The Left Case against Open Borders

Peter Turchin

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As the readers of my blog know, the opinions I express here are strictly non-partisan and non-ideological. My main interest is to go where science leads. Ideological thinking is different from science in that in science data triumphs over theories. Ideologues, on the other hand, can ignore or twist facts to suit their theoretical predispositions (see, for example, An Anarchist View of Human Social Evolution).

But it doesn’t mean that everything coming from an ideological camp is wrong. Take Marxism. I realize that it is now used in certain quarters as a label for “bad people”, but here I mean by it just the philosophical ideas of Karl Marx, Friedrich Engels, and their followers.

My own attitudes towards it went through quite wild swings over my life time. I grew up in the Soviet Union, where I was force-fed Marxism in school, so I took a very dim view of the ideas of Marx and Engels. But when I switched from studying ecology to human societies, I realized that there were interesting and valid ideas in Marx’s theory. The main problem for Marx and Engels, I now tend to think, was that they worked with a very limited empirical material (for example, they didn’t have the Seshat Databank!). I now acknowledge Marxian contributions to the structural-demographic theory (together with other important thinkers, such as Malthus, Durkheim, Weber). Furthermore, I found ideas from a number of contemporary Marxian thinkers to be useful in illuminating various aspects of how our complex societies function. As an example, see my use of Kitty Calavita’s “structural model of the capitalist state” in Chapter 10 of Ages of Discord.

A more recent example is Angela Nagle’s The Left Case against Open Borders. This title seems to be a self-contradictory “oxymoron”. As Nagle notes,

In the heightened emotions of America’s public debate on migration, a simple moral and political dichotomy prevails. It is “right-wing” to be “against immigration” and “left-wing” to be “for immigration.” But the economics of migration tell a different story.

Of course, economics is only one of the considerations that should inform public policy on immigration. It has become a hugely emotional issue. As Nagle writes,

With obscene images of low-wage migrants being chased down as criminals by ICE, others drowning in the Mediterranean, and the worrying growth of anti-immigrant sentiment across the world, it is easy to see why the Left wants to defend illegal migrants against being targeted and victimized. And it should. But acting on the correct moral impulse to defend the human dignity of migrants, the Left has ended up pulling the front line too far back, effectively defending the exploitative system of migration itself.

What I want to do, as I often do in this blog, is to follow Nagle and look below the surface to structural issues—economics, but even more deeply, power.

The economic argument is very clear. Massive immigration increases the supply of labor, which in turn depresses its cost—in other words, worker wages. Clearly, such development benefits the consumers of labor (employers, or “capitalists”) and disadvantages the workers.

Of course, immigration is only one of the many forces affecting wages. I explore this issue in a blog series, Why Real Wages Stopped Growing, with the summary in the fourth post, Putting It All Together (Why Real Wages Stopped Growing IV). My conclusion is that immigration was a significant contributor to the stagnation/decline of the wages in the USA over the past several decades, although not the only one. Unless there are strong institutions protecting workers’ wages, an oversupply of labor is going to depress them—it is simply the law of supply and demand in action.

As Nagle points out, this was clear to Karl Marx, who

expressed a highly critical view of the effects of the migration that occurred in the nineteenth century. In a letter to two of his American fellow-travelers, Marx argued that the importation of low-paid Irish immigrants to England forced them into hostile competition with English workers. He saw it as part of a system of exploitation, which divided the working class and which represented an extension of the colonial system.

It was also clear to those, who were negatively affected—the workers and their organizations:

From the first law restricting immigration in 1882 to Cesar Chavez and the famously multiethnic United Farm Workers protesting against employers’ use and encouragement of illegal migration in 1969, trade unions have often opposed mass migration. They saw the deliberate importation of illegal, low-wage workers as weakening labor’s bargaining power and as a form of exploitation. There is no getting around the fact that the power of unions relies by definition on their ability to restrict and withdraw the supply of labor, which becomes impossible if an entire workforce can be easily and cheaply replaced. Open borders and mass immigration are a victory for the bosses.

In fact, popular opposition to unrestricted immigration goes farther back in the American history. In 1854 the anti-immigrant Native American Party (“Know-Nothings”) achieved a stunning victory in several states that were most affected by the arrival of immigrants from Europe, carrying 63 percent of the vote in Massachusetts, 40 percent in Pennsylvania, and 25 percent in New York.

This 1888 cartoon in Puck attacks businessmen for welcoming large numbers of low-paid immigrants, leaving the American workingman unemployed

And, not surprisingly, the American economic elites also were very well aware that a continuing influx of immigrants allowed them to depress worker wages and increase the returns on capital. Andrew Carnegie in 1886 compared immigration to “a golden stream which flows into the country each year”. During the nineteenth century the corporate community often used the American state to ensure that this “golden stream” would continue to flow. For example, in 1864 (during the Lincoln administration) Congress passed the Act to Encourage Immigration. One of its provisions was the establishment of the Federal Bureau of Immigration, whose explicit intent was “the development of a surplus labor force” (italics are mine).

The business leaders today are much more circumspect about these issues. But one wonders, how many of them think in the same terms, even if they don’t speak publicly about it, instead choosing to emphasize the humanitarian aspects of migration.

To strip Nagle’s main argument to its essence, globalization is wielded by the governing elites to increase their power at the expense of the non-elites. It redistributes wealth from workers to the “bosses”. Some of that extra wealth is then converted into greater political power for big business. Furthermore, antagonism between native and immigrant workers corrodes their ability to organize. As a result, Nagle argues,

Today’s well-intentioned activists have become the useful idiots of big business. With their adoption of “open borders” advocacy—and a fierce moral absolutism that regards any limit to migration as an unspeakable evil—any criticism of the exploitative system of mass migration is effectively dismissed as blasphemy.

 

 

 

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Tim

I understood the argument that immigration decreases wages in the context of a primarily agricultural society with a finite supply of land. However, I do not as easily understand it in the context of a services-oriented economy, or even a self-contained production economy (contrasting a production/manufacturing economy that perhaps has a finite amount of export capacity).

For example, considering the technology industry on the US West Coast, the influx of skilled immigrants seems to have created a positive cycle that increases demand for those same workers, and then increases wages.

I do understand that an imbalance could in immigration could decrease wages for a particular services sector if the immigrating workforce cannot be redirected within the economy. But conversely, immigration could increase wages depending on where the imbalance lies, I would expect.

Vic K

Tim
Land is just one of constraining material resources. There are others; the primary (abstract) resource seems to be energy (the transfer of which is required to perform any work; see a physics textbook for details). In fact, the purpose of agricultural land is to capture (some part of) the solar energy, using the process of photosynthesis. Other material resources can also be limiting factors; e.g., photosynthesis requires water (and carbon dioxide).

“a self-contained production economy (contrasting a production/manufacturing economy that perhaps has a finite amount of export capacity).”
More importantly, any production economy has a finite amount of maximum production capacity; this follows from the law of conservation of energy and matter (and also from common sense). Also, a self-contained economy is not sustainable, according to the second law of thermodynamics.

“For example, considering the technology industry on the US West Coast, the influx of skilled immigrants seems to have created a positive cycle that increases demand for those same workers, and then increases wages.”
And increasing wages did what? Presumably it increased material consumption; which required increases in production of material goods; which required increased use of material resources; which are in a finite supply.

Therefore, in the grand sheme of things, there is no real difference between agricultural economy, industrial economy or “services” economy. If there are more resources than can be used, everything is fine – for the moment. Agrarian states are just the simplest, because there is only one major resource; agricultural land. If there is more land than can be possibly farmed by existing population, then population growth (by whatever means, perhaps immigration) is probably harmless, and might do some good. If not, then not.
Modern economies use many more resources, yet all of them are in limited supply. Perhaps there are still more resources than can be possibly used by the population; if so, everything if fine. If not, then not.

As you see, your line of reasoning assumes that there are enough material resources available to allow for futher population growth. That might be true or it might be false. It was true and it was false many times in history – in different places, at different times. How lucky is your time and location? I don’t know.

Tim

Yes, I don’t disagree — I am assuming that the economy is not limited by some particular resource (be that agricultural land, or something else, or even possibly the size of an export market that is not traditionally considered an “input”). However, it’s not obvious to me that those limitations apply to many firstworld western countries, at least. What I can imagine happening is an internal imbalance where labour mobility is limited: for example, the immigration-driven demand for hotel porters not increasing in proportion to the immigration-driven supply. But it is hard to imagine that the supply of land or wood to build those hotels is the issue driving wage changes.

