Income Inequality and Immigration

My response to Mark Thoma at the Fiscal Times (The Politics of Income Inequality) where he writes that American workers "sense rising economic insecurity due to globalization, digital technology, and the constant chatter about robots taking their jobs."

But all that is true, so how can anyone blame them for feeling economically insecure? Many people will argue that robots (and other forms of automation and technology) HAVE indeed displaced many workers. Automation replaced many U.S. workers in manufacturing before many of those jobs were offshored to China. Then the "job creators" attempted to use robots in China to replace those manufacturing workers. Now that the U.S. is left with a service economy, the fast food industry is also considering using robots — just as McDonalds plans to use robots. The "job creators" will always do everything possible NOT to create jobs to increase their profit margins.

But Mark Thoma (an economist that I admire and respect) says that this is just "chatter". But how so?

Maybe a few union cashiers were laid off...

Then Thoma's article goes on to say, "They want someone to blame. For some, the natural tendency is to blame others for their problems. They turn to explanations, rightly or more often wrongly, such as immigrants are taking jobs, lowering wages, and placing a burden on social insurance programs."

But many people will argue that immigrants ARE taking jobs [via guestworker visas and illegal hiring], thereby depressing wages in an over-saturated labor force. And they are also placing a burden on social insurance programs and the schools.

Thoma goes on to write: "Presidential nominees from both political parties are attempting to tap into the sentiment that the country is headed in the wrong direction, and those who blame the 'others' for their problems are receptive to the Republican message."

But it's not just a "Republican message" — even progressive/liberal Democratic voters and Independents are concerned about illegal immigration, expanding immigration quotas and guestworker visas. (Read Senator Bernie Sanders' take on this issue)

Those "others" that Mister Thoma mentions aren't the problem, not so much as the politicians who are the real problem (on both sides of the aisle, and for different reasons), because it is the politicians who allow those "others" to immigrate here and work here if they aren't legal citizens. They say we "need" them to fill jobs, or that they create jobs. But if picking fruit paid $50/hour, many people might consider those really great jobs, and not "jobs that Americans don't want to do."

Recently Senator Lindsey Graham, who was bashing Donald Trump and defending Jeb Bush's "anchor babies comment", told CNN's Kate Bolduan (At This Hour With Berman and Bolduan):

What Jeb was talking about is birth right tourism. Millionaires from China and other Asian nations — as well as the Middle East — buy tourist visas for the express purpose of having their wife deliver a baby in the United States. There are people who market to rich people in Asia and the Middle East: "Come here for your vacation, we'll get you a tourist visa with a maternity ward." I think that cheapens citizenship ... That's all Jeb was talking about ... When he [Jeb] said "Asian people", he wasn't being derogatory. Birth-right tourism is an industry that's created to take advantage — people literally do buy tourist visas. They're marketed where you can come here, have the child, a maternity ward in the resort ...

Jeb Bush had previously said: "They crossed the border because they had no other means to work to be able to provide for their family. Yes, they broke the law, but it's not a felony. It’s an act of love." CNN has done a number of stories on the manipulation of tourism visas and investor visas (link, link, link, link, link). So, maybe not all immigration is through "an act of love", but also for exploitation and profit.

Rightly or wrongly, the GOP is opposed to open borders and birthright citizenship; but maybe not against tourist and investor visas. And the GOP is definitely not opposed to H-1B visas to offer lower wages to foreign workers with STEM skills (Read about the STEM skills myth). And all while putting domestic college grads out of work, or forcing them to take jobs that high school graduates once worked, who in turn, displace high school dropouts. Now we have women with law degrees working as strippers and men with PhDs driving cabs.

And many people will argue that Democrats want open borders, sanctuary cities, birthright citizenship and paths to citizenship just for political votes, because they lack the strong support from labor unions (due to GOP right-to-work laws) that they once enjoyed before the 1970s (Union membership peaked in 1979, and has been in decline ever since.) And bad trade deals led to the offshoring of many good-paying tech and union manufacturing jobs, leaving us with an under-paid non-union service industry.

This lack of union membership (which has been the GOP plan all along) has left a weaker political base for the Democrats, who now have to rely more and more on minority voters to stay in power — and so therefore, tend to pander to them more (although sometimes, a bit condescendingly) — and that's why it's so difficult to get the white working-class to support Democrats, because they perceive a lack of interest for their needs by the Democratic party (even though, when compared to GOP policies, they would fare much better economically).

That's why Senator Bernie Sanders' new press secretary said at a recent rally, "We need to commit ourselves to a new multi-racial political revolution" — one that benefits ALL of us, not just the wealthy few.

The majority of increased productivity (ever since the Powell Memo) went to the top income earners as our politicians in both parties were also giving tax cuts to them (starting with Jimmy Carter, by lowering the capital gains tax rate from 40% to 28%) — which was a double whammy for lowering our tax base. Dual-household incomes weren't enough anymore (nor multiple household incomes — as Senator Elizabeth Warren pointed out in her book: The Two Income Trap), forcing many people to rely on food stamps and other government programs — a "redistribution of wealth" that the top income earners don't want to pay for.

