4 ms·

Here is the quote from Alan Greenspan: "Yes, there are options to combat that decline, but contrary to what many people believe, we do very poorly in opening u

by tarr11 5y ago

Here is the quote from Alan Greenspan: "Yes, there are options to combat that decline, but contrary to what many people believe, we do very poorly in opening up our borders to skilled immigrants. Our H1-B visa restrictions are a disgrace. Most high-income people in our country do not realize that their incomes are being subsidized by their protection from competition from highly skilled people who are prevented from immigrating to the United States. But we need such skills in order to staff our productive economy, so that the standard of living for Americans as a whole can grow." https://www.theglobalist.com/globalist-interview-with-alan-greenspan-should-jobs-matter-in-the-u-s-trade-debate/ https://www.theglobalist.com/globalist-interview-with-alan-g...

hannasanarion 5y ago
The standard of living for Americans doesn't depend on the pay rate of software engineers. The profit margins of software companies are already astonishingly high. No tech firm is buckling under the weight of their payroll, they are making bank. Google's 2nd quarter financials show a 64% operating profit. Arguably there isn't enough money from these companies going back to the people who actually did the work to generate that success. They could start paying everybody double and still be making more money than any other market sector could dream of. Depressing the wages of software engineers doesn't mean increased standard of living for Americans, it can only mean increased profit margins for stockholders.
- petersellers 5y ago
  The point is that by allowing more highly-skilled immigrants into the country, it enables many other companies to make use of that high-skill labor and increase productivity (which would increase our standard of living, in theory). The lowering of wages is only a side effect of that.
  - onlyrealcuzzo 5y ago
    Why do the companies have to be in the US? Why can't they be in Mexico or India or Brazil - and US investors just invest in those companies and get the resulting dividends? Why does the company have to exist in the US for us to get any benefits of increased productivity?
    - kwere 5y ago
      1) network effects 2) pro business rule of law & attitude 3) cash > "political" network
  - jl2718 5y ago
    But there is generational fallout from this policy too.
btilly 5y ago
And he's right. Immigration restrictions are economically like any other kind of import barrier. It will boost the money to be made in the sector in question, while being bad for the US economy as a whole. In the long run we are all better off from free markets, no matter who is impacted by the short-term disruption.
- geebee 5y ago
  I agree, but the H1B really isn't a general immigration category, or even a general skilled immigration category. In a free labor market, workers are free to choose a field in response to market conditions and their own personal preferences. Job Factors may include salary, flexibility, job stability, long-term career stability, up front investments, probability of success, prestige, the opportunity to do good and work with people (or not have to work with people). If people with the freedom of choice prefer to be a lawyer in NY city over becoming a software developer in silicon valley, that's the market's answer. If tech companies want people to make decisions differently, they need to change the incentives. ...or, they could have the government ask the market on their behalf. The H1B visa is immensely restrictive, essentially allowing employers in a few narrow segments of the economy to decide who is allowed to live and work in the US and the circumstances under which they are allowed to remain. If the would-be immigrant doesn't like it and quits and can't find a new corporate "sponsor", they have to leave and may lose their spot in a long wait for a green card. It's nearly impossible to reconcile the H1B visa with the concept of free labor markets. It didn't lead to freer and more efficient markets, it created market distortions that decreased the desirability of software engineering and a few other fields relative to other fields. To be clear, I'm cool with skilled and general immigration. But once you start talking about corporate "sponsors" who control a would-be immigrant's right to live and work here in a few narrow fields, you're a long, long way from anything even faintly resembling a free labor market.
  - btilly 5y ago
    The H1B is a way for someone who lives elsewhere to wind up living and working in the USA. By definition that's immigration. As you note, it is a really sucky form of immigration. And Greenspan agrees, he said we should just let high skill individuals come in and become part of our workforce without the weird restrictions. Instead we have a complicated system that is broken at many levels.
deleted 5y ago
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by tarr11 5y ago

hannasanarion 5y ago

The standard of living for Americans doesn't depend on the pay rate of software engineers. The profit margins of software companies are already astonishingly high. No tech firm is buckling under the weight of their payroll, they are making bank. Google's 2nd quarter financials show a 64% operating profit. Arguably there isn't enough money from these companies going back to the people who actually did the work to generate that success. They could start paying everybody double and still be making more money than any other market sector could dream of. Depressing the wages of software engineers doesn't mean increased standard of living for Americans, it can only mean increased profit margins for stockholders.

petersellers 5y ago
The point is that by allowing more highly-skilled immigrants into the country, it enables many other companies to make use of that high-skill labor and increase productivity (which would increase our standard of living, in theory). The lowering of wages is only a side effect of that.
- onlyrealcuzzo 5y ago
  Why do the companies have to be in the US? Why can't they be in Mexico or India or Brazil - and US investors just invest in those companies and get the resulting dividends? Why does the company have to exist in the US for us to get any benefits of increased productivity?
  - kwere 5y ago
    1) network effects 2) pro business rule of law & attitude 3) cash > "political" network
- jl2718 5y ago
  But there is generational fallout from this policy too.

btilly 5y ago

And he's right. Immigration restrictions are economically like any other kind of import barrier. It will boost the money to be made in the sector in question, while being bad for the US economy as a whole. In the long run we are all better off from free markets, no matter who is impacted by the short-term disruption.

geebee 5y ago
I agree, but the H1B really isn't a general immigration category, or even a general skilled immigration category. In a free labor market, workers are free to choose a field in response to market conditions and their own personal preferences. Job Factors may include salary, flexibility, job stability, long-term career stability, up front investments, probability of success, prestige, the opportunity to do good and work with people (or not have to work with people). If people with the freedom of choice prefer to be a lawyer in NY city over becoming a software developer in silicon valley, that's the market's answer. If tech companies want people to make decisions differently, they need to change the incentives. ...or, they could have the government ask the market on their behalf. The H1B visa is immensely restrictive, essentially allowing employers in a few narrow segments of the economy to decide who is allowed to live and work in the US and the circumstances under which they are allowed to remain. If the would-be immigrant doesn't like it and quits and can't find a new corporate "sponsor", they have to leave and may lose their spot in a long wait for a green card. It's nearly impossible to reconcile the H1B visa with the concept of free labor markets. It didn't lead to freer and more efficient markets, it created market distortions that decreased the desirability of software engineering and a few other fields relative to other fields. To be clear, I'm cool with skilled and general immigration. But once you start talking about corporate "sponsors" who control a would-be immigrant's right to live and work here in a few narrow fields, you're a long, long way from anything even faintly resembling a free labor market.
- btilly 5y ago
  The H1B is a way for someone who lives elsewhere to wind up living and working in the USA. By definition that's immigration. As you note, it is a really sucky form of immigration. And Greenspan agrees, he said we should just let high skill individuals come in and become part of our workforce without the weird restrictions. Instead we have a complicated system that is broken at many levels.

deleted 5y ago

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