The anti-business Obama Administration has done it again. They feel sorry for "underpaid" undocumented workers. Yeah, the reason why Latino immigrants pay coyotes a small fortune to get them into the US illegally is to get jobs that pay less than their fair market value back home. By some estimates, the average daily Mexican wage is $5; on the other hand, the average 2007 unauthorized worker household income was $36,000 (versus $50K overall). Estimates of dollars sent home have ranged from $10B to $45B or more per year.
You see, when they wire money back home to their families, it's not because they've managed to save money over and beyond their expenses while living in the States. According to a 2009 Pew Hispanic Survey, 8.3 million unauthorized workers, roughly 1 out of 20 workers in the US market, is an unauthorized worker, roughly 60% of which are Mexican (and another 15% are other Latinos). Nearly 1 in 4 farm workers is unauthorized, and nearly 1 in 5 construction workers is the same. In a labor force where only 1 of 10 native workers lacks a high school diploma, nearly 1 of every 2 unauthorized workers lacks the same.
Now personally, I think the minimum wage is counterproductive economic policy. As I've explained in other posts, the minimum wage confounds the supply/demand of labor. What businesses pay for labor is constrained by prices for goods and services, net of other costs and a reasonable operating margin and by the supply and demand of labor itself; the supply is constrained by a number of factors, including skill and/or knowledge levels. Labor is also impacted by technology factors. The point here is that if two parties, e.g., the employer and an undocumented worker, come to an understanding at below an artificially inflated minimum wage, it does not reflect "unfair" wages. If the undocumented worker feels that the wage is unfair, he has the right to go home and earn that $5 a day--if he can find the work. The unfair situation is not that the undocumented worker isn't earning more--because the job probably wouldn't exist at the minimum wage; it would be that authorized worker may not have the ability to make the same deal.
If Ms. Solis wants to go after employers for not complying with the minimum wage and/or payroll tax contributions, I want to ensure that that the IRS goes after unauthorized workers whom have evaded their share of payroll taxes and that any self-incriminating unauthorized worker in question is reported to ICE and immediately deported. You must be consistent in enforcing the law--you can't simply decide to uphold labor laws while ignoring immigration laws, and you don't solve the immigration problem by raising the expected income for unauthorized workers. You don't get more jobs out of the private sector by attempting to intimidate employers. If Ms. Solis really wants to help lower-skilled employees find work, consider waiving or lowering the minimum wage. Progressives have never been good at supply-side economics. Obama continues to push Keynesian spending economics, despite its profound failure during the Great Depression, and its rejection by other G20 nations. Maybe one day Ms. Solis will figure out is that with artificially high labor rates in the US, manufacturers find it more profitable to shift labor-intensive manufacturing operations to places like China and Mexico. You don't grow jobs with uncompetitive high business tax brackets or other business costs.
More on the Judge Feldman Kerfuffle
Megyn Kelly of Fox News mentioned on her early afternoon news report today that Judge Feldman had previously disposed of his energy holdings (in particular, Transocean and Halliburton) that progressives attempted to make an issue of, using an older disclosure report, and that his current assets were focused more on diversified stock holdings, not individual energy companies.
There are a few points I wanted to add to the discussion. The first point is the fact that some of the assumptions progressives made in questioning the alleged holdings were fundamentally wrong. For instance, a moratorium actually is a supply squeeze; this tends to support higher oil prices and profits. In other words, assuming Judge Feldman held considerable energy holdings, it would be to his advantage to SUPPORT the moratorium, not oppose it. Second, it's highly likely that in-demand American oil technology, including idled rigs in the Gulf, would be deployed elsewhere, e.g., Brazil's vast offshore oil holdings. In other words, profitable equipment/operations would simply be shifted from domestic to foreign locations. Third, there are specific technical reasons why Obama's experts supported only a moratorium on new permits, not a cessation of drilling in 500 feet of water or more; it deals with the risky capping process you need to do in stopping operations.
Finally, Judge Feldman today denied a stay of his decision until the Court of Appeals rules on Feldman's decision. In fact, it's very difficult to see the basis of the decision being overturned; the Obama Administration essentially threw the baby out with the bathwater. I think the real story is not the atrocious decision which adds to economic damages to a region dealing with many coastal businesses (fishing, tourism, etc.) This appears to be political posturing, mostly designed at trying to motivate its environmental allies for this fall's election. I think that the Obama Administration is delusional if it thinks the election this fall will be a referendum on highly unpopular BP. I don't think the Obama Administration's handling of the crisis has been well-received, and I don't think Joe SixPack believes that Obama's massive alternate energy subsidies will fill his SUV's gas tank more cheaply.
Political Cartoon
Gary Varvel notes that Obama, frustrated in trying to find someone else to blame for the BP oil spill, finally found an ass he could kick. McChrystal should have put his unprofessional remarks in something Obama would never read--like detailed Afghanistan battle plans. Putting them in Rolling Stone magazine? Come on, Gen. McChrystal--Obama recently met both Bono and McCartney on their White House tours...
Quote of the Day
To be able to practice five things everywhere under heaven constitutes perfect virtue... gravity, generosity of soul, sincerity, earnestness, and kindness.
Confucius
Musical Interlude: Chart Hits of 1976
Barry Manilow, "I Write the Songs"
Gary Wright, "Love is Alive"
Fleetwood Mac, "Rhiannon" Stevie Nicks, a lot of lace, a great song; what more do you need?
Bee Gees, "Fanny (Be Tender With My Love)" I mark for anything Bee Gee's; only the BeeGee's could make disco tolerable
Peter Frampton, "Show Me the Way" from the greatest live album ever....
