Open Border Cost <10%

The simplest most reliable way to help the world’s poor a lot would be for rich nations to accept more poor immigrants. While doing so would lower the price of many goods and services that poor immigrants provide, it should also lower the wages of natives who compete for similar jobs.  If rich nations completely opened their borders, how big might this reduction be?  It seems that even if 90% of the workforce were immigrants, average native wages wouldn’t fall by more than ~10%.  From a new NBER immigration lit review:

Their survey of the earlier literature found that a 10% increase in the immigrant share of the labor force reduced native wages by about 1%. Recent meta-surveys … found comparable, small effects across many studies. … The large majority of studies suggest that immigration does not exert significant effects on native labor market outcomes. Even large, sudden inflows of immigrants were not found to reduce native wages or employment significantly. Effects that do exist tend to be relatively small and concentrated among natives or past immigrants that are close substitutes. … Research on the role of immigrants in the labor market mostly yields consistent findings across countries and experiences: recent migrants have lower earnings than natives, there is partial convergence with duration of stay, displacement effects tend to be small, the most affected groups are close substitutes, etc. (more)

That seems to me a reasonable price to pay for such huge assistance to the world’s poor.

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  • stephen

    Why expect the marginal cost (%1 for every 10) to be linear all the way up to %90 of the labor force?

    • stephen

      Boundary condition check: If %100 of the native workforce were replaced by immigrants, do you believe that native wages would only drop by %10?

      • David O

        I’m pretty sure Robin is assuming that the marginal impact goes down as immigrants become a larger share of the population, which is also the only solution to your boundary check. Using a linear relationship between marginal impact and immigrant share as an upper bound one arrives at <10%.

        I would also add that I think this is a reasonable assumption.

      • stephen

        For some reason I ignored the inequality and saw an equal sign, good catch.

        But the boundary condition question was about total impact not marginal, which of course says something about the latter. If no one from group A is working because they have all been replaced by group B, their wages would be far less than %90 of the total. Which is why a linear/decaying marginal impact seems weird to me. Personally, I would go with a logistic relationship.

  • Evan

    I have my doubts about the factual nature of this study, but that’s not really want i think needs to be debated. to say that a 10 or even 1% decrease in wages is “a reasonable price to pay” for assistance to the poor begs the question: what price do we owe, and why exactly are we supposed to pay?
    I see no impetus for helping the worlds poor outside of emergency help in the event of a natural disaster.

  • James Babcock

    I’m not sure I agree with the position that increasing immigration will help the world’s poor. Sure, it helps those who *actually immigrate*, but what about those who stay behind? Those people would be made worse off, by the departure of the best and most entrepreneurial people from their countries.

    • anon

      Sure, it helps those who *actually immigrate*, but what about those who stay behind?

      Those people would be helped by remittances. Labor shortages would also increase wages and lower the price of scarce resources (e.g. local real estate), which would attract outside investments. This dynamic is actually occurring in some areas of Mexico.

    • Klepp

      Actually, most of the aid that actually helps people in poorer countries is the money sent from those who manage to migrate and get paying jobs to their families and friends who stayed behind. So yes, there is the loss of the best and most entrepreneurial people from their countries, but by migrating to richer countries, these entrepreneurial people can get higher wages, and therefore help by contributing more money than they could originaly.

  • http://thecoldequations.blogspot.com coldequation

    Well, if an abstract to an article that’s hidden behind a paywall says so, it must be true.

    In lieu of being able to read the article, I’m going to go out on a limb and guess that they didn’t properly take into account that immigrants tend to go to places where there are jobs, and not go to places that don’t have jobs, thereby evening out the differences between those places that would otherwise exist. I very much doubt that, if you flooded Sticksville, Nebraska, where the native-born end up moving to Omaha because there are no jobs back home, or Detroit, or any other stagnant market, with immigrants numbering 9X the number of native inhabitants, that local wages would only drop 9%.

    I also doubt it takes the demand side into account – what happens to the price of commodities, American housing, etc when nearly 4 billion people are consuming at American levels? How far will 90% of a present-day American salary go? How will the American road network and other infrastructure handle 3-4 billion people?

    I’m also pretty damn sure that you’re not considering the preferences of the natives. Even if this level of mass immigration didn’t lower wages at all, nearly all of us would prefer not to live in a country where we were outnumbered 9 to 1 by recent third world immigrants. I’ll bet that most Americans would gladly accept a pay cut of more than 10% to avoid that.

    You also have the rare distinction of being perhaps the only Malthusian who actually favors extreme population growth.

