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
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
This country has succeeded on the labor of the most ambitious foreign immigrants. As our society ages we need skilled labor to contribute to the support of aged-out workers. Also, workers driven to immigrate provide an immigrant vitality to the population.
Allowing people to move as freely as goods and capital would make wonders for the world economy and rich and poor people alike. However, it will never happen. It's our bloated welfare state that stands in the way. It's just impossible to have a flood of foreign unskilled workers come to the US if you have to provide them with the same level of healthcare, insurance and pensions etc. that we provide for our own citizens.
It worked great when people came to the US to work before the immigration laws changed in the early 20th century when we didn't have a welfare state. When people come to a new country to work, everybody wins. But if you have a welfare state, many will come for the benefits, like a lot of the immigration today in Europe. And with trillion dollar budget deficits, we certainly can't afford that.
@ Scott I have lived and worked in other countries and STILL BELIEVE FIRMLY we ARE the premier cultivator or progress. China can do nothing more than copy and steal ideas; no original products or innovation comes from Asia, I'd say in China 90% of what they produce is inferior and at the cost of their people and environment they care nothing about. EVERYONE wants to go to Universities and move to the US and for a reason. Too many of the students coming with advanced degrees from other countries ( I see many of them) furthering their education here in the US simply lack problem solving skills and creativity. I see dozens of them weekly. If the United States was not still the best place for social progress the world would not be knocking at the borders doing whatever they can to get here. Canada has a high quality of life but lack the ambition or ability to do anything but sell their resources to others. India produces lots of PhD's here in America but they never leave. They all stay here. That says volumes. Where have you lived and what country specifically are you thinking of? I have worked in Hong Kong and my husband still works there. It's fine with me if the people coming here have to jump through all the hoops and pay the infrastructure taxes WE had to pay living and working in other countries. But we just let people waltz in take all kinds of jobs including physicians in hospitals educated elsewhere and engineers by the thousands. (NUMBERS USA can educate you on those statistics) People who keep talking about unskilled labor being the problem with labor globalization do NOT understand the problem. The issue I have is the incredible number of government and professional jobs being taken by people from out of the US. (never mind all the people on food stamps here illegally who never paid a penny into the system) We ALREADY have poor reciprocation in most countries for Americans who want to go there to work. Unless you want to teach English for peanuts it's very difficult for American's to work in other counties. This I know for fact from experience.
Yes, people should be free to immigrate anywhere and work anywhere they wish. But we have to establish the context this question is being asked in.
Ideally, the market should be truly free. A truly laissez-faire capitalism, with no regulation and no taxes. The government should be very limited, solely to the role of police, courts, and army. All of which should be funded and staffed on a voluntary basis.
In that context, open immigration should absolutely be allowed.
However, in today's context, the government's iron grip on our economy and our lives has created a conflict of interest between citizens and immigrants. It is mainly the welfare state that is creating this conflict of interest. It creates an incentive for immigrants to come here and -not- work and receive other peoples' money in the form of welfare benefits.
Keep in mind though, that this conflict of interest is an artificial one created by the government. We should move toward a freer society, where everyone is able to take whatever actions they wish in the economy (as long as they aren't committing force or fraud). And then it will be in everyone's interest to have open immigration, and we should very well encourage open immigration at that time.
The freer the market is, the more we have to gain from open immigration and letting anyone take a job everywhere. The more unfree the market is, the more likely we are to simply be exploited by those immigrants looking for a free ride from the system that forces us to give them our money. (This goes for everyone who wants a free ride from the state. But the topic is about immigration, so I focused on that.)
Wages for US workers have already been stagnant for years due to the influx of cheaper foreign or illegal alien labor. With millions of US citizens out of work, this policy will further damage our citizens. The only benefit is lower labor costs for unscrupulous businesses. Who will buy their products or services when we're working at part time minimum wage jobs?
I am firmly FOR the globalization of labor, not only for those that would come to the US for opportunities, but also for those US citizens that are increasingly finding that some of the best and most exciting jobs are found overseas. If the US is resistant to a simple and inclusive work visa program, we can expect in-kind reciprocation, as well as ill-will from our global partners. We do a disservice to our citizens by limiting their opportunities to find work abroad.
Also, it is an unfortunate reality that the US is no longer the premier cultivator of ambitious and educated innovators, scientists, entrepreneurs, and other drivers of social progress. We DO enjoy many strong and revered institutions, state-of-the art research and educational facilities, and a high quality of life that attract these kinds of people, if only we let them come.
For unskilled labor, we already outsource work when it becomes too expensive to produce domestically. Instead of exporting manufacturing and services, why not bring unskilled laborers (and prospective consumers) legally to our country, and keep the corporate taxes as well as new individual consumer revenues here in this country?
I am glad I get to vote on these debates!!
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