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"The economy" is not just an abstraction. Benefitting the economy doesn't mean line going up, it means cheaper rice and McDonalds burgers and cars and phones and AI girlfriends for the American working class. It's interesting for the anti-immigration right, after years of saying how importing low-skill immigrants will take jobs away from and lower the wages of Americans who had the misfortune to be born without a high enough IQ to code in python, now objects to us importing Indians with exactly enough IQ to barely write python. The effect on wages depends on the occupation - in theory, allowing in a hundred thousand seasonal fruit pickers should make everyone better off overall, but would lower the wages of existing apple-pickers. But allowing in a hundred thousand javascript monkeys should, because everyone's better off overall, raise the wages of the native fruit pickers! And it's harder to feel sorry for the heritage American FAANG engineers or accountants who'll make 85k a year instead of 95k a year because of Indian competition than it is the 'working class'.
It's not "interesting" at all, it is the same principle being applied consistently.
That is that importing labor from overseas dillutes supply/lowers wages and that this is a bad thing. IQ doesn't factor into it at all. The principle holds regardless of whether we are discussing fruit pickers or python coders.
Though as an aside, having a background in mathematics and computer science i would question the assertion that writing code in python is a "high skilled" job.
The whole point of my comment is that overseas labor does not lower wages overall. It raises real wages overall, by the basic econ 101 logic of comparative advantage and specialization*. It lowers local wages in specific specific sectors where there's a concentration of foreign labor. But by that same logic a concentration of labor in CS is good for farmworkers.
The irony there was intentional - most H1Bs are significantly above average skill, but hardly top 1%.
*I mean in the relatively small amounts from the H1B program here. At larger amounts you could get 'their culture is bad / their iq is too low to work in our economic system' effects, but not at small amounts.
And i don't buy it. Especially when one of the core arguments in favor of importing foriegn labor is that it's cheaper/more cost effective than hiring Americans. I have yet to encounter a compelling argument for why the rules of supply and demand shouldn't apply to labor.
The rules apply to specific sectors! But they don't apply to the economy as a whole because, in a sense, every action everyone takes is labor. So adding more labor doesn't reduce the real "price of labor", because the whole thing we're doing is exchanging our labor for the labor of others. Adding more labor reduces the price of labor in dollars (assuming the amount of money in circulation isn't actively adjusted based on the amount of labor, which it does, but whatever), but that doesn't matter because you don't have a fixed amount of dollars, you have a fixed amount of time to spend doing labor! So reducing the price of labor in dollars reduces the amount of money you have, but you can buy more with it - nominal vs real wages. And then what matters from importing new immigrants is whether they make the economy overall more efficient, and in general specialization and comparative advantage means it does.
In general, all economic arguments against immigration in general, without respect to immigrant characteristics, such as the one you're making, are also arguments against pronatalist population growth. And population growth doesn't seem to have been bad for America's economy historically. Arguments that take into account immigrant characteristics work better!
Just to be clear.
You are asking me to believe that it is impossible for changes in the supply of labor to the effect the price of labor.
It would seem to me that history is rife with counter-examples.
... I am arguing that, absent changes in the money supply, it reduces the nominal price of labor, but not the real price of labor?
Like, the population of the United States 3xed in the last 100 years. This was a huge increase in the supply of labor. But it did not reduce the 'real' price of labor, or the value of the goods and services that we consume, because labor creates those goods and we exchange our labor for the consumption of those goods, which balance out. And then the second-order effect on the nominal price is specialization, but that's the main effect for the real price. Again, absent concerns specific to characteristics of immigrants, like culture or genetic ones, which are reasonable. But your argument applies equally well to population growth via new births reducing wages ... and it ... doesn't do that.
I kind of want to say that a lot of people here have a blindspot in their reasoning for anti-immigration arguments, in the same way that people on the left have a blindspot in their reasoning for anti-racism arguments?