    All in all, this post is a perfect example of why it’s a good thing that most people don’t pay attention to the advice of economists.

    • anon

      Where does this 3×10^9 number come from? That’s more than the population of India and China combined.

      • Evan

        the US current population is arround 300 million. if there was immigration to the extent that the native population became 10% of the population (90% foreign immigrants) the total US population would have to be around 3 billion.
        That amount of immigration is more theoretical than a real possibility…

  • http://daedalus2u.blogspot.com/ daedalus2u

    “It seems that even if 90% of the workforce were immigrants, average native wages wouldn’t fall by more than ~10%.”

    Really? I suppose it might be true, it just means that the sum total of native wages doesn’t fall by more than 10%. Any losses that low-wage natives have just need to be made up by high-wage natives. If 100 natives average $10 per hour before, the average doesn’t change if the “boss” makes $999.01 per hour and each of the 99 workers makes $0.01 per hour.

    I don’t see how this “helps” the poor, except by making more of them.

  • cournot

    This completely ignores all social and political externalities from immigration. There is no way that the US could have 90% of the workforce be low paid Latin American immigrants without politics changing and usually to the detriment of liberal economic policies. Moreover, crime enforcement and schooling would suffer. There is no evidence that crime can be well controlled and schooling managed in existing areas with substantial poor immigrant children from Latin America. The idea that this would improve with an order of magnitude increase in immigrants, and the idea that the welfare state would NOT expand is so absurd as to defy belief. Long before we got to 90% we would see expansions in AA, welfare, and more conflicts on crime, more gangs as well as increased unionization of many areas. And border control of crime and terrorism would basically be non-existent.

  • Vladimir M.

    It seems that even if 90% of the workforce were immigrants, average native wages wouldn’t fall by more than ~10%.

    Um, you take the finding that dy/dx = -0.1 at one particular point, and use it to conclude that y can increase by an arbitrary amount, and x will decrease by one tenth as much, no matter how large the increase in y. Are you really serious with this?

    I won’t even get into the discussion of whether the numerology that produced the first number makes any sense, or what precisely is hiding behind the statement that average wages wouldn’t fall much.

  • Doug

    I think you’re strongly neglecting second order effects here. Let’s reverse the situation, let’s say the immigration goes the other way. What if 1 million first world residents move to a third world country of 10 million? Would you really expect the living standards of the relocated workers to be only 10% less and the living standards of the native workers to be drastically higher?

    If so then there’s an even simpler policy than opening immigration. Ban white immigration from South Africa, because it pretty much fits this description.

    • anon

      “What if 1 million first world residents move to a third world country of 10 million? Would you really expect the living standards of the relocated workers to be only 10% less and the living standards of the native workers to be drastically higher?”

      Yes, provided that the institutions are first-world- rather than third-world-like. This is essentially Paul Romer’s proposal of Charter Cities.

      • Thomas

        Yes, despite the fact that these so called “charter cities” are just a euphemism for colonialism. That doesn’t make them a bad idea though, quite the opposite. Compare Rhodesia with Zimbabwe and you would be mad not to prefer the former. But you would also have to agree that in order to keep your institutions first world, you can’t have a 90% third world population and slap democracy on top of it. Which is the obvious reason I really hope Robin is trolling his own audience with this insane post.

      • anon

        “Yes, despite the fact that these so called “charter cities” are just a euphemism for colonialism.”

        Think of it as Colonialism 2.0–minus the rent-extraction, empire-building and brute coercion. In other words, no it’s not at all like colonialism.

        “But you would also have to agree that in order to keep your institutions first world, you can’t have a 90% third world population and slap democracy on top of it.”

        Democracy can be compatible with liberal institutions if it is backed by strong constitutional protections. It is ironic that some authoritarian regimes have done a better job of preserving the rule of law in developing countries, but the current situation is not necessarily optimal.

      • slapping democracy on top

        @anon: 90% of immigrants would democratically vote that the official language of the USA is Chinese and the minorities have to relocate to Madagascar as they didn’t see problem moving themselves from their home country – former native Americans can’t see it either. 😉

      • josh

        “Think of it as Colonialism 2.0–minus the rent-extraction, empire-building and brute coercion. In other words, no it’s not at all like colonialism.”

        This is why it can’t work. Can the charter city in practice use brute coercion (even killing) to control its subjects? If not, its not a government. Essentially, this is an attempt to govern without governing. This is what the US State dept. already does.

