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Tuesday, September 12, 2006



Why is it that highly-educated, economically literate individuals pretend that the labor market is not actually a market? And when I say highly-educated, economically literate individuals, I really mean the middle-class, socially liberal, Guardian-reading journalists, academics and economists who tend to shape the more "reasoned" discussion of immigration, and yet who also seem to have such a blind spot to the harm caused by high levels of immigration, both in the UK and the US, to lower income groups. If the supply of low-skilled labor suddenly increases, prices in the low skilled labor market are going to go down. Certainly economists can cite all sorts of facts and statistics as to how that's not actually happening, but if you believe in one of the most fundamental tenets of economics, wages for lower income individuals are either going to be lower or lower than they would have been without immigration. Is the price of intellectual honesty so cheap that we're willing to sell it for a double latte that costs 20p less, or a housekeeper that comes by once a week, or a gardener to mow the lawn? Or is it that massive immigration makes the GDP growth figures look better (even if per capita statistics are negatively impacted)? So Blair can say "And it is not true that the earnings of most UK-born workers are lower than they would have been", but if "most" means the just the middle and upper income groups, that's still a huge problem, especially if you're unskilled and poor (and probably not represented by the TUC). Frankly, why doesn't Blair just come out and say, "OK, we've decided to have a massive transfer of income and benefits from you poor people to us rich folks by increasing the competition for your job, and if you go and vote for the BNP or someone like Le Pen, then you're a racist pig and deserve to be poor anyways."


but if "most" means the just the middle and upper income groups, that's still a huge problem, especially if you're unskilled and poor

true, but considering the amounts spent in the educational system, it shouldn't be possible to be unskilled and poor these days.
we still have unskilled poor people because the wellfare is still too good for some who'd rather be pregnant at 16, or drunk from 9-21.00 than work (i too thought this was a myth...) a lack of discipline in school, which leads to a lack of incentives for good teachers, and a lack of policing on the streets of britain.
let's not blame the poles for taking the jobs no brit would or is actually fit to do.

Lars Smith

RichB is making Voltaire's argument, "For the rich to be comfortable, the poor must be abundant."

You would also expect the price of low income housing to go up with an influx of migrants. Is there any evidence for this in UK?

Arthur Eckart

RichB, in a free labor market, the poor doesn't transfer income and benefits to the rich. Capitalists (or the rich) create opportunties for the poor by taking risks to create more capital, which is a virtuous cycle, i.e. capital-employment-income-consumption. Consequently, capitalists create income and benefits for the poor. Also, there's far more wealth and income being transfered to the poor than the rich. Of course in a restricted labor market, poor workers can be overpaid, which can slow the virtuous capital cycle. Also, income is an incomplete measure of living standards, since consumer surplus isn't taken into account, which can increase through competition and education. The problem rich countries have is when there are too many poor immigrants, since the poor tends to take more value from society than contribute.

Lars Smith

See also this paper,

Immigration and Housing Rents in American Cities
by Albert Saiz
(June 2006)

Is there a local economic impact of immigration? Immigration pushes up rents and housing values in US destination cities. The positive association of rent growth and immigrant inflows is pervasive in time series for all metropolitan areas. I use instrumental variables based on a “shift-share” of national levels of immigration into metropolitan areas. An immigration inflow equal to 1% of a city’s population is associated with increases in average rents and housing values of about 1%. The results suggest an economic impact that is an order of magnitude bigger than that found in labor markets.

It can be found here,


Eckart “Also, there's far more wealth and income being transfered to the poor than the rich.”

Yeah, right.

Take a look at the graphic describing the sharing of wealth in the US for 2001, then explain to me how the fact that nearly 60% of the wealth is obtained by 5% of the population. (Source: http://www.faculty.fairfield.edu/faculty/hodgson/Courses/so11/stratification/income&wealth.htm)

Or, if you want another colour scheme, but the same info: Arthur B. Kennickell, "A Rolling Tide: Changes in the Distribution of Wealth in the U.S., 1989-2001," Table 10. (Levy Economics Institute: November, 2003); look here: http://www.faireconomy.org/research/wealth_charts.html

Can't image to which planet your citation above can be attributed. But, I'm willing to learn ... ; ^ )

Arthur Eckart

A Perla, you posed a question I already answered above. If it weren't for the rich, the poor would be poorer. Perhaps, you can give me data how much wealth the U.S. poor transfered to the U.S. rich, and vice versa, or how many jobs the U.S. poor created for the U.S. rich. Of course, the poor has a higher marginal propensity to consume (perhaps near or greater than unity). So, they have little or negative wealth (which supports one of my points).


sir iam a indian man , now working in dubai,can you please arrange any job from your country,ican do any hard work






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