Replies

As Reagan would say:
“There you go again.”

You are arguing before you read and understand. I am pro free market and pro-capitalist. So are many of the conservative opponents of unlimited immigration. Let me try again, one last crack at trying to correct misperceptions ...

1) “ It is balderdash to claim that our legal immigrants are worse for the country than the illegals are just because the legal ones are (legally) eligible for transfer payments. The illegal ones are clearly worse for the country in hosts of ways starting with the undermining of law, then the systematic illegality and mendacity that follows everything they touch, etc.”

You mispresent the argument and attack a strawman. The argument is that legalizing the illegal immigrants of today does not help make them an asset. It’s not an argument about today’s legal immigrants vs today’s illegal immigrants; probably the former are more upstanding.
Your argument is to compare a group of criminals versus law abiding citizens. The real question is: if we legalized rape and let rapists out of jail, would we have a safe, better, more law-abiding society wrt rape? of course not. Of course legalizing illegal immigrants wouldnt magically make them have the higher skills, higher income and less dependence that today’s illegal immigrants have. And thus arguments that amnesty would make them better is no more than bait and switch.

you attack a strawman.

2) “neither do you, since you think it is caused by technology”
!!! You do not realize that our standard of living increases and growth are caused by technology? All the stats on USA from the civil war to 1929 and you dont understand that it was the industrial revolution that helped make that happen? the mind boggles. I guess maybe the fact that I’ve worked in a $200 billion industry created and sustainted by technological innovation gives me a little better understanding of how this works. Technological innovation can create new products (new markets & growth; think iPod, PC, cell phone) or improve efficiency of existing production (electrical motor, brayton cycle turbine); the latter leads to productivity improvements which leads to high standard of living, as standard of living is predicated on the production & services/person.

Sure, we can also grow economically as population increases, but it would be quite uninteresting and underwhelming to live in a USA that has huge population but the standard of living of 1790 USA. We can see that kind of life in India and China, and its not desirable.

Since immigration doesnt by itself destroy technology, it wont by itself cause lower GDP per capita overall (another strawman, that was never the claim), but neither does immigration or population growth by itself create high standard of living. If it did Africa, India and China would be the world’s paradises.

3) “bigot as a man incapable of entertaining the contrary of a proposition”
Thus, you might look in the mirror. I merely provided data and studies that backed up the empirical claim that immigration has an effect that depresses wage rates. To believe such an empirical claim does not disprove capitalism’s benefits nor does it make one a marxist. You’re the one with the rigid thinking here. You’re not thinking that immigration could have complex effects that help in some cases, hurt in other cases; that can help one group (ag businesses get to stay more competitive) and hurt other groups (meatpacker workers get sustituted for cheaper labor).

4) As for the empirical claim ...

“On the contrary, the study you yourself cite below acknowledges that virtually all previous studies (to that one published in 2004) found no correlation between immigration and domestic wages. Clustered at zero and not statistically significant. The author of the paper you cite tries to manufacture such a correlation by breaking the data into many more classes based on his proxies for education level and prior experience.”

Another strawman. It’s not about all wages on average overall. Once again, the claim was/is about the fact that native-born low skill workers are getting hit by immigration’s impact. So you ‘refute’ another strawman about wages in the whole economy and decry as irrelevent the specific point by Borjas. the specific data point was:
“Among natives without a high school education, who roughly correspond to the poorest tenth of the workforce, the estimated impact was even larger, reducing their wages by 7.4 percent.”

Now, you tell me ...
“The average hourly earnings of US workers in 1980 were $12.16 ($6.57 nominal, the rest is inflation) and in 2000 were $13.75, in chain weighted 2000 dollars. Hourly earnings rose 13%.”

you consider that an impressive number? Or less than satisfactory, given that the economy grew, what about 50% from 1980 to 2000? And this average is across both skilled and unskilled, right? Now go look up the increase based on education level ... and then gender only, ie male non-college wage levels. ... it will be enlightening.

Also you mention that previous studies showed no correlation ... yet Borjas explains why they are self-defeating due tothe very mobility of labor *within* the US to equalize impacts of ‘disparate immigration impact’ studies...

“More recent research raises two questions about the validity of interpreting near-zero cross-city correlations as evidence that immigration has no labor market impact. First, immigrants may not be randomly distributed across labor markets. If immigrants tend to cluster in cities with thriving economies, there would be a built-in spurious positive correlation between immigration and wages.

Second, natives may respond to the wage impact of immigration by moving their labor or capital to other cities. For example, native-owned firms see that cities in Southern California flooded by low-skill immigrants pay lower wages to laborers. Employers who hire laborers will want to relocate to those cities. The flow of jobs to the immigrant-hit areas cushions the adverse effect of immigration on the wage of competing workers in those localities.

Similarly, laborers living in Michigan were perhaps thinking about moving to California before the immigrants entered that state. These laborers learn that immigration reduced their potential wages in California and may instead decide to remain where they are or move elsewhere. Moreover, some Californians might leave the state to search for better opportunities.

The flow of jobs and workers tends to equalize economic conditions across cities. As a result, inter-city comparisons will not be very revealing; job flows and native migration effectively diffuse the impact of immigration across the national economy. In the end, all laborers, regardless of where they live, are worse off because there are now many more of them.”