        “It is ironic that some authoritarian regimes have done a better job of preserving the rule of law in developing countries”

        No, it isn’t.

      • ad

        Think of it as Colonialism 2.0–minus the rent-extraction, empire-building and brute coercion. In other words, no it’s not at all like colonialism.

        So the difference between charter cities and colonialism is that your motives are pure, and Kiplings were not.

        According to yourself.

      • anon

        “So the difference between charter cities and colonialism is that your motives are pure, and Kiplings were not.”

        You’ve got that backwards. Rudyard Kipling is the one who ostensibly (his works seem to be intended as satire) endorses coercive imperialism based on supposedly feel-good motives.

        Romer’s proposal is not coercive in the slightest: the charter cities are established with the consent of all involved parties, and their government upholds human rights and the rule of law, which is as far from coercion as you can get.

      • ad

        Calcutta, Bombay, Hong Kong, Singapore and I don’t know how many other places were founded in much the same way. Practically the entire non-white population were immigrants from surrounding regions. They all came voluntarily.

        And yet, if you show people pictures of those cities in the days when a tiny unelected white minority ruled over vast populations of brown and yellow people, they still use words like “colonialism” and “racism”.

  • Pingback: Immigration Study Sez: C’mon in, Y’all! | Daily Libertarian™

  • Matt

    I don’t see any guarantee that the services immigrants provide will drop even as much as 10% in price (these services not being scare in supply or expensive), nor that this will be in absolute terms anything like a benefit worth 10% of wages. Likewise it seems quite likely that the costs of many desirable things such as accommodation and an immigrant free environment (probably rated highly by natives – and immigrants presumably value a native free environment) will rise to quite some extent and I would not be surprised if this offsets the increase in real purchasing power from immigrant labour.

    Otherwise, not problematic from a politics free (and impossible) egoist/utilitarian perspective (some [randomly and incoherently sampled] blend of which is implicit to economics), but deeply problematic from the perspective of actual human life as experienced (in which nations have deeply held and felt value worth spending individual or total utility to retain and people have various class and group motivations).

  • Pat

    It is likely that the improvement of the welfare of poor immigrants would be far outweighed by the costs to farm animals. Factory farms account for about 99% of meat production in the U.S. and are relatively uncommon in the Third World. An animal raised on a factory farm probably suffers far more than one raised on a farm in the Third World.

    Even if this weren’t true, and animal welfare on industrialized and Third World farms were about the same, immigration would still increase the suffering of farm animals. This is because the world’s poorest eat relatively little meat (it is resource-intensive and expensive), but Americans eat lots of it: about 30 farm animals are killed for each American each year.

    The only counterargument I see is that the welfare of humans matters more than that of non-humans. But I have never heard a good argument for making such a distinction.

  • Steve

    I’m not gonna read the whole “study”, but wages shouldn’t ever be falling, if the country is in inflation.

    Do these immigrants create new jobs when they begin to make up 10% or more of the work force?

    Because, if they replaced say, 10% of the native workforce, but wages only went down 1% due to that, but 10% of the workforce was now out of work, it would be some really myopic logic to say that what has happened is not bad.

    “C’est à ce prix que vous mangez du sucre en Europe” – “Candide”, Voltaire

    This is the price of the sugar you eat in Europe, says a slave who receives daily beatings and only two changes of clothes a year in Candide. All so Europeans can have sweets.

    And today, millions of Americans out of work, and idiots like you think that open borders are okay. That we should let people in who can’t take care of themselves in their own country, and let them overwhelm us and wash us out.

    You’re advocating “helping” the third world with a pyramid scheme that will destroy the first world. Don’t teach them to fish, just let them gorge themselves on our fishes.

    But hey, at least we’ll all be “equal” then!

  • Steve

    http://knowyourmeme.com/memes/troll-sciencetroll-physics

    I think I may make a troll physics comic out of this “study”:

    1st frame: “Try to help third worlders”
    2nd frame: “Let them take all your jobs”
    3rd frame: “Wages don’t go down for anyone”
    4th frame: *Insert troll face* “Problem, law of supply and demand?”

  • JamieNYC

    Robin, the consequences of open borders will not be strictly economic. Why do you think the poor countries are poor in the first place? Don’t you think that mass immigration would make the formerly prosperous countries as dysfunctional as those that are poor now?

    I would tend to agree that the US, with a population of 300MM could afford to admit 1MM Haitians without serious consequences, but open borders… This to me seems like such an obviously bad idea, I cannot help thinking that you are pulling our leg.

