Continued increases in productivity will out strip stable growth this leads to global economic collapse
Akyüz 10
(Yılmaz- Special Economic Advisor South Centre Geneva; South Centre Research Papers; MARCH 2010 “GLOBAL ECONOMIC PROSPECTS: THE RECESSION MAY BE OVER BUT WHERE NEXT?” p.20.)
Globalization has tilted the balance between labour and capital against the former. Closer integration of China and India into the global economy and the collapse of the Soviet Union have doubled the global labour force and tripled the total number of workers producing for international markets (Akyüz 2006). This, together with increased international mobility of capital and labour-market deregulation, has significantly reduced the bargaining power of workers. In almost all industrial countries productivity-adjusted real wages have been falling, resulting in falling shares of labour income in GDP. In DEEs such as China, expansion of exports of manufactures has no doubt brought some benefits to labour, as it moved them from low-productivity rural employment to higher-productivity industries. But in these countries too, industrial wages have fallen well behind the productivity growth. This means that the purchasing power of labour over the goods and services they are producing has been falling. The consequent threat of global underconsumption and deflation has so far been avoided thanks to surges in spending on consumption and property driven by asset and credit bubbles and increased household debt not only in the US, but also in a number of other AEs and DEEs, notably in Europe. This has also been associated with massive international capital flows and sharp changes in net asset positions of countries. However, this process has generated not only large global imbalances but also financial fragility and instability, leading to the most serious post-war global crisis. We now face a major dilemma. On the one hand, a return to “business as usual” so as to restore growth based on debt-driven consumption and property booms will simply mean postponing the adjustments needed for reducing trade imbalances and financial fragility, and this will inevitably result in a deeper global economic and financial crisis. On the other hand, financial consolidation and retrenchment by highly indebted consumers and deficit countries to reduce fragility could simply raise the spectre of under-consumption and global deflation, threatening growth and welfare. This trade-off between financial stability and growth exists, however, only in appearance because unless the underlying problem of under-consumption is addressed, neither financial stability nor growth may be sustained for long.
I/L – Consumer Confidence Key
American consumers, infrastructure, and the housing market is key to the economy
Castelllani 9 (“Recommendations for the next stimulus; A focus on the American worker”, John J. Castellani, The Washington Times, February 2, 2009) TKK
First, permanent middle-class tax relief must be a priority. American consumers are key drivers of the U.S. economy, and immediate assistance will increase American families' net incomes and bolster consumer confidence, reigniting our economic engine. Furthermore, Congress should extend federally funded unemployment benefits to help workers who have exhausted regular benefits.
Additionally, we must repair and modernize our infrastructure. Targeted infrastructure investments will help put Americans back to work in the short term, and enhance American competitiveness in the long term. In addition to physical infrastructure, we must focus this reconstructive effort on transformative investments, including uniform, interoperable health information technology, scientific research and development capabilities, and alternative, efficient energy technologies.
We must also stabilize the deteriorating housing market by reducing mortgage rates to 4.5 percent or lower. For most Americans, a home is their most significant asset, making stability of the housing market essential to improving consumer confidence. Additionally, with housing and housing-related industries accounting for more than 20 percent of U.S. GDP, calming the housing market would go a long way toward creating more American jobs.
I/L – Higher Wages Key
Minimum wage hurts the economy all economists agree
Carey 9 (W. P. Carey, “Friend or Foe: Does the Mnimum wage Hurt the Workers It’s Intended to Help?” Published November 10, 2009 in Knowledge@ W.P. Carey)
Economists rarely agree on anything, Boyes said, but when it comes to the federal minimum wage, there is near-unanimous agreement that these wage floors stunt growth, hamper businesses' ability to compete and, maybe most importantly, make it more difficult for low-wage, low-skilled workers (most especially teenagers) to find entry-level jobs. Yet despite the fact that nearly all the evidence suggests that it is a drag on the economy and a burden on American workers, the minimum wage has survived in this country (and many other Western nations) for decades. According to Boyes and others, there's almost no chance that it will ever be abolished.
I/L – Education key to economy
Education is an important distinction – college educated immigrants may improve the economy, but low-skilled immigrants are a fiscal drain on other taxpayers.
