[HN Gopher] Collapse of international mobility a key factor behi...
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Collapse of international mobility a key factor behind wages growth
Author : kryptonomist
Score : 68 points
Date : 2021-11-13 14:35 UTC (8 hours ago)
(HTM) web link (twitter.com)
(TXT) w3m dump (twitter.com)
| aga98mtl wrote:
| The country as a whole is not better off if the wage growth
| causes inflation and economic slowdown. It amounts to a wealth
| transfer to those who work currently from those who retired and
| now live on fixed income. It's a zero sum game.
|
| Funnily I find that it's the older people who are the most
| against immigration. Let them enjoy the high prices for anything
| that involves local labor.
| christkv wrote:
| I don't see this as a problem at all. If anything it show how
| immigration is exploited to keep salaries artificially low and
| hurt the worker and lower middle class.
| Aunche wrote:
| The irony of this statement is that from the immigrant's
| perspective, they are the ones whose salaries are being kept
| artificially low by restricting immigration.
| cnqit wrote:
| Why would they want to immigrate to countries with oppressive
| white male patriarchies instead of building better societies
| at home?
| sokoloff wrote:
| Why should I care to get involved or second-guess their
| thought process and decide if their self-determined
| preference is "sound"?
| echelon wrote:
| There are two stories here. H1B immigration and illegal
| immigration.
|
| Aren't illegal immigrants doing jobs that natural born citizens
| don't want to do? Farming, low pay contract work, etc.?
|
| Businesses can't hire illegal immigrants on the books. They
| can't be waiters, retail workers, or other types of labor that
| the lower class depends on. So how does this impact America's
| poor and middle class? Absence of these workers should push
| prices higher.
|
| H1B immigration is capped, and it has never led to a decrease
| in the salaries of skilled workers. Software engineers have
| never made so much.
|
| More people working and living in the US will create more
| productivity and consumer demand, increasing the strength of
| our economy.
|
| Why all of the vilification?
| pessimizer wrote:
| > Aren't illegal immigrants doing jobs that natural born
| citizens don't want to do? Farming, low pay contract work,
| etc.?
|
| No, illegal immigrants are doing jobs that residents don't
| want to do (or can't do) _at that price._ They can afford to
| work for less because they 're often working in order to send
| remittances, not to live a fulfilling, sustainable life,
| which is what they're hoping to do after they get back home.
|
| > Businesses can't hire illegal immigrants on the books. They
| can't be waiters, retail workers, or other types of labor
| that the lower class depends on. So how does this impact
| America's poor and middle class? Absence of these workers
| should push prices higher.
|
| Absence of those workers should push prices higher because it
| pushes labor costs higher - meaning that the effect you're
| noting here is evidence of the opposite of the claim you made
| immediately before. Absence of those workers should raise
| costs (which may or may not be reflected in prices), and also
| raise the salaries of people who work. Inflation is rising
| prices, rising wages, and falling debts.
|
| Legalizing those workers and encouraging them to migrate
| their families here too would have the same effect, giving
| them the means to negotiate.
|
| > H1B immigration [...] has never led to a decrease in the
| salaries of skilled workers. Software engineers have never
| made so much.
|
| You're just making up the first part, and the second part is
| irrelevant to whether H1Bs lower salaries.
|
| > More people working and living in the US will create more
| productivity and consumer demand, increasing the strength of
| our economy.
|
| Lower wages = higher productivity. Lower wages != an increase
| in demand.
|
| > Why all of the vilification?
|
| Immigrants aren't the villains, the villains are these
| rationalizations for exploiting the precarious and brown for
| the sake of stockholders and owners. A quick an easy path to
| citizenship is just as objectionable to these people, because
| citizens have rights and can organize.
| Jeff_Brown wrote:
| If the labor shortage generates inflation that outpaces wage
| growth it's a problem.
| sokoloff wrote:
| It seems to me like long-run inflation is substantially tied
| to wage growth (or at least to income growth).
|
| Inflation can't outpace income forever, or who will buy the
| goods?
| snovv_crash wrote:
| Who will produce them if employee costs go up though?
|
| Both sides of the supply/demand curve are affected.
| sokoloff wrote:
| Exactly. I think of forces of this type as analogous to
| negative feedback in amplifiers. When a system gets out
| of whack, a system with negative feedback tends to
| stabilize.