    • Gil

      I agree as to poor values being the primary determinate of poverty.

  • Andrew

    Well this appears to be a powerful example of a misinterpretation and/or misrepresentation scientific research.

    In this post our blogger has extrapolated figures in a manner never intended by the authors. At no point does the paper speculate about the effects of a 90% immigration work force. Rather, the data in the paper has come from regions with a more realistic ~10% immigration workforce and reasonable conclusions are made about those populations. To make predictions about such wildly different scenario based on trends identified in this data is grossly inappropriate. (Or to paraphrase: http://xkcd.com/605)

    Further, in the paper itself great care is taken to point out that the effects of labour force immigration are not necessarily evenly distributed across the population, with larger effects likely for at risk populations. This is a common theme within the research and this is repeated in section summaries as well as in the general conclusion. Despite this our blogger has completely ignored this important nuance when extrapolating the data and drawing his conclusion. (I would also point out that our blogger is probably not himself in an at risk population)

    I would also point out that this research paper aims to investigate the effects of labour force immigration on the immigrant and local work forces. It is not an investigation of the effect of labour force immigration on the worlds poor generally. The paper does not give any indication of how immigration would affect source countries and to suggest so as done here implies either ignorance or deceit.

    So what we are left with is a conclusion that based on an economic effect that is itself supported only by the bloggers impressive imagination. This is an incredibly disappointed piece of reporting and does damage to the role of science in informing social policy.

    This is even more surprising given the apparent credentials of the blogger. It makes me think that I must be missing something, but for the life of me I cannot think what that might be. My only hope is that someone, in particular the author, can identify my own misunderstandings. Failing this though, I sincerely hope that the author takes my and others comments on board and either is far more diligent in future when communicating research findings, or keeps his mouth shut.

  • candy

    Seriously poor people can’t afford to buy a bicycle, nevermind get to another country.

  • Buck Farmer

    Is there a way we could get a not-for-pay version of this?

    Why didn’t the U.S. have all these tremendous social/criminal problems during the 19th century?

    As I recall we did…ghettoized Irish, Slavs, and everyone from East Asia…there were riots, there was blood, the political situation was manipulated i.e. see Tammany Hall ward bosses

    Do we wish rather that we’d never let in all those [Anglo-Saxon minority] instead? Would our economy, our science, and our society be even more advanced if only we were just Anglo-Saxons (I’ll throw in Normans for fun)?

    I very much doubt this.

    The common rejoinder is that immigrants then assimilated whereas immigrants today don’t. First, I still see wide-spread immigrant assimilation. Secondly, in the past immigrants didn’t just assimilate, they changed our culture. And thirdly, do you have any strong evidence the rates are secularly different today than a century ago (and why?).

    • Gil

      Is it strange how TV shows like “Bonanza”, “The Virginian” and (to a lesser extent) “Back To The Future 3” romanticise the life of the rural communities of the 1800’s? Never are the show about what life was like in the early big cities. Chances are it was as crime-ridden as modern cities hence wouldn’t make for good TV.

  • http://www.lawyerjourno.com lawyerjourno

    Roissy says you stroll your blog. Anyways you should be thankful for he gave you so many visitors.

  • Danny Chapman

    As usual, most only mention the benefits to those that immigrate – not to the ones already here. If the borders are “open” to say Mexico, my state of Texas would be the first stop – as most poor would walk or take a cheap form of transportation.

    So though the 10/90% number might be correct, it would NOT be an EVEN amount throughout the country. It would affect the border states the most. So please, when speaking of averages – especially as they related to a country or even the world, realize that they are only that; averages. This fact is often missed by those making grand decisions from the marbled halls of government or academia (or from gated suburban homes or tall buildings in Manhattan.)

  • sabril

    This is so inane, I will assume that Hanson is joking.

    Obviously it’s the secondary and tertiary effects of immigration which are problematic. The increased costs to build and staff more hospitals, schools and jails. The welfare payments to anchor babies. The inevitable demands for political representation coupled with envy and hatred for white people. The criminal activity and no-go zones caused by restless “youths.”

    As another poster asked, why exactly are there jobs in the First World and not in the Third? People want to live in the First World just like they want to send their children to “good schools.” But what makes a school “good” in the first place? And what makes a country “First World” in the first place?

    If we (meaning Westerners) really want to economically help the Third World, then perhaps we should divide the World among European powers just like a few hundred years ago.

  • reactionary_83

    The mathematical arguments that economists use to show the benefit of immigration into richer countries do not take into account certain factors that are required for a 1st world civilization to come into being. Some good arguments have been raised so far. I would add two more to do with 1) genetics and 2) automation.

