Wednesday, October 30, 2013
If we value a free market in goods and free movement of capital, should we embrace the free movement of labor? Reciprocal treaties would allow citizens of the U.S. and other countries to work legally across borders. Would the elimination of barriers in the labor market depress wages and flood the marketplace with workers? Or would the benefits of a flexible labor supply be a boon to our economy, all while raising the standard of living for anyone willing to work?
Professor of Economics, George Mason University
Vice President of Innovations and Research, Singularity University
Co-Founder, Migration Policy Institute
Publisher, The Unz Review & Former Publisher, The American Conservative
Author & Correspondent for ABC News
Professor of Economics, George Mason University
Bryan Caplan is Professor of Economics at George Mason University and Senior Scholar at the Mercatus Center. He is the author of The Myth of the Rational Voter: Why Democracies Choose Bad Policies (2008), named "the best political book of the year" by the New York Times, and Selfish Reasons to Have More Kids: Why Being a Great Parent Is Less Work and More Fun Than You Think (2012). He has published in The New York Times, Washington Post, The Wall Street Journal, American Economic Review, Economic Journal, Journal of Law and Economics, and Intelligence, and appeared on 20/20, FoxNews, and C-SPAN. He blogs at EconLog, named a top economics blog by The Wall Street Journal. Caplan is currently writing a new book, The Case Against Education.
Vice President of Innovations and Research, Singularity University
Vivek Wadhwa is Vice President of Innovations and Research at Singularity University; Fellow, Arthur & Toni Rembe Rock Center for Corporate Governance, Stanford University; Director of Research at the Center for Entrepreneurship and Research Commercialization at the Pratt School of Engineering, Duke University; and distinguished visiting scholar, Halle Institute of Global Learning, Emory University. He is author of The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent (2012), which was named by The Economist as a book of the year. He was named by Foreign Policy Magazine as a Top 100 Global Thinker in 2012. In 2013, Time magazine listed him as one of The 40 Most Influential Minds in Tech.
Co-Founder, Migration Policy Institute
Kathleen Newland is the co-founder and a trustee of the Migration Policy Institute, where she directs policy programs on Migrants, Migration and Development and Refugee Protection. She has worked as a consultant to the UN High Commissioner for Refugees, the International Labor Organization, the Office of the Secretary-General of the UN, and the World Bank. Prior to MPI, she co-directed the International Migration Policy Program at the Carnegie Endowment, lectured in International Political Economy at the London School of Economics, and was the Special Assistant to the Rector of the United Nations University. Currently, she is an overseer, as well as Chair of the Advocacy Committee, of the International Rescue Committee, and a board member of Kids in Need of Defense (KIND), the Stimson Center, and USA for UNHCR. She is Chair Emerita of the Women’s Refugee Commission. Newland is the author or editor of eight books, in addition to many shorter monographs, book chapters, policy papers, and articles.
Publisher, The Unz Review & Former Publisher, The American Conservative
Ron Unz, the publisher of The Unz Review, is the former publisher of The American Conservative, a small opinion magazine, and is the founder and chairman of UNZ.org, a content-archiving website providing free access to many hundreds of thousands of articles. He previously served as the chairman of Wall Street Analytics, Inc., a financial services software company which he founded in 1987. He has long been deeply interested in public policy issues, and his writings on issues of immigration, race, ethnicity, and social policy have appeared in The New York Times, The Wall Street Journal, Commentary, The Nation, and numerous other publications. In 1994, he launched a Republican primary challenge to incumbent Governor Pete Wilson of California, running on a conservative, pro-immigrant platform against the prevailing political sentiment, and received 34% of the vote. Later that year, he campaigned as a leading opponent of Prop. 187, the anti-immigration initiative.
49% voted the same way in BOTH pre- and post-debate votes (28% voted FOR twice, 16% voted AGAINST twice, 5% voted UNDECIDED twice). 51% changed their minds (15% voted FOR then changed to AGAINST, 3% voted FOR then changed to UNDECIDED, 4% voted AGAINST then changed to FOR, 1% voted AGAINST then changed to UNDECIDED, 11% voted UNDECIDED then changed to FOR, 18% voted UNDECIDED then changed to AGAINST). Breakdown Graphic
I always said I could go to India and work cheap in a call center (and not be anywhere near as hard to understand). I would be willing to work for local wages since $10,000 per year would allow you to live like a Maharaja. America is done, let everyone else take it.
I fail to see any merits in the Pro side's arguments (Bryan Caplan's moral blackmail fails to serve as an argument), and unfortunately , Kathleen's lack of flow, her persistent stutters trying to find words (or arguments) do not serve her cause, however based in fact it is.
