5 ms·

Wage stagnation has nothing to do with immigration and everything to do with the obscenely rich being permitted to get obscenely richer. It's disappointing that

Wage stagnation has nothing to do with immigration and everything to do with the obscenely rich being permitted to get obscenely richer. It's disappointing that your friends have fallen for that lie.

sokoloff 6y ago
Nothing to do with it is a strong claim. Do you believe that labor is a market that does not generally behave like other markets in terms of supply and demand for price discovery? Do you believe that immigration did not increase supply by more than it increased demand? I’m trying to tease apart and understand your certainty that there is no downward pressure on wages from immigration.
- readams 6y ago
  Immigrants also grow the economy and so create jobs. They participate in the economy as consumers and as entrepreneurs. Maybe a way to think about it that might help is to imagine a country containing only you. Would your job be safe?
  - Samuel10889 6y ago
    On the other hand imagine there was only one country in the world containing everyone, what would the average wage be?
    - bmelton 6y ago
      This is somewhat dated, but the median salary on planet Earth is ~9k a year. https://worldpopulationreview.com/country-rankings/median-income-by-country https://worldpopulationreview.com/country-rankings/median-in...
  - Grustaf 6y ago
    Imagine if you will two countries, one poor and one well off. What happens if you merge them? The average salary drops, GDP per capita drops, tax revenue per capita drops, will infrastructure and welfare spend per capita rises. You might believe that it will catch up at some point, but no body think this will take less than a few generations. Who benefits in the meantime? The largest corporations, the ones whose size is only limited by the size of the country. So not your local restaurant.
sowjetthrowaway 6y ago
its basic supply and demand. the wealthy encourage mass immigration because it makes the cost of labour cheaper in the economies they run businesses in. see: h1b visas and ultra pro immigration silicon valley companies
didericis 6y ago
Those aren’t mutually exclusive ideas.
BobbyJo 6y ago
If we took every dollar from all the billionaires in the US we could give everyone around 10k. If we did the same for the entire top 1% we could give everyone around 100k. We could do this exactly once, and it would destroy enough wealth (most of this money is in assets, whose value would be destroyed in the process) that the real value you'd get out of that number would be A LOT less. The rich are not the source of the working man's problems no matter how many times it gets repeated. People are payed based on supply and demand. Supply and demand is a byproduct of private property. If you like owning things, you're stuck with capitalism and supply and demand.
- andi999 6y ago
  Yes. Also the main point is: this means most of the gains (almost all) of a company go to the employees. The idea 9f let's redistribute income so the rich get less and everybody gets more would not make a real difference. (that is also the reason why the middle class has the highest total tax)
  - BobbyJo 6y ago
    No, I got that part. My argument is that if those gains were redistributed to workers, income gains would be modest at best. 55k to 65k for a single year if we got rid of all billionaires. If we assume we instead distribute the growth of the wealth as income, it's more like 500-1000 dollars a year more in income. If we take everything from everyone worth 2 million or more, and distribute it at 10% a year, that's still only 10k a year extra.
    - chii 6y ago
      And also that by doing this sort of redistribution, you will disincentivize investment, and incentivize consumption (from the rich) - after all, what good would the investment be, if it is going to be taken away when it succeeds, but you take on all the risk of the investment? Rather buy a yacht and go on lavish, extravagent holidays with the money - they can't redistribute the memories in the brain!
- mempko 6y ago
tjs8rj 6y ago
Where are you getting this from? What you’re talking about is a symptom, not a cause. While the issue is still hotly debated, the biggest causes for inequality and wage stagnation since the 1980s in order of impact is: skill-biased technological change (tech favoring skilled workers and amplifying their output, network effects, winner take all economics), globalization and offshoring, and China. For comparison, the rise of China alone is believed to account for the loss of 20%+ of the manufacturing sector. Income taxes across the board are inequality decreasing in their effect. I agree that more distribution is better for societal welfare, but “not taxing the rich enough” isn’t the cause of inequality
- jjk166 6y ago
  > While the issue is still hotly debated, the biggest causes for inequality and wage stagnation since the 1980s in order of impact is: skill-biased technological change (tech favoring skilled workers and amplifying their output, network effects, winner take all economics), globalization and offshoring, and China. > For comparison, the rise of China alone is believed to account for the loss of 20%+ of the manufacturing sector. Income taxes across the board are inequality decreasing in their effect This narrative comes from people who have no understanding of manufacturing and don't take the time to check their predictions. An incredibly simple test is checking if decreases in american manufacturing employment coincide with increases in chinese and other overseas production (hint: they don't) or if american production decreased at the same imports grew (they didn't). The main factor in manufacturing has been process changes which have dramatically increased worker productivity. For example, in 1920 it took 3 man-hours to produce 1 ton of steel in the US, now in the US 1 man hour produces 300 tons. And the improved productivity was not limited to developed countries with expensive labor markets - comparable changes were seen in countries like brazil and south africa over the same period. People imagine such technological changes to be things like robots and machinery automating low skill tasks, and it's easy enough to see that's not happening. However people rarely appreciate where the real cost is in manufacturing. Take for example a plastic extruder: it takes a whole team of skilled people to get it started up, but a single unskilled person can easily operate it while it is running. Simple changes that allow you to run that extruder for longer without stopping, such as switching shift times and online maintenance, significantly reduce labor requirements even though no tasks are being automated. The fact is americans are producing more, but they're not being compensated more. There aren't immigrants, foreigners, or robots doing the jobs cheaper, the jobs simply aren't being done because they are unnecessary now. Really, the issue is that the costs of these goods and services which are now so much easier to produce should have fallen but didn't (despite that 1000 fold increase in steel production per unit of labor, inflation adjusted the price of steel has remained constant over the same time period).

