You Couldn't Make It Up ...

One of the results of mass low-skilled immigration into both the UK and US economies has been to depress wages, by the simple mechanism of supply and demand. As Marx put it :

“The main purpose of the bourgeois in relation to the worker is, of course, to have the commodity labour as cheaply as possible, which is only possible when the supply of this commodity is as large as possible in relation to the demand for it”

So far so bad for those at the sharp end, so far so good for the people who employ them.

But why stop there ? As long as your income's safe - and let's theorise that you're one of the elite - why not expose a few people higher up the economic food chain to the bracing discipline of "if you don't want to do it, there are plenty of other people ...". After all, you don't pay anywhere near as much for cleaners and clerks as you used to. Why can't you cut the cost of your accountants and engineers?

But how do you do lobby for this without saying why? In the case of the low-skilled imported worker, it was easy - they were "doing the jobs the natives just didn't want to do for £5 an hour", but you needn't mention that last bit. They were doing us a favour by coming here at all - we should be grateful - how would the NHS run or City offices get cleaned otherwise?

So what's the narrative to be?

"Tell you what - and this'll kill you - how about social justice?"

"What ?"

"Well, you know how the incomes of the wealthiest have spiralled away while incomes at the bottom stagnated or declined?"

"Do I ! Great, isn't it !"

"Well, lots of people think it's very bad that we're stonkingly rich while some chav serving in Maccies is a tad penurious. There's something called the Gini coefficient ... but I had this thought. All we have to do is deflect attention down a bit - let's say onto something called 'high-income people' - you know - accountants, engineers, IT, scientists, the analysts and bean-counters - we can define who qualifies - and we can argue that their wages - and hence inequality ratios - are kept artificially high by lack of global competition - no, they're "subsidised by their protection" - no one likes a subsidy - "

"I do - I love 'em. Where would we have been without the bailout? "

"Will you let me finish? - and so we should allow far more high-skilled immigration, because that means greater equality - and that means we can do to their terms and conditions what we've already done at the bottom!"

"You, my son, are a ******* genius"

"But it doesn't stop there. You know how mass immigration's depressed wages in lower-paid jobs - the sort young people often do"

"I might have heard something to that effect ... nonsense of course (cough)"

"Well, we can also argue that their lower incomes indicate lower productivity - and that therefore we really need more high-skill immigrants to provide the productivity the natives just don't want to provide"

"Brilliant"

"And there might even be some truth in the bit about productivity. Between ourselves, you know and I know that some of the people who've come over aren't the sharpest knives in the drawer (anyone who says that is a racist, of course, and we'll say it's down to bad teachers) - so it's possible that the 20-somethings really aren't as productive. Either way, it just means we need more high-skill immigrants."

"Awesome. All we have to do is get the ball rolling."

Obviously, the above is just complete fantasy.

At The Globalist, an interview with former Fed chief Alan Greenspan :

Q. How could immigration reform reduce income inequality?

A. “Most of the debate on income inequality correctly focuses on raising the level of low-income individuals. However, it also works by lowering top-level incomes via more competitive immigration. There is much academic research demonstrating that it is the relative position of people in society that fosters views of ‘fairness,’ not one’s absolute status.”

Q. Turning back to the United States, what demographic shift will have major economic implications?

A. “In the United States, we are in the process of seeing the baby boomers — the most productive, highly skilled, educated part of our labor force — retire. They are being replaced by groups of young workers who have regrettably scored rather poorly in international educational match-ups over the last two decades.”

Q. What else points to the inability of young workers to compete?

A. “Most disturbing is that the average income of U.S. households headed by 25-year-olds and younger has been declining relative to the average income of the baby boomer population. This is a reasonably good indication that the productivity of the younger part of our workforce is declining relative to the level of productivity achieved by the retiring baby boomers. This raises some major concerns about the productive skills of our future U.S. labor force.”

Q. Can the U.S. government counter this trend?

A.“Yes, there are options to combat that decline, but contrary to what many people believe, we do very poorly in opening up our borders to skilled immigrants. Our H1-B visa restrictions are a disgrace. Most high-income people in our country do not realize that their incomes are being subsidized by their protection from competition from highly skilled people who are prevented from immigrating to the United States. But we need such skills in order to staff our productive economy, so that the standard of living for Americans as a whole can grow.”

Q. What needs to change with respect to U.S. immigration?

A. “My view is that we should give a green card to every immigrant who gets an advanced degree in the United States. The proportion of those people who will be terrorists is miniscule. That would have a major positive economic impact.”