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Samizdata quote of the day That’s terrible economics. It’s a classic application of a well-known fallacy called the Lump of Labor — the idea that there are a fixed number of jobs in the world, and those jobs get divvied up among people.
How do we know this is a fallacy? It’s obvious that the number of jobs in the world isn’t fixed. Imagine if the United States deported every single American except for Jeff Sessions. Would Sessions then have his pick of any job? No, he’d be in the forest trying to eat berries to survive. Kicking people out doesn’t just reallocate jobs from one person to another. It also destroys them.
– Noah Smith
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Even if the jobs aren’t “taken,” libertarians often seem to forget that supply and demand applies to labor, as well: when you flood a country with cheap labor, that hurts the natives competing for those jobs by lowering demand and wages. It helps the employers, of course, which is why the Chamber of Commerce types love it, but it’s entirely rational for workers to resist mass immigration on these grounds.
Supply and demand applies to pretty much everything, even interpersonal relationships, where the currency is virtue. And, PapayaSF, not only cheap labor in your point above, but also goods and services. When we send food, for example, to some third world country, (higher members of these humanitarian orgs are often well compensated for their constant relocation of goods), we destroy the local farming industry. You can’t compete with free.
Jobs aren’t fixed, wealth isn’t fixed, one can’t screw with the human produced variables and expect conditions to not change. So one has to really wonder about the type of flatland, zero-sum mind that does think in this manner. It’s the sort of mind that thinks that if we tax the rich 90% of their income, then the revenue received will actully = 90% of what is currently their income. It’s simply daft. Then again, politicians pretend that this is the case, duping the stupid electorate and getting their pet projects passed on ridiculous projections.
Sorry, that’s a pathetic article and I only read a few paragraphs. His own employment graph shows the employment rate is the lowest since the early 1980s.
He refers to immigrants creating jobs, but that’s legal immigrants, not the DACA and other unskilled illegals Sessions referred to. The average age of a Dreamer is about 25 and 40% of them didn’t finish high school. Less than 10% of ALL Hispanic citizens finish college.
These aren’t Indian engineers at Google.
An influx of unskilled labor depresses wages for native unskilled. The cost of educating a child of an illegal is $10,000 a year, a birth is $10,000, the average annual medical cost another $10,000 – seeing a pattern?
And of course, who do poor immigrants from Latin America vote for once they receive one of the numerous amnesties? For statist Democrats by a 3-1 ratio, which is the reason the Left is so hot for open borders.
It’s a bitter irony that so many libertarians cheer while the Left imports millions of new voters to secure an eventual permanent majority. In the UK, immigrants vote Labour by 3- and 4-1 margins.
http://www.runnymedetrust.org/uploads/EMBES%20Voting%20Behaviour.pdf
Texas is expected to become a purple state in the next ten years.
Chip, your political objections not withstanding, it does not make Lump of Labour any less of a fallacy
What Chip said. If illegal aliens were conservatives or libertarians, the Democrats would be screaming for deportations and the Wall.
Libertarianism is not a suicide pact. For the US right now, mass immigration is anti-liberty.
A strawman argument, no one is suggesting that, so the OP is ‘reasoning from bollocks’ in a vernacular shorthand. Nowhere does the OP apply any analysis with any methodological individualism, looking at who might be deported, e.g. are they predominantly low-educated and Democrat voting drains on the general welfare?
What Perry said. There are political and other valid reasons to object to illegal/unlimited immigration (which I happen to share). Sessions (and Trump) should spell them out, instead of resorting to a fallacious populist one.
Importing a cheap lump of labour who vote for socialism and state handouts ( and do so even if they are illegals– as O’Scumma brazenly encouraged them to do in 2016) is also a sure-fire way to fix any country’s wagon.
To a certain extent I agree with Chip’s objection, but only to a point. Noah Smith’s argument is as incorrect (or more precisely, incomplete) as is Sessions’. The truth is somewhere in between (admittedly, a bit closer to Smith’s end than to Sessions’). The “Lump of Labor” argument is obviously a fallacy, but that is far from the end of the analysis. Even if his economic argument were absolutely correct (which it is not) there remain legal and moral considerations to be considered, all of which he completely ignores.
