I wish that Steve Forbes would make a better argument for his preferred policy, more immigration if not open borders, than he does. In particular I’d like him to address the following issues:
- If there were really a demand for more unskilled workers in the United States, you’d expect real wages to increase. They aren’t which strongly suggests that there is no such demand.
- If there were really a demand for more STEM workers, you’d expect real wages to increase. They aren’t which strongly suggests there is no such demand.
- The marginal productivity of labor is flat or declining.
- In particular the marginal productivity in labor in sectors that are adding employment, e.g. healthcare, when measured in outputs per hour worked is actually declining and has been for decades.
His main argument is that we have always been a nation of immigrants, an appeal to emotion. Conditions have changed. Real wages increased for most of our history. So did the marginal productivity of labor.
The first part of that linked piece has so many myths and half-truths that my head almost exploded, starting with the first sentence claiming that the U.S. is unique in not evolving from a mythic past, and heading right to Plymouth Rock, religious freedom, etc.., etc.
“We must always have room for those people–even the unskilled–who have the burning desire, as Abraham Lincoln put it, to improve their lot in life.” Granted there are no quotation marks, but “burning desire” does not sound like Lincoln and he rarely spoke of immigration at all.
The closest I can find to a similar statement is a 2002 Forbes article on 9/11: “Those who perished on Sept. 11, 2001, were freely going about their daily business when the attacks occurred. Each in their own way was manifesting the extraordinary dynamism and creativity of a capitalist system that prizes and encourages people who, in Abraham Lincoln’s words, try to improve their lot in life–and thereby the lot of us all.” Perhaps Forbes has a collection of private letters from Lincoln, but these do not appear to be Lincoln’s words or thoughts.
Up until the Revolution, the British did have immigration controls in the form of the market. People who needed workers contracted w/ businesses that specialized in procuring labor. The demand could be as specific as a contract allowed, including independent verification of the requisite skills. The more skilled or specific the requirements, the higher the price, which went to pay for passage and a reasonable profit for the procuring agency. The workers were either paid an agreed wage, and again the more skilled the labor, the more likely this was negotiated wage. The unskilled, seeking an opportunity for self-improvement and fresh start, were simply wage takers, but the truly “wretched refuse” would be sold in bulk for labor they would be lucky to survive.
Government’s role was primarily in making available the court system to enforce the labor contracts, and occasionally requiring procuring companies to take convicts, which was usually resisted as incapable of earning enough to sell. Also, the government may have helped capture and return runaways fleeing before the expiration of their term of servitude.
Immigration was controlled by the cost of transportation and the uncertainty of finding employment in a new country. The procuring companies were middlemen in the trade of labor who providing a service to both those emigrating and those in need of labor. We could easily have a similar system today, starting with getting the government out of the business of procuring laborers, and providing for transparent hiring markets.
“If there were really a demand for more unskilled workers in the United States, you’d expect real wages to increase. They aren’t which strongly suggests that there is no such demand.”
No. What you mean to say is, “If there were really an increasing demand for more unskilled workers in the United States, you’d expect real wages to increase. They aren’t which strongly suggests that there is no such increasing demand.”
It may well be that the wages are high in reflection of the actual demand at equilibrium with the supply.