The "historic" and "unexpected" drop in oil prices since last September taught me a huge lesson in supply and demand elasticity. The media and analysts want a smoking gun explanation, blaming it on the Saudis attacking frackers, Russian geopolitics, the strong dollar, etc. But a drop to nearly 1/3 the price cannot be explained so simply as the supply and demand difference is a small percentage on consumption.

The way I see it is that both supply and demand are inelastic in this case, as the world only needs so much oil at a certain time and cannot ramp up easily. Supply is inelastic in this case because much of the production boom was generated by highly indebted frackers. That means they have to pump and sell no matter how low oil goes. These two factors completely kill price rebalancing.

What does this mean for worker's pay? Simple: the effect of offshoring a few jobs has similarly an outsized effect on the negotiation power of employees. If there is always someone out there willing to take a job at breakeven (paycheck to paycheck living), worker pay will never go up.

Anyone who claims it's only a few jobs or that they pay market rates for H-1B's is either ignorant or a crook.