product costs and cheap labor

Richard

Final Approach
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Ack...city life
At a local convenience store I bought a Dr. Pepper in a 32 oz. plastic bottle. I go there because, well, the convenience, but also because I happen to know and like the employees. I paid $2.00 for that drink.

That got me thinking; it wasn't too long ago that size soda was a lot less. In fact, I'm willing to bet it was around $1.20 less than 3 years ago. I did say I am familiar with the folks who work there and that would include knowing what their wages are. All are P/T, even the store mgr. A clerk will top out at $9.25 after the 1st year. I don't know their benefits package but wouldn't guess it's much. That wage represents a stagnant figure in that it is not significantly different from 5 years ago when my friend's wife worked there. And yet the product prices have risen significantly.

Why are wages drastically falling behind prices? People talk about the need for low skilled labor. When the subject is illegal immigration the arguement always comes 'round to, "But they do the jobs no one else will do." Sure, there will always be jobs that most people will not want. I happen to know my garbageman quite well. Every Monday morning we have a nice chat and he ususally accepts the fresh coffee I offer him. We exchange Christmas cards and talk of other things. He has told me he loves his job. It would take a book to list the reasons why but if he's happy, that is fine by me. It is certainly not a job I would take. Such is the same for many other jobs and the people who more or less find their niche in them.

I also know the illegal immigrants are not limited to the vegatable fields as the argument would have you believe. They are electricians, commercial drivers, and store owners, to name a few of which I have first hand knowledge.

So what does buying an over priced soda have to do with illegal immigration? The answer lies in one of those hidden costs of illegal immigration no one likes to talk about. There are most definately long term costs which are only know beginning to be realized. And it aint pretty. Here is my answer to the question:

A steady source of cheap labor acts to artificially depress the wages. Everyone knows this but the employer is the one taking the most opportunity of it. He doesn't have to pay benefits to a P/T worker and as long as he sets the wage above the minimum allowed by law he is doing nothing illegal. If an employee is unhappy with this he or she can move on. There are hundreds of other employees who will gladly take the job and the employees know it. That is true for even the most menial positions. So is it the employer's fault? He's not doing anything illegal.

That still doesn't explain the over priced soda. Consumer goods have skyrocketed at the same time wages have been depressed because govt continues to add cost after cost which will be passed on to the consumer. Why have costs exploded?

Costs have rapidly increased because of the increase in number of social programs and also because of their ever expanding budgets to run those programs. Those programs become increasingly needed because a larger number of low paid workers cannot make it on their own. They truly need help and it is the govt who has become their champion. This is a consequence of a continued supply of cheap labor. But govt has also allowed a great influx of cheap labor unchecked. It sounds like I am saying it is the govt's fault for the fix we are in.

I am. Only the govt has the ability to tax. Only the govt has the ability to allow this steady stream of cheap labor. The employers take advantage of it but the govt allows to to occur. I'm not saying the govt encourages it (pandering to special interest groups) although I may be naive about that. Yet to allow it to continue unabated will continue to drive wages down and increase consumer costs.
 
Analysis of the latest Census data indicates Florida’s illegal immigrant population is costing the state’s taxpayers nearly two billion dollars per year for education, medical care and incarceration. Even if the estimated taxes collected from illegal immigrant workers are subtracted, net outlays still amount to nearly one billion dollars per year. The annual fiscal burden amounts to about $315 per Florida household headed by a native-born resident.

This is florida, mostly cuban immigrants. I cant imagine what california taxpayers payout. I think we found the reason for the high cost of soda there.
This was taken from http://www.fairus.org/site/PageServer?pagename=research_floridacostsstudy
 
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It's not just the government costs. Although taxes we pay for it
sure take a bite.

Labor cost is one of the few things a retailer can control. Costs of
everything are going up constantly.

Utilities
Freight
Healthcare
Liability insurance
Unemployment
Workmens Comp
Repair costs
Supplies
Financial transaction fees (Credit cards, debit cards, etc)

The cost of the procuct itself is a very small part.

As for suppressing wages .. it's not just illegals. Companies like Walmart that
come into towns and drive out other businesses give them the power then
to dictate wages. And they stay low.
 
RogerT said:
It's not just the government costs. Although taxes we pay for it
sure take a bite.

Labor cost is one of the few things a retailer can control. Costs of
everything are going up constantly.

Utilities
Freight
Healthcare
Liability insurance
Unemployment
Workmens Comp
Repair costs
Supplies
Financial transaction fees (Credit cards, debit cards, etc)

The cost of the procuct itself is a very small part.

As for suppressing wages .. it's not just illegals. Companies like Walmart that
come into towns and drive out other businesses give them the power then
to dictate wages. And they stay low.
Yes, it is those factors...and more. It's so convoluted, where does one start? Let's tackle one; my Work Comp rates went through the roof a couple years ago, with zero claims. They always inched up but is was a slow crawl, then they shot upward like a missile. In 2004 for every $1000 in straight wages I paid $700 in W/C. That figure is W/C only! In 2000 the figure was $230.

In response to my whining my agent told me most of the increase was to cover uninsured employers. (Shhh, no one's supposed to know) Without the rate increase the state would pick up the entire burden. To be fair, the increase is also because the new laws take the claim out of the hands of the injured employee as soon as he seeks treatment. In some ways I think it is a better system but when every little scratch begats the whole process and is heaped in with serious injury....

I don't even want to talk about Liab ins...arrrggggghhhhh! Well, I'll just say my bond capacity has decreased even though I have had zero claims in over 10 years and my P&L gets better every year.

The rest is driven by employee costs. Labor is a huge chunk getting larger. It takes money to care and feed employees; the increased costs are due to govt spending to care for the employee who can not afford to care for themselves. The #1 reason why they need help is due to low wages.

I wouldn't touch the Wal Mart debate if I were a 10' pole. Well...I know small retailers who have benefited from W/M coming to town (Paso Robles) so not all is as it seems.
 
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Richard said:
Costs have rapidly increased because of the increase in number of social programs and also because of their ever expanding budgets to run those programs.

Richard,

While I don't necessarily disagree with what you're saying, I think there's a bigger reason behind it. Why are the convenience stores charging $2.00 for a nickel's worth of sugar-water and plastic? Because they can. And the prices will continue to rise until you and I stop buying their products.

Also, gas stations are trying to keep their gas prices low to remain competitive, so they're charging more for other products. They're barely breaking even on the gas (and in some cases even losing $$$), so they charge more for other things, including Diesel. Remember how Diesel fuel always used to be cheaper than gasoline, and now it's more expensive? I spoke with someone who's married to a gas station owner, and he said that she's making $0.60/gal more on diesel than she used to and using that to subsidize the gasoline sales which are barely breaking even.
 
Richard said:
A steady source of cheap labor acts to artificially depress the wages. Everyone knows this but the employer is the one taking the most opportunity of it.

Exactly why companies went to the gov't complaining that there were not enough engineers/scientists, so the gov't granted large numbers of H1B visas to bring in foreign engineers. Guess what, those engineers were quite happy for work for far less than the going rate. Companies just didn't want to pay anymore. The latest trend in the cycle is outsourcing. Engineer/scientist salaries seem to have stagnated.

Just about EVERYTHING in life boils down to the almighty dollar. Period. But, others argue that's capitalism, adapt and overcome. Dunno? :dunno:
 
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