Tuesday, June 7, 2016

WOULD TRUMP PUT AMERICANS (Legals) IN AMERICAN JOBS? - The notion has Mexico and the Democrat Party Scared Shitless!

AMERICA: A NATION IN CRISIS!

PUT EMPLOYERS OF ILLEGALS IN PRISON

AND BUILD THE DAMNED WALL TO KEEP

OUT MEXICO'S WELFARE LOOTERS,

MURDERERS, RAPIST AND HEROIN

CARTELS OUT.

THE BENEFITS: END OF UNEMPLOYMENT,

END OF THE HOUSING CRISIS,

HOMELESSNESS, END OF THE

MEXICAN CRIME TIDAL WAVE, END OF

THE LA RAZA ANCHOR BABY WELFARE

STATE ON OUR BACKS!


hat's that dark cloud I see?  It's a business slowdown, and it looks more and more as if one is coming.  This is from Fox Business: The median estimate from economists surveyed by the National Association for Business Economic...


I estimate that enforcing the law and deporting all illegals would raise real low-skill wages by about 20% to 40% within 6 years, providing immediate relief to the oppressed low-skill citizens of our country.  (See my notes.)  Allowing in more high-skill people and few low-skill people would have long-term benefits that would eventually tower over this short-term benefit.  A more skilled population would increase the historical trend of economic growth in this country.  We might even become the richest per capita country in the world.
2, 2016

Illegal Immigration and the Wage Gap


By David Lee

There is a close long-term correlation between low-skill wages and illegal immigration. An influx of low-skilled labor drives down wages at the bottom of the income scale, aggravating the wage gap and social divisions, providing fodder for left wing demonization of the prosperous and successful.

