how I learned to stop worrying & trust the free market

[phuckphace]

http://www.buzzfeed.com/jessicagarrison/all-you-americans-are-fired#.ruRVMmL6G

I've noted before that outsourcing and foreign labor are THE CURRENT CENTURY'S version of slave labor, and although it's painfully obvious in a "we didn't need an investigation to tell us this" sort of way, somebody did one anyway.

the above article has it all: relentless corporate greed and shameless fraud, foreigners fraudulently hiring other foreigners, and black Americans seeking gainful employment only to be given the finger by more shifty foreigners.

slave cabins on a cotton plantation or "guest worker" accommodations in the current year? with the free market, it's hard to tell sometimes:

https://ak-hdl.buzzfed.com/static/2015-11/13/15/enhanced/webdr08/enhanced-buzz-wide-32318-1447445886-7.jpg

I'll be back later, but in the meantime consider that corporations view you, the native worker who wants to earn a living, as a cancerous tumor that could really use a few rounds of chemotherapy.

[Vlerchan]

I had a think about this.

It would seem that poor regulators - and not the programme itself - is the problem.

Just so people are aware the article seems to refer almost-entirely to H2A visas. That is visas for agricultural workers. Let it be noted that over a half of low-skill workers in this industry are estimated to be undocumented immigrants. Each of the issues mentioned in the text are in breach of regulation. Most of the firms mentioned were subject to litigation.

This raises two considerations.

The first is along the same lines as phuckphace that firms prey on immigrants alienated from social relations. But we can presume here that to a large extent the outcomes these immigrants receive are superior to those otherwise received if they could not access U.S. jobs.
The regulators seem to be less willing to crack down on abuses. This is the more important point to me. The actions outlined were in breach of legislation. If regulators had been doing their jobs properly these abuses would be avoided. I imagine we'd also see less undocumented immigrants working on farms.
Thus I'm concluding - save the programme: sack the regulators. Even if I'm suspicious that there's labour shortages in no-skill labour.

[Microcosm]

The corps in America would rather employ slaves that they can pay cheaply and illegally than working Americans. It saves them money.

[phuckphace]

Vlerchan - you stated in the immigrants thread that the presence of a large serf-class is in fact staving off Great Depression 2.0 (triggered). wouldn't it follow then that if the extant labor and immigration laws were actually enforced as you propose here, the doomsday economic collapse would end up occurring? the existence of this serf-class is largely dependent on corporations willfully skirting/ignoring the regulations in place. what's it gonna be, fifty dollars for a pound of tomatoes?

- we don't have a no-skill labor shortage. it's that the corporations are simply unwilling to pay their workers anything. the primary truth at the heart of this issue.

- we don't have a skilled labor shortage either. see also Microsoft's prolific use of H1Bs and perma-temp workers.

if this economic collapse truly is inevitable (I'm skeptical of the reasons stated) then I say let it burn. a cleansing fire might be exactly what we need in order to rebuild something better.

[Vlerchan]

wouldn't it follow then that if the extant labor and immigration laws were actually enforced as you propose here, the doomsday economic collapse would end up occurring?
H2A visa workers make up about 3% of the agricultural workforce which in turn makes up about 5% of the total workforce.

That a recession would occur also depends on firms refusing to hire these immigrants in the same numbers at the prevailing rate. I'm sceptical this would occur. Far as I'm aware these immigrants are being paid at least minimum wage. Odds are a large promotion would still be retained.

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Bigger issues would arise with deporting all the undocumented migrants which are a substantial proportion of some regional workforces. It would occur on the basis that with immigrants gone consumption would contract - that means firms would take in less cash and in-turn produce less: and that would prompt more redundancies until there was government intervention that set a floor or a new settled equilibrium was reached. The likelihood is that it would be the latter this time.

You can ask a Greek what it's like to wait for the new settled equilibrium to be reached.

a cleansing fire might be exactly what we need in order to rebuild something better.
I'm not to keen on engaging in deliberate economic terrorism. Not when it would have a catastrophic impact on me in particular - and Ireland in general.

But I guess it might make sense to certain people.

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I'll also respond on shortages in H2B tommorow. I'm about to head to bed.

