I do not believe that the demand for more products increases the number of products, as much as it raises the prices for those products.
Here are just some of the sobering facts:
– There are 8.5 million people receiving unemployment insurance and over 40 million receiving food stamps.
– At the current pace of job creation, the economy won’t return to full employment until 2018.
– Middle-income jobs are disappearing from the economy. The share of middle-income jobs in the United States has fallen from 52% in 1980 to 42% in 2010.
– Middle-income jobs have been replaced by low-income jobs, which now make up 41% of total employment.
– 17 million Americans with college degrees are doing jobs that require less than the skill levels associated with a bachelor’s degree.
The high rate of immigration is not the only reason for the decline of the middle class, but it is certainly one of the reasons.
Your confusing to different things. Immigration may increase the need for more products, but that has nothing to do with the wages paid to make those products. It is in the employer’s interest to pay as little as he can for the job he wants done. It is in the interest of the worker to get paid as much as he can. These competing interests determine how much a job will actually pay. If their are fewer workers, the workers have more power. If there are more workers, the power shifts to the employer. In the first case, the employer is the one pressured to compete for those precious workers. In the latter, the workers are competing with each other for those precious jobs.
Originally Posted by Do Not Taunt
Immigration raises wages. It’s simple supply and demand - since immigrants demand products, they increase demand for workers to make those products and wages go up. See how easy economics is?
If the goods are made/manufactured in China, then higher demand for goods in America because there are more people in America, would not increase the wages of people in America?
In any country that imports a lot of goods, more immigrants means a larger supply of workers causing lower wages.
I’m not sure what the point is you’re trying to make. And I think the point of your first paragraph and that of your second are at odds. But, like I said, I’m a little confused as to what you;re trying to say.
When an item is imported into the US, money is made selling that item. The wholesale price from China remains the same, so when demand/price increase the wage of those selling go up.
American is moving more and more towards service industries relying less on manufacturing. So higher demand for goods means their wages go up.
This is also a good time to review H4 visa, which need to be central in a discussion on immigration.
Wrong. Immigration only increases the supply of workers if the economy is shrinking. The US has a negative growth rate, so without immigration the supply of workers would continue to shrink and impede growth. The reality is that more more immigrants means more shoppers (ie more aggregate demand). That keeps prices steady and helps keep wages up.
That isn’t really supported by the empirical research cited above. Certainly not in relation to unskilled workers.
You need to show that the impact of immigration on the potential size of the consumer base is greater than its impact on the size of the workforce.
More shoppers means higher prices and higher profits, not higher wages.
Flipping back and forth between H1-B’s and illegal immigration is really dishonest and dragging this discussion down.
But more importantly, net flow of immigration on it’s own isn’t enough of a variable. If there aren’t enough farm workers to pick oranges, there won’t be enough oranges for the next guy to make juice. If labour is tight and wages are driven up, the higher cost of oranges means lower demand and puts other people out of work.
Having an available pool of unskilled workers is required for a lot of industries, farming in particular. Without that available pool a lot of people see their jobs disappear.
Where do you think higher wages come from? It’s not magic. You need customers in order to have sales. Sales to have revenue. And revenue to pay people.
In a growing economy like pre-2008 immigration was needed to both keep wage increases in check, and to allow the economy to continue growing by making labour available. An economy can’t grow with a shrinking population. So if immigration helps an economy grow, and a growing economy helps raise wages, it stands to reason that immigration helps raise wages.
It will also work in reverse: if the economy is contracting (like after 2008), an unemployment is high, immigration could make things a lot worse. But as far as I can tell the H1-B system is designed with that in mind. But when unemployment is high, companies don’t need immigration, the shrinking economy will keep wages in check.
:rolleyes: Dude, that link is to the Center for Immigration Studies.
So you can ignore Borjas’ data? He’s a Harvard Professor and has been on numerous advisory panels for the National Science Foundation. He was involved with the 1997 National Research Council report ‘The New Americans’ which looked in depth at Economic, Demographic, and Fiscal Effects of Immigration.
It would be better if you could offer a substantive critique other than not liking the result or CIS.
Do you have some data on a shortage of unskilled workers in the US?
Also, in terms of growing an economy you need to look at the distinction between educated and unskilled immigration. Having a larger and less educated population is not going to be helpful in the long run as technology continues to improve.
There is no ‘one size fits all’ answer. Immigration generally boosts wages if there is sufficient disparity in skill set between the immigrants and native workers.
