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The “anything to back this” is the explanation I go on to give. You can also read Cato, who also mentions the points that immigrants tend to take jobs we citizens don’t want, and that the large-scale entry of women into the workforce is another point of comparison for significant labor force changes.
It’s not a hypothetical, in other words. We can observe countries with different levels of population growth from births and immigration over time, as well as women entering into the workforce. What matters most is productivity. Scarcity of labor only drives up wages to the point a firm can afford.
Remittances aren’t a major variable and also foreigners buy US products.
The Rust Belt needs to adapt to a changing economy. Trying to lock in a given situation, changing factors be dammed, is the very definition of stagnation. I don’t want to end up like Europe thank you very much.
Empowering China was not a problem in pure economic terms, it was a problem in geopolitical ones. In a better world, we would had given more business to say Mexico/Canada/Brazil until China had demonstrated actual willingness to play nice with the US-led international world order. In other words, the Rust Belt can still get fucked for not being a competitive place to run a factory. Whining about it and trying to use government intervention to prevent the outcomes of markets, instead of doing a good job of competing for new industries, is some leftist bullshit that makes me very annoyed at today’s GOP.
That actually brings up another point. If you don’t let labor come to the US sufficient to keep up with hiring demands, you drive up the incentive to outsource production to where there is available labor.
So support free trade and sensible immigration policy. (I’m in the Tyler Cowen/Garret Jones camp, not the Bryan Caplan one.)
the part not mentioned at that point is "with those wages", always find it disingenuous when economists et al treat the situation as if economic incentives doesn't exist for this specific situation and the only way to have your toilet unclogged or burgers in your McDonald is by bringing more immigration, which is how you keep wages stagnant.
What I think they are missing in this excerpt, that the common man perfectly understands, is that they don't need to be perfect substitutes, they just need to be good enough. With languages as similar as english and spanish are is not all that difficult to understand each other, after all spanglish is a thing.
this is the Damore Memo all over again, and even in the same career path Peterson mentions that women are less likely to ask for a raise.
Really sure what does it matter with respect to "While it’s possible for an influx of new labor to drive down wages for a short time or in a particular field without much of a barrier to entry"? the level of elasticity of wages isn't in contention here.
why aren't they a major variable?, and foreigners may buy US products too, but if part of their wage goes to Mexico they will buy less than natives.
And we aren't living only in a economic world, but one with geopolitical considerations too.
It was shortsighted and a perfect representation of everything wrong with the "Line goes up" Meme mentality that economists et al are so fond of. Now we have a hollowed up Rust belt, a Nuclear power hostile to every value you hold dear and Cartels in your backyard. All of this with far reaching consequences like the fentanyl and homeless crisis.
the hollowing out of the rust belt proves this isn't true. Outsourcing is a product of dramatically cheaper labor costs outweighing transportation costs and import taxes.
Wages are ultimately set by productivity and what people are willing to pay. If we reduced immigration and berry prices jump that’s not going to make people happy either.
There’s nothing good about the wages of say plumbers going up forever because of an undersupply of labor (vs. increases in productivity). That’s economic stagnation. You can’t just focus on wages; you also have to consider that consumers pay the higher prices to fund the higher wages. Absent increases in productivity, higher wages mean less consumption due to higher prices and/or shortages. In other words, it’s a poorer place overall.
Remittances aren’t a major variable because I strongly doubt they are large enough to be a significant factor (prove me wrong), criticizing people for how they choose to spend their money is generally bad, and also foreigners receiving the money probably buy some international goods, including from America. Yay globalization.
My point about China is that it’s not a valid criticism of economic policy based on free trade, it’s a valid criticism of geopolitical policy. Free trade in general is great, but not when it’s with the USSR and China, or involves giving up key capabilities from a national security perspective. Europe, for example, was very stupid to become so reliant on Russian gas.
The Rust Belt failed to be competitive as economic needs changed. That’s on them. Compare them to the economic growth in the south and southwest over the same time period.
I don’t think you grasped my point about how restricting the US labor supply strengthens the incentives for companies to go looking for labor overseas, because what you wrote is entirely in line with it.
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