The normal equilibrating capacity of a market economy is short circuited when the influx of low-skill illegal immigrants is nationwide. If American workers could easily escape to another country offering higher wages, then wages in the USA would quickly recover from a surge of immigrant workers, and employers would gain only a short-lived benefit.  So, it might not be worth paying off politicians to import cheap labor from poor countries.
In 1980, Miami low-skilled wages (blue line) were already trending at 94% of those in the rest of the USA. (orange line).  Then Miami wages were hammered down by the Mariel boatlift.  If that event had not occurred, Miami wages presumably would have followed the gold line (Reference), which is 94% below wages outside of Miami.  If so, we get the following wage gap (Gap) between the gold (Reference) and blue (Miami) lines:
Gap = (Miami - Reference) / Reference
The wage gap (Gap, blue line) hits -0.35 in 1986, which means wages dropped 35% below where they would have been if the Mariel event had not happened.  Then the Gap closes back up near zero by 1990. 
The red line is the output of my Gap predictor, which I described in a previous article.  Also, see my notes.  The simple Gap predictor assumes an immediate reaction in wages, but in reality the reaction takes several years to occur (6 years in this case).  The predictor also assumes almost all the resident low-skilled workers will take a 39% pay cut without moving out of the job market.  That is not going to happen for long in an American city like Miami, surrounded by higher-paying job markets. 
The Gap predictor works fairly well for the US as a whole because there is no foreign country where a low-skill worker can get enough of a pay raise to make it worth the move.  So, the wages stay depressed for about 40 years, until the immigrant workers retire.
It is easy to say that immigrants can upgrade their schooling and training and thus reduce the surplus of low-skill labor.  In practice, it is usually very difficult, especially while raising kids. For example, Senator Marco Rubio’s father spent his career mostly as a hotel bartender. He was also a street vendor, security guard, apartment building manager and crossing guard. Rubio’s mother worked as a maid and Kmart store clerk. 
They stayed in low-skill jobs over their entire working careers.  Their children did very well, however.  If the children of immigrants do as well as the children of natives, then the depression of low-skill wages goes away unless more low-skill workers are brought into the country. 
If the children and grandchildren of a large class of  immigrants remain low-skill workers like their parents, then my simple Gap predictor no longer works and we are left with a persistent underclass of people who continue to cause a surplus of low-skill workers and thus continue to depress low-skill wages.
Unfortunately, this is the case for most of the illegal immigrants that are continuing to pour into the country.
Another Permanent Underclass?
If the illegals are allowed to stay, the effects will be dire, according to the findings of Gregory Clark, Professor of Economics at the University of California, Davis.  “Immigration to the United States … rarely changes one’s social status,” he concludes after extensive study and many published works.  His recent book is about the tendency of descendants within a family to stay in the same social class as their ancestors.
Clark writes,
“... the social status of Latinos, even those born in the United States, is persistently low… they are often the people who found themselves in such desperate economic circumstances at home that they preferred to live as illegal immigrants in the United States. (Latinos constitute nearly half of the foreign born in the United States, but four in five of illegal migrants.) The effects have been dire: there can be no doubt that immigration is widening social inequality in the United States.”
Professor Clark suggests a less disastrous immigration policy: 
“To avoid having a substantially poorer and less educated Latino underclass for many future generations, [the US] should considering policies to increase the number of highly educated Latino immigrants.”
But if current immigration policy is continued, the “United States is likely to soon have the unprecedented situation of fostering a semi-permanent underclass.”  This lack of social mobility from one generation to the next is a result that no government uplift program has been able to erase, according to Clark’s study of government efforts in Sweden, the US, and elsewhere.
This means that my simple wage formula will underestimate the negative wage effects of illegal immigration, because the formula assumes that the effect is limited to the 40-year career of immigrants but not their descendants.  A society over-loaded with low-skill workers will have lower wages in that category until the surplus disappears, which in this case might be generations away.
I estimate that enforcing the law and deporting all illegals would raise real low-skill wages by about 20% to 40% within 6 years, providing immediate relief to the oppressed low-skill citizens of our country.  (See my notes.)  Allowing in more high-skill people and few low-skill people would have long-term benefits that would eventually tower over this short-term benefit.  A more skilled population would increase the historical trend of economic growth in this country.  We might even become the richest per capita country in the world.
There is a close long-term correlation between low-skill wages and illegal immigration. An influx of low-skilled labor drives down wages at the bottom of the income scale, aggravating the wage gap and social divisions, providing fodder for left wing demonization of the prosperous and successful.
The normal equilibrating capacity of a market economy is short circuited when the influx of low-skill illegal immigrants is nationwide. If American workers could easily escape to another country offering higher wages, then wages in the USA would quickly recover from a surge of immigrant workers, and employers would gain only a short-lived benefit.  So, it might not be worth paying off politicians to import cheap labor from poor countries.
The Mariel Boatlift event provides a demonstration of this.  Wages were hammered down in a local economy (Miami) by a flood of refugees and then recovered as workers scattered to surrounding areas with higher wages.  The whole process took 10 years.
Miami Wages after the Mariel Boatlift
Harvard professor George J. Borjas has been called "America’s leading immigration economist" by BusinessWeek and The Wall Street Journal.  The good professor recently surprised himself and outraged many of his pro-immigration colleagues with a study measuring the dive in wages for low-skill natives in Miami after the Mariel boatlift of 1980. 
Private boats brought more than 100,000 Cubans to Miami within 5 months.  The data displayed in the graph below shows what happened.
In 1980, Miami low-skilled wages (blue line) were already trending at 94% of those in the rest of the USA. (orange line).  Then Miami wages were hammered down by the Mariel boatlift.  If that event had not occurred, Miami wages presumably would have followed the gold line (Reference), which is 94% below wages outside of Miami.  If so, we get the following wage gap (Gap) between the gold (Reference) and blue (Miami) lines:
Gap = (Miami - Reference) / Reference
The wage gap (Gap, blue line) hits -0.35 in 1986, which means wages dropped 35% below where they would have been if the Mariel event had not happened.  Then the Gap closes back up near zero by 1990. 
The red line is the output of my Gap predictor, which I described in a previous article.  Also, see my notes.  The simple Gap predictor assumes an immediate reaction in wages, but in reality the reaction takes several years to occur (6 years in this case).  The predictor also assumes almost all the resident low-skilled workers will take a 39% pay cut without moving out of the job market.  That is not going to happen for long in an American city like Miami, surrounded by higher-paying job markets. 
The Gap predictor works fairly well for the US as a whole because there is no foreign country where a low-skill worker can get enough of a pay raise to make it worth the move.  So, the wages stay depressed for about 40 years, until the immigrant workers retire.
It is easy to say that immigrants can upgrade their schooling and training and thus reduce the surplus of low-skill labor.  In practice, it is usually very difficult, especially while raising kids. For example, Senator Marco Rubio’s father spent his career mostly as a hotel bartender. He was also a street vendor, security guard, apartment building manager and crossing guard. Rubio’s mother worked as a maid and Kmart store clerk. 
They stayed in low-skill jobs over their entire working careers.  Their children did very well, however.  If the children of immigrants do as well as the children of natives, then the depression of low-skill wages goes away unless more low-skill workers are brought into the country. 
If the children and grandchildren of a large class of  immigrants remain low-skill workers like their parents, then my simple Gap predictor no longer works and we are left with a persistent underclass of people who continue to cause a surplus of low-skill workers and thus continue to depress low-skill wages.
Unfortunately, this is the case for most of the illegal immigrants that are continuing to pour into the country.
Another Permanent Underclass?
If the illegals are allowed to stay, the effects will be dire, according to the findings of Gregory Clark, Professor of Economics at the University of California, Davis.  “Immigration to the United States … rarely changes one’s social status,” he concludes after extensive study and many published works.  His recent book is about the tendency of descendants within a family to stay in the same social class as their ancestors.
Clark writes,
“... the social status of Latinos, even those born in the United States, is persistently low… they are often the people who found themselves in such desperate economic circumstances at home that they preferred to live as illegal immigrants in the United States. (Latinos constitute nearly half of the foreign born in the United States, but four in five of illegal migrants.) The effects have been dire: there can be no doubt that immigration is widening social inequality in the United States.”
Professor Clark suggests a less disastrous immigration policy: 
“To avoid having a substantially poorer and less educated Latino underclass for many future generations, [the US] should considering policies to increase the number of highly educated Latino immigrants.”
But if current immigration policy is continued, the “United States is likely to soon have the unprecedented situation of fostering a semi-permanent underclass.”  This lack of social mobility from one generation to the next is a result that no government uplift program has been able to erase, according to Clark’s study of government efforts in Sweden, the US, and elsewhere.