Rector 6 (Robert, Heritage Foundation Senior Research Fellow, May 12 2006, http://www.heritage.org/Research/Reports/2006/05/Amnesty-and-Continued-Low-Skill-Immigration-Will-Substantially-Raise-Welfare-Costs-and-Poverty) TJN
Overall, immigration is a net fiscal positive to the government's budget in the long run: the taxes immigrants pay exceed the costs of the services they receive. However, the fiscal impact of immigrants varies strongly according to immigrants' education level. College-educated immigrants are likely to be strong contributors to the government's finances, with their taxes exceeding the government's costs. By contrast, immigrants with low education levels are likely to be a fiscal drain on other taxpayers. This is important because half of all adult illegal immigrants in the U.S. have less than a high school education. In addition, recent immigrants have high levels of out-of-wedlock childbearing, which increases welfare costs and poverty.
An increase in immigration would increase future government spending dramatically.
Rector, Kim, and Watkins 7 (Robert, Heritage Foundation Senior Research Fellow, Christine, Heritage Foundation Policy Analyst, Shanea, Heritage Expert, April 4 2007, http://www.heritage.org/Research/Reports/2007/04/The-Fiscal-Cost-of-Low-Skill-Households-to-the-US-Taxpayer) TJN
If the low-skill households' share of interest and other financial obligations for past activities is added, the total annual fiscal deficit of these households rose to $483 billion. Over the next ten years, the constant dollar net cost of low-skill households (immediate benefits received minus taxes paid) is likely to be at least $3.9 trillion. Policy changes that would expand entitlement programs such as Medicaid will increase these costs at the margin. On the other hand, changes in immigration law that would significantly increase the inflow of low-skill workers and families will increase future government spending dramatically.
An increase of low skill immigrant workers receiving services would increase the deficit and burden taxpayers.
Rector, Kim, and Watkins 7 (Robert, Heritage Foundation Senior Research Fellow, Christine, Heritage Foundation Policy Analyst, Shanea, Heritage Expert, April 4 2007, http://www.heritage.org/Research/Reports/2007/04/The-Fiscal-Cost-of-Low-Skill-Households-to-the-US-Taxpayer) TJN
Changes to immigration policy could have a much larger effect on the fiscal deficits generated by low-skill fam ilies. Policies which would substantially increase the inflow of low-skill immigrant workers receiving services would dramatically increase the fiscal deficits described in this paper and impose substantial costs on U.S. taxpayers.
Unskilled laborers are often times an economic loss.
Cox 6 (Stephen, editor of Liberty magazine and professor of literature at the University of California San Diego, October 1 2006, Liberty, Opposing Viewpoints) TJN
Do we have to choose the kind of workers who should be invited in? Yes, we do. I will return to that theme. Before doing so, I want to examine another issue that proponents of open borders usually don't want to think about: the net contributions of unskilled laborers to the actual American economy. Despite all the talk about the economic contributions of unskilled labor, few unskilled immigrants contribute anything equal to what they extract from the unwilling taxpayer. I'm not saying this simply because illegal immigrants generally avoid paying income taxes. Imagine an unskilled laborer who has come here legally, just as proponents of open borders wish that all unskilled laborers could do. Let's say he makes $15,000 a year—an income that is above the minimum wage, an income that is quite good enough to draw millions of people here from almost anywhere in the world, provided we had open borders. And let's say that his wife works too (part time, because of the kids) and makes $10,000 a year. That $25,000 is the value they contribute to the American economy. Out of it, they pay maybe $1,200 in sales taxes, $500 in the property taxes that are included in their rent, $1,900 in Social Security payments, and zip in income taxes. (Whatever taxes are extracted from their checks, they get back in refunds. Actually, because of tax subsidies to poor people, they will probably get back a good deal more than they pay in, but to be extra-fair I won't pause to calculate that.) Of course, the Social Security contributions are not invested and will never earn enough to pay the total cost of the couple's retirement benefits; other taxpayers will have to do that. In this respect, the couple is already a serious economic loss. The scale of that loss will appear when they retire. Other losses are happening right now. Because of their low income, man and wife are eligible for innumerable welfare programs—from subsidized housing to medical assistance (if they don't have adequate private insurance, which they won't) to free legal aid to disaster aid if a storm comes through. Any physical disability may result in hundreds of thousands of dollars in bills to other taxpayers. Whenever the couple have a child, that's $10,000 at the county hospital. Afterwards, it's probably $5,000 a year for a government-financed preschool, then $10,000 a year (the approximate national average) in government funds for K-12 education.
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