7 ms·
I never understood this argument. More people in the country obviously leads to more labor supply but also more labor demand.
by gregwtmtno 8y ago
I never understood this argument. More people in the country obviously leads to more labor supply but also more labor demand.
- deogeo 8y agoThe extra supply is balanced by the extra demand only if exports are zero. I.e. demand for Apple devices won't increase by 10% if the US population grows by 10%. And of course making 10% more rarely requires 10% more workers - you need more on the assembly line, but not more to design the items.
- gregwtmtno 8y agoThose are points I hadn't considered, but what in the US, net exports are negative. Wouldn't that imply the converse effect to what you're describing?
- deogeo 8y agoIt wouldn't. Say someone in the US buys something made in China - how does that increase demand for labor in the US? There's some marginal US labor required for the last part of the transport, but that's it.
- pas 8y agoThough thanks to the bigger market the prices can actually decrease, so living standards could increase, even if wages haven't.
- thfuran 8y agoOnly if they wouldn't have bought it if they hadn't moved to the US.
- ultraluminous 8y agoThee last part of the transport is not marginal in the real world. Increased local consumption drives transport, retail, marketing, etc. etc. Real life economic modeling is not a simple supply/demand, widgets made/sold chart.
- ebog 8y agoThe person pays for the good in US dollars. Where do those dollars go? The Chinese people who now have USD either spend or invest them back in the US.
- raincom 8y agoMost of the dollars go as profit for the multi nationals. The remaining (very minimal) goes to the contract manufacturers.
- greeneggs 8y agoThis is a rather poor argument. US exports in total are only ~13% of GDP. The trade deficit is only ~2 or 3% of GDP. That's a tiny secondary effect.
- slothtrop 8y agoRate of immigration past a certain threshold has been shown to suppress wages. "a migration-induced shift of 10% in the supply of labour is associated with a 3% to 4% movement of wages in the opposite direction" https://www150.statcan.gc.ca/n1/pub/89-001-x/89-001-x2007001-eng.pdf https://www150.statcan.gc.ca/n1/pub/89-001-x/89-001-x2007001... If your supply is perpetually exceeding demand it sets that precedent. Neo-classical touters like to imagine an influx leading to new job creation: a) this is not necessarily true, b) if it is, it can be a slow process, c) if it is, it may not lead to a sufficient rate of job creation, d) companies are absorbing each other and wealth is concentrating at too high a rate. Growth will stagnate and we'll see a new era of "old money", just as it was before the world wars. And, we're dealing with the effects of automation to boot eroding jobs faster than new ones are replacing them. Just remember that what's good for the GDP is good for the rich, not necessarily workers.
- conanbatt 8y agoWages would go lower but goods will be higher. If an immigrant worker produces more than he consumes, the whole is richer, no way to cut that into an unfavorable calculation.
- slothtrop 8y agoWe get more goods with fewer and fewer people in assembly and we're no better off for it as far as structural inequality is concerned. I would check the assumption that a cheap immigrant worker would increase productivity at all.
- conanbatt 8y agoAgain, if the immigrant produces more than he consumes, the whole is richer. The arguments against that calculation would be that you dont like who benefts on that, but the whole is better.
- slothtrop 8y agoYou're referring to GDP increase. I already addressed this. The rest of us aren't seeing the benefits as we should. It's short-sighted.
- xkcd-sucks 8y agoNot if income inequality means only a small pool of incumbents is able to demand!
- deleted 8y ago[deleted]