    Smarter immigrants moving from a poorer country mean that genes for positive traits (such as high IQ, good work ethic, etc.) are removed from that country. As a result, poverty levels there are increased. In the poorer country they would have been reproductively more successful and over many generations this would have spread these traits that are necessary for a complex civilization to exist (this was very well described in Clark’s excellent book ‘Farewell to Alms’). Regression to the mean must also be taken into account. Subsequent generations of immigrants have traits that are more associated with the host country than with their newly adopted country.

    Wake up and face reality. The pace of automation and its intrusion into the general workplace is increasing. The unemployment levels seen now are not going to improve for the foreseeable future unless some disaster happens. So this notion of needing immigrants to do jobs that the natives won’t do is totally bogus.

    One of the most rational and broad-minded viewpoints on the immigration issue can be found on the Parapundit blog:

    http://www.parapundit.com/archives/003344.html

    I usually refer anybody I know to that post when discussing the immigration issue and none have yet tried to refute it. It brilliantly analyzes the problem in a few paragraphs better than anything I’ve ever read.

    • Evan

      holy crap are u serious about that link containing rational thought?! its just a bunch of unfounded statements

  • Buck Farmer

    According to the BBC, immigrants to the U.K. on average pay more in taxes than they extract in social services/education/healthcare.

    The only problem (from an input/output standpoint) occurs when there is a lag in building new schools(even though they can afford it) and similar facilities.

    http://www.bbc.co.uk/programmes/b00r3qyw

    • Matt

      I believe the Polish at least break even, the others largely don’t. British natives don’t break even either, but non-Polish immigrants more so. This is an affirmation of immigration from poor countries to the extent that Poland is considered to be a poor country. I’ll try and find the paper I read this in later.

  • The other Evan

    @coldequation

    I also doubt it takes the demand side into account – what happens to the price of commodities, American housing, etc when nearly 4 billion people are consuming at American levels? How far will 90% of a present-day American salary go? How will the American road network and other infrastructure handle 3-4 billion people?

    Um, it’s pretty basic economics that greater population makes things less expensive, because there are more people to do productive work. I look forward to greater immigration because it will make labor cheaper for me. It’s true Robin has Malthusian views, but he’s not talking about a paltry3-4 billion more people, he’s talking about quintillions of brain emulators.

    I’ll bet that most Americans would gladly accept a pay cut of more than 10% to avoid that.

    I doubt it, I think most opposition to immigration would evaporate if the anti-immigrant people had to pay the full costs of their preferences, personally. The only reason they have such strong views is that border control is a government program, so they think of it in Far Mode instead of Near Mode. If they had to directly pay for border control themselves, instead of indirectly through taxes, their Near Modes would kick in and they’d soon realize their folly.

    @Evan

    holy crap are u serious about that link containing rational thought?! its just a bunch of unfounded statements

    Sadly, I think they might be serious. There’s a certain typed of person, I think in psychology they’re called “grounded people,” who feels an extreme level of attachment to their society, culture, and community, and an extreme fear of people who might alter it in some way. It probably stems from evolution, back in the bad old days when the weird people moving into your area actually had real power to hurt you.

    Grounded people have a gut fear of foreign people far out of proportion to any actual harm they inflict, so they tend to invent arguments on how to keep them away. We already have a way to keep these people away, called “neighborhoods” that keep poor and low IQ people from coming near you because it is too expensive for them to come there. But this isn’t good enough for a grounded person. Because they feel attached and grounded to their community and country, they want these people to not even be in the same country as them, even though their country is huge.

    You can tell that these people decided to keep immigrants out first, and made up their arguments for why later, by the way their arguments are structured. They always advance reasons like IQ, cultures, and voting as reasons to keep immigrants out, without ever considering a way to work around these problems. A born rules lawyer like me will immediately see workarounds that let you have open immigration, or something reasonably close to it, in spite of these problems. For instance, if you let in as many guest workers as wanted to come, but made citizenship still as hard to obtain as ever, all the complaints about immigrants voting to destroy capitalism and receive welfare would be resolved, while still allowing open immigration. None of them ever suggest this, because they want to keep people out, and made up their arguments to serve that goal and no other. Similarly, no one who makes arguments involving low Hispanic IQ suggests restricting movement of African Americans and prohibiting them from moving freely around the USA, even though that is the natural and logical conclusion of IQ-based anti-immigration arguments.

