Some good data on the economic consequences of immigration

[Loren Pechtel]

http://www.politico.com/magazine/st...-immigration-economy-unemployment-jobs-214216

Yes, it improves our economy overall--but at the expense of transferring wealth from workers to employers. Right now we are tipped too far in that direction already.

 

[ZiprHead]

Concentrating wealth in the hands of the wealthy shouldn't be considered improving the economy.

 

[Trausti]

Concentrating wealth in the hands of the wealthy shouldn't be considered improving the economy.

But ultimately that may be the point of current immigration policy. It lets the elites get wealthier at the expense of the middle and lower classes; and at the same time it gives the elites the righteous moral high ground to browbeat the plebs, by calling them names and implying they're stupid and bigoted if they notice that the policy is detrimental to their interests.

 

[Jarhyn]

This isn't a problem with immigration so much as unrestrained capitalism, anti-immigrant/deportation policies, and lack of wage transparency. No human, immigrant or otherwise, is going to tolerate being paid less merely because they are an immigrant, especially when they can prove the systemic discrimination and do not have to fear deportation for making an issue out of it.

If this means fewer companies and businesses hire immigrants, then the problem of immigration will solve itself.

 

[Loren Pechtel]

This isn't a problem with immigration so much as unrestrained capitalism, anti-immigrant/deportation policies, and lack of wage transparency. No human, immigrant or otherwise, is going to tolerate being paid less merely because they are an immigrant, especially when they can prove the systemic discrimination and do not have to fear deportation for making an issue out of it.

If this means fewer companies and businesses hire immigrants, then the problem of immigration will solve itself.

H-1Bs tolerate lower pay for being an immigrant because they can't get other jobs.

In general, however, it's that more workers doing <x> means lower pay for doing <x>.

 

[barbos]

Loren and his personal grudge against H1-B again.

 

[coloradoatheist]

Loren and his personal grudge against H1-B again.

Yep. It's interesting because the author of the article said that it would be most advantageous if we allowed the higher skilled immigrants in, which are the H1B visas.

 

[whichphilosophy]

http://www.politico.com/magazine/st...-immigration-economy-unemployment-jobs-214216

Yes, it improves our economy overall--but at the expense of transferring wealth from workers to employers. Right now we are tipped too far in that direction already.

Driving wages down to enrich the corporations ends up damaging the economy. This is because with low payed workers, less money circulates in the economy so less jobs are available in hotels, travel, home furnishings and home purchases. When wealth was increasingly distributed more to working Americans after the War their used their spending power to purchase the things I mentioned and as a result millions of jobs were created.

A workforce ending up with workers or families sharing one room and little left after tax and rent doesn't boom an economy of course.

 

[atrib]

H-1Bs tolerate lower pay for being an immigrant because they can't get other jobs.

Employers who sponsor H-1B workers are REQUIRED by law to pay them prevailing market wages, and document such to DHS. USDOL determines what prevailing wages are, not the employer. How many times do we need to go through this song and dance before it gets through to you?

 

[Loren Pechtel]

H-1Bs tolerate lower pay for being an immigrant because they can't get other jobs.

Employers who sponsor H-1B workers are REQUIRED by law to pay them prevailing market wages, and document such to DHS. USDOL determines what prevailing wages are, not the employer. How many times do we need to go through this song and dance before it gets through to you?

Yeah, but the enforcement is effectively zero.

 

[whichphilosophy]

Employers who sponsor H-1B workers are REQUIRED by law to pay them prevailing market wages, and document such to DHS. USDOL determines what prevailing wages are, not the employer. How many times do we need to go through this song and dance before it gets through to you?

Yeah, but the enforcement is effectively zero.

One loophole is to call them students on internships. IBM was using that dodge (per a documentary program I saw some years ago).
Essentially the rights of employees which too 200 years to achieve can be removed by unfair competition. In the UK we have people coming from poor countries in Europe to work for bottom wages. They share dormitory type rooms then send money for their houses back home. So much of the wages are not circulated in the UK economy but abroad. Further, jobs were lost in iconic companies such as Cadbury. LIke many others it moved its works to Eastern Europe but did so with Eu grants.