Vic K

“Yes, I don’t disagree — I am assuming that the economy is not limited by some particular resource (be that agricultural land, or something else, or even possibly the size of an export market that is not traditionally considered an “input”). However, it’s not obvious to me that those limitations apply to many firstworld western countries, at least. ”
For example:
In 2000, the United States of America consumed 104.0 exajoules of primary energy.
In 2018, the United States of America consumed 106.7 exajoules of primary energy.
(source: IAEA)
This is the growth rate of 2.5%, far below the population growth rate.
Now tell me, what in the “economy” doesn’t require energy? Do you have some examples? I can’t think of anything. Construction surely does (and a lot of it).
So that’s one obvious candidate for a limiting factor.

Richard

So this is a reason for optimism, then, as the cost of renewable energy is dropping like a rock. Specifically, solar and wind. Ultimately, all our energy come from solar or geothermal, and yes, there is a limit to them, but we are so far away from using the total solar energy received by this Earth that it’s essentially limitless in our lifetimes.

Neil Wilson

“However, I do not as easily understand it in the context of a services-oriented economy, ”

How has the brain drain from Detroit to Silicon Valley helped the people in Detroit, or the people that were living in San Fransisco before the house prices went through the roof?

And that’s with a fiscal transfer agent supposedly able to rebalance.

The problem with gravity theory is that always you end up with a singularity of infinite density. Nobody wants to live that densely.

Mike Alexander

Actually its a bit more complicated than the resource limitation argument, since that wouldn’t apply to services, which is most of the economy. Not all entry-level workers are the same. Some will be more motivated and have more energy or “get up and go” than others. Immigrants are a population that is selected for “get up and go”, precisely because they “got up and went” (from their homeland). They come because they desire to build a better life for themselves and their families, so they are motivated. They however do not generally have as strong a command of the language and culture of their new country so they tend to start out at low wage jobs. Here they compete with natives for low wage jobs, who often have better language skills and cultural skills, but less motivation and energy than the immigrants. For jobs that do not require strong language skills immigrants will, on average, be a better worker than natives at the same price point. Employers are well served to hire immigrants for such jobs. Have you ever noticed how many construction jobs are held by Latinos? Agricultural workers are often immigrants too. After some time the immigrants (or their children) gain command of the language and culture and move into higher-paying jobs.

Thus, a large influx of immigrants provides a large supply of inexpensive, relatively high quality labor for capitalists to employ, increasing the profitability they would otherwise enjoy if they had to hire more expensive domestic labor of equivalent quality (or lower quality workers for the same money). The result is a large swath of lower-quality unskilled native labor is locked out of the labor market.

Now compare this to the postwar era of strong economic and jobs growth, but low levels of immigration because of the 1924 immigration restriction law. Companies had a choice of paying high wages to lure good workers from competitors for low-wage jobs, or hire lower quality recruits and work with them to improve their quality. In some cases the people they hired and trained developed the characteristics of high quality workers would move up into increasingly productive roles, become a solid asset for the company. This created what has been called the “escalator to the middle class” that transformed a pre-1929 poor tenement-dwelling white industrial proletariat evolve into a modestly prosperous 1960’s white middle class.

Racism prevented black folks from taking full advantage of the escalator. But racism also meant black unskilled labor was available at a lower cost than white unskilled labor. As a result of this, wage levels of black workers relative to white workers rose from 40% in 1940 to 75% in 1980.

Immigration restriction played a role in these phenomena. Other factors were important too (some more) such as high marginal tax rates, low interest rates, and until the 1960’s balanced budgets to prevent inflation, plus pro-union state policies.

Jack

This is incorrect. The so-called “skilled” immigration program that Big Tech has employed to bring in foreign labor using the H-1B visa program has done more harm than good for American workers. First of all, these H-1B visa workers being brought in under the guise of “high-skilled” workers are nothing more than ordinary workers from India willing to work for cheaper salaries in exchange for immigration benefits. This has resulted in displacement of American workers that were doing these tech jobs because the employer could bring in someone from India on a visa who would happily do it for half the salary. So Americans started getting pushed out of these tech jobs. Thereby creating shortages of Americans in tech because no American has a future in tech if the salaries are stagnating and there’s no job security if they are getting replaced by a cheaper Indian worker. This has what has largely contributed to the decimation of wages for the American white-collar class. That is why Silicon Valley is 75% all foreign born workers – all brought in through the cheap H-1B visa program. It is also why most of Silicon Valley is Indian and Chinese now.
What we are further doing is harming American grads. Universities have created a pipeline to increase revenue using the F-1 student visa program. Once again, it’s mostly Chinese and Indians coming through this pipeline because they all want a shot to immigrate into the US. What’s made it easier for them is thanks to Bill Gates lobbying DHS, DHS created the Optional Training Program (OPT) which allows any foreign student graduating from a US university to get an automatic one year work authorization card to work in the US. This opened the floodgate to so many other foreign students coming in from India and China. What started happening was companies started favoring hiring OPT workers over American grads because OPT workers will happily work at whatever salary so long as their employer sponsors them for an H-1B visa and then a green card one day. So that created a new pipeline for cheap labor for Silicon Valley. Large supply of skilled labor depresses wages in the long term. Furthermore, there is no shortage of talent. Government intervention creates these shortages.

Tim

At some point, the argument seems to devolve into a statement that both immigration is bad and emigration is bad (arguing both Detroit and Silicon Valley are hurt). Although it is possible for both statements to be true (there is no rule that this must be a zero-sum equation), it seems fairly unintuitive and in my mind requires a significant burden of proof.

The argument about a singularity of infinite density is interesting, and probably cannot be immediately dismissed if discussing policy. However, I do think it quickly trends towards political and philosophical assertions, although it is self-evident that infinite density is neither achievable nor desirable.

A large supply of skilled labour is a major consideration for employers in terms where they locate and, for smaller employers, how succesfully they can grow, further fueling their demand for highly skilled labour. It is hard to imagine any other explanation for geographical wage differences and engineering bases.

The university argument is interesting and not fully without merit, but it does assume that the output of the education system is more-or-less fixed and does not have the ability to scale. I don’t think this is a fundamental truth, although sometimes policy decisions or cultural factors (eg: employers only willing to hire ivy league graduates, enrollment caps, and public funding decisions) may cause it to behave this way. I suggest that these policy decisions and cultural factors are bad from a societal perspective.

I wish I believed that there is no shortage of talent, but I think it is a challenge for the primary + secondary education systems to meet demand, at least in NA.

Richard

Jack, the hole in your Silicon Valley argument is that while SV is majority foreign-born now, workers there are also highly compensated. More highly-compensated than tech workers anywhere else, in fact. How do you fit that in to your thesis that foreign workers push down wages?
You also ignore that foreign talent innovate and create jobs. SV likely would not be SV and US tech prowess would not be the world leader it is if SV didn’t draw talent from all over the world and was filled with foreign workers.

JanModus

There is a big difference between orthodox Marxism in the form of Soviet Union things and Marx his writings. People from the Mega2 (http://mega.bbaw.de) have shown how difficult it is to even speak of one book of Volume 1. I urge you before testing Marx his ideas to take this work very seriously and not ready Marxist treatments of handbooks. For example the current translation in English or Russian of Volume 1 is very flawed because Engels did not use the French version of Das Kapital. A version he himself directed and proofread intensively. Also the idea that he was deterministic is offcourse ridiculous. The notion that there was ever a social scientist that believed that he could have a theory that fully predicts any past and future based on something that its known today like a billiard ball moving on a carpet is ridiculous. Also there is a large literature on the differences between Engels and Marx even to the extent that he somehow directed attention to only some aspects, obfuscating other points. A case in point is the illusion of a “simple commodity economy”. Also the idea that Marx somehow believed in one line evolution or even Eurocentrism is mistaken as shown by for example Anderson and Musto.

MattH

The problem with the idea that migration depresses wages is that a high birthrate should do the same. Labor is an input to the economy, and more of it means more output. which will tend to drive up wages. My guess is migration has mostly short run effects on wages, it would not be impossible to construct a scenario where wages decrease from competition. Level of migration and continuous migration are important in preventing adjustment from output driving up wages. But that doesn’t happen too often.