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They do, that's the "lowers local wages in specific specific sectors where there's a concentration of foreign labor" effect. If you want an intuition pump for how that doesn't lower (real) wages overall, consider that money isn't real, it's just an account of value. Some total amount of goods and services are produced in the economy, and the more goods and services are produced per person, the richer the average person is.
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Completely agreed. American tech workers are seriously overpaid relative to other developed countries. It should be made clear to them that either they compete for jobs on a fair footing with the best from all over the world or else they'll be the immigrants applying for the job because now it's based in London.
American tech companies make enormous profits per employee. I'd say they are underpaying their workers. I don't count Europeans being underdeveloped as an excuse to increase the profits per employee of American tech companies by cutting wages.
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No they aren't.
Now, you might say that this is merely me making a naked assertion, negating the naked assertion you've originally provided. But in fact, I can back this assertion by pointing to a) the market producing the salaries you consider excessive, and b) the relative success of the American companies providing those salaries versus foreign tech companies employing foreign workers.
Further, it's interesting to me that you are so transparently hostile to the one segment of the American economy that offers be best and most obvious hope for widespread economic growth and prosperity. How much poorer should Americans in general be, in your view? Which class seems to you to enjoy appropriate compensation?
Is it Quants?
I am not hostile to tech, I actually like it a lot; in fact my day to day job is basically as a ML-esque programmer and if needs be with a bit of retooling I think I'd be able to transition to somewhere like Deepmind if push came to shove. Tech is basically my long term exit plan from finance and so I have a personal interest in seeing it do well in the UK/Europe beyond the general benefits to humanity that removing barriers to trade have. The people I'm talking about being overpaid are not OpenAI/Anthropic engineers (they are appropriately paid) but the ones who don't understand shit about computers but get paid $150k+ to stack frameworks on top of frameworks until hey presto the compiler shits out yet another CRUD/advertising app. Meanwhile my friends with PhDs in computational biology who went into biotech are earning like $60k in the UK and the lucky ones who managed to land a position in California are earning $90k-$130k.
Just because the rest of the developed world shoots itself in the foot with regards to overregulation which leads to US companies winning by default doesn't mean they deserve their excess profits any more than a monopoly that doesn't get challenged deserves its excess profits. They got lucky by being born on the correct piece of soil where the government in charge doesn't regularly commit self harm and now they wish to protect the fruits of this accident by birth even though it directly hurts Humanity if a US programming job (where the lack of overregulation leads to a higher force multiplier in how much good the worker is able to do for the world) goes to a mediocre American vs a talented Briton.
Quants are underpaid relative to the value we generate for the capital employing us but that's a discussion for another day. Plus the discrepancy between US vs UK quant pay is small enough that you can genuinely say that people choose to forgo a little bit of money for a better ambiance while the gap for tech is so high that it only makes sense if UK tech developers (amongst which group I count many friends) are artificially prevented from moving to greener pastures, which is exactly what is happening.
The ad apps, while simple and presumably beneath an intellect of your caliber, make value for the capital employing them. Yet you do not think that the people who make said apps should be paid based on the value they provide the capital employing them:
But you, the noble quant, should be judged by that same value. And in fact you are underpaid for your value to the capital employing you:
Have you considered that maybe its because all your really talented British developer friends aren't actually really talented? Maybe they are actually kind of dumb? Like there is this supposedly really lucrative thing they can do, its so easy they can "shit it out", they don't even need to know how computers work, they have the app store in the UK so they don't even need to be in California, but like... they don't actually do it?
There it is. Its you. Claiming to know who deserves what. That's what it always boils down to.
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American everythings are way overpaid relative to the rest of the world.
Yes, but American Software Engineers are especially so even compared to other jobs.
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The American tech sector has a big advantage though.
The jobs aren't moving to London because you don't want to even try in Europe (including the UK, since the attitudes aren't that different even though it's not in the EU anymore). You will be regulated to death immediately. Europe follows a mostly corporate (in the old sense) economic model. There's little room for entrepreneurship, and that's by design, even though few politicians would openly admit that.
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