Economists Oppose Immigration Because “Dey Took Our Jerbs!”

The Bogus High-Tech Worker Shortage: How Guest Workers Lower US Wages | The Business Desk with Paul Solman | PBS NewsHour | PBS.

Don’t let the big words and the scientific sounding rhetoric fool you, this piece by Hal Salzman, B. Lindsay Lowell, and Daniel Kuehn is built entirely around fallacies, faulty premises, and good old fashioned nationalism.  At the end of the day, these three highly educated gentlemen advance an anti-immigration position not significantly different from the mob of lower-class townspeople on a widely known episode of South Park.

Essentially, they oppose the expansion of the H-1B work visa program on the grounds that too many foreigners are entering this country legally and stealing jobs away from well qualified, middle-class, white Americans.  The entire piece seems to operate under the premise that computer science graduates are entitled to a job with a high salary.  Oops, did I say computer science graduates, I meant computer science graduates who happen to be American citizens.  The rest of the world can go kick rocks.  Are you a brilliant, well-educated IT professional who has committed no crime other than happening to have been born in India?  Well too bad for you Sonjay, this is our economy and these are our jobs and if we let you in, why you just might commit the terrible crime of doing great work for a low wage.  We certainly can’t have that!  Think of the devastation it would wreak on the economy if the quality of labor was kept constant while the price of labor was able to fall!  (Note:  Don’t actually think about this if you are a Keynesian, you just might get the dry heaves.)

I also find little support for the allegation that recent graduates won’t be able to find “the types of jobs that will allow these graduates to pay off student loans, much less enter the middle class,” while the piece links to a chart showing that the average salary for programmers and computer and IT professionals has never dipped below $50,000 since 1992.  According to the census bureau, median household income (keep in mind that many households have more than one individual who works) was about $53,000 from 2007-2011.  In this exact period of time, the “Computer and IT Salary” was over $70,000.  I think that safely puts computer and IT professionals well into the middle class.  There are plenty of college graduates out there with just as much student loan debt who will be entering fields with significantly lower prospects of employment and high pay, yet this piece somehow expects us to cry for the poor IT professionals who are only making $70,000 a year because those dastardly foreigners are coming over here and are willing to do the same jobs for less than that amount.

Of course, nothing is stopping any American college graduate from accepting the same “lower” amount that foreigners accept.  Foreigners are at a natural disadvantage in the American job market.  The average hiring manager would almost certainly prefer an equally qualified American to a foreigner, assuming the costs were equal.  The American is almost certainly fluent in English, and familiar with the cultural and social norms of the United States.  Because of this disparity, foreigners have to be willing to accept lower wages in order to compete in this job market.  They are not evil for doing so.  They are simply acting according to their own rational self-interest.  That said, there is nothing stopping an American graduate from accepting a job offer at the same rate of pay that foreigners are typically willing to work for (well, other than a sense of entitlement that is).

The authors ask:   Can anyone argue that prioritizing access to good employment for high-skill domestic workers is not in the national interest?”

Why yes, I most certainly can.  You see, labor is a good just like any other.  Restrictions on immigration are the direct analogue to tariffs on physical goods.  A protective tariff is designed to make foreign imports more expensive for the direct purpose of making domestic goods more competitive than they otherwise would be.  This, of course, has the effect of raising the price of these goods for the population as a whole.  Small groups of producers benefit at the expense of the entire population who consumes the good in question.  The authors of this piece are demanding that immigration into the United States be restricted on the same grounds, for the same reasons.

The reason that it is “not in the national interest” to protect domestic IT professionals from the “threat” of low-cost foreign competition is that lower labor costs in the IT industry will lead to one of two outcomes (likely a mixture of both).  Either the savings can be passed on to the consumer (thus lowering the cost of all products which depend on skilled IT personnel, which is basically everything), or the firms themselves can keep the savings as retained earnings, (thus increasing the wealth of stockholders, either through dividend payments or re-investment into the company, potentially leading to new products and innovation).  “Protecting” us from low-cost foreign labor serves the exact same purpose and function as “protecting us” from low-cost foreign imports.  It benefits a very small and select group of people at the expense of society as a whole.  I wonder if the authors of this piece would so enthusiastically argue in favor of high protective tariffs on physical goods…

Another quite stupefying aspect of this piece is the repeated insistence that somehow, allowing more immigration violates “market” principles.  This is an absurdity.  The market has absolutely no regard for imaginary lines drawn on a map.  Markets have no use for various political jurisdictions, which offer nothing but restrictions on market activity.  One of the headings of the piece asks: “Isn’t Ours a Market Economy?”  Well, in terms of the labor market, the answer is no.  Immigration restrictions of any kind represent government interference into the labor market.  In a true free market, laborers would be able to enjoy complete freedom of movement, and employers would enjoy the freedom to hire whomever they please, regardless of their nation of origin.  They wouldn’t have to go begging Congress to allow them to hire more foreigners, they’d be able to just do it.

The article closes by stating:  “Before asking government to intervene in labor markets by handing out more guest worker visas and green cards to STEM graduates, we should ask for audits of shortage claims and workforce impacts as a first step toward developing evidence-based policy on this issue, an issue critical to the nation’s future.”

In this case, they have it completely backwards.  Crafting a more liberal immigration policy is not an “intervention” into labor markets.  It is the exact opposite.  The fact that skilled workers from other countries must obtain special permission from the government to come work for American companies is the intervention into the labor markets.  Any action that increases the freedom of movement among laborers in any field is the exact opposite.  It is the removal of a government intervention.

It’s quite a shame to see such a profound misapplication of basic economic principles appear in an article by three men who almost certainly should know better.  I’d like to give them the benefit of the doubt and assume that they do in fact know better, they’re just attempting to confuse and mislead the general public in order to advance their political ends, but I’m not entirely certain.  Either way, this article completely misrepresents the concept of “intervention,” argues in favor of protective tariffs known to reduce economic efficiency, and appeal to nationalistic and xenophobic urges to stop foreigners from “taking our jobs.”  It is disappointing that such a piece can be considered legitimate economic analysis.


About Dude Where's My Freedom?

My name's Matt and I love Freedom.
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