That being said I think Zoning and migration work together to make the losers from globalization unable to take part in its rewards. There is higher paying work in the city, but joe six pack can’t afford to live there, because of zoning. So labor isn’t being reallocated to it’s best match, and the lower match means less output and lower wages.

Vic K

“Labor is an input to the economy, and more of it means more output. which will tend to drive up wages.”
Humans are not just an input, they’re also a sink (final consumption). If the total consumption is limited by something other than human labor, adding workers will decrease real wages (decrease consumption per capita).

MattH

This is the essence of malthusianism. Totally true in a world before the industrial revolution. Possibly true in some nations. Almost certainly not the case in the US today9

Richard

Right. Humans aren’t just inputs and outputs but also change the system that takes inputs and puts out outputs. That is, humans create and become more productive, and the technological prowess of the US has been in large part by immigrants.

Raphael Nicolle

How did Americans become the richest people on the planet as the same time of massive immigration (which most recents decades are not representative of). So what gives? It is not hard to see that the theory is wrong and why it is. The law of supply and action works at multiple levels.
new labor also becomes consumers, and while short term wages might be decreased, competition between businesses decrease prices and increase in consumption do the opposite, in short market equilibrium keep the employers’ margin in check. The net effect of immigration in a relatively free market is increase in everyone’s wealth.
But see, my theory is backed by facts.

Yawrate

The USA limited immigration in 1925. See https://en.m.wikipedia.org/wiki/Immigration_Act_of_1924

Yawrate

Right.

Richard

The US economy absolutely skyrocketed during the first phase of high immigration, going from half the size of the Chinese economy in 1870 (biggest economy bin the world at that time) to double the size of the Chinese (and British, Germany and Russian) economies in 1913 (US leading by far at the start of WWI

https://en.m.wikipedia.org/wiki/Angus_Maddison_statistics_of_the_ten_largest_economies_by_GDP_(PPP)

Paul Cockshott

The open frontier acted as floor on wages keeping them higher than in Europe. This encouraged more use of machinery and faster technical progress. The inflow to the East coast from Europe was offset by Westward migration.

Vic K

“How did Americans become the richest people on the planet as the same time of massive immigration (which most recents decades are not representative of). So what gives? ”
First and foremost, massive expansion in the use of fossil fuels – primarily coal and oil.

Richard

So this is a reason for optimism, then, as the cost of renewable energy is dropping like a rock. Specifically, solar and wind. Ultimately, all our energy come from solar or geothermal, and yes, there is a limit to them, but we are so far away from using the total solar energy received by this Earth that it’s essentially limitless in our lifetimes.

Nerve74

This is a classic correlation vs causation problem. Its just as likely that Immigrants are drawn to fast growing economies as it is that immigrants cause economies to grow fast. “Migrants and the Making of America: The Short- and Long-Run Effects of Immigration during the Age of Mass Migration” shows some positive long run effects from migration.

httpd://www.nber.org/papers/w23289

Studies that break down the immigration groups however find negative economic effects from immigrants that come from low trust societies with a minimal history of representative government.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2612312

Peter J Richerson

I often see economists quoted as saying that immigration does not depress the wages of native workers. Have you gotten to the bottom of that argument?

Tom Christoffel

In the early 1990s I was told that industrial capital was the most mobile capital in the world. Working in Virginia, the economic development people at the State level said Northern companies moved South to get out of old technology and old labor relationships. Also, environmental regulations were a reason to move. At the same time, industry in the US opposed a strong border policy, to keep illegal immigrant labor coming. My brothers-in-law didn’t like Hispanics being in the plants, but liked that they were productive. The local Community College came to teach Command Spanish for supervisors.

The fall of the Soviet Union and opening of China expanded the global workforce, so the industrial capital went there. The Chinese even came and bought the old machinery. As manufacturing jobs went offshore we weren’t to worry as with the Internet we’d make money sending emails. Plus, consumer goods from offshore were cheap and much improved because they had modern machinery.

The service economy didn’t pay all that well and is often seasonal. Tourism one example. Michael Hudson has written about the American Plan that emerged in the mid-1800s that envisioned a high-wage manufacturing economy. Tariffs protected American industry so it could grow. Public investment in education and infrastructure made business in the US easier relatively speaking and more competitive. Germany and France, lagging Britain in industrial development, used similar strategies, developing banking and bankers knowledgeable about specific industry.

Evolution does occur. Obsolescence and entropy mean there is a need for renewal at many points on the mostly forward moving timeline. Achieving a dynamic balance, without depletion of the local a d regional environment has been a civilizational challenge since the development of settlements.

Now with a worldwide network of connected City-regions in Nation-states, there’s an interdependence on our Local Planet that requires a high level of responsible freedom. This new scale is a dark shadow to some, but if unrecognized, getting to a dynamic balance that restores Nature’s base, will be far more painful. The economy will shrink to what is sustainable. Science is too slow to register and recommend action.

It is interesting that historic cultures could envision and act with a time horizon of centuries where we can’t get beyond the next quarter or day news cycle. British foresters planted oak trees so there’d be stock to replace building beams in 400 years.

John Martin Strate Jr.

Perhaps real wages over time have failed to increase despite gains in productivity more as a result of shifts in the demand for labor than immigration and shifts in the supply. In the metro Detroit area, wages in auto and parts manufacturing seem, to have fallen due to more efficient manufacturing and the exit of plants and building of new plants in non-union states, These are questions for labor economists to study and answer.

J. Daniel

Neither the mainstream left nor right put the mass’s interest foremost. As DST holds, political power is wielded by the elites, who have their own interests to pursue, with the masses as pawns to be courted for political support as needed (in the US, that means fooling them to get their votes).
Marxism was one of the few major innovations in governmental systems, and it didn’t work very well. It’s been a long time with no major innovation in government and we need a new one. If DST is so basic an underlying force, such an innovation might do well to short circuit the DST cycle. Any ideas about the next major innovation in government?

Neil Munro

Here’s a very good example of how immigration is unlike extra children; Immigrant labor flows to capital, while capital must flow to native children:
https://twitter.com/NeilMunroDC/status/1264330499486515200?s=20

Vic K

Anyway, Petr Valentinovich… some thoughts:
It seems to me the main difficulty in applying the structural-demographic theory to modern polities is this: the theory, which was developed based on observations of agrarian societies (and inspired by biology?), assumes that food is the primary resource, even the only one worth examining. That appears, for the most part, correct for agrarian states, but is obviously incorrect for modern states (where agriculture is a small part of “economy”, and food doesn’t seem to be a limiting factor for many of them), so how can the theory be applied to those?
I think the theory can be made more abstract. Specifically, it’s possible to replace the term “food” with “energy” everywhere (where the definition of “energy” is the same as in physics). The caloric value of all sorts of food (wheat, rye, rice etc.) is well known and probably didn’t change much over the centuries. For example, 1 kilo of wheat is about 13.7 kilojoules of energy (according to Wikipedia).
Then, it’s easy to see that modern economies are not, in principle, different. Both agrarian and modern economies can be viewed as “performing work” (where the definition of “work” is also the same as in physics). If you think about it, mechanical and electrical work is almost all, if not all, that is going on in any “economy” (e.g., movements of human bodies is mechanical work). Work requires transfer of energy, therefore, total energy consumption is a good proxy for performed work and, thus, economy of any kind of state, and per capita energy consumption is a proxy for material prosperity.
I think that should make sense to a biologist?..
Energy consumption of various modern polities can be, in principle, calculated. For example, IAEA says that primary energy consumption of the United States stayed about the same in 2000-2018 (while the population has increased):
https://cnpp.iaea.org/countryprofiles/UnitedStatesofAmerica/UnitedStatesofAmerica.htm

…Some other thoughts: primary energy consumption is probably the most imporant factor, but there are others… Energy conversion efficiency (well, that seems impossible to calculate, probably should be considered about the same everywhere), exports and imports of all goods and services (basically, imports = gaining energy, exports = losing energy), and the amount of energy consumed by the energy-producing sector itself (since this energy is not available for any other purpose) also matter…

…What do you think about it?

Vic K

“As to energy, I don’t yet have a fully formed opinion. I doubt that it is such a large factor in history as claimed by some.”
Well, you don’t have doubts about at least some forms – like the chemical energy of food. At least, judging by “Secular Cycles”, that’s a major part of the structural-demographic theory.

Richard

So this is a reason for optimism, then, as the cost of renewable energy is dropping like a rock. Specifically, solar and wind. Ultimately, all our energy come from solar or geothermal, and yes, there is a limit to them, but we are so far away from using the total solar energy received by this Earth that it’s essentially limitless in our lifetimes.