One argument that kept astonishing me throughout the debate, is how anyone could purport that raising the minimum wage would help protect American workers' quality of life, or how it would have any positive effect at all. Interesting that economists feel to realize what has always happened, everywhere: raise salaries; inflation follows, mechanically, There are two main reasons: first, to raise salaries, employers need to either find the extra cash in their margins (whenever they have any left), and/or raise their prices (inflation). The second reason for inflation, is that many markets rely not only on supply & demand, but also marketing. Before you market a product, you find out what prices similar products are being sold at on the market, and how your product fits in the lineup, then you set a price according to your margins and prospective sales. The goal of any sane company is to create cash flow, and increase margins. If you customer base has more cash, you raise prices. That has always happened; no reason to believe it miraculously won't happen if the minimum wage is raised. Very surprising (or disingenuous) that these economists didn't consider this fact.
Sounds like the real problem here is the lack of a universal government. Abolish the bad governments of the world that abuse their people and give the regulatory and military power to a worldwide government that can enforce those standards everywhere (including the United States, it isn't perfect)
Mr. Wadhwa has a reputation of speaking nonsense really fast and I wonder why he is even invited to a serious debate like this one.
44 64955635Respectfully, I feel that the debate's position "FOR" was as shocking a position as I have ever heard suggested to be inflicted upon Americans. In the US, statistics demonstrate that the vast majority of individual wealth is reportedly held in the hands of only a small percentage of Americans: (A) Reportedly, 1% of US households own approximately 35% of all privately held wealth; (B) About 19% of Americans hold roughly 54% of America's individual wealth; (C) Therefore, about 20% of Americans own approximately 89% of the nation's individual wealth; (D) Leaving a mere 11% of our nation's individual wealth in the hands of the remaining 80% of the American population. It appears clear that to "Let Anyone Take A Job Anywhere" is simply another designation for open and largely uncontrolled immigration. Such an approach would permit (and highly motivate) non-citizens from around the world to enter the USA in very large numbers, take numerous jobs from Americans, do so at much lower wages and, thereby, further drive down the wages of many Americans. This approach would prove highly injurious to the 80% of Americans that are already challenged for possessing a mere 11% of individual wealth within the US, while also serving to drive many middle class Americans out of the middle class - and into poverty. Further, this approach would increase the wealth of both America's economically top 1% of individuals - and American corporations (largely due to an increase in cheaper foreign labor freely entering the "territorial" USA boundaries). This would be an immoral act inflicted upon today's living Americans, as well as upon Americans not yet born (both future natural born citizens and/or future legal immigrants). One of America's greatest blessings is that we are a nation of immigrants. Clearly, responsible immigration greatly benefits and enriches America, but only when it is controlled and strictly executed under US laws and regulations designed to benefit the American "people" as a whole. Our responsibility is, first and foremost, to our fellow Americans. Lastly, Americans have historically proven extremely generous regarding the significant volumes of assistance that we have freely given to the peoples of the world. Certainly, that generous assistance will continue - its in our nature to be generous! However, please don't ask that we sacrifice the American people to achieve your described goals. Thank you!
I would fall somewhere on the "For" side itself, but listening to the debate, the people arguing for the motion almost made me change my mind out of sheer dislike for the way they framed their arguments. Both terrible choices for this debate.
Since the state allows citizenship to incur involuntary costs on others, the mere presence of someone who wants to simply trade his labor for someone's money is not that simple so further inspection is required before normal taxpayers are willing to accept an influx of the most likely immigrants we would receive. It turns out that the birthrate of immigrants exceeds the native birthrate, while their income is much less to pay for the cost of even the K-12 education for each child, not to mention other costs. Yes, it's not their fault that the state steals from others to subsidize their higher costs, nor is it our fault that we oppose their immigration because of this fact.
While the debaters touched briefly on the economic impact of outsourcing by U.S. companies, I wish this had been addressed more carefully. I think outsourcing, particularly of skilled jobs, is more detrimental to the U.S. economy than a more open immigration policy would be. Outsourcing a job overseas and hiring an immigrant to do that job here are fundamentally different propositions.
When a U.S. company hires an overseas worker in a knowledge industry over an American who earns a higher wage, not only does someone here lose a middle class job, their community loses all the benefits that come from that job being located here: the overseas employee doesn't pay U.S. taxes or buy local goods and services. Repeat this often enough and you undermine infrastructure and production in exchange for cheaper consumption, hollowing out our economy. I'd much rather have that overseas worker immigrate here and at least put something back into our country in the form of the taxes they'd pay and the money they would spend in our markets, rather than simply benefiting multinational corporations and their stockholders.
On a tangential note, I really wanted someone to ask Vivek Wadhwa if he compensated any of the women who crowd-edited his book for their time and labor. It's all well and good to say, "look at all the free expertise I can access globally," but that's a far cry from people being able to make a living with their skills.
