegal Immigration as automation chips away hard at existing jobs. If you want to raise wages, the market has to eventually support that increased wage. Some people want to have it both ways.

Your thoughts?

The supply of labor for unskilled jobs is so high, that you're not going to meaningfully shrink it. However, because people are illegal they can operate under the table and tax free which lets them work for less than an honest worker. It doesn't matter what your minimum wage is, they can always do this. The only way to make a level playing field is to put illegals and legals on the same axis, which ultimately means amnesty.

Additionally, the point of technology is that it lowers the barrier to entry to jobs, it takes the skilled and makes it unskilled. This means that job security over the long term is negative. We can only maintain our society in a world where not everyone will be able to work, with a UBI.

originally posted by: WhiteWingedMonolith

originally posted by: enlightenedservant
a reply to: pavil

Automation, illegal immigration, and raising the minimum wage aren't as related as you're implying. "Illegal immigration" kids who were illegally brought here, etc. That has nothing to do with automation or minimum wage laws.

Most illegal immigrant workers (undocumented workers) still work in agriculture, yard work, house work, construction, the sex trade, etc. Coincidentally, minimum wage laws typically exclude agricultural labor. And yard work, house work, independent construction work, and the sex trade are typically negotiated "under the table", meaning that minimum wage laws have nothing to do with them either. And good luck automating any of these professions.

As for raising the minimum wage, that comes in response to the massive productivity increases American workers have achieved over the last 40 years or so. Yet wages have been largely stagnant in that time period, with the excess profits from that increased production going to ownership, stop holders, upper management, etc. So the push for minimum wage increases is actually about the workers regaining the same purchasing power and compensation as they previously did (when adjusted for inflation). And that doesn't even include the massive cost of living increases that have happened in the last 30-40 years.

Also, one of the dirty secrets of capitalism is that it needs cheap labor to reach its potential. So of course many businesses and some entire industries love undocumented workers. They can pay them lower wages, give them fewer or no benefits, force them to work longer hours, and then just report them to the govt if the workers start demanding too much in return. It went from slave labor, to sharecroppers & child labor, to poor immigrant labor, to automation. And if possible, companies would probably move on to making their customers do the actual labor while still having to pay for the end product.

Wal-Mart already gets customers to do the actual labor with self check out including scanning and bagging.

Everytime a customer uses a kiosk or ATM they are doing the labor of the business.

It is called externalizing costs. Businesses are experts at it. Look at superfund sights, medicaid, food stamps/snap or any social service really. This allows corps to pay low wages and still have someone else feed and take care of the employee because there is no way in hell they can make it on the wages paid.
Some people refuse to see that either the employer pays a living wage of the tax payer supplements the wage.

originally posted by: theantediluvian
a reply to: Edumakated

The technological advances do lead to better standards of living. Even those at the lower end of the income scale live better than the upper class did decades ago. In fact, if we are being honest, there isn't a huge delta in standard of living between rich and poor except at the very margins at least here in America and other first world western countries.

Yes and no. Do poor people today live better than poor people of 100 years ago? Without a doubt. But how much of that is owing to advances in technology vs the advent of social welfare programs? I think it's mostly the latter.

The poorest in America have cars, clothing, TVs, cell phones, air conditioning, etc.

This reminds me of the "reports" by Rector and Sheffield who up until a few years ago, pretty much considered a refrigerator to be a luxury item. It's an observation that doesn't account for things like changes in what is or isn't a necessity. There was a time when a car was a luxury item. Now it's a necessity for most people and one for which there is no alternative. There was a time when a cellphone was a luxury item but for a lot of people, it's how they access the Internet — something that's only existed for a few decades and yet, something a lot of people would consider a necessity. There was a time when air conditioning was a luxury item and then again, there was a time when heat waves killed a lot more people than they still kill today.

And as I said above, it's not the case that technological advances have simply made these things more readily available, we're redistributing wealth to the bottom so that people who couldn't afford them otherwise, can.

I think the issue right now though is that it is becoming harder and harder to stay competitive in terms of employment. The penalties for not being educated, criminal records, having kids out of wedlock, and other decisions can have far more of a negative impact on someone's earning prospects today than in the past.

It used to be you could be a goofball in high school. not go to college. Sooner or later, you'd mature and you could get a job at a plant driving widgets and make a decent wage. It isn't like that anymore.

Yes and no here as well. I don't think the average factory worker of a couple generations ago was a "goof ball in high school" who simply fell into a decent job regardless of his efforts at self-sabotage. But certainly, the availability of good paying blue collar jobs is a difference.

We shifted from an agrarian society, to an industrial one. The class of people who were involved in low-skilled agricultural jobs moved to low-skilled blue collar jobs. And now we're in an era of deindustrialization. I believe what's happening is that we're effectively phasing out a whole class of worker. What are the chances that people who 200 years ago would have been farmers and 50 years ago, assembly line workers, are suitable for highly skilled jobs today, regardless of access to college?

Sure, *some* of them will be suited for that sort of work but has the aptitude of the average working class person increased such that a person with an IQ of 90 can go to college and become a network engineer?

Operating a computer is mislabled as low skill when it depends on how many know how to do it and the easier it becomes for them to do so.

30 years ago if employees at one business all worked using smart phones and no one else did, they would be seen as smart, professionals, high tech. Ohhh look at them. How cool. Now most people can operate one and it's seen as no big deal. That even stupid unprofessionals can. That's not the right attitude at all.

It seems to many of us that once most know the once coveted "skill" and can use it without too much thought, that somehow it MUST be easy and since everyone can, or almost everyone, it's not special anymore. That's ridiculous.

The fact of the matter is everyone is needed. And special. Everyone works in their own way. The rise of automation in many people's opinion is to get everyone to recognize that and appreciate one another for all our capabilities.

a reply to: WhiteWingedMonolith

From a business stand point not everyone is needed.
This is the problem that we will face, not enough busy work for the worker bees. The hows, whys, and how much's have yet to work out. But usually this ends in wars. Big enough wars reduce populations and blow a bunch of countries infrastructures to kingdom come. Busy work and reduced population achieved.

The fact of the matter is everyone is needed. And special. Everyone works in their own way. The rise of automation in many people's opinion is to get everyone to recognize that and appreciate one another for all our capabilities.

.