Wage stagnation has nothing to do with immigration and everything to do with the obscenely rich being permitted to get obscenely richer. It's disappointing that your friends have fallen for that lie.

sokoloff 6y ago

Nothing to do with it is a strong claim. Do you believe that labor is a market that does not generally behave like other markets in terms of supply and demand for price discovery? Do you believe that immigration did not increase supply by more than it increased demand? I’m trying to tease apart and understand your certainty that there is no downward pressure on wages from immigration.

readams 6y ago
Immigrants also grow the economy and so create jobs. They participate in the economy as consumers and as entrepreneurs. Maybe a way to think about it that might help is to imagine a country containing only you. Would your job be safe?
- Samuel10889 6y ago
  On the other hand imagine there was only one country in the world containing everyone, what would the average wage be?
  - bmelton 6y ago
    This is somewhat dated, but the median salary on planet Earth is ~9k a year. https://worldpopulationreview.com/country-rankings/median-income-by-country https://worldpopulationreview.com/country-rankings/median-in...
- Grustaf 6y ago
  Imagine if you will two countries, one poor and one well off. What happens if you merge them? The average salary drops, GDP per capita drops, tax revenue per capita drops, will infrastructure and welfare spend per capita rises. You might believe that it will catch up at some point, but no body think this will take less than a few generations. Who benefits in the meantime? The largest corporations, the ones whose size is only limited by the size of the country. So not your local restaurant.

sowjetthrowaway 6y ago

its basic supply and demand. the wealthy encourage mass immigration because it makes the cost of labour cheaper in the economies they run businesses in. see: h1b visas and ultra pro immigration silicon valley companies

didericis 6y ago

Those aren’t mutually exclusive ideas.

BobbyJo 6y ago

If we took every dollar from all the billionaires in the US we could give everyone around 10k. If we did the same for the entire top 1% we could give everyone around 100k. We could do this exactly once, and it would destroy enough wealth (most of this money is in assets, whose value would be destroyed in the process) that the real value you'd get out of that number would be A LOT less. The rich are not the source of the working man's problems no matter how many times it gets repeated. People are payed based on supply and demand. Supply and demand is a byproduct of private property. If you like owning things, you're stuck with capitalism and supply and demand.

andi999 6y ago
Yes. Also the main point is: this means most of the gains (almost all) of a company go to the employees. The idea 9f let's redistribute income so the rich get less and everybody gets more would not make a real difference. (that is also the reason why the middle class has the highest total tax)
- BobbyJo 6y ago
  No, I got that part. My argument is that if those gains were redistributed to workers, income gains would be modest at best. 55k to 65k for a single year if we got rid of all billionaires. If we assume we instead distribute the growth of the wealth as income, it's more like 500-1000 dollars a year more in income. If we take everything from everyone worth 2 million or more, and distribute it at 10% a year, that's still only 10k a year extra.
  - chii 6y ago
    And also that by doing this sort of redistribution, you will disincentivize investment, and incentivize consumption (from the rich) - after all, what good would the investment be, if it is going to be taken away when it succeeds, but you take on all the risk of the investment? Rather buy a yacht and go on lavish, extravagent holidays with the money - they can't redistribute the memories in the brain!
mempko 6y ago

tjs8rj 6y ago

Where are you getting this from? What you’re talking about is a symptom, not a cause. While the issue is still hotly debated, the biggest causes for inequality and wage stagnation since the 1980s in order of impact is: skill-biased technological change (tech favoring skilled workers and amplifying their output, network effects, winner take all economics), globalization and offshoring, and China. For comparison, the rise of China alone is believed to account for the loss of 20%+ of the manufacturing sector. Income taxes across the board are inequality decreasing in their effect. I agree that more distribution is better for societal welfare, but “not taxing the rich enough” isn’t the cause of inequality

jjk166 6y ago
> While the issue is still hotly debated, the biggest causes for inequality and wage stagnation since the 1980s in order of impact is: skill-biased technological change (tech favoring skilled workers and amplifying their output, network effects, winner take all economics), globalization and offshoring, and China. > For comparison, the rise of China alone is believed to account for the loss of 20%+ of the manufacturing sector. Income taxes across the board are inequality decreasing in their effect This narrative comes from people who have no understanding of manufacturing and don't take the time to check their predictions. An incredibly simple test is checking if decreases in american manufacturing employment coincide with increases in chinese and other overseas production (hint: they don't) or if american production decreased at the same imports grew (they didn't). The main factor in manufacturing has been process changes which have dramatically increased worker productivity. For example, in 1920 it took 3 man-hours to produce 1 ton of steel in the US, now in the US 1 man hour produces 300 tons. And the improved productivity was not limited to developed countries with expensive labor markets - comparable changes were seen in countries like brazil and south africa over the same period. People imagine such technological changes to be things like robots and machinery automating low skill tasks, and it's easy enough to see that's not happening. However people rarely appreciate where the real cost is in manufacturing. Take for example a plastic extruder: it takes a whole team of skilled people to get it started up, but a single unskilled person can easily operate it while it is running. Simple changes that allow you to run that extruder for longer without stopping, such as switching shift times and online maintenance, significantly reduce labor requirements even though no tasks are being automated. The fact is americans are producing more, but they're not being compensated more. There aren't immigrants, foreigners, or robots doing the jobs cheaper, the jobs simply aren't being done because they are unnecessary now. Really, the issue is that the costs of these goods and services which are now so much easier to produce should have fallen but didn't (despite that 1000 fold increase in steel production per unit of labor, inflation adjusted the price of steel has remained constant over the same time period).