Wednesday, May 17, 2006

Price & Quantity Supplied

I'm heartened by this Cornyn amendment to the Senate bill but I have trouble believing it will do much without specifying how wages affect the "willingness" of American workers to fill a job.

The amendment protects U.S. workers by requiring the Department of Labor to certify that there is not a U.S. worker who is able, willing, qualified and available to fill the job position that is offered to the foreign worker.

More econ101. Price is central. A firm can advertise X job for $5.25/hour and when no Americans bite, are they in the clear? Americans will work any of the jobs currently done by illegals for a higher wage. And if there is a shortage of workers (no workers "available"), a higher wage will induce more workers to enter that field. That is how markets work; this is what we call supply and demand. Why are we afraid to let the market work? We wouldn't want income inequality to decrease or anything!

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