[…] Peter Turchin wrote in a recent blog post (from which I stole the pic […]

Peter J Richerson

Peter,
I discovered this review of Borjas’ book. They are critical of his analysis. The argument is pretty techy.

Card, David, and Giovanni Peri. “Immigration Economics by George J. Borjas: A Review Essay.” Journal of Economic Literature 54, no. 4 (2016): 1333-49.

Joe1

Borjas’ skill-cell methodology of measuring wage elasticity of immigration (WEI) is an inherently different approach than spatial models and because of that Borjas’ work is problematic.

Borjas’ number for WEI is -0.3 to -0.4 (nearly double the average in the literature) and makes 2 assumptions:
– immigrants and native workers are perfect substitutes.
and
– high school graduates, non-graduates and immigrants are in different skill-cells.

Regarding the first point, a review article of borjas’ work in the Journal of Economic Literature found that if the perfect substitutability assumption is weakened, an increase in the number of immigrant workers increases wages for native workers.

On Borjas’ second point, the mistake is the assumption that high school graduates and dropouts are not perfect substitutes and so when immigrants enter the same skill-cell, containing both graduates and dropouts, they are actually competing with a larger pool of workers.

Borjas’ views fall short in other ways. First, he uses a limited time series and under-counts the % of immigrants in the US labor force from 1960-2010 in order to measure WEI.

The problem with that limited measure is that the period, 1960-2000 represents the lowest share of immigrant workers in US history at 5.6%, and when researchers added just the 2010 census data, in order to be able to measure WEI from 1960 to 2010, Borjas’ WEI number fell from -0.33 to -0.22, which puts it right inline with the literature.

Borjas’ model doesn’t fully capture the mass entry of women into the labor force from 1960-2010, and this is an egregious error/oversight.

His model cannot explain how wages and employment opportunities for men saw little to no change during this period even after the large influx of low-skilled supply into the labor force.

Using Borjas’ own models, but adding the one census year of 2010, researchers have concluded that the number of women entering the labor force from 1960-2010 had no statistically significant impact on the wages and job risk of men.

In fact, on an annual basis, men’s incomes actually increased during this period, meaning that Borjas’ models aren’t just picking up labor demand (he is forcing and violating perfect substitutability at the same time).

When Borjas’ under-sampling is accounted for WEI is −0.2 rather than −0.3 to −0.4.

The data shows Borjas’s assumption of perfect worker substitutability is wrong because wages for men and women both increased as women entered the workforce from 1960 to 2010.

Borjas’ models assume perfect substitutes where they don’t exist and under-count the number of immigrants where they do exist in different skill-cells in the workforce and as such, his work is not an accurate description of the impacts of immigration on native wages and/or job risk.

Joe1

The Mariel immigrants increased the low/unskilled labor force of the Miami metropolitan area
by 7%.

– Despite the fact that a large portion of the immigrants were relatively unskilled and despite
the proportional increase in the labor supply in low and unskilled workers, wages of
non-immigrant workers over the 1979-85 period were unaffected.

MOST IMPORTANTLY regarding Nagle’s argument that immigration hits black and brown communities the hardest:

– Despite a 7% increase in the immigrant population of South Florida, the Mariel Boat-lift did
NOT lead to an increase in the unemployment rates or decrease the wages of low-skilled
blacks or other non-Cuban workers and even among the Cuban population in Miami, wages
and unemployment rates of earlier immigrants were not substantially effected.

https://www.nber.org/papers/w3069

Joe1

If Borjas’s model was correct on its own, simply adding data from 2010 should not have affected the WEI in the way that it did (it cut it almost by half and this is a devastating flaw in his work).

VLADIMIR DINETS

That’s all true, but let’s look at the bigger picture. Immigration depresses wages; emigration improves them. So the whole process just moves money from rich countries to poor ones (also in the form of remittances, which are a major component of GDP in places like El Salvador and Kyrgyzstan). A good thing if you ask me.

John

“So the whole process just moves money from rich countries to poor ones”

Most of that wealth goes to the rich financial classes in rich countries, And it creates a distortions in emigrant countries by relying on remittances instead of increasing development.

You might say thst’s good for poor countries, but has anyone ever consulted the working and middle classes? A crappy thing if you ask me.

Richard

The working and middle class of which countries?

If you look at the world as a whole, globalization has be terrific for most. Read Branko Milanovic.

John

Ah Richie, my favorite baizuo

“The working and middle class of which countries?”

The working and middle classes of America, and south European countries (Most notably PIGS). They’re the ones hurt by an economy that’s addicted to foreign capital, and has a sizable current account deficit.

“If you look at the world as a whole, globalization has be terrific for most billionaires and international bankers.”

I fixed that for you.

“Today’s well-intentioned activists have become the useful idiots of big business. With their adoption of “open borders” advocacy—and a fierce moral absolutism that regards any limit to migration as an unspeakable evil—any criticism of the exploitative system of mass migration is effectively dismissed as blasphemy.”

Richard

John, I had to look up what the heck a baizuo is. As I expected, it’s some weirdo CCP term. It figures that you’re brainwashed by braindead Commie thought.

Oh, and you can’t deny that globalization has lifted up to the middle class hundreds of millions in the third world. Well, I suppose you can, but you’d be blind.

Joe1

oooh the dreaded Commie thought, that forever dreaded boogieman (along with blacks) in the nightmares of patriotic americans.

Globalization, like any other tool or policy or law, is not in itself a negative, it is in how it is used that carries with it negative impacts on the poor. Talk to any small holder across the world, in mexico, africa, india, anyone in the global south.

You can call it globalization all you want, but if it walks and talks like neo-feudalism…

For example, in sub-saharan africa poverty is endemic, yet even nomadic tribal people have cell phones, and the world bank, the IMF and the Davos/Doha set wave their hands vigorously and yell as loud as they can:

‘see??? globalization! lifts people out of poverty!!!’

Let them eat phones I guess or an untried vaccine, or let them take our computer trash and mountains of old t-shirts.

I know globalization is good for the people when I see shoe-less, pant-less african toddlers wearing old addidas or nike t-shirts while they starve or die from malaria.

Lastly, globalization as it is practiced is a zero-sum game, so as “millions are lifted out of poverty” someone’s lifestyle has to compensate to the negative, possibly to the point of convergence for the masses. In other words, globalization is fantastic if you are in a privileged position to not give two shits about any and all externalities.

it’s a nice racket, unless you also need a planet to live on.

John

@Joe1
Amen. Couldn’t have said it better. I’m far right, but in that particular case, I completely agree with you

Joe1

hey look at that we agree on something! now if only…

Joe1

john i don’t think you’re far right; i think you see some things very clearly as we all do in our own way. I think you have some conservative notions which don’t clash with immigration at all vs someone like Nagle who in my opinion isn’t authentic.

She spent hours in chat rooms, she comes from an elite background, how many of us could get a book deal based on our experiences in chatrooms and reddit boards; nothing she said in her book was revelatory or original in content or form.

she is a pretender and someone who having gotten the praises a person whom i consider to be a neo-fascist under the cover of words, Slavoj Žižek, is someone I reject.

For the record, I am pro-immigration, all the way. open borders.

Joe1

borders are an elite construct and raise turchin’s “immiseration coefficient”;
and really that’s all we need to know, borders are good only for the elite, they profiteer the most from national borders. look at the panama papers; rampant border arbitrage by elites. pareto rolling in his grave.

the only thing that elites respond to is actual physical violence. Look at history.

sad, but true, ultimately for a bunch of hair-less chimps.

say hello to heaven.

joe1

john, what elites absolutely FEAR: is you and me getting together;
people like you and me vs them. the cycle, the know it but dear it. can’t change it. can’t really control it. too much greed. thing is, this time, they killed the planet.

John, friend,

“if it be now, ’tis not to come. If it be not to come, it will be now. If it be not now, yet it will come—the readiness is all.”

it’s like chris cornell said before he died: Wooden Jesus, I’ll cut you in
On 20% of my future sin.
Wooden Jesus, where are you from?
Korea or Canada or maybe Taiwan?
I didn’t know it was the Holy Land
But I believed from the minute the check left my hand
Can I be saved?
I spent all my money on a future grave”

stay up man,

VLADIMIR DINETS

The rich get their wealth from selling stuff and services to the masses. They only get as much as we give them or they steal from us. I don’t think hiring immigrants (or people in poor countries – doesn’t matter) gets them much more profit in the long term; what it ultimately does is drive down the costs of those goods and services. Am I right?