Smith’s primary error (intentional or not) is to conflate legal immigrants with illegal ones and with “Dreamers”. Legal immigrants are permitted into the country on a discretionary basis, primarily because they offer skills which are useful to us. Clearly on balance they grow the economy and create employment (some directly but most indirectly; see Say’s Law). However, illegal immigrants probably do take low-skill jobs from some Americans; in that particular sector, where unskilled jobs are largely fungible, the “Lump of Labor” concept is somewhat less of a fallacy. A massive influx of such immigrants does have adverse consequences to the population (at least in the short term), especially to those at the lower end of the skill and income spectrum. This is one purely pragmatic reason why immigration needs to be managed, but illegal immigration destroys the ability to do that effectively. In the long run that population increase does expand the economy and thus result in the creation of more jobs, but the short-run dislocations are considerable and can’t be ignored. (Cue here that famous quote from Keynes.) And a continued influx of low-skilled illegals means that the job-creation effects will never catch up to the numbers.
“Dreamers” are a different story entirely. Their illegal immigrant parents may have taken low-skilled jobs from Americans, but they themselves aren’t interested in that; they attend college at a fairly high rate (perhaps higher than the indigenous population) and will largely become thoroughly Americanized and productive members of our society. They are not “taking jobs” from Americans (although it can be argued that they take University slots from citizens). And they are relatively few in number (800,000 or so); we can absorb that without difficulty. It is here that Noah Smith’s economic argument is strongest. But it completely ignores the legal and moral issues. True, they did not knowingly or intentionally violate the law when they came here, but rather were dragged here by their parents and had little choice in the matter. But should they be permitted to benefit from their parents’ crimes? If I robbed a bank and used the proceeds to buy a house for my children, should they be permitted to keep it even though they took no part in my crime? How is benefiting from the earlier crime of illegally entering the country any different? And what sort of signal does it send when we grant amnesty (in some form) to these people? Does anyone really believe that it will end there, and in the future there will be less such illegal importation of minors? Of course not; the volume will only increase. You always get more of something when you subsidize it, and amnesty is no different. (And if you think otherwise, I need only point you to Reagan’s “one time” amnesty program in 1986. No sentient being really believed that once that precedent had been established it wouldn’t be repeated.)
“Dreamers” present a difficult problem, and probably whatever solution we come up with will completely satisfy nobody. I am sympathetic to the plight of perfectly law-abiding (except, of course, for the original sin of illegal immigration) young people being deported from the only nation they really know to some “foreign” country. At the same time I am sensitive to the problem of incentives, and rewarding criminal action (and whatever else it might be, amnesty for them is clearly a “reward” for their parents). Perhaps the best solution would be to deport them all pour encourager les autres. Harsh, yes, but it would certainly send a message and reduce the incidence of such immigration in the future. However, I seriously doubt that we will do this, simply because of the optics (no Republican ever wants to be seen as “heartless”*). So I suppose the second-best option would be to grant some form of amnesty along DACA terms but strictly limited (Obama’s version was far too generous), with immediate deportation for anyone who fails to qualify. And of course that needs to be coupled with increased enforcement of the immigration laws, with special attention paid to the deportation of those bringing young children here, in order to prevent a recurrence of this unfortunate circumstance. But somehow I doubt that our politicians have the courage in take this approach either. Whatever “solution” our solons come up with will probably be the worst of all possible approaches, and won’t even be a real “solution” at all.
* Although that never seems to bother Democrats, who were perfectly happy when Janet Reno forcibly (using a SWAT team no less!) deported a crying and terrified Elian Gonzalez back to Cuba.
If only. A large percentage get here for “family reunification” a.k.a. “chain migration.”
If the economy, infrastructure, and capitalization were free to expand, then zero-sum reasoning might be inapplicable. But maybe this zero-sum worldview is correct in a nation in which the economy has been crippled, where it’s been thouroughly de-industrialized. If the supply of labor of a given type is expanded through offshoring and mass-immigration, if the demand is held constant (because industry isn’t expanding, and the foreign immigrants are not spending any money on the products they are producing) and if the cost of living for the natives is skyrocketing (the floor being set by taxes and rent), then the natives in that sector of the economy get priced out of the ‘market’ – the market in this case being ability to sustain their lives.