If global labor markets were completely liberalized, those on the bottom would rise and those on the top would fall until an equilibrium is found.
How would those poor benighted Haitans get to America? It would still be very expensive. Rob's conspiracy theory is not that unreasonable, and it would rapidly approach something of a police state to monitor everyone.
What about the native industry in places in Mali, where it is already hard enough to get by due to the loss of agriculture? All of the poor dirt farmers in the world would rush to the cities, assuming they could pay for the trip.
As an America, who despite a college degree and nearly a decade of work experience, could still be undercut by a foreign worker for a third of the cost, why on Earth would I support this motion? Why is it my responsibility to see their ship rise when mine is full of holes? Psst, Bryan, when can I get one of those sweet global citizenships you seem to have? I feel for the Hatians, but they need to stay home and improve their own lot. The brain drain would be unimaginable.
I have had my suspicions to never trust an economist reinforced by the questionable relationship to the truth that many seem to have by those present on IQ2US. This latest debate sealed it.
Caplan consistently demonizes America for selfishly not adopting the role of rich uncle to the world's developing nations. He and Vivek both advocate a system change driven by ostensible charity and good will. Oh, but wait, they are simultaneously arguing as economists! So which is it-- can't stand to see obstacles to global efficiency and production or can't bear to face the reality of poor people existing anywhere? In their tunnel vision dementia these two intelligent men see these problems as inseparable.
No one called them on this underlying assumption: How is it just or moral that the First World should be held responsible for remedying world poverty for billions of people? Where is the responsibility of those poor to their own condition, or does it even exist? If I don't seek to actively help my neighbor then I am actively harming him? According to Caplan, I am. Armed with state power to enforce supposed solutions, this is an extremely dangerous mentality.
Also notably absent was any discussion of cultural conflict inherent in the unbridled mixing of disparate populations. That would have bogged things down but this is not a purely economic issue. Many nations are living the underreported nightmare of integration failure and associated loss of social capital (trust) and disintegrating communities, developments which DO have economic impact. For someone like Caplan, these factors are pure fantasy. If only that were true.
Bryan Caplan seems to think we can offer employment to an unlimited number of immigrants without any tax-costing benefits to go along with them. He said as much. But the problem with such a policy is the same problem we face with all the undocumented immigrants we already have in this country. If a migrant worker (or his pregnant wife) with no entitlement to government benefits shows up at a hospital emergency room, are we then expected to refuse life-saving medical treatment because he has no ability to pay and no insurance, and no social security number to track down later in case he keeps checking in at multiple hospitals every time he gets hurt? How draconian a society would that make ours? That was the point Kathleen Newland kept trying to make. You cannot invite people into your country without accepting at least some measure of responsibility for their well-being. What Bryan Caplan described was blatant immigrant exploitation and yes, the Haitian workers he so repeatedly referred to would be FAR better off staying in Haiti under such a system as he proposed.
I hate to be captain obvious but this debate "Let Anyone Take A Job Anywhere" actually means "Let's change the US immigration laws so that anyone can take a job in the US".
I want to put emphasis on how Vivek dodged John Donvan's question successfully:
"Vivek, you were born in India. You went to NYU Business School, became a naturalized citizen in 1989. Just curious, if this were all happening in your life now, business school, 2013, 2014, would you go to India now or would you still want to stay
John, I wouldn't have had a choice. I couldn't get a visa. We will close the doors. We'd lock the borders. We're turning away brilliant people because of our flawed immigration policies. So I would have had to leave. "
"So I would have had to leave." The question was whether Vivek wanted to go back to India or not but he said "he would have to go back, meaning he wouldn't want to go back to India after graduating but he would have to. Who would want to leave the US and go back to India anyway? No one in their right mind would do that. Great dodge Mr. Wadhva. He also shamelessly used the woman card and I'm glad Donvan called him out on it. Bryan used the racism card subtly and Vivek used the woman card. It just shows how they didn't have a strong argument.
Anyone who has ever used Elance to bid on projects knows how ridiculous the competition gets when people from third world countries work for peanuts. These people are literally working in tech sweatshops. They don't bother raising their prices in order to win more bids. Freelancers from the US and Western Europe try to keep their hourly rates in two digit numbers to make a living for themselves so Indians increasing their hourly fees would not only create a more level playing field but they would also become rich because charging 15$ per hour would boost their income immensely considering their average hourly fee is 4-5$ an hour but they won't do it. Why? Because they know they look more attractive to employers when they slash their prices so they play the race to the bottom card. Just take some time and read the blog posts written about Elance and similar sites and then imagine the same thing not only happening online but on local level as well.
