Wages decline

The economy consists of many markets and submarkets. One market is the labor market. When there are open vacancies in an economy, we have a workers’ market which means that the workers have the advantage. There is overdemand for workers. When we say workers we mean people that are employed. This is the same as a sellers’ market. In the labor market the seller is the worker. If there are more workers than jobs we have an employers’ market and the employers have the advantage. This is similar to a buyers’ market.

Through an economic mechanism, the economy will stabilize in a position where there is no overdemand or oversupply but an equilibrium. In the first case of workers’ market, the salaries will go up and the economy will stabilize at a lower point. in the second case of employers’ market, the salaries will go down and the economy will stabilize at a higher point. The impact of immigration has to do with whether we have a workers’ market, an employers’ market or an equilibrium.

If we have an employers’ market, bringing in new workers will make things even worse for domestic workers. In the case of equilibrium, it will create an oversupply of workers and an employers’ market. In both cases immigrants will take the jobs from locals since they get paid less. The only case which can be argued that it is beneficial for the economy as a whole, is in workers’ market where there are job vacancies.

From the employer’s perspective, it could be beneficial to bring in workers at any of the three situations. From the domestic worker’s perspective, it could be beneficial at any of these three situations to deport working immigrants. More workers bring salaries down and less workers bring salaries up. If all these are confusing to some people we will make it as simple as possible. Immigrants can be beneficial from an economic point of view, only when there are job vacancies. Their number and skills should match the job vacancies. There is a bogus argument that immigrants will create jobs. They will create jobs after some time and it will be only a fraction of the jobs that they have taken.

There are two simple questions and the answer to these determines the position on people movement and immigration.

1) Is it right that a person can come from anywhere in the world and take the job from a citizen of a country?

We believe that this is not right and should be somehow prevented.

2) Is it right if there are vacant job positions to be filled by citizens from other countries that will migrate legally.

We believe that this is right.

We should have a humanist approach. Immigrants are people but so are locals who lose their jobs and their life gets disrupted. There are two issues around immigration and these should be dealt separately. One is filling job vacancies and the other is assisting fellow human beings in poor countries.

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