 

[atrib]

Yeah, but the enforcement is effectively zero.

One loophole is to call them students on internships. IBM was using that dodge (per a documentary program I saw some years ago).
Essentially the rights of employees which too 200 years to achieve can be removed by unfair competition. In the UK we have people coming from poor countries in Europe to work for bottom wages. They share dormitory type rooms then send money for their houses back home. So much of the wages are not circulated in the UK economy but abroad. Further, jobs were lost in iconic companies such as Cadbury. LIke many others it moved its works to Eastern Europe but did so with Eu grants.

Foreign students are allowed to work for one year as part of a vocational training program related to their education, while staying on their student visas. I don't see how it would be effective for companies to pay for foreigners to go to school in the US just so they could work for them for 12 months.

 

[maxparrish]

http://www.politico.com/magazine/st...-immigration-economy-unemployment-jobs-214216

Yes, it improves our economy overall--but at the expense of transferring wealth from workers to employers. Right now we are tipped too far in that direction already.

True. However, as a long-time (and rabid) anti-immigration supporter I still recognize that there may be some major benefits to some kinds of immigration. Anyone paying attention to the founder of immigration economics (the author of your article, Borjas) appreciates that both labor models and empirical data suggests that that there is a net benefit to society as a whole IF the immigrant is highly skilled or of high ability.

The takeaways from your article (and other books by Borjas) is:

1) The annual gain to the native born from current immigration is negligible, around 50 billion dollars a year (in a 15 trillion dollar economy).
2) This "gain" is more than offset by the external costs to the native born (welfare, education, crime, etc.).
3) The biggest gainers are employers and immigrants, who obtain a 500 billion dollar 'transfer' from the native born.
4) The biggest losers are the working class and least skilled native born...on average earning 5 percent a year less do to new competition.
5) While immigration of the unskilled creates a net loss to the native born, the highest skilled create a surplus.

I have no problem with your concern over H1B workers. Native born accountants, programmers, engineers, and other significantly skilled technical employees will also suffer some wage loss from immigration. However, from a national perspective, the highly skilled likely bring some net economic benefit to the native born as a whole.

The most serious problem with US immigration is that it lacks sufficient ethnic diversity, and most of it is unskilled labor of marginal (or little) ability. Chain migration and illegal immigration has produced a large population that is a net burden to the native born (including the second generation children of immigrants).

So while I find some agreement with you, I also find it of secondary importance. And while I think it is too late adopt a sane immigration system that will stem the flow, I remain an advocate of:

1) A border wall or double security fence system covering most of the southern border.
2) Punishment and deportation of illegals, and the denial of a path to citizenship for those illegals.
3) Severe employer punishment for the hiring of illegals.
4) Ending or highly restricting chain immigration.
5) Establishing prudent immigration quotas based on merit (as do many other countries).

None the less, it seems to me that H1B folks are more likely to be of benefit than others.

 

[Lumpenproletariat]

Artificially-higher labor cost hurts all consumers = lower standard of living for all.

http://www.politico.com/magazine/st...-immigration-economy-unemployment-jobs-214216

Yes, it improves our economy overall--but at the expense of transferring wealth from workers to employers. Right now we are tipped too far in that direction already.

No, it's good to tip the economy to transfer wealth from the less productive/less valuable to the more productive/more valuable. Rewarding wage-earners who are a dime a dozen and have such low value and are so easily replaceable does not benefit the economy.

It's good when these low-value producers get replaced by someone or something to do the job at lower cost. It benefits ALL consumers for the lower-value workers to be replaced and for the labor cost to be reduced for the lower-value overpaid workers who just drive up prices and hurt all consumers because of the extra cost they impose onto the production.

Just like it's good for consumers when the low-value workers are replaced by robots, so also it's good when they're replaced by lower-cost labor, including immigrant labor.