|
| Too much inflation? People buy less. Too little
| inflation? People buy more. Labor too expensive? Less
| labor is used (perhaps via automation). Labor too cheap?
| More labor is soaked up on projects that would have been
| marginal or automated otherwise.
| rsj_hn wrote:
| There's no "if" about it.
|
| Latest median earnings are negative for the last month as
| well as year over year:
|
| https://www.bls.gov/news.release/realer.nr0.htm
|
| _Real average hourly earnings decreased 1.2 percent,
| seasonally adjusted, from October 2020 to October 2021. The
| change in real average hourly earnings combined with a
| decrease of 0.3 percent in the average workweek resulted in a
| 1.6-percent decrease in real average weekly earnings over
| this period._
|
| Look at this graph:
|
| https://fred.stlouisfed.org/series/LES1252881600Q
| nend wrote:
| Can you expand on that? Who is doing the exploiting and how are
| they doing it?
| christkv wrote:
| If a job is worth 10 eur a hour but there is a lack of
| workers they have to offer more to attract workers. If I
| bring in immigrants who are willing or forced by
| circumstances to accept 10 eur an hour I keep the hourly rate
| down. Once you remove this factor the businesses have to pay
| the actual market rate for the work.
| ghaff wrote:
| Or the work simply doesn't get done because there isn't a
| significant demand for the service/product at the market
| rate. There are a ton of things that people would like to
| have done for/provided to them but even upper middle class
| people may not be willing to pay what they would cost.
| pessimizer wrote:
| Which is a good thing. A business model that requires
| paying net wages too low to compete is just laundering
| slavery. People working those jobs are _losing money_.
| ghaff wrote:
| "Slavery" gets thrown around way too loosely.
|
| But, yes, pricing is a useful discovery and market making
| mechanism. If I want a personal chef but I'm only willing
| to pay $2/hour in the US for such a service, I should and
| will have to deal with cooking my own meals or otherwise
| find some way to obtain food that doesn't have as large a
| labor component as personal service does.
| Swizec wrote:
| Businesses are always paying the actual market rate for the
| work. It's just that immigration changes the supply side of
| that market.
| christkv wrote:
| I mean that the market is distorted by legal and illegal
| immigration. Since this mostly affects blue collar
| workers it helps drive wage disparities ensuring the
| unskilled labor losses economical power. This group is
| now starting to wake up to its plight and voting anti
| immigrant and against traditional labour parties which
| have been co opted by the progressive university elite.
| Tanjreeve wrote:
| Legal and illegal immigration are two wildly different
| beasts. The problems of illegal immigration aka
| undercutting of wages is a solvable one of enforcing the
| law (this is usually blocked by the same interests
| pushing the anti immigrant line). Legal immigration would
| be low supply high skilled workers who don't really
| affect much or at worst are paid minimum wage still.
|
| >This group is now starting to wake up to its plight and
| voting anti immigrant and against traditional labour
| parties which have been co opted by the progressive
| university elite.
|
| That's a bit of a stretch to think universities are
| progressive or that they're the ones calling the shots
| politically. The multi millionaire oligarchs pushing this
| and funding anti immigrant AstroTurf groups and running
| the usual PR firehose of BS are of course somehow "not
| elite" as ever.
| pessimizer wrote:
| > Legal immigration would be low supply high skilled
| workers
|
| This isn't a requirement, this is a bad choice that one
| can make. There's no benefit in favoring highly-skilled
| workers other than that these are the workers that
| middle-class professionals associate with. The only
| reason IMO to favor highly-skilled workers in specific
| fields is to break professional cartels; you don't even
| have to favor them, just remove the artificial barriers
| to their employment that have been institutionalized.
|
| > That's a bit of a stretch to think universities are
| progressive or that they're the ones calling the shots
| politically.
|
| It's just sucker right-wing pseudo-populism financed by
| the same people who employ 99.9% of illegal immigrants.
|
| -----
|
| edit: those people would love to make the process of
| legal immigration so onerous that only they themselves
| could navigate it easily, to make laws against illegal
| immigration so draconian that every undocumented worker
| was living in constant fear, and to route all enforcement
| of those laws through an regulatory agency that they have
| completely captured.
