immigration

okay, a short post on the same day as a super long one. (sorry!)

Many who speak out against illegal immigration say that the increased worker supply depresses wages and puts "real americans" out of work.

In the short term, they are probably right.

Many of those same people are scared to death of factories in China or call centers in India because they depress wages and put "real americans" out of work.

I could talk about comparative advantage, but at a very low skill level, they're right again.

But here's where people have a disconnect. Companies will do anything to save money. They can cut labor costs by continuing to operate in the US and hiring (possibly illegal) immigrants, or they can cut labor costs by moving overseas. Those are the options. You can't force companies to spend more money than they want to spend. Well, I suppose you could pass some law requiring them to both stay in the US and spend more. But you know what they could do then? Go out of business.

So you only have two choices: let companies hire immigrants, or let companies outsource. Which is worse? Even if you are totally xenophobic and short sighted (maybe even because you are), isn't outsourcing worse? At least immigrants wages, even under the table, untaxed, and way below minimum wage (descriptions which are not always true), are turned around and spent in the US economy. Immigrants still need to buy food and shelter and transportation. Do you prefer it if those low cost foriegners are contributing to your own GDP or to India's?

I am oversimplifying a lot of things. I'm still right, though.

social mobility

today I was reading a blog on the economist. specifically, this post.

At first I thought it was really smart, because I think people's gut negative reaction to income inequality has to do with how much people "deserve" their outcomes in life. As in, "It's not fair that he's poor! He's worked hard his whole life." or "It's not fair that he has so much more money than I do. Everything's always been handed to him on a silver platter." And at its heart, discussions about social mobility are about people "getting what they deserve." if you work hard, you get rich. If you don't, you won't.

and so a line like:

I would prefer to live in a world where the children of Bill Gates, and an average welfare mother, have the same opportunity to succeed.

sounds appealing.

Then one of the commenters made me think again.
The thing is, with the possible exception of Warren Buffett, I think one of the reasons you work to become rich is so you can provide for your family/make life easier for subsequent generations. Beyond just making money, a lot of how parents with the necessary means spend money (buying houses in good school districts, enrolling kids in enrichment programs, etc.) is aimed at giving kids an advantage in life. We might be for equality of opportunity as a general principle, but on a micro level, we want to have more opportunity than others.

I think this becomes even more clear when you realize that "equality of opportunity" or "social mobility" means opportunity to succeed -or- fail, to move up -or- down in class. And the thing is, there will be successes and failures. Unless you actually expect an efficient economy where everyone makes the same amount of money, there will be some "winners" at the top of the income distribution and some "losers" at the bottom. This is mitigated by the fact that potentially even the "losers" could be quite well off, but what it comes down to is this: no one wants his kid to be worse off than he is. With actual equality of opportunity, that would happen.