On June 9, 2013, Giovanni Peri writes an op-ed in the Los Angeles Times that argues that by regulating the future flow of foreign workers, legislation pending in the Senate has the long-run potential to lift all boats.
If current demand for these workers and past experience are any guidance, most H-1B visas will go to scientists and engineers working in fast-growing sectors of the economy. Their innovations, entrepreneurship and discoveries will be a powerful engine of economic productivity and wage growth. In a recent study of H-1B workers in the U.S. from 1990 to 2010, I found that they accounted for between one-sixth and one-fourth of the total productivity growth in the U.S. That means all Americans are richer and more productive because of them.
A study I coauthored that looked at individual census data and data from the Bureau of Labor Statistics provides another reason. By hiring immigrants for manual jobs, companies create new work for natives as production expands overall. For instance, construction companies that hired immigrants have created jobs for supervisors, trainers, accountants and site managers, and many native workers have the skills or have been able to acquire them in order to take those better-paying jobs.
As of 2011, census data show that 35% of all California workers were foreign-born; 42% of the state’s PhDs as well as 62% of its agricultural workers were born abroad. And in analyzing the inflow of farmworkers as well as high-tech workers in local economies, researchers have identified what’s called the “local job-multiplier effect” of foreign labor.
It means that one job attracts other related jobs. In agriculture, immigrant labor in the fields and in processing plants has generated jobs for farm managers, sales representatives and supervisors and has helped the food and restaurant industries thrive. The addition of foreign scientists and engineers has led to high-tech firms hiring more lawyers, accountants, managers and other professionals who were typically U.S.-born.
In my research, time and again I have found very little evidence of job displacement by immigrants but clear evidence of increased productivity, efficiency and investment in response to immigration. Immigrants have, in the long run, complemented rather than displaced native workers.
Giovanni Peri, an immigrant, proclaims himself to be an economist but sees the world through JOBS ONLY while promoting the notion that labor in the form of scientists and engineers create innovations, entrepreneurship and discoveries that are a powerful engine of economic productivity and wage growth. While it is true that scientists and engineers create innovations that result in the increasingly productiveness of the non-human factor of production––human-intelligent machines, super-automation, robotics, digital computerized operations, etc.––it is not true that wage growth is the byproduct. Instead, due to tectonic shifts in the technologies of production resulting from such innovations, jobs are destroyed and labor’s worth is devalued.
In the United States today we have over 20 million people unemployed with millions more underemployed or completely off the reporting records. Sixty percent of jobs lost in the recession were living wage jobs, and 60 percent of the jobs that are being restored after the recession are not living wage jobs.
Peri, advocates for more high-skilled foreign-born scientists and engineers to be allowed to immigrate as well as less-educated workers to provide globally “competitive” low-cost manual labor. No where does Peri address the consequences of innovations in productiveness that further concentrates the ownership of FUTURE wealth-creating, income-generating productive capital assets.
The reality is that America has six million corporations, but just 2,600 of them own more than 80 percent of all business assets. And the concentration of ownership is increasingly narrowing, which effectively denies the 99 percent, from a practical standpoint, from acquiring over time a viable individual ownership share in America’s FUTURE wealth-creating, income-generating productive capital assets. The 1 percent are effectively accumulating the bulk of the money through monopolized productive capital ownership.
Increasingly entrepreneurs end up working for the 1 percent ownership class. Our scientists, engineers, and executive managers who are not owners themselves, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital owners’ assets work more productively. How much employment can be destroyed by substituting machines for people is a measure of their success––always focused on producing at the lowest cost. Only the people who already own productive capital are the beneficiaries of their work, as they systematically concentrate more and more capital ownership in their stationary 1 percent ranks. Yet the 1 percent are not the people who do the overwhelming consuming. The result is the consumer populous is not able to get the money to buy the products and services produced as a result of substituting machines for people. And yet you can’t have mass production without mass human consumption. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.
Without this necessary balance hopeless poverty, social alienation, and economic breakdown will persist, even though the American economy is ripe with the physical, technical, managerial, and engineering prerequisites for improving the lives of the 99 percent majority. Why? Because there is a crippling organizational malfunction that prevents making full use of the technological prowess that we have developed. The system does not fully facilitate connecting the majority of citizens, who have unsatisfied needs and wants, to the productive capital assets enabling productive efficiency and economic growth.
Instead of a focus on facilitating the path to immigration for foreign scientists and engineers and in sectors where college degrees are not needed––construction, agriculture and personal and hospitality services––the focus should be on educating our own citizens and preparing them for the science and engineering positions of today and the FUTURE, and for what job opportunities are created as a result of FUTURE economic growth. Foreign immigration should be a last resort measure, and should never replace the opportunities for Americans.
Once we reform the system to enable consumer earning power to be systematically acquired in the course of the normal operations of the economy by people who need and want more consumer goods and services, the production of products and services should rise to unprecedented levels, and entrepreneurship should flourish. Furthermore, the quality and craftsmanship of products and services, freed of the cornercutting imposed by the chronic shortage of consumer purchasing power, should return to their former high levels. Along with flourishing entrepreneurship, competition should be brisk. Cost should be deflationary and the purchasing power of money should remain stable year after year.
The solutions can be found in the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, Monetary Justice reform at http://capitalhomestead.org/page/monetary-justice and the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
http://www.latimes.com/news/opinion/commentary/la-oe-peri-immigration-visas-20130609,0,5196931.story