| fallingknife wrote:
| Yeah, it's not an accident that it's really easy to get
| in illegally and compete for low paid jobs, but really
| hard to get in legally and compete with the upper middle
| class.
| mistrial9 wrote:
| this is a naive statement
| mbesto wrote:
| *Businesses are always paying the actual market rate for
| the work within the context of their sovereign operating
| model.
|
| There, I fixed it for you. In a purely globally
| democratized and free market, wages would be perfectly
| aligned to market rates, but this isn't reality. In other
| words, your labor supply is artificially fixed to birth
| rates in that sovereignty.
|
| The overall point is anyway moot because you could also
| make an argument that says "because we're not having
| enough babies and therefore labor is relatively short
| from previous decades, wages are artificially
| high...maybe we should create policies to increase birth
| rates?".
|
| Point is - trying to correlate wages and immigration
| dynamics is a fool's errand. IMHO, immigration policies
| need to be considered from an overall market perspective
| and not an individual wage one. i.e. does immigration
| provide a net benefit to the economy and that sovereign
| society? Given how much illegal immigration is used in
| our food system in the US to keep consumer prices low, I
| think Americans equivocally believe some level of
| immigration is necessary to generate wealth for the
| middle class.
| twofornone wrote:
| The managerial/investor/owner class that ultimately profits
| from low wages?
| anonuser123456 wrote:
| I'm fairly certain the migrants profit considerably from
| the bargain.
| LongTimeAnon wrote:
| $2 an hour must be like winning the lottery every 15
| minutes.
|
| Go away, Brookings Institute shill.
| Proven wrote:
| Bullshit.
|
| Did wages in developed countries drop because too many qualified
| workers stayed home? I don't think so.
|
| Any significant tech employer can employ an arbitrary number of
| workers right where the workers are, immediately and without wait
| or relocation. Why would they or host countries limit their
| options in any way? Those employers couldn't care less about
| where employees work from.
| thatfrenchguy wrote:
| Correlation is not causation?
| rndgermandude wrote:
| Maybe. Maybe not. Sometimes correlations do in fact point to
| the causation, it's just that correlation does not
| _necessarily_ imply causation. In this case, it would be very
| hard to determine, tho. You cannot just do a controlled
| experiment on nation-scale economies. What you can do is look
| at what changed and what changed in likely reaction to it (and
| you still might be wrong). However, in the pandemic years, a
| lot more than just immigration numbers changed dramatically,
| which makes assessing this theory even harder, if not entirely
| impossible.
| kryptonomist wrote:
| "The collapse of international mobility and therefore
| immmigration is a key factor behind wages growth acceleration in
| advanced economies."
| throwvirtever wrote:
| That is the full text of the tweet.
|
| I don't see any support for that assertion anywhere though.
| kelseyfrog wrote:
| The tweet is a specific case of the general idea that "Market
| inefficiencies result in price-value disparities." If you
| believe this, the tweet naturally follows. The author assumes
| the audience already believes this.
| [deleted]
| h2odragon wrote:
| I think its implicitly an argument from authority, the
| twitter poster is a "somebody"
| dqv wrote:
| Earlier on Twitter, there was an account called SoDamnTrue
| that would just tweet pop-wisdom. It's a SoDamnTrue tweet
| for economists.
| btilly wrote:
| The claim fits with supply-demand curves.
|
| If you're missing 2 million people who would happily take low
| wage jobs, and there are as many of those jobs to do, the
| price paid for that work has to go up.
|
| That said, I suspect that the great resignation has a whole
| lot of impact as well. Again, reduced supply causing an
| increased price. (The ones who walk away from bad jobs into
| good ones not being as impactful as the ones who took early
| retirement post-COVID, accelerating a worrisome demographic
| trend of having lots of old people and few working age
| people.)
| hhaha88 wrote:
| Of course it has to be an end of scary immigration.
|
| Best distract from the story of workers not showing up for
| peanuts anymore.
| ardit33 wrote:
| you missing the point yo. Workers are being paid peanuts
| because illegal immigration suppresses their wage.
|
| Why pay someone $18/hr plus benefits/taxes, where you can pay
| some one who is an illegal immigrant for $12/hr, and no
| benefits and willing to do the job?
|
| Simply supply and demand. Illegal immigration suppresses the
| wages of the low end type of jobs (manual labour and such),
| which in turn hurts people that are low income, and mostly
| minorities.
