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I think there are two separate though somewhat linked questions in the whole debate over Vivek's recent extremely controversial post:
I think that the answer to #1 is a very complex one and largely boils down to what you value. Clearly high-skill immigrants who assimilate benefit the economy, but they also take away jobs from possible US native-born competitors. A lot of one's answer to this question will depend on whether you want to maximize your at least short term market value and are willing to accept a sort of socialist nativism to try to maximize it, or whether you value other things more. There are also obvious questions of the possible dilution of culture by immigrants, fears of future race wars, and all sorts of complicated issues.
I would like to focus on #2. Is the Asian work model actually better than the US one? To me, the answer is pretty clearly no, and this is what offends me mainly about Vivek's post. The whole idea that Americans are too lazy and we should have a work ethic more like Asians.
I don't think many would doubt that the Asian work ethic is in many ways personally damaging to people who follow it. It is both emotionally and physically damaging. I have met more Asians who complain about that work ethic than Asians who support it.
But does it even bring objectively better economic results? To me the answer seems clearly to be no, it does not. Take Japan for example. It has had more than 70 uninterrupted years of peace and capitalism, yet despite its Asian work model, it has never managed to economically catch up with the US. Now to me it seems clear that Japan is in many ways a better place to live than the US is - it has much lower levels of violent crime, it seems to have a better solution to finding people housing, and so on. But I think those things, while correlated with their work culture, are also potentially separable from their work culture. I see no fundamental reason why Japanese could not adopt a more Western type of work model while also retaining the low violent crime rates and the better housing situation.
Japanese have less per-capita wealth than Americans. If working constantly was truly superior, then why do they have this outcome? Of course America has many advantages, like a historical head-start on liberal capitalism and great geography and winning wars and so on. But it's been 70 years now... the geography is what it is, but certainly modern Japan has not been plagued by a lack of capitalism or by wars or by authoritarianism. If they slave away working so hard, or pretending to work so hard, all the time, then why are they still significantly poorer than we are? To me this suggests that the Asian work model is not essentially superior to the Western one, and it would not only be personally damaging to me if we were to import it here in the US, but it would not even make up for that by yielding better economic outcomes.
It's not just that. If the argument was "Yes, some native-born Americans will lose their jobs to immigrants, but the economy will improve overall for everyone," it might be an easier sell to those who aren't ethnonationalists. But I don't see a lot of evidence that middle class whites or working class Latinos or lower-class blacks benefit from a bunch of H1-Bs flooding certain markets, to say nothing of illegal immigrants. All that wealth they generate seems to mostly circulate within their own community or get sent back home. So it's not just techbros crying that they got laid off for an Indian H1-B and unable to see how America is benefitting by recruiting the "top 0.1%" as Elon would have us believe. It's that the techbros get laid off and their replacements aren't actually doing anything for "America"; they are generating wealth for themselves and their masters.
As for Japan, I agree with you that the Asian work model is not categorically superior to ours. (I have long pointed out, before it was fashionable, that all the people praising how great Japanese and Korean and Chinese kids are at math have never actually interacted with them in a classroom and tried to get them to produce an original idea that wasn't rote-memorized from a textbook.) However, I'll also point out, for those with short memories, that the 80s was the decade of Rising Sun. Japan was ascendant and buying up half of California, and a frequent meme was that Japan had lost World War II and was now winning the economic war in revenge. Why did their economy end up tanking in the end? It's complicated and I won't pretend to have a concise answer for that, but I will say that very few people were predicting it back then; if there were signs of an inherent weakness in the Japanese economy that would spell their eventually failure (as many people are now saying is true of China), they weren't obvious. Look at how many near-future SF tales from the era depicted Japan as the future global superpower. (Just as many people today now think it will be the Chinese century, though I think there is more justified skepticism of this as well.)
I don't know why you think that the wealth circulates in their own community - they buy goods and services like any other Americans. Cognizant H1Bs aren't getting haircuts from other Cognizant employees.
They do send remittances, but what's wrong with that? Taking money out of circulation in America reduces the price level.
It's my understanding that taking money out of circulation is bad for the nation's economy, but I am open to explanation as to how it's actually good for billions of dollars to be earned in the US and sent to other countries.
What's your view on fiscal multipliers from local consumer spending?
The basic premise of the multiplier effect is that the benefit to GDP is larger than the actual amount of currency spent, and while there are different types / uses / implications, a basic point is that the value gained from the local spending by the remittance-sender can be more than the actual dollars spent. The UN estimates that on average migrants send only about 15% of their income back home as remittances. Of that remaining 85%, if you have a multiplier effect of 1.2 you're at 102%- i.e. not only not losing net money, but even still ahead.
Of course, that assumes a global standard of remittance %, but it also assumes a low multiplier effect of only 1.2, as opposed to something lower... or considerably higher. In the US I've seen variations as high as 2, as in a dollar spent is doubling in value of the economy. While there are general theories for the variations- local spending has higher multiplier effects thanks to more immediate reuse than spending on international chains where the money goes away- it's generally understood to be positive.
As long as it is positive, however, you have to have some very wonky dynamics for the addition of a migrant- and thus an additional job to the economy- to produce less net multiplier benefit than the job sans the migrant.
Say you have a net-value job worth net-1, standard benefit to the economy. Even if the remittance-migrant taking the job lowers the net benefit to net-0.5, the person who the migrant-taking-the-job affects (displaces) has to go from a net-1 job to a sub net-0.5 to provide a worse net effect... as opposed to a worse-paying net-0.8 job (new net gain of 1.3 versus 1), or an-even-better net-1.1 job enabled by the migrant (now net 1.6).
