August 18, 2005

"The costs of immigration"

From Alfred Tella, "former Georgetown University research professor of economics" comes this rundown of the costs of the current de facto immigration system:

It is often contended that low-skilled immigrants work in jobs U.S. natives don't want. That is doubtful. What American workers don't want are low wages depressed by the easy availability of immigrant workers. Many native-born are available for work and would willingly accept low-skilled jobs at the higher wage that would be offered if there weren't an excess supply of immigrants holding wages down...

Economist Ethan Lewis of the Federal Reserve Bank of Philadelphia recently completed a significant econometric study, "Immigration, Skill Mix, and the Choice of Technology" (May 2005). Using Census Bureau plant-level data, he examined the effect of low-skilled labor on technology adoption in U.S. manufacturing. The study concluded "plants in areas experiencing faster less-skilled relative labor supply growth adopted automation technology more slowly... and even de-adoption was not uncommon. ... The relative supply of less-skilled labor reduced demand for technology." In his paper, the author cited other related studies.

The negative effect of low-skilled labor on technological development is particularly worrisome. Technology-induced productivity growth in many ways is our golden goose. It boosts our incomes, lowers prices, fights inflation, helps keep interest rates low, gives us greater leisure, and raises our standard of living. What hurts productivity hurts us all. All told, the economic costs of low-skilled immigration are too high...

Posted to Immigration2005b at August 18, 2005 05:32 PM

Comments

This is exactly what theory would expect. Abundant labor at the same or declining wages, will tend to kill the demand for labor saving capital within an occupation. The surplus of labor at declining skill levels entrains a process of substitution, in which labor tends to substitute for the increase in capital per worker which otherwise goes along, and indeed causes per capita economic growth. Without per capita economic growth and the demand for technological improvements which save labor used for agiven task, technology makes nop progress overall, and decline sets in, as in Africa. that power seeking offcials would want us to become like africa is no surprise. thank goodness there are some honest researchers who will give us the inductive data showing the beginnings of this process.

Posted by: John S Bolton at August 18, 2005 05:49 PM

To Bush and his controllers in the cheap-labor profiteer community nations are obsolete and a study like this therefore has no relevance. But the vast majority of US citizens still believe they are citizens of a sovereign nation with the democratic right to at least attempt to control their destiny as a people. Bush tries to obscure his Globalism with the pursuit of the senseless war in Iraq and its appeals to militaristic chauvinism.

Posted by: perrozul del norte at August 18, 2005 06:13 PM