I'd also like to remind everyone that both Bryan and Vivek work in academia. This means two things: First, it is unlikely that an influx of immigrants or overseas workers would threaten their job security. Secondly and more importantly they're far from reality in their ivory tower. They churn out utopian abstract ideas that don't work in real life. I said utopian and I may have used the wrong word. It is very likely that these two people have an agenda such as serving corporate masters.
Oh by the way, I'm a legal immigrant and some of the members in my family are also immigrants. The US is already very generous with its current immigration system.
The chance for abuse, corruption and deregulation is so great as we have seen with the present state of affairs it is assured to happen. Special interest groups must be weighing in with their on-line votes. Abuse abounds...
This is a no brainer, we know exactly what would happen...Jobs have been leaving this country for years and workers compensation here has been dropping drastically. The only benefit would be for businesses. The world is falling apart! If min. wage was raised today that would remain the same for the next 50 years with no change. Hooey to this whole concept!
This debate is extremely America-centric and because of that, I think it misses an opportunity to actually be insightful and relevant. Of course, if you open up just American borders to foreign workers, then wages will drop.
On the other hand, abolish all borders -- everywhere. Let workers move freely just like capital does. That's a huge reason why wages have been driven down: capital flight because of "free trade" agreement. There's not a demand for American labor anymore because capital can get cheaper labor elsewhere, so there's left a glut of American labor stuck with shit wages. The ways to remedy this are either to adopt a protectionist stance (which most economists, even Marxian economists, agree is a bad idea) or everyone opens up their borders to all labor so labor has the truly free choice of getting a job elsewhere without fear of legal or financial ramifications. Make it truly globalized and not just globalized for capitalists.
Great point by Bryan in his opening statement that is incredibly helpful in thinking about and discussing any economic issue. The relevant quote is "How on earth can we ever judge the overall effects? There is a very simple answer. Keep both eyes firmly on production. When global production doubles, you're standard of living is very likely to rise."
While Caplan is talking about immigration, it is easy to see that this applies to almost every field on economics. Indeed, this is almost a clearer rephrasing of what Hazlitt said in "Economics in One Lesson."
Multi-laterlizing the labor movement would really cause a problem. Just like our government is getting around the law by extraordinary rendition, and let's not kid ourselves, this is bottom-line in the name of corporations and expansionism, they will attack, undercut and do anything they can to debilitate a global labor movement, and it would be almost impossible to counteract - especially without some global human rights and legal standards. This is probably centuries off.
Look at California, the result of what has been a mostly unregulated border has been that life in California has gone way down. Millions of Mexican have moved into California and the population here rebelled against paying taxes for them, to education them, to pay for their welfare, to pay for their education, and when they do not get developed and integrated into the economy - to pay for their incarceration. End result, we no longer have free schools, and a safety net for our citizens, we no longer have our own educated people to fill tech jobs, and we have a more stratified and unequal society - which we are now coming to understand is one of the roots of our political and social problems - and the basic cause of our economic stagnation.
So we have developed an implicit segregation, and a virtual slave class of people who are not citizens and hence cannot get their real legal or human rights. I see no reason to think that globalizing this is going to solve any of these problems - even if everything went right, for decades if not centuries. This is just hidden racism/classism, especially hard to understand if you have not the greatest education or economic prospects, particularly if it is generational.
This continued offering of laissez-faire capitalism with limited government has linearly coincided with the decline of America on almost every measurable level. The end of the "shining city on the hill" is because the capitalists are pushing the city down into the slums to join the rest of the underdeveloped world.
In response to Kathleen Newland's argument: why assume that letting anyone take a job anywhere would mean that the market for labor would no longer be regulated? I think the "logical" step would be to multilateralize the movement of labor as well.
I agree with what Patrick S. said about the Welfare state in which we live. I believe it was Kris Kobach who said, in the May 3, 2011 debate Don't Give Us Your Tired, Your Poor, Your Huddled Masses, that our immigration policy should be one which takes the cream of the crop, the engineers and other educated immigrants who will turn into job creators and innovators rather than one which imports poverty. His side won that debate.
We don't need, and can't really afford, to open the floodgates of immigration. We don't need more construction workers, meat packers, and pickers who will accept payment under the table in amounts lower than the minimum wage that American citizens are entitled to, forcing unemployed Americans seeking work to either remain unemployed or resign themselves to lower wages than they are entitled to under the law. That's what is meant by 'depressing wages'.
"Wages for US workers have already been stagnant for years".
Actually average real total compensation per hour for US workers has been rising. We just have not been seeing it in wages because tax policy encourages many benefits to be paid directly by the employer. See http://www.nber.org/digest/oct08/w13953.html
Studies suggest that immigration to the US is actually leading to greater income to "native" workers with a high school degree or more (through specialization) and its effects on the income of native workers with less than a high school degree is only slightly negative. A great analysis of the research is here: http://davidcard.berkeley.edu/papers/jeea2012.pdf
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