Edit:

ou might assume the job openings are caused by the skills gap, a lack of technical training. Except that the industry in question is California's farming sector and its crop-harvesting related jobs. According to a new survey of 800 farmers, nearly 2 out of every 3 farmers are having trouble finding enough workers to harvest crops. And 1 out of 5 farmers say they've been forced to cut back on planting or left crops unharvested as a result of the lack of workers for these $10-an-hour jobs.

http://jobs.aol.com/articles/2012/12/20/farmer-job-illegal-immigrant-barack-obama-worker-shortage-skills-gap-farm/

I'll need to read the survey but I found that on a Google search.

I imagine the rate being paid isn't differentiated enough for prevailing social welfare rates.

Edit2:

phuckphace

Here's the latest data on IT professionals.

Employment data from the first quarter of 2015 suggests that the technology industry’s hiring momentum continued virtually unchecked into the new year, with the unemployment rate averaging 2.3 percent—the lowest rate recorded since the second quarter of 2008, when the unemployment rate hit 2.1 percent.

If that news wasn’t good enough for tech professionals, the unemployment rate continued to dip over the course of the quarter, from 2.5 percent in January to 2.0 percent in March. Web developers, computer-systems analysts, computer support specialists, network and systems administrators, software developers, computer & information systems managers, database administrators and network architects all saw their unemployment rates decline.

http://insights.dice.com/2015/04/30/tech-hiring-trends-q1-2015-unemployment-dips-again/

In general a market is deemed to be in shortage when the rate is below 4%. It's referred to as 'full employment'.

I realise that there's a graph somewhere on the Internet that claims a large number of STEM graduates don't end up in their chosen major. But that's not relevant. It still remains that IT workers earn a substantial wage premium which would indicate that there's insufficient people attempting to enter the field for whatever reason.

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Edit3:

That's actually 2015 Q1 figures. I imagine it's lower at this stage.

I'll find 2016 Q1 figures later.

[Porpoise101]

a cleansing fire might be exactly what we need in order to rebuild something better.
Just going to point out that an atheist was the last person I'd expect to say that. But you always surprise me I guess.

[phuckphace]

Vlerchan - I'm not a proponent of economic terrorism, it's just that, if all this is true, it's more than inconvenient - it's a little too inconvenient. the nation as a whole does not benefit from infinite growth through consumption anyway - this has been the SQ for decades now and in the aggregate we've suffered immensely for it. I remain skeptical that there's absolutely no other way to maintain prosperity and in any case what gains we do make in the short term seem like a Pyrrhic victory when one considers the costs (loss of community, homogeneity, etc.) that were vital to our societal well-being.

it's a shame that we now see "well-being" as synonymous with a high GDP-per-capita average.

[Porpoise101]

it's a shame that we now see "well-being" as synonymous with a high GDP-per-capita average.
I like to look at the Gini coefficient and HDI too ...

[phuckphace]

I like to look at the Gini coefficient and HDI too ...

or to put it another way, "look how many iPads we can afford now compared to the 1950s!"

there's a reason I keep bringing it up even though it's arguable that we're doing "better" economically now. what good is a little temporary economic well-being if it translates to atomization and misery in the long term?

we might as well just legalize slavery again what with how things are now.

[Vlerchan]

the nation as a whole does not benefit from infinite growth through consumption anyway
Consumption shores up growth in the present. It's investment in stable capital deepening (bounded) and technological advancement (unbounded) that drives sustained long-run growth.

I remain skeptical that there's absolutely no other way to maintain prosperity and in any case what gains we do make in the short term seem like a Pyrrhic victory when one considers the costs (loss of community, homogeneity, etc.) that were vital to our societal well-being.
It's fine to believe that. It's also arguable that certain growth paths have destructive long-run consequences. But surely these paths to growth are based in cultural factors as opposed to economic factors.

That's the reason I see this sort of frontal assault on economic progress as missing the point entirely.

