I love how all the elite arguments that immigration doesn't reduce wages (which the working class always thought were complete bullshit) were proved to be complete bullshit during the pandemic-related border closures.
Of course, the discussion about what to do about that remains - open borders & keep wages low, or close borders & raise local wages, or close borders & keep wages low & invest in automation - but it's nice to have the discussion honestly, without gaslighting the opposition.
Pretty big red flag was why so many multinational corporations are pro open borders. Corporations rarely take a stance on political issues unless they have a reason to do so.
In the US there is a particularly pro big business conservative wing of the right that is hyper in favor of unlimited low skill immigration. It's totally at odds with the mainstream conservative position on immigration. So why do they hold that position? It's not out of the kindness of their gentle pro-immigration conservative hearts of course. It's because they want the cheap labor to feed to big business and it helps to suppress wages for all the rest of their workers.
If you go back just 15-20 years ago, the Democrats universally understood this fact of labor supply/demand. Large amounts of low skill labor hurt their middle class and lower class labor voters, hurt their wages. And the Democrats used to be against such vast low skill immigration, because they had a large labor vote to protect. You can see this in action by looking at speeches from decades past (including by still prominent Democrats like Bernie Sanders). Their position now? Crickets. They've gone radio silent on the matter vs a few decades ago. That specific labor vote is no longer what they view to be the future, how they are plotting political dominance for the next 50 years.
The more you think about it the worse it gets. It's one thing to be in favor of immigration, it's another thing entirely to be in favor of illegal immigration. The Tyson Chickens of the world love illegal immigrants, they don't file workers comp claims or take you to court if you fail to pay them. Supporting illegal immigration is supporting the creation of a untouchable quasi-slave caste. If immigrants had the same rights, privileges and responsibilities of domestic workers, they probably wouldn't work for such a steep discount. This is why I believe many proported immigration proponents don't ever seem to manage to meaningfully open up the border, that isn't what they are going for.
That's certainly right. One of the big lies in the US today about illegal immigration is that there are 11 million illegal immigrants in the US. That has been the same number touted for most of two decades (it's still mindlessly repeated by talking heads on TV).
The real number is now closer to 22 million illegal immigrants, according to a recent Yale study [1]. Representing around 6% of all people in the US. So wait, how are all of those people surviving? They're cheap labor for the big business machine, they're an unprotected cheap labor caste as you correctly point out. They can't complain, they don't have well protected worker rights, and it can take a long time to become a citizen. It's a human rights travesty, and both the big business conservatives and the Democrats (as both are pro open borders) are morally culpable for it.
The rational approach for the US would be to remodel its immigration system as something similar to Canada, focused more on high skill labor. We need to turn off the flood of illegal immigration while simultaneously creating a reasonable citizenship pathway for the 22 million illegal immigrants that are here now (most are never leaving, so the proper thing to do is to provide a citizenship pathway), which would also begin bringing them into the tax base and protecting them as workers.
Or simply relax immigration policies to basically let migrants get work permits, they would argue for a fair wage, and we can let the market decide. From what history says, that's what the US used to be in previous centuries. People came and worked, and grew and made what the US had become before politicians decided to make it harder and harder for migrants to settle legally.
> (including by still prominent Democrats like Bernie Sanders)
Bernie only changed his tune after Trump got elected. FWIW, it's always been obvious that more immigration reduces wages for low-skill workers (and everyone I suppose, depending on the volume of immigration). I was always really confused that this was not common knowledge.
Like, Ross Perot ran against Clinton/Bush 1 on pretty much this platform, and that was in the 90's.
There’s no opposition to gaslight, the vast majority of the population believes the myth of immigration reducing wages, while there’s no evidence of it being true (you are welcome to provide some). This vast majority is not the opposition, but the force that elected the past 3-4 conservative and euro-skeptic governments that gave us the “hostile environment for foreigners”.
In the UK, EU nationals earn more than the locals, so one inclined to silly socio-economic statements should argue that locals reduce wages.
The proof is in the pudding: "we can't find local workers willing to work for these low wages so we'll import them from abroad".
A lot of EU immigrants come to London to work in tech/finance because they offer higher wages than pretty much anywhere on the continent (I was one of them). But the working class is pretty far removed from the effect of professional-class immigration.
The UK has many other structural problems so collapsing the whole Brexit discussion into one dimension is a bit of an over-simplification, though if you asked me to do the PCA, I'd say the main cause was "protest vote". (Pre-BJ governments weren't Euro-sceptic.)