There are times and places where zero-sum explanations seem to work. Right now, for example, India seems to be trapped in a sort of Malthusian hell. Mercantilism also seems to be working (within the context of unilateral disarmament in a trade war by the western economies)- Everyone loves to gush about what success China seems to be having, and about how wonderful their industrialization is, and the same people turn around and snarl at the natives of their own country that have the temerity to want those industrial jobs back. Somehow it’s great for them, and it’s supposed to be undesirable for us, but “us” is composed of a few diametrically opposed classes of people.
Maybe the zero-sum game is the result of horrible policies that are crippling our civilization. But if you really are trapped in a zero-sum game and you don’t have the ability to break the restrictions trapping you there, wishing you aren’t in a zero-sum competition doesn’t solve your survival problem.
MadRocketSci, you clearly don’t understand the law of comparative advantage. (Check out Ricardo.) But to your point, you have been seduced by the nonsense spouted by non-economists. If you look at the actual numbers, contrary to the claims of economic luddites such as Trump (and despite NAFTA), the actual amount of industrial production in this country has grown substantially in the last decades. (See this.) True, the type of manufacturing has shifted somewhat, but it hasn’t gone away and isn’t going away.
India is indeed in a sort of Hell (although I challenge your use of the adjective “Malthusian” to describe it). But that is entirely due to a government which does everything in its power to stifle trade and private enterprise, and which is now working aggressively to ban cash in a country where substantial majorities don’t even have bank accounts. Every member of its federal government should be lined up and shot. India’s problems have absolutely nothing to do with the laws of economics and everything to do with rank stupidity of its rulers.
I’ll look into your index later. It is the question though these days: Which is true, your economic index or our lying eyes? On just about every issue: Employment, inflation, cost of living, the number of businesses being started versus going under, we are given a bunch of graphs that have no correspondence whatsoever to our experience. Is the grass really greener in some corner of our state/country that we don’t know about (hidden away), or are these numbers contrived for political purposes?
In many cases, the statistics are damn lies. As true as anything put out by the Soviet Union.
Laird, does your linked graph include natural gas and oil production? My impression is that it does, and that, absent these factors, “manufacturing” would be sloping down for the past decade.
Is the grass really greener in some corner of our state/country that we don’t know about (hidden away), or are these numbers contrived for political purposes?
I grew up in a three bedroom house. I own a five bedroom house. I have pretty much exactly the same job as my dad.
I have a mobile phone, a tablet, a computer and a (work) laptop. My parents bought a TV when I was five.
I eat avocados out of season, tomatoes all year round, asparagus, etc. My folks ate what they grew.
So yeah, things are definitely worse.
That people refuse to see all the good changes in their lives makes them human. But they are wrong still. Life in the West is definitely better than it used to be for the average person compared to my parent’s generation.
Chester, speak for yourself. For many of us, our lives are WORSE than our parent’s, by any metric.
The article’s free market credentials would be bolstered if it did not assume a closed economy in everything but labour.
Foreigners can provide goods and services to Americans from outside the US. Whether Americans benefit from receiving those goods and services from foreigners parked on US soil, more or less than they would if the foreigners remained abroad is not capable of being answered by banal references to lumps of labour. The lonely Jeff Sessions could buy all sorts of stuff from foreigners living outside the US, with the proceeds of exporting copies of his collected speeches. There is no certainty that he would be scrabbling for berries in any forests.
Undoubtedly the lawn mowing and gardening services performed so splendidly by illegal immigrants from Mexico add to the welfare of Californian owners of gardens and lawns. But if those Mexicans remained in Mexico, they might do just as much for the generality of Americans as they do now. We don’t know. What we do know is that these Mexicans think that they themselves benefit from moving to the US, otherwise they’d stay put.
Sessions was making a political point unsupported by evidence or economic theory. Ditto Smith.
The prosperity of the US post-WW2 was an aberration, brought about by the destruction of the major economies of the world, and prolonged by the communist bloc.