This means that my simple wage formula will underestimate the negative wage effects of illegal immigration, because the formula assumes that the effect is limited to the 40-year career of immigrants but not their descendants.  A society over-loaded with low-skill workers will have lower wages in that category until the surplus disappears, which in this case might be generations away.

I estimate that enforcing the law and deporting all illegals would raise real low-skill wages by about 20% to 40% within 6 years, providing immediate relief to the oppressed low-skill citizens of our country.  (See my notes.)  Allowing in more high-skill people and few low-skill people would have long-term benefits that would eventually tower over this short-term benefit.  A more skilled population would increase the historical trend of economic growth in this country.  We might even become the richest per capita country in the world.

Financial parasitism and the global housing crisis


"In other words, the deluge of cheap credit 

provided by the world’s central governments 

to their major banks has unleashed an orgy of 

speculation. The world’s richest are getting 

even richer by doing nothing as their real 

estate investments shoot through the roof. 

Meanwhile the vast majority of the world’s 

population must pay increasingly obscene 

amounts just to have a place to live."




This trend can be seen clearly in the United States. Between 

2001 and 2014, the average real rental price rose 7 percent 

nationwide according to Harvard University’s Joint Center 

for Housing Studies. During that same period, 

median household income dropped by 9 percent.

Financial parasitism and the global housing crisis

By Gabriel Black 
31 May 2016
Rent and housing costs in most major cities have skyrocketed

since the financial crisis, cutting deeply into workers’ 

standard of living and prompting concerns about a new 

global housing bubble. Driving the soaring cost of rent is a 

global financial system that is being pumped full of cheap 

credit by all the major central governments at the expense of 

workers around the world.
Prices in some areas boggle the mind. San Francisco’s average asking price for a one-bedroom apartment went from $1,258 per month in January 2010 to $4,126 in February 2016. In London, the average home price has doubled since 2009, from about £300,000 ($437,600 USD) to £600,000 ($875,100).
Hong Kong’s housing market, which largely avoided the US real estate crash, more than tripled in its average sale between 2004 and today. The city is now considered the least affordable place in the world, with the median Hong Kong home price worth 19 times the city’s average skilled white-collar worker’s annual salary.
Housing and rental markets are so high that the Swiss bank UBS estimates that the majority of the world’s urban real estate markets are now “significantly overvalued.”
What is most striking about the colossal increase in prices, however, is how divorced it is from the incomes of the vast majority of the global population, which are moving in the opposite direction.
Historically, rent prices have tended to move with income and inflation. For example, in the United States the median home price adjusted for inflation remained largely flat between 1970 and 1998, fluctuating slightly above and below $160,000. This was a period in which workers’ incomes were also flat. After 1998, however, the housing market skyrocketed, with the median home price rising from about $160,000 in 1998 to $275,000 in 2006, the peak of the finance-driven boom. This jump was driven by all manner of 

financial speculation, including rampant criminal behavior, 

which had been let loose by the lowering of interest rates by 

the US Federal Reserve.
The housing market today is going through a new version of the 2006 housing crisis. However, unlike 2006, this process is global. Nearly every major capitalist government in the world is pursuing a policy of near-zero interest rates, encouraging rampant speculation in both the stock market and the real estate market.
This trend can be seen clearly in the United 

