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Originally Posted by Lenny2
Gee you're right, I don't know anything about macroeconomics 
So I guess my statement was totally off base that when you flood the market with supply (illegal immigrant labor) it causes prices to go down or stagnate?
Just because I didn't explain supply and demand in the exact same way the textbook does, doesn't mean I don't understand it and that the principle doesn't apply to my argument about labor.
I was paraphrasing off the top of my head. Get a grip man. |
The problem is you didn't fail to explain it as the textbook does you completely missed the boat.
Supply represents the amount of a good or services that people would want to provide at each given price point.
Demand represents the amount of that same good or services that people would want to buy at each give price point.
The market price is determined where those two lines cross.
Unemployment does not occur at the equilibrium point because everyone who wants to work at the wage given match up exactly with the number of jobs that are available.
Minimum wages represent an artificial barrier just like a monopoly (but for demand instead of supply) create an inequity but only for jobs where the equilibrium price is lower than the minimum wage.
People want to cross the border illegally because the difference between the equilibrium price is so far below the minimum wage that people would be willing to take risks to save themselves the money.
The real solution is to eliminate the minimum wage for legal employees, and then create a fine structure force people paying illegal workers make them pay the equivalent to old minimum wage for each illegal worker. Provide a reward (whistle blower pay) for anyone turning in such a shop. This would eliminate the incentive to cross the border and increase the risk of hiring an illegal as well.
But getting rid of the minimum wage would be political suicide so they are talking about allowing guest visa to AVOID technological innovation that would eliminate 100% of the jobs (both legal and illegal).
The technological innovation that would allow a business to continue without the need for illegal workers would also put the legal workers out of work too.