As China is showing, that’s not enough anymore. Forget about comparing current average levels of wealth against the Boomers, the correct comparison is of the average productivity of the US worker against workers in other countries. The US worker is still the highest productivity worker in the world, it’s just that there’s also a lot of dead weight pulling him down. Also, the accumulated wealth/capital from the post-WW2 period is still being drained – there’s a lot of ruin in a nation.
As somebody said, it’s privatised benefits and socialised costs. There are actually proposed mechanisms to deal with this. I rather like the idea of an immigration insurance/bond to be paid by employers as a guarantee of good behaviour. With something like that, open borders are a great idea.
And by most metrics, that’s really not true of most people, even if it’s for you and ‘many’ others.
And yet, back here in the real world where I live all the dirty and dangerous jobs used to have lots of tenth generation American black men and women doing them. Now all the hotel maids and nail pounders look like they came from Chiapas.
This change has taken about 15 years.
The “lump of labor” is a straw man in this case. Yes, jobs are not finite. Yes, you could conceivably destroy some by kicking out immigrants. But you’d have to destroy more jobs than there are illegal immigrants before it’s a net loss for the country. And there’s no amount of handwaving that will get you past that evidence problem.
Then please provide the evidence for your position. Where exactly are the low value added native born Americans driven into destitution, eagerly waiting to cut grass, flip burgers and mop floors when them pesky furners are given the boot?
The decline of the summer job. I washed dishes, washed cars, and cut grass. Guess who does those things these things? Fun fact: in the 1950s farm work was not an uncommon job for college students.
No doubt after the Purge, all those English & Wimyn’s Studies majors will rise to the occasion and step in where Wetbacks once trod 😀
Where exactly are the low value added native born Americans driven into destitution, eagerly waiting to cut grass, flip burgers and mop floors when them pesky furners are given the boot?
On welfare.
Quite. So actually the problem is welfare
Yes, but getting rid of welfare is politically impossible now, while getting rid of mass illegal immigration is not only possible, it’s politically popular. And it could actually shift the political landscape in the direction of making welfare cuts more possible.
So actually the problem is welfare
In part. Another factor is that it is much harder for illegal immigrants to enforce the sort of employment rights that have been granted by legislators and judges, and which makes employing Americans so expensive*. Even absent welfare, it would still be cheaper to hire illegal immigrants.
*Though nothing like as expensive as employing Europeans.
There’s another problem, for which there isn’t a term that I know of. It needs one. Due to some sort of collective failure or negative condition (a bad culture, a bad economy, bad hygiene, crowdedness, or whatever) some people decide to flee to greener pastures. However, in the process, they bring with them the conditions which created the very problems they are fleeing. Examples: “Californication,” in which people flee high taxes and government regulation for other states, but then vote for the same sort of politicians whose work they fled. Gentrification, in which cheap neighborhoods become hip, then fashionable, and then too expensive for young hipsters to live in. Muslims fleeing Muslim rule, then recreating the same oppressive cultural conditions in European neighborhoods. Mexicans fleeing Mexico, bringing many of Mexico’s problems. Tourists seeking the “exotic,” and then becoming so numerous in the exotic location that they degrade the original experience (say: Venice, or many natural wonders). To make a harsh analogy, they are all like plague victims fleeing a plague, but carrying the disease with them. (Of course, not all of them bring those conditions with them, but enough to visibly matter, in all those examples.)
Libertarians tend to forget that humans are not just interchangeable economic units. Culture matters.
Culture does matter, but it also has nothing to do with the Lump of Labour fallacy being employed to support booting out low value added people.
Right, so the only thing left to do is to stop lying about the reasons for doing so, and to start spelling out the real reasons: welfare and culture. Because otherwise the perfectly legal US-born welfare queen (of any gender) is left with the comforting illusion that her/his uselessness to society is the fault of a lawn-mowing illegal Mexican.
That’s just another form of welfare, at least for the purposes of this discussion.
It is not “terrible economics” to point out that, under some circumstances, more people can be bad news for the people already in a country.