|
| I am always baffled by some of the 'progressives' that chant
| BLM slogans, workers rights, and Defund the ICE at the same
| time.
|
| Unfettered illegal immigration hurts black and lower income /
| working people the most.
|
| "Champage leftism/progressivism" is the worst. It makes things
| worse for everyone involved, except themselves. It is political
| grift.
| hhaha88 wrote:
| Pretty sure intentional political scheming is what's hurting
| everyone.
|
| What do I know having been in rooms with people of the sort
| to be invited to Davos talking about keeping power out of the
| hands of the masses, just as James Madison, author of the
| Constitution, meant when he wrote the Senate ought to protect
| the opulent minority from the poor majority.
|
| Blue collar Protestant work ethic is the worst. Instigating
| anxious doing in rubes is tribal warlord 101; yes yes you
| stay busy while I sit here.
|
| My value store isn't dollars, it's a network of people
| collectively building in all contexts, not just the ones that
| are preferred by politics (indeed the "god father" of market
| economics, Adam Smith, only mentions one market; a free labor
| "market" that can move between gigs as needed; not sitting
| still for one employer). That just gives rich nobodies a pass
| on real effort, loads me up on real work by gate keeping
| undesirables rather than training them.
|
| It effectively creates constraints on agency at scale, and
| quotas for the poor; exactly the sort of economy the US is
| not.
|
| I bet the rich didn't have a hard time finding TP.
|
| You're letting someone grift alright, just not who you think.
| dang wrote:
| We've banned this account for using HN for ideological
| battle and ignoring our request to stop.
|
| Please don't create accounts to break HN's rules with.
|
| https://news.ycombinator.com/newsguidelines.html
| klyrs wrote:
| Nice strawman.
|
| Actual leftist policy would open all borders, recognize a
| universal freedom of migration (so small-L libertarian of
| them), and demand universal workers rights. To wit, the only
| form of illegal immigration would be against the migrant's
| will: human trafficking.
|
| Throw in some really strong unions and as the theory goes,
| the issue of migrant workers being paid less / given less
| benefits would evaporate too.
| filoeleven wrote:
| > Illegal immigration suppresses the wages of the low end
| type of jobs
|
| "Failure to enforce existing labor laws against employers who
| hire illegally" is a critical step between "illegal
| immigration" and "suppressed wages."
|
| Abolishing ICE does not equate to stopping immigration
| enforcement: ICE has only existed for 18 years; enforcement
| did not start in 2003. The waters are also muddied by
| conservatives' intentional conflation of "refugee applicants"
| with "illegal immigrants."
| salt-thrower wrote:
| ICE was created in the Bush years and has been demonstrably
| brutal and racist. You don't need ICE to handle immigration.
| Somehow America made it until the 2000's without it, and much
| like other three letter agencies created post-9/11, their
| effectiveness is dubious at best.
|
| One real way to solve illegal immigration would be to make it
| easier to legally immigrate. Making them citizens means they
| have equal labor rights and can't be treated like serfs, so
| then can command higher wages.
|
| Also, outsourcing has done far more damage to the working
| class than immigration. Billionaires ginning up the "they're
| taking your jobs" sentiment while offshoring as much good
| paying blue collar work as possible. Neoliberalism in a
| nutshell.
| coryrc wrote:
| It was a re-org of INS. Bush the Lessor did not create it.
|
| Today you even see immigration down and wages up and still
| you deny reality.
| timdaub wrote:
| Classic tweet and a reason I don't like Twitter. It's completely
| unclear what is being said here specifically even though I
| understand a tiny bit of economics.
|
| It'd be better if the author would have either not said anything
| or took the time to formulate their thoughts into a piece of text
| worthy and representative of the complexity of the concept.
| sva_ wrote:
| There is a line of arguments that are sometimes made which
| claim that immigration leads to the stagnation of wages
| (abundant supply of workers -> lower wages).
|
| I believe the author is trying to express this.
| _Microft wrote:
| On Nitter for those without a Twitter account:
|
| https://nitter.net/C_Barraud/status/1459440257783549954
| sneak wrote:
| Teach a man to fish:
|
| https://chrome.google.com/webstore/detail/privacy-redirect/p...
| novok wrote:
| The default redirects are way slower, at least behind a
| mulvad VPN, did you reconfigure yours to have faster ones?