    Pro-immigration economists, like Bryan Caplan, David Friedman, and Robin, all don’t seem to be grounded people to me. They all seem glad to stand outside their society and judge it, and they also tend to anticipate radical cultural and technological change with glee and excitement. For this reason they sound bizarre to grounded people, who can’t understand why they don’t notice this huge and obvious threat.

    For the record, I’m not a grounded person, and to me most extreme anti-immigration types sound paranoid at best, and pathological at worst. I can’t understand why they aren’t embracing a way to help millions of people that requires absolutely no effort on their part. To me open borders sound like the deal of the century, a way to help lots of other people without spending any of my own time or money.

    • http://daedalus2u.blogspot.com/ daedalus2u

      The other Evan, that idea of “grounded people” is interesting, I have never heard it before. Do you have a link? I would simply consider such people to be xenophobic bigots (which I have written about).

      http://daedalus2u.blogspot.com/2010/03/physiology-behind-xenophobia.html

      They do need to avoid people who are not like them. As I see it, the feelings of xenophobia develop because these people do not understand “the other” at a sufficiently primitive enough level (below verbal language usually). When people meet, they in effect do a Turing Test to see if the other individual is “human enough”. If the error rate is too high (if there is not a good one-to-one matching of cognitive and language primitives), then feelings of xenophobia are triggered through the uncanny valley.

      It is the feelings of revulsion that come from the uncanny valley that trigger the rationalizations of why “the other” is hated, race, religion, IQ, “death panels”, sexual orientation, etc. The hating comes first.

      My hypothesis provides a rationale why such people need to avoid contacts with the objects of their bigotry. Contact with “the other” causes your own mental processes to self-modify to try and understand “the other”, and eventually you will understand “the other” because you will have a piece inside of you that is “other-like”. If you continue to hate “the other”, then you will start to hate yourself.

      This is what is behind what the IQ bigots are doing. They feel hatred and need to justify their hatred as being due to some property of the people they are hating. In reality the hatred comes from the haters. Such people think the objects of their hatred are low IQ simply because they are unable to understand “the other” on their terms, and so everything that is different is discounted to be of zero value.

      You have to be able to understand an intelligence to be able to evaluate it. If you don’t understand it, then you can’t evaluate it. This is what most of the IQ fans are unable to appreciate. They have a limited idea of what intelligence is, and can’t evaluate anything outside their conceptualization. This holds true for AI too (which is why I think there will never be a singularity. The AI will be unable to evaluate the smarter AI it is trying to build to tell if it is actually smarter, or simply insane in a way that the less smart AI can’t figure out. )

      If the IQ bigots really did want to raise the IQ of everyone, they would be doing what we know works, better nutrition, better education, better prenatal care, less bullying, less poverty, etc. They are not doing what we know works, they are trying to use IQ as a rationalization to be bigots against people who are not like them. Pretty transparent if you ask me.

      I think the reason they don’t want those people even as guest workers is that there would be gene flow, and that would be unacceptable.

    • http://thecoldequations.blogspot.com coldequation

      Um, it’s pretty basic economics that greater population makes things less expensive, because there are more people to do productive work.

      That may be true when it comes to things that are produced by work. It’s mostly true whether they live in the US or elsewhere. A low-paid Chinese factory worker does not have to live in the US to make manufactured goods cheaper. In fact, he would probably find that he would do better not working and living off the system than working for Chinese wages in the US (if we didn’t have minimum wage laws anyway).

      For things that need to be done locally, there generally aren’t many economies of scale. A maid service or a lawn service isn’t much more efficient if it’s larger scale. A nurse can handle 2-6 beds whether she’s in a small hospital or a large hospital. That means that, if immigration caused prices to drop, it would mostly have to be through wage decreases. I think that would happen, but that contradicts the hypothesis of this post, which is that wages would only drop 10%.

      Other things are not created by labor. What’s the single biggest expense for most people? Housing. More immigration means more potential construction workers, but it doesn’t create land near desirable locations, nor does it make Americans want to live in multi-dwelling housing instead of detached housing. The cost of housing is already much higher than the amortized cost of housing construction in most areas. I also don’t see how 3 billion immigrants are going to cause enough gasoline to be produced to fuel enough cars to satisfy 3 billion people who expect an American standard of living. Same goes for lots of other natural resources, in greater or lesser degrees.

      In general, it’s clear that immigrants would increase supply, lowering prices, and increase demand, increasing prices. It’s not clear what the net result would be.

