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61 sats \ 3 replies \ @SimpleStacker 22 Mar \ on: Is it a wage shortage or a labor shortage? Immigration impacts NC Construction econ
The analysis of immigrant labor is not much different than the analysis of any international trade.
It's well known that in any market where international producers can make the same product at lower marginal cost, it makes sense to import the product from international producers. This hurts domestic producers because they have to compete with lower price international producers. But it benefits domestic consumers because they get lower prices. Overall, it increases economic output because the final product is being made at lower cost.
In the construction labor market, the producers are the workers and the consumers are the developers. International producers are the immigrant workers who are able/willing to work at lower prices, while domestic producers are the native born workers.
This sounds like a textbook economics class answer and ignores the reality of the real world? This type of answer never explains why is labor and production cheaper in said country over another? Besides having mineral and energy advantages I often think develop nations exploit poorer ones to maintain this labor wage imbalance which is a feeding ground for socialism and communism
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Could it be that the organizing principles of the societies that are very poor tend to make most people very poor while only a few get fabulously wealthy? When a society degrades property rights to nothing then only people with wealth can protect themselves from the ravening state (probably because they are cronies of the state). When there is no protection for property rights of the people, everyone has no human rights and will remain poor and oppressed.
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I agree, the textbook answer ignores a lot of issues.
It does explain why working class natives are more likely to oppose immigration while business leaders are more likely to support it.
Another thing that happens a lot is that economics students only learn this part: trade increases economic output without remembering the part where trade creates winners and losers.
And lastly, you're right... the textbook theory doesn't address at all the actions that developed nations can take to keep developing nations poor, and it doesn't address at all the cultural frictions that come from mass migration.
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