John

Am I right?

No. You’re literally reading a post about billionaires and bankers profiting from mass immigration. And you cling to your ideology.

“The rich get their wealth from selling stuff and services to the masses. ”

This is a simplistic understanding of economics. Goods and Services are tied to labor and wages, which is tied household purchasing power and consumption expenditure (in national accounts). You probably (maybe Im wrong) don’t know what these are but they’re tied to what Turchin calls popular immiseration (pardon if I misspelled that)

VLADIMIR DINETS

I don’t know which ideology you think I’m clinging to, but I don’t understand your argument. If wages go down, so does purchasing power, and people can no longer pay for goods and services, so how are capitalists going to make profit?
Also, why is hiring immigrant workers worse for the labor market than moving production abroad?

John

@VLADIMIR DINETS
“If wages go down, so does purchasing power,”
It’s not that simple.
I don’t have time to educate you. Go read https://www.bea.gov/data/economic-accounts/national. Look at the data, break it down and identify its correlation with immigration.
“why is hiring immigrant workers worse for the labor market than moving production abroad?”
They’re both bad. Economically, Modern mass immigration is just the equivalent slavery and the latifundia system. It creates all kinds of negative externalities in favor low cost production in the short term.
Ask yourself this: How come China doesn’t accept mass immigrantion or use foreign labor? If such things are so good then everyone would be doing it, not just western countries.

VLADIMIR DINETS

Actually, purchasing power should go down faster than wages, because much of those wages is locked in residence rentals/mortgages, and only a part is left for purchasing anything.
China doesn’t need immigrants of foreign labor markets because it has unlimited supply of very cheap labor already inside. Worker rights in China are among the worst in the world, by the way.

John

@Vladimir Dinets

‘Actually, purchasing power should go down faster than wages, because much of those wages is locked in residence rentals/mortgages, and only a part is left for purchasing anything.’

Wrong
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All of these figures are directly affected by mass immigration.

‘China doesn’t need immigrants of foreign labor markets because it has unlimited supply of very cheap labor already inside. Worker rights in China are among the worst in the world, by the way.’

https://time.com/5523805/china-aging-population-working-age/

Same with Japan but they’re not accepting mass immigration either. Instead, they use automation.

Richard

John, you’re so behind the times. Japan has a ton of Vietnamese and Chinese immigrants now.

John

@Richard

“According to census statistics in 2018, 97.8%”

https://en.wikipedia.org/wiki/Ethnic_groups_of_Japan

‘John, you’re so behind the times’

No, I’m not.

Joe1

@Vladimir: Friend, you are indeed correct.

Thank you for your questions and comments regarding the impact of immigration on native jobs and wages. I believe it is honorable to take the time to try to address your comments and concerns. I will do so in my limited way and I will not passive aggressively attack you simply to stroke myself.

lets clearly state the argument from the anti-immigration side which essentially holds:

1- immigrants and native workers compete for both low wage and high wage jobs.
2- illegal immigration lowers wages and creates more competition for native workers.
3- limiting illegal immigration benefits Native low wage low skilled workers.
4- High skilled workers would be better off with no or limited H-1B visa immigration.

In my view all of the above assumptions are wrong and indeed simple-minded.

If one does not cherry pick the data, the vast majority of the literature supports the following:
1- immigrants and native workers do not compete for the same
low wage and high wage jobs.
2- immigrants and natives have different comparative advantages, even at the low
skilled level and if a native wage effect exists at all it is negligible in response to
reduced immigration.
3- Depending on the methodology, when we take into account the US labor market
wage elasticity of immigration – which is the % change in wages we can expect
given % change in the number of migrant workers – which is about -0.2, it means
that we can expect on average a 2% decline in native wages per 10% increase in
the # of migrant workers, which for a $10 dollar per hour native worker amounts to a
reduced wage of .20 cents per hour worked, translating into roughly $1.60
less earned per 8 hour shift or roughly $78.40 dollars vs $80 per 8 hour shift
(pre-tax).

The subtleties teased out from the data don’t fit well with shallow analyses coming mainly from the right, libertarians and so called ‘centrists’ and leftist pretenders such as Nagle.

For example, anti-immigrant arguments often assume immigrant workers and native workers are perfect substitutes, but the data actually shows that even when we look at the same skill sets and education levels, migrants and native workers are not perfect substitutes for each other — different languages being one factor.

Anti-immigration advocates also claim that national labor market effects should be taken into account when making immigration policy. But in the US, female workforce participation has been called one of the greatest labor market transformations of the last century.

So, if the negative of effects of migrants or substitute workers (in this case women) on native wages and labor risk (in this case men) are profound, then we can test this by looking at the massive numbers of women entering the US workforce during middle of the last century and gauge the effect on the wages of men.

After controlling for age, child birth and mobility, if the anti-immigration advocates are right, we should be able to see a significant negative wage effect on the average weekly wages for male since females increased the US labor supply en-mass since 1960.

But what we see instead is no significant effect at the weekly wage level and surprisingly an increase in annual income for men, which also disproves that migrants workers are substitute labor and therefore detrimental to native worker wages and job risk.

Lastly, studies have shown that immigrant workers actually raise the productivity and earnings of native workers. For example, foreign graduate students working with native professors increase both the output of their professors and their earnings VS native professors that do not use foreign students.

In conclusion, it is clear to me from the data and the body of economic labor-market literature, that:

1- In real terms, banning immigrants will not create a positive outcome for native
workers’ wages and/or native workers’ employment risk.
2- An increase in the immigrant labor supply can actually lead to increased
productivity and wages for native workers.
3- Labor risk is negligible or non-existent for native workers given that immigrant
workers are not perfect substitutes.

There are additional negative knock-on effects if immigration is banned which will not lead to increased native wages such as automation, high-skilled women leaving the workforce because low-skilled childcare work by immigrants is banned and the likely negative effect of reduced US exports to immigrant source countries as poverty increases there, which could negatively impact employment risk and wage levels for native US workers.

Hope that helps.
Best,

John

Look at my response above yours. The data clearly shows that income inequality is rising and immigrant labor is one of the causes.

All of your arguments have focused on productivity. Mine focuses on income inequality and social cohesion. And you people wonder why your world’s falling apart

Joe1

john, I agree with you that inequality is rising, i’m just not sure on the effects of immigration on it; the data I’ve seen so far doesn’t suggest that, but I’m open to the idea if the data is out there;

as far as social cohesion, I agree, in different times, immigration can have a negative impact on social cohesion, but that is not based on economic data; the answer there perhaps lies in psychology, anthropology, sociology and history (elites) not economics in my view.

For example, the gilens & page study says nothing about immigration.

best,

VLADIMIR DINETS

Joe 1: thanks for the explanation!
John: the links you provided actually show that purchasing power is stagnant while wages go up. So if wages go down, purchasing power will decline even faster, just as I said.
Japan has only a few % of immigrants but they are a sizable chunk of the workforce. In Okinawa, where I used to live, about 2/3 of workers in tourist industry (which feeds the entire province) were non-Japanese.
As for China, despite ageing population it has 4% unemployment (pre-virus data, now it’s up to 10% and might not go down as lots of countries pull production out of China), plus huge job creation programs that don’t make economic sense. 4% in this case is 40 million people. And there are hundreds of millions of rural residents who are not listed as unemployed but have borderline survivable income. Entire provinces such as Ningxia and Guizhou have deeply empoverished rural population ready to work for a pittance. So no, China will not need immigrant labor anytime soon.

steven t johnson

Migration from the rural south to northern cities by African American, then migration from the home to the workforce by women substituted for immigration from foreign countries?

On another note, I agree that heights are one of the most powerful indicators of well-being. I tend to think of it as conclusive in a way monetary measures are not.