So prior studies showed no/little impacts because they were flawed studies that wouldnt account for self-compensating aspects of our dynamic economy.

let’s get to real, ground facts.
I work in a global technology business with immigrants and with outsourcing. Our company and managers are not stupid. If and when it is cheaper to do projects in India or China, we go there. A lot of companies do. Hiring in US is consequently less than it might have been in certain tasks and jobs. This is the *real* free market in action, and to deny the supply/demand impact on labor costs is to deny econ 101. When labor markets are tight, wages go up; we couldnt even hire a freshout PhD for $100,000 at the top of the bubble in early 2000; when labor markets are not tight, wages are flat or sinking. the converse - since the bubble, many wages and market availability was much easier, in 2002-2005. the amount of hiring I got to do: ZERO. the place where all hiring on net basis is happening - “low cost centers” ie India and China. Now Microsoft wants more H1Bs. we now why - they want to get more brains for less dollars. The flipside: Without the H1Bs, they would have to bid up to pay for programmers, and people would switch careers if the wages were high enough. The supply would be there, the supply is *always* there - at a higher price. I know. I work with H1Bs.

For meat packers, there is a history of hiring illegal aliens since the 1980s:
http://www.ktvotv3.com/Global/story.asp?S=5831797&nav=1LFs
http://www.iht.com/articles/ap/2006/12/19/business/NA_FIN_US_Immigration_Raid_Lawsuit.php
When the Swift plant opened in Cactus, wages were approximately $20 (€15.27) an hour,” said another plaintiffs attorney, Michael Haygood. “Now, the average wage is approximately $12 (€9.16) to $13 (€9.93) an hour. Illegal immigration has fueled this depression in wages.”

“The meat packers are confirming what we know,” says University of Maryland economics professor Peter Morici, “and that is that this large group of illegal aliens in the United States is lowering the wage rate of semiskilled workers, people who are high school dropouts or high school graduates with minimal training.”

In fact, a meat-packing job paid $19 an hour in 1980, but today that same job pays closer to $9 an hour, according to the Labor Department. That’s entirely consistent with what we’ve been reporting — that illegal aliens depress wages for U.S. workers by as much as $200 billion a year in addition to placing a tremendous burden on hospitals, schools and other social services. “

“according to the University Of Maryland as reported by Lou Dobbs, meat packers in 1980 earned $19 hour.Now that the immigrants have taken over in this industry they earn less then $9 hr.”

Now you can believe a few things:
1) these claims that meatpacker wages fell are untrue (go ahead, figure out the average meatpacking wages, and convince me they are 13% or above from 1980 to 2000 in real terms, I dare you.).
2) that the claims are true but “overall” the economy is better for it anyway and therefore we should just suck it in and live with it. Maybe it is, but try telling that to those whose standard of living is lower than it was 25 years ago because of these changes.
3) that the claims are true and that, irrespective of the fact that GDP numbers might look okay while this is happening (since the meatpacking companies are producing more), we should be concerned about the impact to our society, ie working class non-college-educated workers, as a result of these changes. See the comments in this post:
http://www.huffingtonpost.com/robert-weissman/meatpackers-immigrants-_b_20119.html

Yeah, from lefties most of the comments, but they can not be adequately responded to with a simple “immigrants help the economy” cheerleading. If they help the ‘economy’ mainly by improving profit margins and driving down wages and thereby increasing inequality, there are many people who see that as a *problem* not a *solution*.

5) Perhaps we are seeing the human and cultural dimension and aspects beyond raw GDP numbers. you argue irrelevent and strawman points, without addressing the concrete realities and problems from illegal and related low-skill immigration.
These problems cant be waived away with peaens to immigrants past or analogies to situations in our history that are not fully comparable.

Your error is in:
1. failing to distinguish between the two cases of “all other things being equal” versus “this effect is absolute”. I am not asserting an absolute as you seem to think, but a relative statement that wages are lower than they otherwise would be when you increase labor supply relative to demand in a particular category. Such nonsense like thinking I’m claiming per capita income is falling etc.
2. failing to discern between the overall average impact and the disparate impact on subgroups.
3. failing to recognize that the welfare state and USA of long ago are two different situations. In the past the poor huddled masses were mostly on their own (although their poverty kicked off the start of the welfare state in the form of progressivism). Failing to notice that most immigrants are dependents who could/would be Govt dependents, not workers, skews analysis.

I will repeat again my bottom line:
“*SOME* immigration is helpful and *SOME* immigration, whether legal or illegal is hurtful ... moderate levels of immigration based on skill levels helpful to the economy - good. massive chain migration of impoverished illiterates - net drain. The main differences are net impact on taxpayers, since unskilled and non-workers do not ‘pay their own way’ through life and become added burdens on taxpayers also how they impact wider economy through earnings and spending.”

This is not a black-or-white issue, where all immigration is only bad or only good. But this is an issue where real defenders of free market economics need to be careful about defending an ‘open borders’ policy that brings about, in reality, many of the claims of the anti-capitalist left make against corporate America: Inequality, abuse of workers rights, corruption, lack of improvement in standard of living from one generation to the next, etc. As a result, allowing this to continue will shift (perhaps already has shifted) our politics to the left in many different ways. Dangerous politically, dangerous culturally, and dangerous economically.

Nothing you have said would change/dispute that assessment so perhaps you can agree with it and call it a day.