For example the price of land and housing tends to go up – Henry George noticed in the 19th century that as more and more people went into an area the price of land went up, it was harder to buy a farm or even a house, and many people ended up dirt poor. However, (misled by the economics of David Ricardo – which really is “terrible economics” but was not totally refuted till the time of Frank Fetter) Henry George blamed the private ownership of land and rent – and thought his “Single Tax”, disguised land nationalisation, would fix things. It would not fix things – it would make even worse problems. So population going up above a certain point does not “just” destroy the fields and woods that people love – it has negative ECONOMIC effects for the people already in an area.
Just as an area can be UNDER populated (Jeff Sessions can not do all the jobs in advanced society), so it can be OVER populated – i.e. more people being a net loss for the people already in an area.
And that is leaving out TRIBALISM and the WELFARE STATE.
People have been divided into rival cultural and ethnic groups long before the existence of the modern state – such “tensions” are not invented by the state (because they are older than the state). The conflicts can be overcome – common BELIEFS can overcome ethnic divisions, but people who ignore the divisions and say that people should be nice to each other (without any basis of common BELIEFS) are just silly.
So people who say (for example) that unlimited numbers of Mexicans and so on can just move into California without negative “tribal” effects for the “Anglos” already there are barking – UNLESS there is a basis of COMMON BELIEFS to overcome the ethnic divisions. And of course common BELIEFS (faith in America and American principles) is just what the media (especially the entertainment media) and the education system try to DESTROY – in their Frankfurt School of Marxism way. Leaving people with just ethnic tribalism – “Identity Politics”.
The sort of F.A. Hayek or M.J. Oakeshott view of the world, where one just leaves things to “evolution” without any need for people to have conscious thought-out beliefs and acting upon them, just will not work. If people do not have common beliefs to unite them (real beliefs that they have thought out) then they will unite on ethnic lines. Liberty can not be achieved by unconscious social evolution and it can not be maintained by unconscious social evolution – indeed F.A. Hayek’s hero, David Hume, actually knew that, but it did not bother him as he did not really believe in liberty (political – as well as not believing in philosophical liberty) anyway. See his “Euthanasia of the Constitution” where the late Mr Hume treats the possible collapse of British liberty into a system of despotism with almost total indifference. Someone who tries to base Constitutional Liberties on the philosophy of Hume-Hayek builds his house upon sand, indeed upon quick sand. People must have a conscious belief in basic liberty – and they must understand it, or all is lost.
Lastly the WELFARE STATE.
People who believe that mass immigration is good (not bad) in an area where the government offers “Public Services” and Benefits are just mad – mad as the mist-and-snow, away with the elves and pixies…. (choose your own form of words).
So, for example, people not guilty of “terrible economics” would have supported Proposition 187 in California – cutting off at least illegal immigrants from at least some “Public Services” and government benefits.
So people who support de facto unlimited immigration supported Proposition 187?
No they, the Economist magazine and the rest of the usual suspects with their utterly fake “liberalism”, opposed it (it was “racist” and so on).
That shows that this whole argument is not about “terrible economics” – as it is the people who support unlimited immigration into an area with government benefits and “public services” who are guilty of “terrible economics”.
When such representatives of the establishment elite as the Economist magazine come out in FAVOUR of such things as Proposition 187, cutting off at least some government benefits and “Public Services”, then I will believe they might be sincere.
Till then the pro unlimited immigration “liberal” elite are just liars – lying scum who want to destroy their own countries.
Yes, Paul – only Sessions didn’t say any of that, he just said that these immigrants are taking jobs away from Americas, and that is ‘terrible economics’.
Paul: then by all means argue against tribalism and the welfare state (as indeed they need to be opposed at every turn). But how does that change the fact the tedious bullshit of the Lump of Labour fallacy was trotted out yet again by this Trump drone?
Alisa: quite.
Alisa – but they do, in certain circumstances, take jobs from Americans (although deindustrialisation is a much worse threat – not “taking jobs” but good jobs getting more-and-more scarce, with people having the choice of “McJobs” or no job) and they depress wages. Not always – but certainly in present conditions. In some conditions more people may not mean lower wages, and in other conditions it does mean lower wages – it depends on the circumstances.
If they did NOT do this big companies would not support unlimited immigration – as it would NOT mean lower wages for them to pay.