But as Senator Bernie Sanders says, "They can't have it all!" The economic pie in the U.S. gets bigger and bigger with each passing year; but as the population grows, our little slices of the pie have been getting smaller and smaller — all while those at the very top of the income ladder have engorged themselves on more and bigger slices: Bigger beachfront mansions, sleeker yachts and faster private jets. Their conspicuous consumption has been so excessive that, it goes far beyond what one can simply describe as "morally obscene".

Rather than investing in infrastructure, or creating on-the-job-training for the unemployed, or building factories in economically plighted areas, or raising wages in America, our most wealthy "job creators" would rather hoard their money and/or maintain perpetual dynasty trust funds, providing wealth for their family's generations well into the future. Why would 6 human beings (the Walton family heirs of Wal-Mart) need over $150 billion in the bank? They hoard their cash, rather than pay their employees living wages. In a recent interview Thomas Piketty said, “Over a certain wealth level, particularly if you are Bill Gates, if you have several dozen billion dollars, you know it’s not very useful for society if you keep it forever."

And there's also corporate hoarding: A football field double-stacked with standard-sized pallets packed with $100 bills five-feet high is about $2 trillion (image below). That's how much cash corporations are hoarding in offshore banks from overseas earnings because they don't want to pay tax on it — even though, they have no other use for the cash, other than to stuff it into their pockets. As it is now, 95% of corporate profits last year were spent on stock buybacks and dividends, to increase stock values for stock-option grants for corporate executives.

Not only are jobs are offhored, but the cash is too...

Politicians on both side of the aisle (The D's and R's) have always showed the most favoritism to the most wealthy people in this nation (just look at the tax code.) When the American people look for people to blame, the politicians are the ones they blame — not necessarily the very rich or illegal immigrants, but the politicians who allowed the very rich and the illegal immigrants to do what they do (dodge taxes and work illegally) — and that's most likely why Donald Trump and Bernie Sanders have been fairing so well in their respective parties against both of the establishment political party machines.

It has been unchecked greed that has hurt America the most (in our "un-sharing economy"). Higher wages would have done far much more to grow the economy than just increasing the incomes of those at the very top. If the job creators won't pay living wages, then they should be taxed accordingly to compensate for the lost revenue to the economy. If their companies use "tax inversion" to escape taxation, then don't allow them to do business in this country (e.g. shut down Burger King). If companies like Ford move their factories to Mexico or China, charge them stiff tariffs as Donald Trump has suggested. Sure, the American people won't pay 30% more a car, but that's the whole point — to punish the so-called "job creators" for not creating jobs in the United States for American citizens!

Or, as the Facebook co-founder did, having laws allowing him to renounce his U.S. citizenship to escape paying income tax: Maybe he should have been hunted down and hanged for treason. Our tax laws shouldn't have allowed for his tax evasion! He made a mockery of our immigration laws: "Come on in to our great country and take advantage of our great economy, and then skip town while flipping us the bird without paying your fair share of taxes."

Politicians on both side of the aisle (The D's and R's) have allowed this.

And the GOP is also still going after Social Security — even after workers have already been getting totally screwed for the past 40 years. But as Bernie Sanders says, "They can't have it all" — but yet, these billionaires (aka job creators) will always want it all; and only the "government" (we, the people) can check their lust, gluttony, sloth, wrath, envy, narcissistic pride, and excessive greed. They all should be made to "Feel the Bern" — ;)

* As an aside from TIME: How the Democratic National Committee (the Democrat's establishment Third Way pro-corporate political machine) and its chairwoman (Rep. Debbie Wasserman Shultz) is rigging the Democratic primary debates to benefit Hillary Clinton over Senator Bernie Sanders.

Undocumented workers (from all foreign countries) do take jobs and depress wages for legal immigrants and natural born Americans alike. And going forward, more immigration will also deprive current illegal immigrants of jobs as well. Today a record 93.7 million working-age people in the U.S. are not in the labor force. Job creation is not keeping up with the all the high school and college grads we have every year. Technology and the offshoring of jobs has indeed been taking a toll on the number of jobs we need to support those who are already living within the U.S. borders.

Immigration just isn't a problem for the U.S. — it is in Europe on other parts of the world as well. If governments (democracies and dictatorships) had managed their economies better, and redistributed their nation's wealth in a more fair and equitable manner (rather than starting wars), then millions of people wouldn't have the need to flee their own home countries to escape poverty, famine, political persecution, prison and death.

But let's get our own house in order first, and show our current natural-born citizens (and legal immigrants) "an act of love" by giving them a means to work to be able to provide for their families first, before extending the generosity of our great country to more foreign-born citizens...whether they're "the best and brightness" or not.

* The graphic below is not a scientific breakdown of the demographics, just a rough estimate. The immigrants depicted are not from any specific country — or are not of any specific ethnicity and include Canadians as well — so "race" has no bearing on the issue. It's just "math". Even if the U.S. allowed more legal immigrants into the country, it could put illegal immigrants (who are already here) out of work as well.