« Baffling Remark of the Day | Main | Doddering »
Re: Lant Pritchett Challenge
By Ned | December 7, 2007
For Chris Hayes and anyone who considers themselves concerned with the least well off in society: do you support full labor mobility as envisioned by Lant Pritchett? If not, why not? Do you think having varying labor restrictions based on nationality is justifiable economically, socially or morally? If so, why so?
Read the whole post for further context. Now my understanding of economics and matters of trade and such is significantly shakier than Matt’s - which is why when you see posts on this blog about such matters I tend to defer to Matt, Matthew Yglesias, Ezra Klein, Kevin Drum and the like - but this idea is to intriguing not to write about. And what else was the Internet invented for if not for smartass college students expressing their opinions on things that they only have a sketchy understanding of? I mean, besides LOLcats and porn.
Anyway, after giving some thought to Matt’s challenge I’d like to say “yes.” In theory, greater labor mobility between countries sounds like a great idea. Besides the obvious immediate effects Matt mentions, giving workers in poverty-stricken countries (like, say, India) more mobility is going to give employers in those countries a huge incentive to boost salaries and benefits unless they want to start hemorrhaging employees. And if corporate manufacturers need to start paying decent living wages in order to keep their workforce intact, in the long run it gives a reduced incentive to pack up shop in the US and move production to a country where the workers are more easily exploited.
To a much lesser extent the same goes for the impoverished in the United States - our poverty level, while obviously nowhere near as bad as many countries, is still unacceptable for a nation with our wealth and we could stand to learn a few things about health care and workers’ rights from some Western European countries. Maybe this could help with that.
Or I could just be talking out of my ass. I’d like to hear what some actual experts have to say about the challenge.
Topics: Economics |
December 8th, 2007 at 7:04 am
So I’m not sure I understand…The idea is to bring foreign workers to American businessmen? Why? Why doesn’t the businessmen go to the workers, pay them fairly, and help the local economy, be profitable, while still being completive on a global scale?
Either way, American workers are being replaced, but one model uproots foreign workers from their families for the convenience of the business owner.
Just my take, maybe I misunderstood something.
December 8th, 2007 at 8:20 am
Daboo,
Oftentimes, actual dislocation is necessary for foreign workers to gain employment. For example, a Mexican farmworker can’t pick grapes in California if he’s not in California. Similarly, if someone wants to hire Indian steelworkers to work in Oklahoma so as to service the oil industry in Texas, the steel workers can’t live in India…
Daboo, what you seem to be supporting is what is typically called “offshoring” or “outsourcing”. The advantage to actually bring workers over is that their wages will shoot up to, if not be at the same level as native wages, but will certainly be much higher than their wages back home, even if they are working for Western businesses.
Also, Pritchett discusses how due to productivity gains, an increasing portion of jobs in the developed world will be “hardcore non tradeables.” These are jobs like barbers, security guards or nursing home attendants. These jobs that can’t be done by, for example, Filipinos in the Philippines, they have to be done in the United States. Increased labor mobility is the only way to get foreigners those types of jobs.
December 8th, 2007 at 9:42 pm
Fair enough, and I do agree that labor mobility ought to be increased for these hardcore non-tradables.
And I certainly am advocating offshoring. I see that as a crucial step towards America becoming a truly post-industrial society. The mobile industries of the US (like you said, oil will stay in Texas, but other industry has flexibility) can help industrialize third world countries.
In a globalized world, this is both feasible and necessary for progress (both here and abroad).
I’m going to stop myself before I tangent too much…