Wednesday, August 25, 2010

Know-Nothing Labor Myths

Jacob Lyles at The Distributed Republic:

Open border libertarians like to pretend that the supply of immigrant laborers has no effect on the welfare of existing United States workers. But this is not the case.

Broadly speaking, the welfare of an average Joe who trades his labor for a living depends on two factors. The first is labor productivity which determines how much employers are willing to bid for workers. The second is the supply of labor of similar quality. Increasing the supply of labor with a particular skill set will bid down the wages of workers with substitutable skills. ...

There is no a priori reason to think that labor markets are immune to economic incentives.

I've never, ever, ever heard a libertarian claim that "the supply of immigrant laborers has no effect on the welfare of existing United States workers."

On the contrary, an unconstrained ability of workers to move back and forth across imaginary lines drawn on the ground by politicians ("borders") almost certainly has a great many effects -- some of them putatively negative (increased local labor supplies where labor is needed, driving down wages), some of them putatively positive (decreased labor costs driving down prices for everyone), many of them unnoticed, all of them certainly subject to what Mises referred to as the "calculation problem" when it comes to regulation.

The real question is not whether or not Worker A will have less leverage in seeking higher wages if Workers B and C are "allowed" to cross one of those imaginary lines.

The real question is whether or not the state has a legitimate power to distort the market for the alleged benefit of Worker A at the expense of Workers B and C who are forbidden to rent their labor, at the expense of the employer seeking to rent labor, at the expense of those called upon to involuntarily "undo" the distortions with still further distortions, and at the expense of the customer who has to pay more for the product or service because Worker A got the monopoly he wanted.

The libertarian answer to that question, in case you were wondering, is "no."

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