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Tuesday, May 30, 2006

It's Economic 101

There's a great post at a blog, from Northern California, called UnlawflCombtnt about how illegal immigration leads to wage suppression. While I am not knee jerk against immigration and I think the issue of how to deal with illegal immigration is nuanced and complex, the main thing I liked in this post was the explanation of how wage suppresion harms the economy.

It's author, who calls himself an economic populist, explains the link between wage suppression, over investment, and rising CEO salaries. UnlawflCombtnt claims, rightly I think, that ultimately the suppression of wages harms the economy and will lower the Gross Domestic Product. Our economy is fueled by consumer spending, not just investment. With lower wages, less discretionary income, and rising costs, workers will not be able to buy what is produced. As UnlawflCombtnt asks, "who will buy the goods?"

Eventually the high profits and huge bonuses will deflate in on themselves when suppressed wages result in a depressed market. We're already seeing flat sales in once economic powerhouses like Wal-Mart. That could be a harbinger of things to come.

It's certainly an issue to keep in mind in the debate over outsourcing of jobs and guest worker programs that is bound to be part of the Virginia's politics.

2 comments:

unlawflcombatnt said...

Anonymous Is A Woman,

Thanks for linking to my blog. I greatly appreciate your reading and understanding of my latest post. I think of all the people who've read what I've written you follow it the best. You're dead on in your interpretation(s) of what I've written. I think you've really got my message about "someone has to buy the goods." That's the most important point I've made.

Feel free to repost anything and everything I've written, if it will help the "populist" cause anywhere else.

AnonymousIsAWoman said...

Sorry I didn't get back sooner. But lots of controversy now in the Virginia elections.

Thanks for your comments. I think you were my first reader, way back when I first started blogging.