 

[Lumpenproletariat]

Replacing workers to lower the production cost makes virtually all workers better off.

This isn't a problem with immigration so much as unrestrained capitalism, anti-immigrant/deportation policies, and lack of wage transparency. No human, immigrant or otherwise, is going to tolerate being paid less merely because they are an immigrant, especially when they can prove the systemic discrimination and do not have to fear deportation for making an issue out of it.

If this means fewer companies and businesses hire immigrants, then the problem of immigration will solve itself.

H-1Bs tolerate lower pay for being an immigrant because they can't get other jobs.

In general, however, it's that more workers doing <x> means lower pay for doing <x>.

And lower pay = lower labor cost = lower prices = higher standard of living overall. I.e., 300 million consumers benefit, and only 1 or 2 million workers are worse off. But even workers who are replaced eventually also end up better off from the overall replacement of low-value workers or overpaid workers.

Just like replacing them with robots makes us all better off, by reducing the production cost. Even the workers replaced by robots end up better off because of all the other workers who got replaced over time, because improving the production really benefits us all in the long term.

No? OK then, get rid of all those farm machines and bring back the workers to harvest the crops, like 200 years ago when 90% of U.S. workers were picking crops.

You cannot escape the logic that it's always good for everyone when workers are replaced by whatever/whoever can do it at lower cost.

 

[Lumpenproletariat]

The economy is not improved by making crybabies out of the wage-earners and paying them extra out of pity for them.

http://www.politico.com/magazine/st...-immigration-economy-unemployment-jobs-214216

Yes, it improves our economy overall--but at the expense of transferring wealth from workers to employers. Right now we are tipped too far in that direction already.

Driving wages down to enrich the corporations ends up damaging the economy.

Not if it's the market that drives down the wages. Lower cost of production always benefits the economy, i.e., all of us, if the same output can be produced at the lower cost. Which is what happens if it's market competition that drives down that cost, including labor cost.

There's no reason to make an exception for labor cost and insist that this one cost alone has to be made artificially high.

This is because with low payed workers, less money circulates in the economy . . .

No, the lower paid workers = lower labor cost = lower cost of production = lower prices = higher spending power of consumers who have more money to spend = the same money circulation, but higher living standard as a result of the improved production.

. . . so less jobs are available in hotels, travel, home furnishings and home purchases.

No, with the improved production, everyone's spending power has increased, so they can buy more than before.

If you insist that there is net harm to everyone, then you must say the same about replacing those workers with robots/computers, and then your logic requires that we get rid of the computers/robots and never replace workers with machines that do the job cheaper. Because replacing them with machines also means fewer jobs "in hotels, travel, home furnishings," etc.

So you think the onset of computers and robots has reduced our standard of living? because of the lost jobs?

When wealth was increasingly distributed more to working Americans after the War they used their spending power to purchase the things I mentioned and as a result millions of jobs were created.

But the "jobs" per se that were created did not make the country richer. It was the production which made us richer, and this production benefited everyone as long as it was efficient production in which the costs were kept down to the lowest possible level. No wealth is created by making the cost of production artificially higher, such as by artificially increasing the wage level, or creating excess "jobs" that are not needed.

We are made richer as long as competition keeps down the costs. Anything driving up the cost artificially makes us worse off and reduces our standard of living. Just like replacing the expendable workers with robots raises our living standard, by reducing the production cost, so also replacing them with cheaper labor raises our standard of living.

The economy is not made better by artificially driving up wages or any other cost of production, because this forces consumers to pay higher prices. Just giving some workers an artificially-high income does not improve the economy overall.

A workforce ending up with workers or families sharing one room and little left after tax and rent doesn't boom an economy of course.

What booms the economy is for those low-value workers to become more valuable so they can perform better and make themselves worth a higher income. But paying them higher out of pity for them rather than in return for better performance will do the opposite and depress the economy.

 

[Lumpenproletariat]

The proper function of business is to serve consumers, not provide babysitting slots for job-seekers.