States. Between 2001 and 2014, the average 

real rental price rose 7 percent nationwide 

according to Harvard University’s Joint 

Center for Housing Studies. During that same

period, median household income dropped by

9 percent.
In Los Angeles, the second largest city in the US, 40 percent of families either make poverty wages or are unemployed. As families and individuals increasingly struggle to make ends meet, rent has increased sharply in LA. In January 2010, an average one bedroom apartment went for $1,224 a month. Six years later, the cost was $1,935. And the worst is not over. A 2016 forecast by USC Casden Multifamily predicts that in the next few years rent will “soar.” It is no wonder that homeless in the city grew by 16 percent in just two years between 2013 and 2015.
Another way of capturing the growing divide between wages and rent for hundreds of millions of workers around the world is the Median Multiple, the ratio between median household income and average home price. According to the Demographia International Housing Affordability 2016 Survey, a Median Multiple of three and under is considered affordable (e.g., a family making $50,000 a year buying a house at $150,000 or less). A multiple exceeding five is considered “severely unaffordable.”
In 2015 Demographia surveyed 367 cities inside the UK, US, Canada, Australia, New Zealand, Ireland and Japan. According to the group, the 10 most unaffordable cities were: Hong Kong with a Median Multiple of 19.0; Sydney (12.2); Vancouver (10.8); Melbourne, (9.7); Auckland (9.7); San Jose (9.7); San Francisco (9.4); London (8.5); Los Angeles (8.1) and San Diego (8.1). All of these cities have experienced a doubling or even tripling of their Median Multiple since 1998.
The surge in prices and collapse in income has led to more renters on the renting market, since buying has become out of reach. In the United States, between 2005 and 2015, there were 9 million new renting households. This is the largest gain on record for a 10-year period according to Harvard University’s Joint Center for Housing Studies. In 2015, 37 percent of all US households rented, the highest level since the mid-1960s, and up from 31 percent in 2005.
Workers are now becoming trapped in this situation, as they spend more of their income paying for rent and are less and less likely to be able to buy a house. In 2001 in the US, 41 percent of renters spent 30 percent of their income or more on rent. This rose to 49 percent in 2014. In the same year, 26 percent of the renting population spent more than half of their income on rent. In the UK, a fifth of all young adults now stay in their parents’ home until they are at least 26. In 2015, 31.5 percent of US young people aged 18 to 34 lived at home, up from 27 percent in 2005.
While workers suffer under crushing rent 

burdens, landlords and investors are raking in

millions if not billions. This year, a total of 

184 billionaires made their wealth through 

real estate. This was up by 22 individuals 

from the year before, even as the overall 

number of billionaires went down from 1,826 

to 1,810 individuals.
Those who make money off of rents do not add anything to the productive system. While a certain amount of money can go to maintenance and upkeep, vast and increasing sums of money made by real estate are from the pure monopoly status of owning land.
The wealth of these billionaires principally comes from the unsavory fact that in order to keep the global economy afloat, the central banks around the world have pumped the major banks full with cheap credit.
As UBS Global notes in its 2015 Global Real Estate Bubble Index, “Loose monetary policy has prevented a normalization of housing markets and encouraged local bubble risks to grow.” They write that much of the “overvaluation” in the global housing stock comes from a “dependence on low interest rates.”
“Price-to-rent (PR) multiples are greatest in Zurich, Vancouver, Hong Kong, Geneva and Singapore. The extremely high PR multiplies indicate an undue dependence of housing prices on low interest rates. Paris, London and Sydney follow suit and form a trio of cities with PR multiples around 30. House prices in these cities are vulnerable to a sharp correction should interest rates rise.”
In other words, the deluge of cheap credit 

provided by the world’s central governments 

to their major banks has unleashed an orgy of 

speculation. The world’s richest are getting 

even richer by doing nothing as their real 

estate investments shoot through the roof. 

Meanwhile the vast majority of the world’s 

population must pay increasingly obscene 

amounts just to have a place to live.

As Lenin noted in his work Imperialism, in capitalism’s state of decay there is an “extraordinary growth of a class, or rather, of a stratum of rentiers, i.e., people who live by ‘clipping coupons’, who take no part in any enterprise whatever, whose profession is idleness.”
This describes exactly the parasitic layer of real estate moguls, whose money comes not from producing anything of value to the world economy, but by sucking away money from the system in the form of rent. There is no one who benefits from high rents except the small layer of people who control the vast majority of the world’s property.

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