Never mind resource constraints. Suppose a billion plumbers move to the US. By your and by “economists’” reasoning, this will not drive down the price of hiring a plumber at all, since although competition will reduce the price, the economy is not fixed, and more plumber jobs will be available, compensating for this.
Furthermore, if adding more people doesn’t reduce the number of or the pay for jobs, then it necessarily follows that removing people shouldn’t increase the number of or the pay for jobs. Do you seriously believe that if half the plumbers dropped dead, the price of hiring a plumber wouldn’t go up, and the remaining plumbers wouldn’t find it easier to get jobs?
Do you seriously believe that if half the plumbers dropped dead, the price of hiring a plumber wouldn’t go up, and the remaining plumbers wouldn’t find it easier to get jobs?
If it’s unrelated to the plumbing job, one would expect the increase in wages to be transient, as others reskill into plumbing. (Current licensing requirements often require five years of training, but would hopefully be modified in such a situation.)
Talking about a specific trade obscures the general model. A plumber produces a service, but consumes many goods and services. One can imagine America with twice the number of people in it, or America with half the number of people in it (i.e. America in 1950). Prices then and now seem roughly the same in a large number of categories (higher in some, and smaller in others—living in cities that can’t expand anywhere but up is more expensive now than then, but goods and services that benefit from scale are considerably cheaper now than then), particularly when one considers wages. The main wage gains seem to be in industries that have larger returns to scale (things like software).
The primary economic costs with immigration are the switching costs of reallocating people and jobs. (Cultural and social costs deserve a separate discussion.)
1) Pay taxes to pay for a plumber’s schooling, starting with kindergarten
or
2) Have foreigners pay taxes to pay for a plumber’s schooling, and then have the plumber immigrate to your country?
It costs a lot of money to educate a child. When you let in an educated immigrant, your country gets all the benefits of that immigrant’s education without having to pay for it.
The original question compares extra immigrants to doing nothing. It doesn’t compare extra immigrants to extra natives. Your suggestion that extra immigrants are better than extra natives is irrelevant to the question, even if true.
(And if I was a plumber, I wouldn’t want either extra immigrant plumbers or extra native plumbers. There is a reason that cartels try to limit the number of people in a profession.)
The question about immigration specifies that immigrants arrive each year, not that there is a one time influx of immigrants that ends. So it’s a continuous stream of short-term effects. The long term equilibrium that happens once society adjusts to the immigrants is never reached because there are always new immigrants to which society hasn’t adjusted yet.
So it’s a continuous stream of short-term effects.
There’s an important difference between effects caused by a surprising change (sudden influx) and the results at equilibrium (ongoing expected rate). The long run is just the sum of the short runs, but the some of those short runs include reactions to previous short runs and expectations of future short runs.
Perhaps “immediate reaction to a change” and “equilibrium” are better terms than “short-term” and “long-term”.
In the equilibrium / long-term, there are very few plumbers who remain solely plumbers throughout their lives. Many will switch roles according to demand and aptitude. So the question isn’t about influx of plumbers, but of humans who can change and adapt.
If you’re continually adding plumbers at a constant rate, you will get an equilibrium. But the equilibrium you get will be different from the one you’ll get if you had a one-time influx of plumbers and the market compensated for that. You’ll get an equilibrium where the influx of plumbers continually drives the prices down and the compensating factors continually drive the price back up. Exactly where this equilibrium falls will depend on the relative rates of each part, and it may, in fact, be a net downwards effect.
Well, I suppose that natural resource constraints do apply eventually...
Never mind resource constraints. Suppose a billion plumbers move to the US. By your and by “economists’” reasoning, this will not drive down the price of hiring a plumber at all, since although competition will reduce the price, the economy is not fixed, and more plumber jobs will be available, compensating for this.
Furthermore, if adding more people doesn’t reduce the number of or the pay for jobs, then it necessarily follows that removing people shouldn’t increase the number of or the pay for jobs. Do you seriously believe that if half the plumbers dropped dead, the price of hiring a plumber wouldn’t go up, and the remaining plumbers wouldn’t find it easier to get jobs?
If it’s unrelated to the plumbing job, one would expect the increase in wages to be transient, as others reskill into plumbing. (Current licensing requirements often require five years of training, but would hopefully be modified in such a situation.)
Talking about a specific trade obscures the general model. A plumber produces a service, but consumes many goods and services. One can imagine America with twice the number of people in it, or America with half the number of people in it (i.e. America in 1950). Prices then and now seem roughly the same in a large number of categories (higher in some, and smaller in others—living in cities that can’t expand anywhere but up is more expensive now than then, but goods and services that benefit from scale are considerably cheaper now than then), particularly when one considers wages. The main wage gains seem to be in industries that have larger returns to scale (things like software).
The primary economic costs with immigration are the switching costs of reallocating people and jobs. (Cultural and social costs deserve a separate discussion.)
Let me try another argument.
Would you rather:
1) Pay taxes to pay for a plumber’s schooling, starting with kindergarten or 2) Have foreigners pay taxes to pay for a plumber’s schooling, and then have the plumber immigrate to your country?
It costs a lot of money to educate a child. When you let in an educated immigrant, your country gets all the benefits of that immigrant’s education without having to pay for it.
The original question compares extra immigrants to doing nothing. It doesn’t compare extra immigrants to extra natives. Your suggestion that extra immigrants are better than extra natives is irrelevant to the question, even if true.
(And if I was a plumber, I wouldn’t want either extra immigrant plumbers or extra native plumbers. There is a reason that cartels try to limit the number of people in a profession.)
I think the two words missing in this discussion are “short-term” and “long-term”.
The question about immigration specifies that immigrants arrive each year, not that there is a one time influx of immigrants that ends. So it’s a continuous stream of short-term effects. The long term equilibrium that happens once society adjusts to the immigrants is never reached because there are always new immigrants to which society hasn’t adjusted yet.
There’s an important difference between effects caused by a surprising change (sudden influx) and the results at equilibrium (ongoing expected rate). The long run is just the sum of the short runs, but the some of those short runs include reactions to previous short runs and expectations of future short runs.
Perhaps “immediate reaction to a change” and “equilibrium” are better terms than “short-term” and “long-term”.
In the equilibrium / long-term, there are very few plumbers who remain solely plumbers throughout their lives. Many will switch roles according to demand and aptitude. So the question isn’t about influx of plumbers, but of humans who can change and adapt.
If you’re continually adding plumbers at a constant rate, you will get an equilibrium. But the equilibrium you get will be different from the one you’ll get if you had a one-time influx of plumbers and the market compensated for that. You’ll get an equilibrium where the influx of plumbers continually drives the prices down and the compensating factors continually drive the price back up. Exactly where this equilibrium falls will depend on the relative rates of each part, and it may, in fact, be a net downwards effect.