“There is not a fixed lump of jobs” – yes, but there is not an unlimited number of jobs either. People who want unlimited immigration should openly state they want lower wages – that this is the point of importing competing workers. And lower wages can be GOOD thing for many people (for example the employers of servants) I do not deny that. Nor is lower wages a sufficient reason to keep people out – I might NOT support keeping people out just because it means lower wages and worse conditions of work, but it does mean lower wages and worse conditions of work (under certain circumstances).
Of course then the new people turn on the companies who supported their importation – by voting (illegally voting – but then the Economist magazine, and the rest of the Big Business “liberal” elite are totally opposed to proper checks on voting) for “Social Justice” candidates who put “Social Justice” taxes.
“Redneck” culture does not care if other people are rich – “Social Justice” (envy) is not part of their belief system. That is the real reason that the education system and the media hate their culture – they hate (for example) Southern Baptists (of the old type) more than they hate anyone else on Earth (I turned off a film just last night because of the way it showed a church of Southern Protestants) – and they (the “liberal” elite) passionately welcome the decline of this culture (its replacement by drug abuse and general degeneracy in even rural areas).
But other cultures DO care if other people are richer than them.
So the rich people who import workers from these cultures are, in the end, cutting their own throats.
“I can hire Mexicans – they will work for less than you Trump voting Rednecks”.
Perhaps they will – but the Trump voting Rednecks will not produce something like Mexico after 1910.
Do you own a car?
Cut-your-throat.
Do you have an upper level to your house – a staircase inside your house?
Cut-your-throat.
Do you employ people for wages?
Cut-your-throat.
Not terribly good for economic development – and a bit of a high price to pay for lower wages for a period of time.
Hollywood knows about this – they have been making films celebrating the Mexican Revolution (and other Latin American revolutionary movements) for many decades. But they do not seem to have “twigged” that they (the Hollywood types) would be among the people who would be having their throats cut – as they are very rich.
“But this was a long time ago” – in Mexico perhaps, but not in other Latin American countries. And even in Mexico such things as abduction-for-ransom are very common – basically do-it-yourself Social Justice. Just what the “Liberation Theology” CHURCH now teaches – although they sincerely do not believe they are teaching it when they tell people that their poverty is because of the rich and they have “a right” to stuff from the rich.
So it is not just a matter of lower wages – although, yes, wages (in current circumstances) will be lower. Otherwise there would be no point in importing these people. There is no shortage of people now – quite the contrary.
When a new factory is opened up (not a common thing now – but it does happen) there is no chance of no one turning up for the jobs. Although skilled jobs may be a problem – as the education system no longer teaches skills (it prefers to teach disguised Marxism rather than such things as metalshop).
What is in doubt is the level of wages and the conditions.
Big Business supports the unlimited immigration activists because they (Big Business) hope for lower wages (under current circumstances) – but they really should think about the motives of the unlimited immigration activists.
Why should a bunch of Marxists (which is what the unlimited immigration activists are) want to help Big Business?
The answer is that they do not – they actually want to cut the throats of their backers.
But unlimited immigration that did NOT (in current circumstances) lead to lower wages? There would be no point to that.
Of course, in current circumstances (i.e. many millions of people already being here) unlimited immigration is going to lead to such things as lower wages and higher rents (due to land being limited – not due to private ownership of land).
Of course wages might still go HIGHER over time – in a very free market economy with very high and rising productivity. But under modern conditions – no.
Of course there is the other side of the argument…..
Morally why should someone from, say, Mexico not be allowed to move to the United States just because it will depress the wages of the people already there?
The Mexican will still get HIGHER wages than the wages they are getting now – and the net gain in income to him (or her) is likely to be higher than the net loss to existing people in America (or Britain), there is indeed a “economic productivity gain” overall.
So if there are no benefits or public services AND the Mexican really does REJECT “Social Justice” (a sincere conversion) – then can one morally keep such a person out, just because it will tend to depress one’s own wages?
I think that is strong argument – even though I am exactly the sort of person who is likely to lose economically by mass immigration.
If there are no benefits and no public services, and if the people coming have sincerely REJECTED “Social Justice” and embraced Western principles – then I have no moral case to keep them out. Even though, yes, it means lower wages for me.
No Paul, that is such a gross simplification that it is simply wrong.