> The proof is in the pudding: "we can't find local workers willing to work for these low wages so we'll import them from abroad".
Everywhere in world there are labour shortages, because we just ended lockdowns 3 months ago. In other places they are blaming the shortage on the young being lazy or on unemployment benefits, with the same scientific rigour. So I’m still waiting for a proof (not a pun or an anecdote) that immigration reduces salaries.
> A lot of EU immigrants come to London to work in tech/finance because they offer higher wages than pretty much anywhere on the continent (I was one of them).
Which means that EU nationals living in the UK earn more than the locals, so they can’t be driving salaries down. Unless you hypothesise a fantasy counterfactual where Jack deChav, who’s now an underpaid bartender, would have become a software developer and would be earning 6 digits if only Carlos de Perros, S/W developer from Malaga, didn’t steal his job.
> But the working class is pretty far removed from the effect of professional-class immigration.
Whatever the working class is in the UK, if they believe that immigration reduces salaries, they are far removed from any modern notion of truth.
> The UK has many other structural problems so collapsing the whole Brexit discussion into one dimension is a bit of an over-simplification, though if you asked me to do the PCA, I'd say the main cause was "protest vote". (Pre-BJ governments weren't Euro-sceptic.)
I’m not collapsing anything into anything. I’ve read a false statement “immigration reduces salaries” and I replied to it. Incidentally the UK has been playing with “hostile environments”, euro-skepticism and Brexit and yet real salaries are still below 2008.
>So I’m still waiting for a proof (not a pun or an anecdote) that immigration reduces salaries.
And what would that be? A study linking both while accounting for every other factor? I don't think it's even possible to do such a thing.
>Which means that EU nationals living in the UK earn more than the locals, so they can’t be driving salaries down. Unless you hypothesise a fantasy counterfactual where Jack deChav, who’s now an underpaid bartender, would have become a software developer and would be earning 6 digits if only Carlos de Perros, S/W developer from Malaga, didn’t steal his job.
There is competition even in software development, it doesn't take anyone to be a bartender for competition to cause a wage drop, moreover the reality is way more stark when you look at jobs that aren't as cushy as software development. A Spanish waiter is probably used to lower salaries and is probably more dependent on his job than an English one that has a support network in his country, his chances to unionize are also lower. We see it all the time with immigrants from low income countries.
I can imagine how immigration can lead to economic growth and salary growth as a result, but I find it impossible that the race to the bottom caused in low-income jobs is worth for them at all, if anything the economic growth is caused by this low-cost labor.
> And what would that be? A study linking both while accounting for every other factor? I don't think it's even possible to do such a thing.
What’s the point of saying something if you think that it’s impossible to prove?
> There is competition even in software development, it doesn't take anyone to be a bartender for competition to cause a wage drop, moreover the reality is way more stark when you look at jobs that aren't as cushy as software development. A Spanish waiter is probably used to lower salaries and is probably more dependent on his job than an English one that has a support network in his country, his chances to unionize are also lower. We see it all the time with immigrants from low income countries.
The number of software developers in the UK kept going up until the beginning of lockdowns, but salaries went up instead of going down. How’s that possible if more people mean lower wages?
Is there any evidence of Spanish bartenders pushing bartender salaries down?
> I can imagine how immigration can lead to economic growth and salary growth as a result, but I find it impossible that the race to the bottom caused in low-income jobs is worth for them at all, if anything the economic growth is caused by this low-cost labor.
Is there any evidence of this “race to the bottom [..] in low-income jobs”? Is there any evidence of it being caused by immigration?
Sorry, I don't agree. If the supply of labour increases without any consequent increase in demand, then one would expect to see the price of labour reduce, right?
That's what econ 101 would say, right? You're the one making the claim that it doesn't. If such a claim is self evident, then you should be able to produce some kind of reasoning as to why it is so, no?
> Sorry, I don't agree. If the supply of labour increases without any consequent increase in demand, then one would expect to see the price of labour reduce, right?
Which is only true if the foreigner in question teleports themself to their country of origin whenever they are not working. Even if they got all their food delivered from Poorland, there would be an increased demand for deliveries.
> That's what econ 101 would say, right? You're the one making the claim that it doesn't. If such a claim is self evident, then you should be able to produce some kind of reasoning as to why it is so, no?