But I don’t think there is so much a left case for open borders as a left case or international labor solidarity and destruction of imperialism….which would tend to decrease the need for emigration from countries being ruined.

asparagus

An other take on the problem:
Brahmin Left vs Merchant Right: Rising Inequality & the Changing Structure of Political Conflict
(Evidence from France, Britain and the US, 1948 -2017)
Thomas Piketty
March 2018 WID WORKING PAPER SERIES N° 201 http://piketty.pse.ens.fr/files/Piketty2018.pdf

A digest::
Piketty tracks electoral trends across three countries—the US, Britain, and France—from 1948 to 2017. Despite their vastly different electoral systems and political histories, he finds, a similar trend can be found in all three countries: left and center-left parties no longer represent the working- and lower-middle-class voters they were traditionally associated with. Instead, both the left- and right-wing parties have come to represent two distinct elites whose interests diverge from the rest of the electorate: the intellectual elite (“Brahmin Left”) and the business elite (“Merchant Right”). Piketty calls this a “multiple-elite party system”: the highly educated elite votes one way, and the high-income, high-wealth elite votes another. With the major parties on both sides of the political spectrum becoming captured by elites, it’s no wonder so many voters feel unrepresented. A 2016 poll by the Public Religion Research Institute (PRRI) found that more than six in ten Americans don’t feel that their views are being represented by either of the major political parties.

Richard

In an hour, more energy hits the Earth from the sun than all human civilization uses in a year:

https://www.google.com/amp/s/www.businessinsider.com/this-is-the-potential-of-solar-power-2015-9%3famp

Richard

Oh wait, I shouldn’t say all energy is solar or geothermal. There are also nuclear and chemical energy.

Nuclear technology has also advanced a ton. There are actually a lot of reasons for optimism if we humans can refrain from killing each other and make decisions that are counterproductive in the long-term.

Richard

So one problem I have with using the Mariel boatlift as something to guide overall immigration policy by is that in that case, the human capital of the people who came over was about as low as a can be, below even your typical unskilled immigrant (typically, there is a selection bias, as immigrants tend to be among the more driven; otherwise, they would not leave their homeland). Not the case of the Mariel boatlift.

Some absurdly high (and disproportionate) percentage of founders and leaders of the world-beating US tech industry are immigrants or the children of immigrants.

Not taking that in to account when considering immigration doesn’t make a lot of sense.

However, despite how I feel, I do see the US becoming more nativist and isolationist. It’s a replay of the ’20’s and ’30’s again, it seems, unfortunately (COVID-19 hitting almost a century after the Spanish Flu, though the financial crashes don’t line up perfectly and the world wars haven’t started yet).

John

” I do see the US becoming more nativist and isolationist. It’s a replay of the ’20’s and ’30’s again,”

It’s not a replay. Rather, the past 70 or so 80 years of Pax Americana was an interlude. And it’s coming to an end. What’s happening is that humanity is going back to its default setting, and I dont think people like you will like it

https://www.youtube.com/watch?v=kSdCoNQgpvY

Richard

John, considering that the “default setting” (besides xenophobia) also contains a lot of war, strife, death, and suffering, I don’t think you would like it either.

Luckily, we have had greater and greater periods of peace between devastating Great Powers Wars in the West (Pax Britannica between the Napoleonic Wars and the 2nd 30 Years War encompassing WWI and WWII and the Pax Americana after WWII), but that will inevitably end.

John

‘besides xenophobia’
Consider the following hypothetical: All white people disappear. Would the world become less xenophobic or more…
https://www.hrw.org/news/2020/05/05/china-covid-19-discrimination-against-africans#
https://www.youtube.com/watch?v=2S2qtGisT34
https://www.youtube.com/watch?v=Dg7nf0uW86o
https://www.washingtonpost.com/world/asia_pacific/india-poised-to-pass-controversial-citizenship-law-excluding-muslim-migrants/2019/12/11/ebda6a7e-1b71-11ea-977a-15a6710ed6da_story.html

‘I don’t think you would like it either.’
You don’t know anything about me, nor do you speak for humanity

‘but that will inevitably end.’
Good

Joe1

“history doesn’t repeat itself, but it does rhyme” – sometimes attributed to samuel clemens

@Richard,

you’re exactly right:

– The Mariel immigrants increased the population and labor force of the Miami metropolitan area
by 7%.

– Despite the fact that a large portion of the immigrants were relatively unskilled and despite
the proportional increase in the labor supply in low and unskilled workers, wages of
non-immigrant workers over the 1979-85 period were unaffected.

MOST IMPORTANTLY regarding Nagle’s argument that immigration hits black and brown communities the hardest:

– Despite a 7% increase in the immigrant population of South Florida, the Mariel Boatlift did NOT
lead to an increase in the unemployment rates or decrease the wages of low-skilled blacks or
other non-Cuban workers and even among the Cuban population in Miami, wages and
unemployment rates of earlier immigrants were not substantially effected.

Jack

The so-called “skilled” immigration program that Big Tech has employed to bring in foreign labor using the H-1B visa program has done more harm than good for American workers. First of all, these H-1B visa workers being brought in under the guise of “high-skilled” workers are nothing more than ordinary workers from India willing to work for cheaper salaries in exchange for immigration benefits. This has resulted in displacement of American workers that were doing these tech jobs because the employer could bring in someone from India on a visa who would happily do it for half the salary. So Americans started getting pushed out of these tech jobs. Thereby creating shortages of Americans in tech because no American has a future in tech if the salaries are stagnating and there’s no job security if they are getting replaced by a cheaper Indian worker. This has what has largely contributed to the decimation of wages for the American white-collar class. That is why Silicon Valley is 75% all foreign born workers – all brought in through the cheap H-1B visa program. It is also why most of Silicon Valley is Indian and Chinese now.
What we are further doing is harming American grads. Universities have created a pipeline to increase revenue using the F-1 student visa program. Once again, it’s mostly Chinese and Indians coming through this pipeline because they all want a shot to immigrate into the US. What’s made it easier for them is thanks to Bill Gates lobbying DHS, DHS created the Optional Training Program (OPT) which allows any foreign student graduating from a US university to get an automatic one year work authorization card to work in the US. This opened the floodgate to so many other foreign students coming in from India and China. What started happening was companies started favoring hiring OPT workers over American grads because OPT workers will happily work at whatever salary so long as their employer sponsors them for an H-1B visa and then a green card one day. So that created a new pipeline for cheap labor for Silicon Valley. Large supply of skilled labor depresses wages in the long term. Furthermore, there is no shortage of talent. Government intervention creates these shortages.

Joe1

The claim that immigrants – both low and high skilled – negatively affect the labor market prospects of native workers in advanced countries is not seen in the actual data.

In 1965 the united states banned almost 500,000 Mexican braceros from its labor market. This migrant farm worker exclusion did not lead to higher incomes and/or employment prospects for native US workers, instead employers used technology as an adjustment.

In 2011 the state of Alabama passed the anti-immigration bill HB56 and the economic results were:

– HB56 devastated Alabama’s #1 industry, agriculture, when migrant workers fled the state and
farmers tried and failed to attract native workers, resulting in the provisioning of state
prisoners to do the work.

– The bill actually reduced the overall number of job openings in the state because MNCs
viewed the state negatively.

– Economic activity in the state actually decreased, further impacting both the wages and job
prospects of native workers.

As to highly-skilled immigrant workers on H1B visas:

– A 2014 study looked at the % of H1B STEM workers in metropolitan areas across the
US during the GFC and found that cities with a higher number of H1B workers had a large
increase in workers in computer related fields for non-college graduates, as well as a small
net increase in total employment in those with college degrees in computer fields.

In other words, importing highly-skilled H1B immigrant workers, even during a recession, led to the computer sector of the entire cities and regions being better off, with low-skilled workers and those without college degrees benefiting disproportionately.

Australia, Canada, and New Zealand all have a higher foreign‐​born population than the U.S., and all in addition to the UK have more new immigrants each year per capita than the U.S.

steven t johnson

I have no idea why you assume that real wages in an economy showing productivity gains should be stagnant. Or that cheaper labor has nothing to do with making sure productivity gains do not result in higher real wages. To be honest, this strikes me as kind of nuts on the face of it.

Joe1

I don’t assume that, this is what the data shows using skill-cell, spatial or hybrid models.
I don’t know why you have no idea either, maybe because a lot of this is counter-intuitive to political ideology.

But, immigrant workers effects on native wages are negligible if not zero and in the long term the presence of immigrants in the labor force actually leads to an increase in wages.

There are no assumptions here, just data.

The overall body of literature regarding the wage effects of immigration on native workers clearly shows the effect to be small to statistically insignificant and the actual data fails to substantiate significant and profound negative wage effects on low/unskilled native workers(high school dropouts), which also explains the current consensus on this issue: the data.

Furthermore, if immigrant workers transmit low productivity (not borne out in the data), then open borders can be inefficient, but the impact is very small to statistically insignificant relative to global productivity gains.