      And you don’t think that people would pay not to live in your immigrant-filled hell, but you acknowledge the existence of “grounded people?” Don’t you think your “grounded people” would take a 10% pay cut to avoid living in it? If not, their fear must not be very “extreme.” And how do you know that a bunch of weirdos moving into your neighborhood can’t hurt you anymore? Has it not hurt, for example, Palestinians in recent times? Can you take rule of law for granted when the majority of your population are third worlders?

  • reactionary_83

    It is true to a certain extent that the attitudes of ‘grounded’ people towards immigration into their native territory arises is a sentimental response that arises from a less evolved part of the brain. However in a Darwinian World this evolved for a good reason, harsh though this reality may seem. Any advanced country will have a fraction of people with low IQ through absolutely no fault of their own. The bigger this fraction becomes, however, the more dysfunctional that country will become.

    Like Caplan, Friedman and Hanson I would like to see future technological progress for the indefinite future-this would improve the lives of everybody on the planet. As the low IQ fraction of a country’s demographics increases there will be greater demand for people in areas such as policing,medicine and govt bureaucracy. Due to this demand people with higher IQ will be attracted to these jobs instead of performing fundamental and applied research. The development of resulting technologies would help those in the 3rd world in the long run. Open borders would help those from 3rd world countries in the short term but would dissuade those with higher IQ from developing things in the long run. High IQ people living in 3rd world countries are not renowned for devising new innovations that will improve everybody’s prospects for the foreseeable future.

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    That seems to me a reasonable price to pay for such huge assistance to the world’s poor.

    I don’t think that that is the major price. I don’t think that mass immigration and democracy go well together. Hereditary systems of rule would be different – however much immigration there was, the same people would remain in charge.

    Our political problem with immigration is due to the fact that people vote with ballot papers more than with their feet.

  • Luke Parrish

    Perhaps more effective would be a job-trading arrangement between more developed and less developed countries. For example, unemployed individuals from the US with a high level of education could move to Mexico to work at jobs they are suited for (e.g. teaching, engineering), and in exchange an equal number of individuals from Mexico would move to the US to fill menial labor positions. The reduction in number of overqualified candidates for positions requiring education in the the more developed country would generate more opportunities for upward mobility, and their presence in the less developed country would accelerate its development.

  • The other Evan

    Like Caplan, Friedman and Hanson I would like to see future technological progress for the indefinite future-this would improve the lives of everybody on the planet. As the low IQ fraction of a country’s demographics increases there will be greater demand for people in areas such as policing,medicine and govt bureaucracy. Due to this demand people with higher IQ will be attracted to these jobs instead of performing fundamental and applied research.

    First of all, I’d like to commend you for actually thinking of these people at all. The impression I get from Steve Sailer and most of the other VDare people is that low IQ people aren’t really human and beneath any moral consideration. I don’t feel the warmth and the desire to improve humanity that I feel when I read something written by Caplan, Friedman, Hanson, or Hanson’s former coblogger Yudkowsky. Instead I feel this simmering hate and a desire to keep these icky people away.

    That being said, while your argument does make a good point against mass granting of citizenship, I don’t think it does as well against increasing the amount of guest workers without increasing the amount of citizens. That solves nearly every objection everyone in this thread, and in anti-immigration debates in general, make:
    -Guest workers can’t vote, so they won’t vote for socialism
    -Guest workers have a lot harder time using the welfare state
    -Guest workers won’t commit a lot of crime out of fear of deportation.
    -Guest workers send money back to their home country, so that country won’t be deprived of workers.
    -Since guest workers work and don’t commit many crimes they won’t suck away high IQ people from other work, in fact their comparative advantage would increase the number of high IQ work done by freeing up high IQ people from low-IQ labor.
    -This policy would be easier to implement than other ones. It will likely be a lot easier to convince the electorate to let in more guest workers than convince them to let in more citizens.

    I think the main reason so many anti-immigration types focus on letting in more citizens, rather than more guest workers, is that it is a lot easier to attack citizenship immigration, since it has a lot more obvious downsides. By contrast there is little in the way of arguments against more guest workers that don’t sound racist or morally myopic.

    However in a Darwinian World this evolved for a good reason, harsh though this reality may seem.

    Just because something evolved doesn’t mean its good. Don’t commit the naturalistic fallacy. And just because something was useful in the ancestral environment, doesn’t mean it is now. It is possible to evolve to extinction. in my view groupishness was evolutionarily useful in the past, but only in the short term interests of our genes, in the long run it impeded human development by impeding free trade, globalization, and peace.

