“Harvard Is Vaulting Workers Into the Middle Class With High Pay. Can Anyone Else Follow Its Lead?” (nytimes) is a feel-good story for readers about an enterprise so stuffed full of cash that it claims to pay workers wages based on something other than the market (left out of this is that, with higher pay, the contractors may just hire fewer and more-productive workers; see “MIT professor studies high-wage retailers” for how high wages may actually cut the percentage of an enterprise’s revenue that flows out to labor due to “Costcoization” (hiring only the most productive and energetic folks)).
From the Times:
Martha Bonilla is not your typical middle-class worker. And it’s not just that she was born in a backwater of El Salvador and crossed Mexico hidden among a pile of bananas in the back of a truck to make her way illegally into the United States at age 20.
Like millions of Americans lacking a college degree…
“Coming to the United States was the best decision I ever made,” Ms. Bonilla said.
For Ms. Bonilla, the result is an hourly wage of more than $25. Adding the money from a part-time job cooking at a student dorm, most weeks she clears more than $1,500.
So the good news for an American with minimal education is that it is possible to earn nearly $80,000 per year (in a town where a 3BR house costs $2 million!). On the other hand, the actual job described has been taken by an illegal immigrant.
The folks at the New York Times can’t imagine that an expanding supply of low-skill workers due to low-skill immigration has anything to do with the challenge of finding a high-paying job:
As the wages of American workers without a college education languish below where they were 40 years ago, Harvard’s experiment has led some economists and union organizers to think about similar arrangements to broadly benefit low-pay service workers, who form the biggest and fastest-growing part of the job market.
Recent research by economists at four top universities and the Social Security Administration concluded that the parceling out of less-skilled work to low-wage contractors — Goldman Sachs outsourcing its janitorial services, say, or Apple contracting out the assembly of its iPhones to Foxconn — could account for around one-third of the increase of wage inequality in the United States since 1980.
It is shuffling an employee from one enterprise to a different one that accounts for the huge wage cut. Nothing to do with supply and demand. Thus, if you’re a hospital and tired of paying surgeons $600,000 per year you can contract with Surgco and get surgeons for $400,000 per year plus a 5 percent fee for Surgco.
Larry Summers still remembers some economics (see “Women in Science” for how he never considered an economic explanation when he pondered a phenomenon and got fired):
But as Mr. Summers pointed out, across the economy, better jobs may mean fewer jobs. If, say, Massachusetts were to introduce a similar policy for public services, it would need to find the money. Taxpayers could provide it — or the state could scale back services and cut jobs. And employers forced to pay more may attract better-trained workers, displacing less-educated ones.
(i.e., Summers could manage a Costco if he gets forced out completely the next time he says something about women)
Readers: Is the nytimes trying to get low-skill Americans to vote for Trump? If not, how can we explain this article highlighting the fantastic low-skill job that has been snagged by an illegal immigrant?
Poor Larry. He was publicly emasculated, forced like the Chinese professors in the Cultural Revolution to recognize his deviationist ways by doing penance, they shoveling pig manure, he writing monthly columns for the Financial Times, each warning the Davos crowd and the nineteen Americans who read the FT that the end of civilization is near because of Donald Trump. Let that be a lesson to anyone who might want to look at the data when it appears to show biological differences between males and females.
A mildly-autistic google employee tried to use science to explain differences in the workforce. He was fired for “reinforcing gender stereotypes” and is now blacklisted from further employment in his field.
Both Summers and Google heretic are mentioned in a story about a mathematical paper being supressed for being politically incorrect.
https://quillette.com/2018/09/07/academic-activists-send-a-published-paper-down-the-memory-hole/
Circuit City went bankrupt shortly after they purged their ranks of their best payed and most productive employees.
http://www.nbcnews.com/id/17837882/ns/business-us_business/t/circuit-city-fire-more-workers/
Whoever knowingly hires an illegal should be in jail. Why are Harvard administrators exempt from following the law?
Mememe: The well-paid worker profiled is currently legal, according to the article. At some point she was able to transition from illegal to legal, but it doesn’t say how (an ex-post-facto asylum claim was approved?)
She probably benefited from an amnesty, like the one in 2000.
The low-skilled workers who voted for Trump are not primarily being displaced by immigrants, rather their jobs are sent overseas or replaced by automation. That said, they are the primary losers of globalization, even if it benefits the country as a whole, but since no compensatory measures are ever put in place, the elites and middle class are effectively telling them to drop dead. It’s not surprising they are lashing out or medicating themselves to death.
As for Larry Summers, the fact he lost Harvard’s endowment a cool $1B in failed investments should have seen him fired outright. He should be grateful that was preempted by his professionally less embarrassing firing for political incorrectness.
The connection between low-skill native wages and immigration has been studied by a Harvard economist, George Borjas. See https://www.politico.com/magazine/story/2016/09/trump-clinton-immigration-economy-unemployment-jobs-214216
Both low- and high-skilled natives are affected by the influx of immigrants. But because a disproportionate percentage of immigrants have few skills, it is low-skilled American workers, including many blacks and Hispanics, who have suffered most from this wage dip. The monetary loss is sizable. The typical high school dropout earns about $25,000 annually. According to census data, immigrants admitted in the past two decades lacking a high school diploma have increased the size of the low-skilled workforce by roughly 25 percent. As a result, the earnings of this particularly vulnerable group dropped by between $800 and $1,500 each year.