Conservation of Labor

A common complaint against immigration is the loss of low-paying or unskilled jobs to the newly-arrived workers. What is rarely mentioned is that each immigrant also arrives with a set of needs and desires. These needs must be met by other workers somewhere (there are only so many jobs an immigrant can "steal" at a time.) Granted: some of these needs and desires will be met by imported goods and services - but the same can be said for the needs of long-time citizens.

An immigrant in an American factory doesn't have time to grow his own food, build a bicycle, or earn a law degree. He'll purchase food from a local supermarket, buy a bicycle from a local store (or ride a bus), and he'll hire a lawyer when he needs such services. Had the immigrant stayed in his home land, he never would have brought the need for these American products and services with him. In other words, when we accept immigrants, we also import jobs.

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This is my knee-jerk

This is my knee-jerk response to critics of immigration as well. It seems so obvious, yet it is a point rarely made.

Why is that?

Perhaps the same people that lament the loss of jobs are very often the same people who think that there's too many of us in general.

Could be.

Why is that? Call me a

Why is that?

Call me a cynic, but I think it is because potential immigrants have no political representation. Think about where you hear the most noise about the evils of immigration and free trade--usually from politicians trying to drum up support and usually during election years.

Same thing happened in South Africa when the apartheid government used the "black danger" as a rallying cry. Blacks can't vote, so use them as a scapegoat. Once liberation came and their jobs depended on black voters, the same politicians did a 180? turn so fast you could see faces on each side of their head...

I agree, I just think we

I agree, I just think we should do a better job at assimilation rather than creating ethnic enclaves. Cops in L.A. don't even enforce immigration laws for fear of upsetting communities. ethnic loyalty, or fear of it, shouldn't trump civic responsibility.

...on another note I'd appreciate it if you found time to stop by and read/give your thoughts on this entry:

I know you're busy, but I love coming here to get your points of view!


In some economics class long

In some economics class long ago, and in current dealing with political justification of tax offsets to encourage trade, tourism or local manufacturing, the concept of "multiplier" comes up. {vaguely it was 3?)

The logic goes that if I can get ten new jobs in my city I can get the city to pay (by tax forgiveness the equivalent of the xx people's salaries one time), over a period I will cause other jobs to exist, other taxes to be paid etc. Thus the offer is justified to me as a taxpayer. This incentive is routineley offered to businesses to relocate.

If that logic holds then the outsourcing of jobs from my city to another city, when the business could hire locally, COSTS the local economy some multiple of the payroll loss. As a city taxpayer I would be unhappy with my city if they gave tax breaks and then applauded the company shipping jobs away, to make more profit. I would be even unhappier if the profit went to stockholders outside my city so none of the dollars would circulate here.

By extension when jobs are outsourced, even just from my city to another, my local government incurs a signigicant multiple of the labor costs in local jobs, and thus significant tax loss. The same logic would seem to work with international job transfers and the resulting loss of "spin off" jobs and tax revenue.

Can some economist out there tell me why there is a "benefit" to the locality, to help ship jobs to the next city, county, state or country? If it is logical to pay business to locate in your area why is the opposite also a benefit?

Can some economist tell me why the alien's job, of which he spends a portion here is not just aslightly lower multiplier?

Seems like we outght to tax those who offshore work and give tax breaks to those who bring jobs even if they import aliens to do the work?

I live in New York City. We

I live in New York City. We find it beneficial to "outsource" our corn-growing needs. Is that a bad thing? No. We have a comparative advantage in other fields. We've found it's much more productive to use scarce square-footage for financial services rather than corn services.

Outsourcing corn-servicing jobs benefits NYC by freeing-up physical space that would have been used for growing and storing corn, fertilizer, etc. And just as every corn job has a multiplier effect - corn growers have special needs, which lead to the creation of new jobs - every financial services job has a multiplier effect too. Rich bankers need expensive suits and restaurants, and taxing the sale of expensive suits is probably more lucrative than taxing the sale of corn fertilizer.

Seems like we outght to tax those who offshore work and give tax breaks to those who bring jobs even if they import aliens to do the work?

HOWEVER, it is NOT logical to have a municipality PAY for the import or export of jobs - it distorts things. It would be VERY BAD to give tax incentives to encourage the "importation" of corn-related jobs. Similarly, we shouldn't tax grocery stores that "offshore" their vegetable-growing work.