    • http://thecoldequations.blogspot.com coldequation

      The 14th Amendment pretty much ruins any guest worker plan. Even now we don’t give citizenship to the majority of immigrants, but their anchor babies have birthright citizenship, so in the long run, it doesn’t matter. Your guest worker plan would change nothing.

      Even if we did repeal the 14th Amendment, the long-run track record of keeping lower castes down isn’t very encouraging. In most cases the lower castes end up getting equality and intermarrying with their masters. Hardassed, unempathetic Romans and Southern Americans ended up freeing their slaves. Modern Italians are as much descended from Roman slaves as they are from Roman citizens. The same will be true of Americans in a few more centuries. If assholes like those couldn’t keep their subjects down, what chance do we have, when non-discrimination is practically the state religion? It would require that Americans stop acting like Americans. You might as well ask us to take up mandatory female circumcision. Your proposal has no bearing on reality. Of course, a Sperg of the Caplan/Hanson type, living in his world of abstraction, would never understand this.

      If you could wave a magic wand and make it work, it would probably be OK for a lot of Americans, just like it is for Emiratis (Dubai). I wrote about this a year ago, so it’s not like it never occured to anyone on the immigration restrictionist side.

  • Jordan

    There’s a problem with this post, based on whatever your (the reader’s) beliefs happen to be:

    1. You’re a racist, and think that the most important aspects of culture are immutable and solely the domain of genetics. I don’t need to explain the problem with the post in this case.

    2. You think that culture (including traditions, laws, taboos, social incentives, attitudes to outsiders, and business practices) has absolutely no effect whatsoever on success, and the current wealth situation is based 100%, entirely on circumstance of geographic location. In this case, yes, the plan itself is fine, but now you have to explain why someone like you would possibly be reading a blog that concerns itself with “utility”.

    3. You think that culture plays some role in success, and that wealthy countries tend to have better overall meme-sets. In this case, you should be terrified at the prospect that people chasing the money from less-successful meme-sets (cultures) are going to completely subsume the uniquely beneficial memes in this one. Ecologies can recover from stress, but too much too fast and the thing falls apart forever.

    The only mindset I can imagine being in support of this plan is one that thinks that culture plays some role in success, but not enough, and that the success of wealthy culture X is actually more-deserved by – and will be put to better use by – poor culture Y.

    Of course, this is only about entirely open borders. Being entirely closed to the memes of immigrant cultures is also bad in the long run. In that case, the first time another culture goes up against your isolated dodo bird of a culture, your day is ruined. (See: history of the Americas)

  • http://race-traitor.blogspot.com Race Traitor

    I wish that seasteading were real. One seastead with open borders, another with restricted immigration. I predict that a prediction market would predict that the seastead flooded with Somalis and Hondurans would be much less productive than the one Patri Friedman was one.

  • reactionary_83

    The Other Evan,

    In theory, the Guest worker program you have proposed sounds like a great idea. In practice however, guest workers do not want to their return to their host native country due to various disadvantages (after all, why did they leave in the first place?). If anything, conditions in the native country would among have deteriorated as those on the right hand side of the Bell Curve would be the first to leave. The only means of overcoming this obstacle would be mass deportation and this will not happen due to human rights considerations. As Coldequation mentions, various loopholes would be found to facilitate citizenship. Wealthy countries tend to emphasize human rights to a greater extent and so there would be no shortage of people to aid them in this process. We therefore end back up at square one, which, as I described previously, harms the interest of everybody in the long run.

    The second argument against a guest Worker program (which wasn’t valid in the past perhaps) is the accelerating pace of automation. The rate of job destruction surely now exceed that of job creation. The unemployment rate will only increase in the future in 1st world countries (where the technologies can be maintained and improved upon), even without any immigration.

  • http://blog.ulaapatagonia.com/patagonia/mirando-el-bosque-en-ulaa-maria-godoy/ Maxwell K. Reeves

    In that more technical paper Peri found a clever way to control for Ive discussed before that can contaminate estimates of the effects of immigration on native employment outcomes. I thought it was important though to point out that academic economists dont really contest the existence of this . That said we have learned a lot by trying to poke holes in the landmark experimental studies summarized and ..While those famous papers dealt with important measurement issues weve also learned that experimental studies are inadequate to deal with at least two other factors indicated by economic theory that may be biasing the one way or another..First and this is the measurement issue dealt with by the experimental studies we want to be sure that there is not something that makes a particular area or job a more attractive place to work causing both foreigners and natives to migrate to that area or job.

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