Employers who sponsor H-1B workers are REQUIRED by law to pay them prevailing market wages, and document such to DHS. USDOL determines what prevailing wages are, not the employer. How many times do we need to go through this song and dance before it gets through to you?

Yeah, but the enforcement is effectively zero.

To Hell with the enforcement. The country as a whole benefits from the improved production, the lower costs. We should stop forcing companies to babysit the workers and instead let them serve consumers, which is their real function.


Cheap labor is good for the economy!

 

[whichphilosophy]

One loophole is to call them students on internships. IBM was using that dodge (per a documentary program I saw some years ago).
Essentially the rights of employees which too 200 years to achieve can be removed by unfair competition. In the UK we have people coming from poor countries in Europe to work for bottom wages. They share dormitory type rooms then send money for their houses back home. So much of the wages are not circulated in the UK economy but abroad. Further, jobs were lost in iconic companies such as Cadbury. LIke many others it moved its works to Eastern Europe but did so with Eu grants.

Foreign students are allowed to work for one year as part of a vocational training program related to their education, while staying on their student visas. I don't see how it would be effective for companies to pay for foreigners to go to school in the US just so they could work for them for 12 months.

The loophole (but not really on inspection ) was to take interns who are doing work experience and pay them a pittance as expenses (token intern payments) to work for the company. That pittance would be comparable with countries such as India.

 

[whichphilosophy]

Yeah, but the enforcement is effectively zero.

To Hell with the enforcement. The country as a whole benefits from the improved production, the lower costs. We should stop forcing companies to babysit the workers and instead let them serve consumers, which is their real function.

Cheap labor is good for the economy!

300 years ago that would have been a popular argument when workers worked in sweatshops for very little and in some cases were paid in tokens to spend at the company shops.

In reality, employees who are paid reasonably so can afford homes and cars spend for that in the economy. More goods are sold in the shops thus creating more jobs.
Foreign workers who have lower costs back home and work for lower wages in richer countries improve their own economies back home but add very little to the host country.
Cheap Labour is perceived as good for the company but in not practice beneficial for the employee or the actual economy itself since spending is stagnated.

In countries where cheap labour is the norm, poverty and lack of consumer spending is the norm. Countries like India have a large economy because it has over one billion people but a lot of people have nothing. Europe benefitted from plundering its colonies more than cheap labour back home. I don't see India actually booming. I've been there a few times and it looks like a rubbish tip even in the capital full of squalor. Yet a few years ago the media reported Indian industrialist Mukesh Ambani built a 27 story house surrounded by slums.

There's not harm in being rich but building a one billion dollar home while 5 million people in Mumbai have no toilets in the house and many have no running water s an affront.
https://en.wikipedia.org/wiki/Antilia_(building) India of course is one of the countries where people are regarded as expendable and many paid derisory wages.

Even worse, I posted a whole string of examples where companies in the UK were given Eu grants to move UK factories to their own countries, or in other cases European companies were given grants to purchase British companies.

 

[Loren Pechtel]

http://www.politico.com/magazine/st...-immigration-economy-unemployment-jobs-214216

Yes, it improves our economy overall--but at the expense of transferring wealth from workers to employers. Right now we are tipped too far in that direction already.

No, it's good to tip the economy to transfer wealth from the less productive/less valuable to the more productive/more valuable. Rewarding wage-earners who are a dime a dozen and have such low value and are so easily replaceable does not benefit the economy.

It's good when these low-value producers get replaced by someone or something to do the job at lower cost. It benefits ALL consumers for the lower-value workers to be replaced and for the labor cost to be reduced for the lower-value overpaid workers who just drive up prices and hurt all consumers because of the extra cost they impose onto the production.

Just like it's good for consumers when the low-value workers are replaced by robots, so also it's good when they're replaced by lower-cost labor, including immigrant labor.

I figured you would show up here sooner or later.

You're not presenting anything new here, but you are missing the point of the article.

Yes, the overall standard of living goes up--but at the expense of transferring more from workers to employers. In today's economy that's not a good thing.