Most immigrants tend to work in low-skilled jobs. More workers in lower-skilled jobs will most likely lower overall wages, at least in the short term. Longer-term, however, immigrants tend to be a net positive for the economy. Labor market flexibility should help free up more workers for higher added-value jobs. Again, this is a long-run benefit. Just like buying cheap imports from China in the short-term may be negative, in the long run it is a positive.
100 years ago, half the US workforce was in agriculture. Now that figure is about 2%. Unemployment is high at the moment, but it’s not like we permantly lost over 40% of US jobs.
Well, not if lower population (and lower population growth) comes at the same time as people are living longer thanks to medical advances. For starters, you end up with an increasingly smaller number of working-age people supporting retirees living on pensions. Ask Japan how they feel about being the fastest-aging country in the world. Ask them if they are facing any problems because of it.
Again, this doesn’t mean that any immigration would help. It needs to be skilled to replace the skilled retirees. If they brought in a large unskilled population that would only exacerbate their problems.
No it wouldn’t. For example: estimates suggest Japan faces a shortage of around 1 million nursing care / health care providers over the next 10 years. So highly educated women (wives/daughters etc) are forced to stay home and take care of an increasingly aging population.
But Japan could bring in healthcare providers from overseas. While they do a difficult and very valuable job, in general they still are less educated than the wives/daughters they’d be replacing. This would result in a much lower opportunity cost, as it frees up more workers to return to the workforce to do higher added-value (and higher-paying) work. Not that taking care of family members is ‘low value work’, but hopefully you realize I’m speaking in the economic sense.
There’s a whole sub-set of problems in Japan that are beyond the scope of this thread, but the idea that ‘immigrants would make Japan’s problems worse’ is exactly the xenophobic nonsense spouted out by many of Japan’s political leaders. There is a lot of economic evidence that says immigration is a source of short-term costs, but ultimately lead to long-term growth. Japan is no exception.
in my opinion, it creates new jobs, mainly low-paying types.
Define ‘creates’. Do you mean that immigrants work in jobs that wouldn’t otherwise exist unless the immigrant showed up at the employer’s doorstep?
pretty much. mainly unskilled and semi-skilled labor. one funny example is during one episode of the apprentice. it was a marketing job so the teams scanned manning agencies that offered the cheapest hourly-paid warm bodies to carry plackards and streamers. the cheapest agency sent them a motley group, most of who can’t even speak english, but adequate for the job at hand.
one can increase the number of cleaners, care-givers for the elderly, even ancilliary jobs for ancillaries (nursing aids.)
You don’t see a slight problem with the logic here? The suggestion seems to be that employers - normally very very reluctant to spend money if they don’t absolutely have to - would pay people to do jobs that they otherwise wouldn’t want or need done if the immigrants weren’t available.
I think this discussion can be made a little simpler: Imagine you want to start a fusion sushi/churrascaria restaurant in Iowa. You’ve done your research and you know this can work. How many Brazilian sushi chefs do you suppose are currently unemployed in Iowa? In the US? But for you to start this business, that’s what you need.
When your restaurant opens it will hire one Japanese/Brazilian and a dozen locals. Assuming your concept is successful, YOUR salary will go up. Jobs have been created so everyone else’s salary goes up. This is the economy growing.
Right now in the US people hear “immigration” and instantly think “unskilled.” H1-B’s are not unskilled, and when done right (legally) allow companies to hire skilled workers that they aren’t able to find in the US. It’s not enough to say that the US has lots of engineers. Engineering is extremely specific, and if you have a business that needs one guy skilled in one very specialized area, you need to look internationally.
It all goes back to the concept of international trade. Some times a business needs materials that aren’t available in their country. Canada has a hard time growing bananas, but does a pretty good job growing wheat and potatoes.
But an idiot farmer could look at slumping sales and say, “Allowing imports is lowering prices. Flooding the supermarket with cheap starch means fewer people buy potatoes.”
So back to the sushi/churrascaria restaurant, now let’s say you are going to be super busy during Iowa’s state fair, or some other big festival. And what you need is a lot of unskilled labour, but at a time when everyone else needs unskilled labour. Again, their aren’t enough workers available in Iowa, so the restaurant looks to bring in help.
If we go based on supply and demand, it means that eventually wages are too high to allow businesses to function. A typical business plan sets out desired wages, and becomes unprofitable if wages go too high.
As a result, without immigration to fill the unskilled jobs your business can’t run. That means you don’t make any money, and the rest of your staff doesn’t get hired.
That’s immigration in a nut shell. It increases the talent pool to include highly specialized workers that aren’t available locally. And it increases the availability of unskilled workers to prevent shortages.
Both cases can be seen has negative in the short term, but both are required for a health and growing economy.