|
| Also most youtube videos are not as high quality as the
| original youtube site, typically 1080p+ seems to be missing.
| seneca wrote:
| Stated another way, importing illegal immigrants has suppressed
| wages for Americans for decades. Nothing about that should be
| surprising.
|
| Illegal immigrant labor is a key part if the American economy.
| These people are intentionally kept in a state of legal limbo.
| They're tolerated, but always could be prosecuted and have their
| lives destroyed. This keeps them exploitable and able to be
| treated in ways we would never tolerate for American workers.
|
| The entire game is that because they are breaking the law,
| employers can ignore labor law when it comes to employing them.
| It's like any black market. The fact that everyone is breaking
| the law means all bets are off.
|
| An imported serf class, intentionally kept in an exploitable
| legal state, is inherently going to reduce the leverage of labor
| that would otherwise occupy those jobs.
| dash2 wrote:
| You may be right, but... got evidence?
|
| Here's Hanson et al. (2002):
|
| In this paper, we examine the impact of enforcement of the
| U.S.-Mexico border on wages in U.S. and Mexican border regions.
| ... For a range of empirical specifications and definitions of
| regional labor markets, we find little impact of border
| enforcement on wages in U.S. border cities and a moderate
| negative impact of border enforcement on wages in Mexican
| border cities. These findings are consistent with [ed: i.e.
| either of] two hypotheses: border enforcement has a minimal
| impact on illegal immigration, and illegal immigration from
| Mexico has a minimal impact on wages in U.S. border areas.
| mbesto wrote:
| > border enforcement has a minimal impact on illegal
| immigration
|
| this doesn't talk about anything regarding wages.
|
| > illegal immigration from Mexico has a minimal impact on
| wages in U.S. border areas.
|
| That seems narrowly scoped to "US border areas" whereas the
| parent comment is talking about America in general. Likewise
| how do you provide a control factor for a study like that?
|
| I think the evidence is pretty much obvious and doesn't
| require a study to conclude. The market wouldn't prefer
| illegal immigration (which it does - ask any restaurant
| operating in the US) if it _didn 't_ reduce labor costs for
| businesses. So the opposite must be true - citizens and legal
| immigrants would increase labor costs.
|
| The other factors are simply true by careful observation. How
| is it not obvious that a labor class that has no legal rights
| of citizenship is also not going to have legal rights in the
| labor market? (i.e. ability to legally fight wage fraud,
| depressed benefits, etc.)
| marcusverus wrote:
| The idea that you could add millions of workers from third-
| world nations (per capita PPP GDP for Mexico, Guatemala,
| and Honduras are 8,500, 4,490, and 2,200, respectively,
| compared to 63,000 in the US) _without creating downward
| pressure on wages_ just doesn't pass the sniff test.
| [deleted]
| Jeff_Brown wrote:
| Good God that's a coherent argument where I'm used to reading
| gibberish.
| dragonwriter wrote:
| > importing illegal immigrants has suppressed wages for
| Americans for decades.
|
| Er, no, to the extent immigration is an issue with the recent
| wage rise _legal_ immigrants have done that. Net illegal
| immigration dropped below zero without significant upward wage
| pressure well before the pandemic.
|
| EDIT: Just to be clear, its not actually _legal_ immigration
| dropping, either, that led to the tight labor market; its the
| acceleration of permanent (e.g., retirement) and temporary
| departures from the labor force during (and in part induced by)
| the pandemic
| pessimizer wrote:
| During the peak of US anti-immigrant frenzy, net illegal
| immigration was _negative_.
| wyldfire wrote:
| Before they were illegal immigrants they were migrant workers.
| For years they would come across the border freely for seasonal
| work. The US has arable land that can produce crops that
| compete with crops in Central America. But the labor there is
| cheaper.
|
| Seems like there's some elements similar to prohibition - the
| desire is strong enough to create a black market for labor and
| immigrants are willing to take these risks. Maybe if we
| permitted more seasonal ag work visas and a lower minimum wage
| (but still safe workplace requirements) it would be a better
| compromise.
|
| It's very sad that falsehoods about the immigrants fall into
| racist tropes and all of a sudden we can't have a reasonable
| dialogue about better solutions to the problem.
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(page generated 2021-11-13 23:02 UTC)