Wednesday, April 2, 2008

How simple can it be? - Part 2

Yesterday's post engendered a comment from someone named ChamberPost:
You can quote Baker, but he is wrong.
The link is to a post titled, "It's Workers, Not Wages: H-1B Visas." The writer is Kelly Krieger Hunt, Senior Manager, Immigration Policy, U.S. Chamber of Commerce, and it's a fairly standard recitation of how American companies are hurting for workers, how U.S. software workers are fully employed, and how workers and employers will be caught "in a dilemma until Congress acts."

I entertained the possibility that ChamberPost's comment was auto-generated; I can see why the C of C would need to respond quickly to any mention of doubts about the wisdom of expanding a program that keeps corporate profits high. It's probably true, given that there was a similar terse comment left about the same time in response to Dean Baker's post:

Some good comments. More facts refuting Baker's arguement at:
(The "some good comments" refer to the two people out of 30 or so who believe that we need to bring in as many people from other countries as possible.)

One note to the Chamber of Commerce: you may want to do some hiring yourself, maybe find someone who knows how to spell "arguement."

I figured, though, that, even if I'm responding to a bot, the points made in the Chamber's post are the same ones we hear and will hear, so I'll provide some input. I started to write it as a comment on the original post, then decided that it deserved a post of its own.
Looked at your post and can tell you that you're wrong. I understand that the U.S. Chamber of Commerce has some pretty strong incentives to support legislation that is good for business, so I'm not surprised.

Even if I were to concede that "raising wages will not solve the problem if there still are simply not enough workers," basic economic theory would still tell you that there would be upward pressure on wages as companies compete for the scarce resource. And we haven't seen that happen. You see, people don't have to stay at one company, so employers can fill their gaps by vying for skilled people...unless they can find a new source of cheap labor.

I won't get into the well-known problems with the unemployment rate; suffice it to say that a relevant number would be the percentage of fully-utilized technical degree holders who are employed in their field of study, and I doubt you have that number.

As for citing the number of job openings, that is an invalid number. Again, look at the incentives to pad that number - mainly the ability to dodge heat over this very issue. If intelligent profit-maximizing companies had that many openings, they would provide incentives for students to go into those fields, fund scholarships and the like, but we don't see that.

The study by Jacob Funk Kirkegaard that is cited, I'm not going to pay $18.95 for it. But the abstract to which you linked is not very convincing. Essentially, the argument is that, since there is full employment in the technology sector, we should drop virtually all restrictions on immigration, an extreme view indeed. We should abolish the cap on visas (the only restriction being that a single business entity should be limited to a "sensible level of maybe 50 percent"), create a new visa category just for India (and, curiously, "strike a bilateral immigration agreement with India" - does that mean our students would have open access to the $750 per year education offered at Tom Friedman's favorite, the Indian Institute of Technology?), and publish "detailed data on the characteristics of all high-skilled immigrants" (wow, look how good they are - I'm glad we let them come).
The issue, of course, is not that one post from a biased group is full of misinformation. It is that it comes out under the imprimatur of a group that most people think of as a genial bunch of back-slappers, exchanging business cards at luncheons. But the Chamber of Commerce has become a major force in Republican politics. They spent $72 million in 2006 on lobbying in favor of so-called pro-business laws.

The sad thing is that many of their members will be hurt by these initiatives. Oh, not the big companies that provide most of their funding today, but the little Main Street stores that are owned by the folks who do go to those luncheons and dutifully pay their C of C dues every year. Because the downward spiral of wages started by the big companies that increasingly find America irrelevant will hurt Mom and Pop first, as the towns and suburbs lose jobs and income.

So, little Chamber of Commerce bot, you can cross this blog off your list. Your flawed studies are never going to convince me (if you wanted to throw some of that $72 million my way, however...).


ChamberPost said...

Not a bot, and very true that my spelling is atrocious.

I asked Kelly to respond to Dean’s post because to quote you "The issue, of course, is not that one post from a biased group is full of misinformation" In Baker’s case it is that there is "one post from a biased group full of no information." It is just general business bashing and class warfare tied to a specific issue of great importance to our economic competitiveness.

You can dispute that our facts are the correct ones to analyze the issue, but at least we take the time to collect data and make informed statements, which is more than Baker did.
(Brad Peck)

Androcass said...


I'm not going to defend Dean Baker, he has more resources than I to do that, except to point out that he was making a fairly unremarkable statement grounded in basic economics, one that has a few hundred years of data to support it.

And if you're going to refute statements that are held in common agreement about supply and demand as it applies to labor markets, then, yes, I will dispute that your facts are the correct ones.

More importantly, and again I speak for myself and not Baker, the last thing I would engage in is "business bashing and class warfare." I honestly believe in free enterprise, but I don't believe it inexorably leads to results that Americans expect. It is no longer necessarily true that everything that's good for General Motors is good for America (if it ever was).

When the gains from offshoring and H-1B visas are concentrated in relatively few hands, rather than being used to uplift the nation, I would contend that there is class warfare, but I am not creating or condoning it. The compensation structures that create competition between business executives and their workers provide strong incentives to have that kind of battle, and I am in no position to influence that.

I do respect your position, because these issues are complex enough to support multiple interpretations. However, I also think that it becomes natural to "argue the conclusion" when you work in a setting that has a built-in bias (which can be unconscious).

As I stated in the post, I see the future playing out differently than you probably do. And I found the evidence that Kelly marshaled to be unconvincing. But I hope that, at some level, we are all seekers of truth, and I would not mind being proven wrong if it results in prosperity for all and an attainment of our nation's goals - I just haven't seen that proof yet.

ChamberPost said...

Sorry I didn’t mean to imply that you were business bashing, I was referring to Baker. We also truly believe in honest debate toward progress and prosperity. It is frustrating to see complicated issues reduced to class based comparisons in order to be dismissed out of hand. I was offering our post to you and your readers as a counterpoint to Baker’s, which I felt was simplistic. And thank you for reminding me that I need to run spell check on everything I type, not just most things. - Brad

Androcass said...

Gee, Brad, you're taking all the fun out of this by being reasonable.

You know, (cliche alert) at the end of the day, I think most people want the same things for our country. What's amazing is how differently we see the road for getting there. I hope one day we figure it all out, even if I'm 100% wrong.

Red Oak said...

"It is frustrating to see complicated issues reduced to class based comparisons in order to be dismissed out of hand."

Indeed, Brad. I've noticed a lamentable tendency to try to shut down debate with flippant evocations of "class warfare" or "populist" whenever the public expresses unease about the direction of the economy.

E.g., Baker's argument may be simplistic, it may be refutable, but it is a plausible position for which it is easy to find supporting data. And I'm pretty much at a loss to see how one can discuss the marked upward redistribution of income we've been seeing this last decade while scrupulously avoiding any reference to socioeconomic class. If you know a way, please let us know. (And do we have to abjure any reference to differentials in money and influence to avoid being thrown into the outer darkness of "the populists"?)

A layman interested in these issues is exposed daily to "dueling experts", and has access to reams of data by which to fact-check any advocacy group's claims. If, instead of playing the "class warfare" card, a group could, say, satisfactorily clear up the mystery of stagnating or falling wages during a labor shortage, that would be a slam-dunk for its position.

It's important to recognize that "class" rarely has much purchase in the American political psyche. Whatever our besetting sins as a people, envy isn't among them. So class warfare or class envy isn't the first explanation I'd reach for when trying to understand why certain ideas gain traction.

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