I was told by someone who works for them not long ago that less than 1 in 50 people who apply for a job at Pret A Manger are British. British folk just do not want those jobs. So people who run fast food joints in the UK like Pret are not lobbying for a situation where they can force down their labour costs, because the alternative for them is basically having or not having any labour force at all. In short, Pret A Manger’s business model became possible because of immigrant labour, the alternative is not replacing them with Brits, it is between having Pret A Manger (et al) and not having them.
And objections to “Lump of Labour” are not predicated upon there being “an unlimited number of jobs” at any given point, it is predicated upon the number of jobs not being fixed over time (i.e. it is much like objections to the absurd “Fixed Quantity of Wealth” fallacy that underpins most leftist economics, it is not arguing that there is an unlimited amount of wealth at any given point, just that it is not a ‘fixed pie’ that must be divided in a zero-sum manner).
Over here, it’s phrased as “immigrants do the jobs Americans won’t do.”
You leave out the same ending that they always forget: “British folk just do not want those jobs at the wage level that immigrants will accept.”
So, no, the typical American carpentry trainee/new guy won’t take the job that’s being offered at $12.00/hour, which the immigrant snaps up because it’s four times the wage he’d be getting at home. Ask your friend what wage he’s offering those applicants at Pret A Manger.
This apparent libertarian view of labor that you push suffers from the same defect as socialism. Everything is aggregate and time-insensitive. Every person is average and fungible. Introduce a huge influx of cheap immigrant labor into an area, and eventually, everyone can somehow move around and adapt themselves and GDP will be just fine.
But in the meantime, there’s an entire layer of existing society that is going to be uprooted and ruined and cast aside. Just as in the move to communism in so many countries, they are the price paid to move to the new system. Given enough time, they’ll die out and everything will be fine. Whether it’s kulaks, or the Cambodian middle class, it’s no big deal, because in the end, in the aggregate, the numbers work.
If you want to guarantee that the average citizen scoffs at libertarian thought, keep pushing open borders. It is a valid libertarian concept, but one that is most properly advanced only after the various economies of the world have evened out.
Yes that is right, Brits do not want jobs at that wage level, so the alternative is either Pret A Manger charges £12 for a sandwich they currently charge £4.50 for, or Pret (et al) just does not exist and we are back where we were in London circa 1980, as no office worker will pay £12 for a sandwich just to employ a few Brits. Pret is not taking British jobs, it created a whole new middle class targetted fast food segment in the market.
Regardless of the absolute impact on wealth levels from free trade and immigration, it does have an impact on relative wealth, with the unskilled facing lower wages, and the wealthy becoming more wealthy as they pay less for unskilled labour. Or, at least , it would have, if it were not for benefits.
If benefits were restricted to natives, I suspect there would be less noise from the working class about immigration. In fact, I rather suspect a lot of them don’t mind being on benefits rather than work, and much of the dissatisfaction about immigration is about the pot of benefits (including council houses etc.) being spread over a greater number of people, or the prospect of this happening.
It is a mistake to think there is a fixed amount of economic activity that just displaces low value added locals. That is why “Lump of Labour” is both Marxist *and* Nativist codswallop.
But yes, much of the objection is really about what actually is finite: state largess. Locals bludgers do not want competition from newcomers regarding free stuff from taxpayers.
Used to be that a lot of kids starting out a construction career began by working on roofing crews. It’s hard work, it requires relatively little skill, but it was an entree into the field.
It’s pretty much been taken over now by Mexican work crews, who will do the work for a much lower wage than it takes to attract aspiring young tradesmen. And, no, they have not simply enabled the construction or repair of more roofs and thus created a new market – they’ve displaced native workers by accepting a lower wage.
Lots of young people also used to go into landscaping/lawncare work, for the same reasons. And they no longer do, for the same reason. I’m watching the common areas here being mowed as I type, and if the workers weren’t all born south of the Rio Grande, I’d be surprised. And, no, we didn’t devote more areas to lawn in order to efficiently make use of cheap available labor – they’ve displaced native workers, again by accepting a lower wage.