Indeed, the data shows that limiting immigrant labor across borders tends to decrease global production by impeding efficient spatial reallocation of labor which can lead to wage declines for all workers including natives (elites love this for a myriad of reasons).

Some on the right and center, argue that immigration barriers tend to raise global production by limiting the spread of poor people into rich countries. This maybe theoretically plausible under extremely high levels of immigration, but it does not exist in the actual data.

The net effects of migration on labor markets depend on:

– Transmission. That is, the degree to which source country productivity is embodied in
migrant workers.

– Assimilation. Which is the degree to which immigrant workers’ productivity converges
with native workers’ productivity in the host country.

– Congestion. That is, the degree to which both transmission and assimilation change at
higher immigration levels.

The data shows that productivity losses from trade barriers are small, but varying and wide wage gaps across the world for the same jobs suggest large losses in productivity as a function of barriers against the efficient spatial allocation of labor, which turns your argument on its head because it is as a result of such inefficiencies that real wages have stagnated vs productivity.

Lastly, since the number of jobs is a function of population growth, it stands to reason that a larger population leads to higher demand and increased production.

In the US, at current levels of population and immigration, what the data shows is that immigrant workers transmit large gains of productivity to their host countries (transmission) while not negatively impacting wages of native workers (no congestion) and that this effect on productivity lasts long after immigration (assimilation).

For the right and center, and indeed for Nagle to be correct regarding this issue, immigration into the united states would have to increase by at least an order of magnitude and based on the available data a base case for limiting immigration based on ideology would turn out to be in fact an argument against limiting immigration.

Joe1

Negative immigration wages effects on US born workers are small to zero.

While immigration does have small wage effects on native workers who are also high school dropouts (roughly 8% of the US population), 90% of native US workers experienced wage increases from 1900-2004, with previous immigrants’ wages being most negatively affected.

US workers under historical levels of immigration have experienced both short-term and long-term increases in wages and in fact, one study found that a 1% increase in immigrant employment per state leads to a 0.5% increase in wages per worker.

Even for some workers displaced by immigrant labor, such as some H1B sectors, the workers shifted from that sector to other areas experienced productivity gains and thus demand which lead to wage gains for those same displaced workers.

steven t johnson

“But, immigrant workers effects on native wages are negligible if not zero and in the long term the presence of immigrants in the labor force actually leads to an increase in wages.”

Real wages for households have been pretty stagnant for decades, despite much productivity growth. An answer about studies of nominal wages in response to foreign emigration is not an answer, but an evasion. I suggest the internal migration of women from the household economy to the waged economy has played a major role in this.

“Indeed, the data shows that limiting immigrant labor across borders tends to decrease global production by impeding efficient spatial reallocation of labor which can lead to wage declines for all workers including natives (elites love this for a myriad of reasons).”

The tacit assumption here that the free market of course finds the most efficient allocation of resources is….breathtaking. You sound like you believe wage=marginal productivity of revenue! Fetishization of statistics in judging whether an economic policy is overall conducive to human welfare is not serious thinking.

Jack

The research you are citing is funded by special interest groups. It’s not peer reviewed. That research has been debunked several times by researchers at the Economic Policy Institute. 75% of H-1Bs go to Indian nationals with nothing more than questionable Bachelor’s degrees from questionable universities in India. They are doing ordinary routine IT jobs which many qualified American workers were doing only to be displaced by the incoming Indian H-1Bs because they will work for cheaper, and the work is outsourced to contracting companies that profit off labor arbitrage through the outsourcing business model. The top 10 users of the H-1B program were Indian IT outsourcing companies.https://www.epi.org/blog/h-1b-visas-do-not-create-jobs-or-improve-conditions-for-u-s-workers/

Joe1

yes it’s a conspiracy…

the Journal of Development Economics, the ILR Review, Review of Economics and Statistics, American Economic Review, Economic Journal, Population and Development Review, Journal of Globalization and Development et al.

all colluding just to prove you wrong…

Joe1

questionable universities in India? geez check your bigotry much? you mean like liberty university or regents? the university of Farmington? or the myriad of no-name “colleges” and “universities” aka “degree mills” in the united states which push out degrees as fast as they can? or maybe you mean the ivy league universities in America where regardless of your abilities if you got a rich dad you’re in? do you mean like jared kushner at harvard? Operation Varsity Blues? certainly you don’t mean those kinds of “questionable degrees” right? are you sure you want to open that box and cast the first stone?

why do you are conflate the issues? outsourcing is not immigration.

Joe1

The average software worker in the US earns about $80,000 US dollars per year more
than in India; why is that?

could it be because the cost of living is more in the US than in India? what Jack Baumol called the “cost disease”?

or it could be both workers, one in India and one in the US, produce imperfectly tradable goods? US workers make a better product?

or it could be the geographical setting which provides more human capital, more technological capital, and in which, what paul krugman calls “agglomeration economies” with non-tradable inputs to production like institutions exist.

One way to test this is to look at the same group of workers in the two different settings.

When we look at the same IT workers in different locations, but what they make is the same perfectly tradable good, using identical technology, and with the same human capital expectations, we still observe on average a $60,000 wage gap for the same exact workers, doing the same exact work; Indian IT workers in India VS Indian IT workers in the US, the only difference being their geographical location.

This suggests that a large part of the value of these workers comes from their location and that the effects of geoghraphy and agglomeration economies have a comparably large impact on these workers’ marginal revenue product.

So, here is the real question:

Under what conditions do wage differences reflect differences in economic productivity or MRP?

the answer is that at spatial equilibrium in labor demand, gaps in wages reflect gaps in location-specific MRP.

In other words, Intuitively, if US ICT firms could get the same MRP from employing Indians in India, with zero trade costs, it would lower their profits to bring Indians to the United States and pay them more simply because the cost of living is higher.

Meaning most of these differences in wage and MRP cannot be attributed to differences in the workers themselves or the technology they use.

Large portions of international earnings gaps do not arise from individual workers’ human capital or task specialization, which suggests the importance of productivity effects of face-to-face interaction, location-specific knowledge spillovers and the costs of limiting the mobility of labor.

steven t johnson

OMG! You do believe in marginal revenue productivity sets wages! In spite of the fact wages have lagged productivity gains for decades!

Amazing, truly. But I mean this in the worst way possible.

Joe1

sir, you seem to be lost in some transitive state… perhaps take deep breaths and calm yourself…all your palpitating is steaming the windows.

Joe1

Here is some data from the St.louis Fed from a 2017 report looking at the impact of immigration on labor markets.

Using state-level US census data from 2000-2005 they looked at the impact of immigrant workers on labor market outcomes for US workers.

By measuring the correlation between immigration and the unemployment rate and immigration and wages, the question they wanted to answer was, to what extent, if any, do migrant workers contribute to negative wage growth and increased job risks for US based workers.

Three examples from their data are illuminating:

– In Alaska, from 200 to 2005, the % of immigrant workers dropped by -0.8%, while
during the same period the unemployment rose by +0.5%.

– In Arizona, during the same period, the state also experienced a +0.5% increase in
the unemployment rate, however, the % of immigrants increased by +0.6%.

– In the state of Washington, the unemployment rate for this period also increased by
+0.5% while at the same time the % of immigrants also increased by 2.1%.

Since all 3 states had markedly different changes in the % of immigrants in their respective populations and yet they experienced a similar increase in their unemployment rates, this suggest a weak correlation between immigration rates and unemployment rates, inline with the data from the rest of US states.

In fact, the data shows that the correlation is less the 0.1%, revealing no connection between immigration and native workers job risk (unemployment).

This result holds true even under the extremely stressful conditions of the GFC from 2007 to 2009 during which the US unemployment rate rocketed higher.

But if immigration does not negatively impact the US unemployment rate, does it negatively impact the wages of US based workers?

Looking at the same census data, from 2000 to 2005, we find again a weak correlation between the number of immigrants in a particular labor market vs the wage level of US based workers.

In other words, wage levels across all states are more stable than the change in the number of immigrants in the labor markets of all states. That is, even as the immigrant population changes, wage levels for native workers remain stable and again this held true during the extreme conditions of the GFC period.

