In economics a “substitute” is a good or service that can be used in place of another good or service. The classical examples include that you can use a $5 bill or five singles (fungibility) or that Coca Cola may be consumed as a substitute for Pepsi and vice versa. It doesn’t necessarily mean that the two goods or services are identical—just that one may be used in place of the other.
Substitution pertains to the labor market as well. Pyramids can be built using 20,000 workers dragging huge shaped stones, teams of draft animals and teamsters, or a relatively small number of workers operating machinery. You can get your hair cut by a barber or a hairdresser. You can be treated by a licensed physician or an unlicensed, untrained quack. The choices are governed by law, by availability, and by preference.
Returning to my post on unemployment yesterday, over the last half century in this country the availability of a reliable stream of low cost labor provided by immigrants, especially those who are in the country illegally, has had a substantial impact on the overall economy. We are growing crops we would not otherwise grow or growing and harvesting them in ways we would not otherwise use, building buildings that would not otherwise be built or would be built in a different way, and operating restaurants we would not otherwise be operating or in a way in which they would not otherwise be operated. All of those are forms of labor substitutions.
Furthermore, people are hiring nannies, maids, and gardeners to perform tasks they would otherwise perform themselves. In some cases this allows them to work at jobs themselves which they would not otherwise do. Using nannies or maids has observable effects on child development which may well be unforeseen.
The problem with all of this is that it is unsustainable. We are requiring more housing, transportation, security services, K-12 education, and healthcare than would otherwise be necessary and for people being paid wages too low to pay for them on their own. There are only a handful of ways of addressing that. We can pay those workers enough that they can be self-supporting. That will have material impact on the decision to engage those workers at all. In some cases the very fact that the workers function outside the law may influence the decision to engage them. We can continue to pay those workers low wages but augment their earnings with various forms of government subsidies, increasing taxes accordingly. That means we will be subsidizing certain sectors and the costs will be paid by people who may not benefit at all which is simultaneously unjust and inefficient. Or we can continue to pay wages too low for the people to live, creating a permanent underclass.
I am old enough to remember President Nixon’s negative income tax proposal that would have guaranteed a defined minimum income for all workers. The Democrats preferred the Great Society welfare system, and Nixon’s proposal went nowhere.
Nixon’s proposal was tied to actual jobs, so it did not address the problem of the jobless underclass. I don’t remember how it related to minimum wage legislation, but it seems likely it would have obviated it.
The bigger problem is immigrants bring their culture with them, so the whole country undergoes a slow/fast cultural evolution. Much of immigrant culture is incompatible or even hostile to native American culture.
Islam is a good example. Sharia is a complete, integrated religious, moral/ethical, political and economic system. Interest on loans is prohibited, but there are complicated work-arounds:
https://en.wikipedia.org/wiki/Islamic_banking_and_finance
I don’t know how that works out in practice.
Biden’s open borders stance is first, cruel and inhumane given its byproducts of burdens on border towns, human trafficking, crime and fentanyl etc. Second, the destruction of the wage structure for low skill jobs is perhaps the most anti-“working class” policy there is today.
Biden (and his clown of a VP) have completely failed to deal with a very serious issue harming US citizens. (You tell me – mental impairment, crass politics, stupidity, or just cruel people) McConnell and his corporate interests the same. A pox on both.