Fast food used to be the realm of teenage workers. You’d walk in to a White Castle or a Burger King and see a group of 16 and 17 and 18 year old kids working – and they’d be the sons and daughters of the locals. No more. My local McDonalds yesterday was just about all over-25 adults of a very international flavor. The unemployment rate amongst the 16-18 year olds who used to fill these jobs is now very high, and even then is kept artificially low because kids now consider it impossible to get such jobs and no longer try to get a job until they have to move away. And they’re not selling any more cheap burgers than they used to – they have not created some new market using cheap immigrant labor that was not being filled earlier.
And there’s not a government benefit to be had from any of these jobs. But if there had been, would that be enough to discount the impact? That entire argument has a strong “let them eat cake” flavor about it.
Bobby b, I have to disagree. First, from a purely practical perspective, where I live there is not a fast food restaurant, grocery store or Walmart which doesn’t have “help wanted” signs all over its doors. Those are all minimum-wage jobs. And the employment shortage is not for lack of illegals; we have plenty (mostly, as you say, working in the lawn care and building trades, but also in some very large poultry rendering plants we have around here). If the teenagers wanted those jobs they’re there for the taking. Clearly they don’t, so something is going on other than “job disintermediation”.
But from a more theoretical perspective, it’s important to keep in mind that there is no “intrinsic value” to any job; it is worth only as much as the value it produces for the employer. You can’t artificially increase that value by legislatively raising the minimum wage or restricting immigration. If no one wants to do the work at the wage you’re offering, you might have a slight ability to increase the offer, but not much; the offer price is probably right at the margin of profitability. If (for whatever reason) I have to pay $20 per hour for menial, unskilled labor the job simply disappears. It makes no sense to hire someone at a rate which costs me money; it’s more rational to automate or simply go out of business.
What you’re also missing is the other side of the equation: the cost to consumers. If wages are forced up (for whatever reason), most if not all of that will be passed through to the end purchaser (again, if the company can’t make a profit it goes out of business). This drives up costs for everyone, which has the (wholly predictable) effect of decreasing sales and diverting spending from other purchases. A relatively small number of people may benefit (in the short term), but at the cost of lower overall economic growth and the relative impoverishment of all of society. It’s Bastiat’s old “that which is seen and not seen” once again. It’s the second- and third-order effects which are rarely taken into consideration by protectionists.
Japan has a very restrictive immigration policy, and fairly high wages for even fast food staff. Along with substantial automation. Doesn’t seem to have hurt their capacity to innovate in that area either.
I’m glad to see the zeitgeist has shifted towards a saner immigration paradigm. Wasn’t too long ago when the open borders crowd dominated the discussions here.
Given differences in genetic potential and culture, I can guarantee that this will never happen.
I agree with this. If fast food restaurants can’t hire sufficient staff at low enough wages to keep themselves in business, they will close down. There comes a point, however, when sufficient fast food restaurants have closed down that consumers are deprived of choices and have to make the economic decision of preparing their own food on their own time and energy or using their money to buy more expensive fast food.
I don’t necessarily see the equilibrium point as being an ‘impoverishment’. You could argue that a high ability individual’s time could be better used for more productive tasks rather than preparing their own food, but the people preparing their food should also be compensated. And this compensation tends to make high-worth individuals more cognizant and appreciative – contrast to the current situation where immigrants do the work and are looked down upon. An appreciative and grateful society is a more harmonious one.
All else being equal, an immigration-restrictionist nation/society tends to fare better than those with open borders. It’s no surprise that Switzerland, Japan, and Israel have highly functioning societies that are the envy of the world.
TWG, of course it’s “impoverishment”. The aggregate economy is smaller (fewer businesses are in existence), the capital invested in them has been lost, and the retail cost of purchasing fast food has increased so there is less money available for other purchases. Yes, a new equilibrium point will be reached (that’s what economies do), but it will be at a lower level (both curves will have shifted down). Everyone loses, albeit some more than others. How you can think this is not “impoverishment” is beyond me.
I am not arguing for open borders; I agree that any country needs to manage immigration responsibly. But I am taking issue with the mindless claims of nativists (including Trump) that preventing immigrants (legal or otherwise) from “taking the jobs” of citizens, and thus forcing up wages, is an unalloyed good or a wise economic policy. It is neither.