No, unless we assume that workers don't consume anything and are perfect substitutes, if there is perfect information in the labour market, etc...
None of these assumptions holds true, so the impact of immigration on wages can't be estimated like the impact of potato overproduction on the potato market. So it becomes an empirical question, and evidence suggests that no country experienced long term wage compression because of immigration.
I meant that the vast majority of Britons (and of Westerns) believe that immigration has a negative effect on wages, which is a false credence. They haven’t all voted for the Conservative party, but the notion that these people have been gaslighted or ignored by the elite (which includes the parliament and the government) is patently absurd, given who ruled the country and what happened in the past 10 years.
> I meant that the vast majority of Britons (and of Westerns) believe that immigration has a negative effect on wages, which is a false credence.
Maybe they read Bank of England reports? [1]
> The static results suggest that the statistically significant negative effects of immigration on wages are concentrated among skilled production workers, and semi/unskilled service workers.
There's a University of Oxford study that confirms EU migration has had negligible impact on wages in the UK. The study appeared to be focused on wage decline. What I'm less convinced of, and what is much harder to measure, is what impact it has had on wages rising.
I'm pretty sure it is well known that globalization equalizes wages globally. That means they meet in the middle. Poor nations see relative wage growth and wealthy nations see relative wage decline. On average everyone is better off but it also means that those living in wealthy countries now feel extreme pressure to compete globally. For most people that simply means skilling up at college and moving to large cities to which investor money is flowing.
Globalization equalizes wages amongst people who can't lobby for protectionism. So only for the poor. If medical/drug patents and professionals were subjected to the same type of globalization that lower-leveraged workers were, inflation would run in reverse for the next 10 years. Instead, people who spend most of their income on consumption are drowning in what are really hidden tariffs and rent-seekers doing arbitrage.
This is a really good point, unfortunately I don’t think people will learn their lesson. Instead, we will complain about all the wasted food, and we will spend effort on trying to bring back this invisible servant class instead of investing in automation.
I disagree. The value of the pound plummeted as a result of Brexit. So relative wages might increase in future, but there is no guarantee that it will make workers any wealthier overall. Of course you might argue you only care about relative wealth, but then you have to worry about inflation due to rising cost of imports etc. I think it's more complicated than the simplistic picture you paint above.
For me the things that need to change in the UK are to (i) reduce the cost of access to education and (ii) reduce the cost of housing.
In the short term, sure, the domestic workers get higher wages, but in the long term it just incentivizes fruits to be imported directly from Eastern Europe instead.
On each country it really depends. For the US, low wage immigrant workers don't depress wages that much but in high skill areas immigrant workers can depress wages up to 20% last time I read a study on the matter. So it's really about what kind of work and where. Lots of engineers have felt the squeeze on immigrant labor for years but since engineers don't usually unionize they don't bark as much and thus bare the loss.
Immigration doesn't reduce the wages of those making the argument, who are usually employed in professional/managerial classes that benefit when there are lots of employees at the bottom.
This also illustrates the economically rational response to immigration, though. Be a turncoat. Move up the value chain into management (or other industries that benefit from a larger population of workers), so that you too can benefit.
It is a bit more complicated because if the wages of fruit picker decreases, the farmers may sell their fruits for a lower price. So everyone else's wage actually increases. Not the amount of £ you get at the end of the month but what you can afford with these £ (more fruits).
This same argument could be used to justify slavery. I'm quite unsympathetic to such arguments, especially when talking about the lowest classes of the society (as measured by wealth).
The meme to mock those critical of immigration (usually conservatives) is "Those dirty immigrants are taking our jerbs!"
It's a miss statement about when the crux of the issue is. It's not jobs being taken, it's wages being held low.
I worked at a warehouse that started pay at $12/hr. This was in 2016. Talking to one of the older guys, he started at $12/hr as well. In 2001. I'm sure you can guess what the worker makeup of that place looked like. There is no need to raise pay if you always have willing workers.
Usually nationalists. Conservatives love wages being lowered, and employees that can't complain without being deported. They're anti-immigration when it comes to law, but very pro-immigration when it comes to enforcement. Ideally, for them, they would have draconian immigration laws that would only begin investigations based on a tipline that only employers would have access to.
Of course, the discussion about what to do about that remains - open borders & keep wages low, or close borders & raise local wages, or close borders & keep wages low & invest in automation - but it's nice to have the discussion honestly, without gaslighting the opposition.