A meme running around the blogosphere this week is that the added participants in the economy since the 60s (women and immigrants) are substantially to blame for men's joblessness, and stagnant wages.
Half-nonsense.
I'm not willing to address the women argument yet. It's more complex than is being handled presently. Immigrants causing job losses? nonsense.
1. Jobs are dynamically created and destroyed. They are not static.
2. Adding 1 person to the economy increases both total demand and total supply of labor. Overall...adding a working adult to the economy has somewhere between a tiny positive and a tiny negative effect, once we consider both the services consumed and the work given.
3. The US has had persistently higher job creation and destruction than Europe for most of the last 50 years. What accounts for the difference? Largely, regulations. Europe is far more regulated than is the US. HOWEVER, in the past 15 years, the number of US regulations has been growing incessantly, narrowing the gap between the US and Europe. Shockingly, our unemployment is also up.
4. What is the major/primary cause of unemployment in the US? Labor market rigidities, primarily introduced by government regulators. If you're not talking about regulators causing the problem here...you're trying to bandage the stubbed toe on a cancer patient.
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2 comments:
half nonsense
So we get half credit? I'll take it.
If by immigrant you mean labor force participant, then you are correct. But there is so much more to immigration. I hired a good immigrant worker, but he was no better than the native talent overall. Now he has imported his inlaws et al with big families who don't do much, have few job skills, and suck down lots of public services. With such we are lessening our dynamic to create and destroy with an upside afterward: we get more destruction than creation. Immigrant groups trend toward in -group altruism, and you know how that ends.
We've had all this immigration and women in the workforce, and yet we have a pretty big economic downturn. I'd say practice is not lining up with theory, and it is time for a new theory.
RSF,
What I'm hearing from you is that our public welfare system sucks, and that we shouldn't give away free stuff to immigrants.
I'm saying that we should expect the jobs downturn that we have with or without immigration, due to the stifling regulation that is imposed upon us.
I think that there is something to the women argument.
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