This is, uh, not the common economic case over time. It's not impossible for it to happen- if people are permanently unemployed and don't re-enter the workforce- but for that to happen at a systemic level you're probably talking far more along the lines of 'barbarians have sacked civilization and are enslaving the artisans' than 'remittance-migrants are undercutting salaries.'
Returning to the remittance, though- as long as the balance of the relationship is favorable (more benefit than harm), then you're just seeing a cost tied to a net-benefit. As long as that holds true- as long it remains a net benefit- then you want to scale up, not down, that cost, because the scaling of the cost is also scaling the benefit.
For example, go back to our UN % of remittances as 15% of income. Wiki estimates the US was the world's largest source of remittances at 148 billion in 2017. For simplicity, let's round that to 150 billion in remittance outflow.
If we take that UN 15%, that means that 150 billion of outflow is a result of 850 billion not outflowing. Which, in turn, means $850 billion for spending on the normal things that already eat up the %s of income, like taxes / housing / food / transportation / healthcare / and so on.
Since the outflows (remittances) and inflows (everything else) are tied to the same entity (the migrant with both categories attached to them), 'saving' $150 billion by blocking the worker from arriving in the first place also means not gaining- also known as losing- the $850 billion they weren't sending out of the country.
That's not impossible to be the 'right play,' but it's making some serious assumptions.
If you don't make new assumptions though- then as long as the ratios and relationship hold true, the bigger the cost, then by consequence the greater the net benefit.
If remittances stay at 15% and the remittance relationship is net positive 150 billion < 850 billion is not as good as 150 trillion < 850 trillion
It doesn't actually matter how big the outflow goes, because what matters isn't the absolute cost, but the relative relationship. You could argue the merits of tweaking the relationship- it'd be better if the remittances were a lower percent over time- but that already occurs. It's called generational turnover, which corresponds with both assimilation (migrants establishing roots) and generational turnover (people being more willing to send to still-living parents than dead ones, and less willing to send money to cousins than siblings).
that entire paragraph sounds to me like there is an assumption of infinite jobs up for the taking, something that is not true. The displaced 25 years old coder has to work in McDonalds now that they were replaced from their job by a HB-1 and thus a teenager than in other circumstances would have occupied that position spends the rest of his time playing videogames. How do you square that?
EDIT.-
checking your source one problem I see is that their source looks to be themselves and isn't available to peruse and the last bit of "is re-ingested into the local economy, or saved." what they fail to say is that the saved wealth goes with the migrant worker to his country of origin when he leaves, be it permanently or during vacations.
By questioning an economic model where the next-best job for a coder is a McD's, but then noting you just made the economic case for migration more compelling, not less, by increasing the relative net-gain for the economy by the implication of the relative value equivalence of the two jobs.
First, there do not need to be infinite job openings for Coder to just undercut the entire market of existing coders equivalent to himself by accepting paycuts. The fewer job openings the stronger this angle is, because there doesn't need to be a new job opening for Coder to displace some other Coder-employee in the work force. The reason Coder wouldn't do this (beyond skill issue) is that Coder's self-interest is that the paycut will still be preferable to the McD's job until the McD's job is preferable to a coder-with-paycut.
If you present a model where a coder's next-best-job is as a mcdonald's clerk, and not a as a coder-with-a-paycut, then you're presenting a model where the economic value of the coder and the mcdonald's clerk are both roughly equivalent. There are a lot of jobs that are IRL inbetween the value / income spectrum of software coder and McD's employee, and if the coder wasn't already taking them for his own self-interest, that would indicate they weren't options because they were over his/her value threshold. That implies the Coder's value of net-1 is closer to the value of Mc'D's job than Coder-with-paycut.
Just the setup of the premise requires that Coder > McDonald's Clerk > Coder-with-paycut. If that coder-with-a-paycut was 20% reduction and that was still worse, then that would mean C = 1 > McD > 0.8, meaning McD is somewhere between 1 and 0.8 net value. Coder wouldn't take the McD job over the Coder-with-cut transition otherwise.
But that means the McD net value is greater than net 0.8. For the economy to get a net less from this transition when Migrant-Remittancer comes in, the net-value of the migrant-remittancer would need to be 0.2 or less. If Migrant was 'just' 0.7, that would mean the two of them together are 1.5, which is great net gain of 50% over Coder pre-migrant. If Migrant was 'just' 0.3, it'd still be a net gain. For this to be actively negative- when the next-best job is McD's paycheck level- you have to start having some really weird or extreme issues... and if those are true but Coder's former employer still prefers the migrant to them, that implies bad things about Coder's actual and absolute value.
In the real world, if someone's next-best job from a technical specialist position is entry-level menial labor like McD's, that starts to imply that Coder was incompetent and over-paid, and possibly only employed as a coder in the first place as a result of some form of corruption.
It doesn't actually matter what the exact numbers are for the relationship to be valid. You're confusing a demonstration that was explicitly simplified with a foundational claim.
The 15% remittance rate was used as a baseline, not a dependent claim, to demonstrate that a modest multiplier effect (1.2 for a 15% remittance rate, when multipliers can range far higher) would address the argument of net value leaving the economy from allowing migrants in the first place. If you change that remittance rate up or down X%, then all that means is that the multiplier rate requirement for that relationship to stay valid would go up and down. But the argument doesn't rest on a claim of what the multiplier actually is, and so contesting the remittance rate (which could just as well be lower- remittances are after essential expenses, which take %s of poorer people's income) doesn't contest the argument.
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This makes the opposite error in assuming that there is a fixed number of jobs.
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