[phuckphace]

[...]But surely these paths to growth are based in cultural factors as opposed to economic factors.

it's both. fundamentally, there's a rather delicate dance between economic prosperity and cultural prosperity, and since the two are inseparable (culture influences economy and vice versa, not to mention they're comprised of the same individuals) any economic trade-off that back-burners the culture and its traditions will have to face the fallout sooner or later. you know, since the people are the economy.

to put it another way: a nation is the sum of its parts, and if you treat the parts as modular and able to be swapped out at will, the result will be different and likely negative. Detroit is a microcosm of this: it declined into a third-world hellhole after its former inhabitants, who made the city into what it once was, were displaced by others who made the city into what it is now.

That's the reason I see this sort of frontal assault on economic progress as missing the point entirely.

I don't want to come across as though I'm stamping my foot petulantly at all you fools not "getting it." the far-right or "alternative right" is crawling with weirdos who are in the habit of dreaming up fanciful socioeconomic arrangements (neomonarchy, etc.) or, as I like to call it, dumb shit that's never been tried because it wouldn't work. I like historical precedent because it gives us a tried-and-true model to work with - like people can be sold on "the 50's were better" because it actually happened (which is useful) and there are still folks who lived in that era around today who can confirm that yes, most American-made goods were solid and didn't cost your life's savings to purchase. from that, I've simply put two and two together and concluded that there's little reason that those socioeconomic arrangements wouldn't work today, and that many of those who claim they wouldn't are likely doing so out of simple ideological disagreement. their claims that today's arrangements are just part of some divine destiny, to me, smacks of propaganda.

[StoppingTom]

I'm pretty surprised that corporations don't see the long term effect of doing this. It creates a larger class of poor people, and those poor people all have a vote, and that's how someone like Sanders or economic liberal can rise to power and give them the Fleischgewehr.

[phuckphace]

I'm pretty surprised that corporations don't see the long term effect of doing this. It creates a larger class of poor people, and those poor people all have a vote, and that's how someone like Sanders or economic liberal can rise to power and give them the Fleischgewehr.

lol @ Fleischgewehr

this is exactly why the GOP is suicidally stupid. they cucked for corporate oligarchy ("the free market") which will never be satisfied until the cost of labor is literally zero dollars, but in turn created what will eventually become a permanent Democrat stranglehold on our politics like Mexico's PRI. if the free market demands we become the United States of Aztlan in exchange for affordable tomatoes, then who are we to question its divine will? I'm sure there's some hidden magic in our geography that can turn the populace of a failed state into STEM geniuses and Moon-golfers.

[Vlerchan]

Detroit is a microcosm of this: it declined into a third-world hellhole after its former inhabitants, who made the city into what it once was, were displaced by others who made the city into what it is now.
I imagine if the black people had felt treated like equal citizens within the state there wouldn't have been the same devastating riots that caused the flight of human capital that there was. The issues of Detroit grow out of the U.S's peculiar relationship with race as opposed to some natural law.

I have produced papers before documenting that increased cultural variation within city's tends to result in higher levels of economic welfare. The issue of cultural variation exists insofar that it produces decreased levels of civic engagement that might be seen to prompt demand for higher levels of alienating technological devices - on a thought.

and that many of those who claim they wouldn't are likely doing so out of simple ideological disagreement.
I see it as an anomaly on the basis that [1] the economies of potential competitors in Europe and the East where bombed to non-existence [2] it was the beginning of an era of debt-driven consumption-based growth and people wasn't leveraged up to their ears as per 2016 [3] WWII ushered in a level of unprecedented technological growth - the space race compounded this [4] and as an extension there's intersections of capital-labour ratios and skill-based technological change (http://economics.mit.edu/files/3809) [5] though there's also that shared experiences during WWII left people in the U.S. with unprecedented reserves of social capital.

That's just from the top of my head and I imagine if I read around I could imagine a number more. I more or less ignored citing social phenomena since I've little clue there but given the major shifts WWII would have induced I imagine there's a number. One that just occurred - editing - is that it induced a culture of home-ownership: most people rented before the 1950s.

It creates a larger class of poor people, and those poor people all have a vote, and that's how someone like Sanders or economic liberal can rise to power and give them the Fleischgewehr.
Would you mind explaining how it creates larger classes of poor people?

[StoppingTom]

Would you mind explaining how it creates larger classes of poor people?

Outsourcing jobs to foreign workers on the cheap means less jobs domestically, which means less (Americans in this case) people working stateside. These people get fed up with not having an income, and vote for someone who will basically take a dump on corporations.