But what about low/unskilled workers? would wave after wave of low/unskilled refugees negatively affect economically impacted areas in black and brown communities? should we limit or stop immigration in order to deliver a better outcome in wages and job risk in those communities?(Nagle’s argument)

We have the fitting example of the Mariel boat lift during which 125,000 low/unskilled immigrants arrived in miami, increasing the population of south florida by 7% in just 5 short months, and yet there was no evidence that wages and job opportunities of blacks or non-cubans were negatively impacted.

Even if one argues that the Miami labor market is not representative of the US labor market, the vast amount of data in study after study leads inevitably to this consensus:

– little to no evidence of a connection between immigration and labor market outcomes.

Given this counter-intuitive result, possible explanations include, transference of productivity and increased specialization of native workers.

J. Daniel

The book Day of Empire by Amy Chua makes a case that countries achieve wealth by accepting immigration.

Joe1

@JD

she is both historically and empirically correct.

steven t johnson

Beware of lawyers pursuing hobbies to ward off the soul-deadening of their day jobs!

Von Hayek had a theory that the upper classes were the motive of economic growth because their pursuit of consumption drove innovation. Being Hayek, you know it’s not true in the sense he meant, an ongoing justification of the upper class rule. The foundations of empires required new technology and a more or less integrated material culture. Call it imperial efflorescence. Chua notes that the foundation of a new material culture is like every act of creation, developed from the previous material cultures. It is the conquest of other cultures that creates the imperial efflorescence, after all.

Chua switching the emphasis from the ruling class to previously foreign employees changes nothing. Neither ruling class consumption nor immigration is an on-going source of renewal. The burst of creativity in the foundation of a new “empire,” (literal or figurative,) is limited in time and space. The vested interest in the old synthesis means new ideas, whether from the insatiable appetites of the owners or the cultural outsiders immigrating into the metropole will never be as powerful as when things are in flux, at the beginning.

Anyone who thinks fundamental material/technological change has occurred in our lifetimes might draw a different conclusion. But I think they would be mistaken.

WARE_bluefield

Thanks for the interesting argument. This post has also been translated into Japanese.
https://bit.ly/2CclwPd

I’ve also translated a argument by Canadian philosopher Joseph Heath. What are your thoughts on his argument of immigration and the current state of affairs regarding immigration in Canada?
http://induecourse.ca/canadian-exceptionalism/

Joe1

Angela Nagle is not a “contemporary marxist thinker”; she is to marxism what Hillary Clinton is to liberalism.

I also don’t consider Kitty Calavita a “contemporary marxist thinker” either (nor Gramscian) but at least she uses legitimate dialectical analysis in her work which stands up to academic scrutiny;

Whereas, Nagle has been caught using RationalWiki and Wikipedia as sources for her book which greatly weakens if not totally destroys any credibility she might have had.

She has also been accused of plagiarism and it is disappointing and problematic to see her weak arguments being treated as legitimate here.

Simply splashing a couple of quotes from das kapital into a nearly 5000 word essay does not make an argument materialist and she has shown absolutely zero original thinking, analysis, or synthesis from a marxist POV.

Leftists should not buy into her specious argument that elites favor open borders, when in fact they benefit more from controlling and limiting the physical movement of labor across national boundaries.

In the face of the seemingly unlimited power of capital, it is political malpractice for leftists to arbitrarily limit themselves to atavistic nativists (which include some elites such as peter thiel, steve bannon) by excluding immigrants from the movement.

Nagle has been rebutted satisfactorily elsewhere, so I will simply try and paraphrase Georg Lukacs
– born a baron into an elite family, to a banker father who was knighted by the austro-hungarian empire – who as education commissar in the Hungarian people’s republic wrote in 1919:

“The very solidarity propagated as an unattainable social ideal by the greatest bourgeois thinkers is in fact a living presence in the class interests of the proletariat…[and]…the possession of the power of the state is also a moment for the destruction of the oppressing classes. A moment, we have to use”

In other words, consolidate the masses and destroy the elites;

That, is a real “marxist thinker” talking; the words of one born into empire, witness to a world war and actor in a revolution.

For the elite, the Internet dissolves time which is a form of punishment under capitalism.

By dissolving the time of surplus labor and algorithmically trapping it in endless recursive loops of screen time, labor’s visceral edge is cut and capitalist control preserved without the destruction of property.

Nagle has spent a lot of time in 4chan rooms and on reddit boards, so she does have that going for her.

Sakda

Communism, along with Capitalism, Socialism and every other ism will die out with the death of Pax Americana. The Near East will return to Islam, East Asia will return to Confucianism, the global South will return to tribalism. It’s already happening. All of your dialectics are ultimately a whitey thing

Richard

Whitey Thing Communism had a huge impact n Asia, if you’ve noticed.

BTW, you left our South Asia.

The next Great Powers War will be between China and India (decades in the future) and reserve currency status will go to the victor. The US will become a backwater like the rest of the Americas (US right now already isn’t much different from Brazil except with world-beating high tech and higher ed– and also thus finance–sectors).

joe1

lol i m as dystopian as anyone, @Richard, but come on dude, the us is no where close to brazil man; i feel you tho; elites = real enemy; top 10% by income. i can work with the rest. but top 10% im wearing the vest and walking into that “family banking” office.

stay up man;

Paul Cockshott

People can be misled by focusing on the wrong question: did wages actually fall as a result of more immigrants. The more relevant question is whether higher immigration raises the Marxian rate of surplus value which closely correlates with Turchin’s immiserisation coefficient.
For the UK I show in my book How the World Works, that it certainly does. There is a strong positive correlation (0.75) between the rate of surplus value and the rate of immigration.
Internationally there is also positive correlation between birth rate, the other expander of the workforce, and the rate of surplus value.

Joe1

both the marxian rate surplus-value (rate of exploitation) and the “immiseration coefficient” sound a lot like the gini index…or maybe corollaries..

bobforrester

what do u think that in France we have 6 millions unemployed and the gouvernement continues opening the borders! what for ? if not breaking the workers solidarity ! There are 300000 jobs in buildings cie and hostelery why the millions of immigrants unskilled dont take those jobs made for them ? if not for doing nothing and perceive the french generous social solidarity!

Orso

Import of cheap labour via immigration, apart from being useful to siphon upwards (to those on the top of the pyramid) the profits made in the productive sector of the economy, serves another purpose that connects to this thread. Namely the demand for cheap services by the middle class who are eager to spend disposable income in luxuries, leisure or entertainment. The most characteristic example is how middle income families would hire a low paid immigrant to do the house chores (cleaning lady) instead of doing the job themselves. A privilege that in other eras was enjoyed by the wealthy aristocracy. You need lots of low paid immigrants to fill the ranks in this sector of the economy with price of services tailored for the middle class.

This topic is touched by George Bataille in his book “The Accursed Share”.

“According to Bataille’s theory of consumption, the accursed share is that excessive and non-recuperable part of any economy which must either be spent luxuriously and knowingly without gain in the arts, in non-procreative sexuality, in spectacles and sumptuous monuments, or it is obliviously destined to an outrageous and catastrophic outpouring, in the contemporary age most often in war, or in former ages as destructive and ruinous acts of giving or sacrifice, but always in a manner that threatens the prevailing system.

Bataille’s inquiry takes the superabundance of energy, beginning from the outpouring of solar energy or the surpluses produced by life’s basic chemical reactions, as the norm for organisms. In other words, an organism in Bataille’s general economy, unlike the rational actors of classical economy who are motivated by scarcity, normally has an “excess” of energy available to it. This extra energy can be used productively for the organism’s growth or it can be lavishly expended. Bataille insists that an organism’s growth or expansion always runs up against limits and becomes impossible. The wasting of this energy is “luxury”. The form and role luxury assumes in a society are characteristic of that society. “The accursed share” refers to this excess, destined for waste.”

J. Daniel

Conspiracy theories typify “ages of discord”:
“QAnon carries on a tradition of apocalyptic thinking that has spanned thousands of years. It offers a polemic to empower those who feel adrift. In his classic 1957 book, The Pursuit of the Millennium, the historian Norman Cohn examined the emergence of apocalyptic thinking over many centuries. He found one common condition: This way of thinking consistently emerged in regions where rapid social and economic change was taking place—and at periods of time when displays of spectacular wealth were highly visible but unavailable to most people. This was true in Europe during the Crusades in the 11th century, and during the Black Death in the 14th century, and in the Rhine Valley in the 16th century, and in William Miller’s New York in the 19th century. It is true in America in the 21st century.” -https://www.theatlantic.com/magazine/archive/2020/06/qanon-nothing-can-stop-what-is-coming/610567/

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