[Vlerchan]

Outsourcing jobs to foreign workers on the cheap means less jobs domestically, which means less (Americans in this case) people working stateside.
The empirical evidence to date, while still tentative, actually suggests that increased employment in the overseas affiliates of US multinationals is associated with more employment in the US parent rather than less.

Mankiw, G. and Swagel, P. (2006) 'The politics and economics of offshore outsourcing', Journal of Monetary Economics, 53(5), pp. 1027 - 1056.

I imagine this is because offshoring is productivity-enhancing at a firm level and acts as an effective compliment to higher-skill labour. This seems confirmed in Hummels et al. (2014) (https://www.aeaweb.org/articles.php?doi=10.1257/aer.104.6.1597) examining Danish data and concluding that off-shoring "increases (decreases) the high-skilled (low-skilled) wage". Low-skills refers to non-college.

Nonetheless I'm of the opinion that acting against this process - which would involve cancelling trade relations - is a lot more harmful than this consequence.

If people are interested in trade economics I'd suggest reading the non-technical Bernard et al. (2007) (http://www.princeton.edu/~reddings/pubpapers/FirmsTradeJEP2007.pdf) to start.

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The thread content is also on guest worker programmes but I thought I'd take advantage of people letting me talk economics.

[Vlerchan]

Lol'd like you wouldn't believe it.

[...] the economies of potential competitors in Europe and the East where bombed to non-existence [...]

The decline of the heavy manufacturing industry in the American “Rust Belt” is often thought to have begun in the late 1970s, when the United States suffered a significant recession. But theory suggests, and data support, that the Rust Belt’s decline started in the 1950s when the region’s dominant industries faced virtually no product or labor competition and therefore had little incentive to innovate or become more productive.

As foreign imports increased and manufacturing shifted to the American South, the Rust Belt’s share of manufacturing jobs and total jobs declined dramatically. Eventually the region’s manufacturers began to innovate, resulting in a stabilization of employment share at a significantly lower level. Our model suggests that this factor—lack of competitive pressure— accounts for about two-thirds of the Rust Belt’s decline in employment share.

Lee E. Ohanian (Dec. 2014) Competition and the Decline of the Rust Belt Federal Reserve Bank of Minneapolis, Economic Policy Paper 14-6. (https://www.minneapolisfed.org/~/media/files/pubs/eppapers/14-6/epp_14-6_rev.pdf)

No region of the United States fared worse over the postwar period than the "Rust Belt," the heavy manufacturing region bordering the Great Lakes. This paper hypothesizes that the Rust Belt declined in large part due to a lack of competitive pressure in its labor and output markets. We formalize this thesis in a two-region dynamic general equilibrium model, in which productivity growth and regional employment shares are determined by the extent of competition. Quantitatively, the model accounts for much of the large secular decline in the Rust Belt's employment share before the 1980s, and the relative stabilization of the Rust Belt since then, as competitive pressure increased.

Simeon Alder, David Lagakos, Lee Ohanian (Oct. 2014) Competitive Pressure and the Decline of the Rust Belt: A Macroeconomic Analysis NBER Working Paper No. 20538 (http://economics.yale.edu/sites/default/files/lagakos-130212.pdf)

No region of the United States fared worse over the post-war period than the “Rust Belt,” the heavy manufacturing zone bordering the Great Lakes. We argue that a lack of competition in labor and output markets in the Rust Belt were responsible for much of the region’s decline. We formalize this theory in a dynamic general-equilibrium model in which productivity growth and regional employment shares are determined by the extent of competition. When plausibly calibrated, the model explains roughly half the decline in the Rust Belt’s manufacturing employment share. Industry evidence support the model’s predictions that investment and productivity growth rates were relatively low in the Rust Belt.

Simeon Alder, David Lagakos, Lee Ohanian (Jan. 2013) [i]The Decline of the U.S. Rust Belt: A Macroeconomic Analysis[i], Journal of Economic Literature, pp. 1 - 40. (http://economics.yale.edu/sites/default/files/lagakos-130212.pdf)


tl;dr: That which was mentioned in the quote wasn't just an aberration. It was an unsustainable one.