Will Stirs the High-Skilled Hornets Nest

by on July 16, 2008 · 73 comments

My colleague Will Wilkinson has a great commentary on Marketplace where he points out that more H1-B visas means less inequality:

Increases in wage inequality over the past few decades is primarily a story of the supply and demand of skilled labor together with the effects of technological innovation. Wage increases tend to track improvements in the productivity of labor and gains in productivity tend to be driven by innovations that help workers do more in less time. But in recent decades, technical innovation has increased the productivity of more highly-educated workers faster than it has for less-educated workers. These growing inequalities in productivity have helped create growing inequalities in wages.

But that’s not the whole story. The American system of higher education produces skilled workers too slowly to keep up with the demand. This scarcity in the supply bids up the wages of the well-educated even more, further widening the wage gap. If we raised visa quotas on skilled labor, that would help bring supply in line with demand and reduce the wage gap between more and less skilled workers.

These days, almost everybody but their beneficiaries think agricultural subsidies are a lousy idea. They benefit a few already relatively wealthy American farmers and agribusiness firms to the detriment of poor farmers around the world. But H-1B visa restrictions are subsidies that benefit relatively rich domestic workers over their poorer foreign peers, and so it turns out many of us liberal-minded college grads are enjoying our own protectionist boost.

In this case, it seems the moral outrage is… well, we seem to be keeping it to ourselves.

Will is spot on. And he’s greeted with a cacophony of condemnation from commenters who either don’t seem to have grokked Will’s basic argument, or who make nakedly self-serving arguments of the form: I have an advanced degree, and I don’t make as much money as I’d like, therefore we need to keep the brown people out to push up my wages. This has the virtue of candor, if nothing else, but normally when people advocate positions that benefit themselves at the expense of people less fortunate than themselves, they at least have the decency to pretend that’s not what they’re doing.

What virtually all of the commenters seem to be missing is that the costs of protectionism for high-skilled Americans falls not only on immigrants who are unable to make better lives for themselves, but also on less-skilled Americans who are forced to pay higher prices for goods and services produced by high-skilled workers. That I take to be Will’s point, and hardly any of the commenters seem to have even taken note of it, much less offered a coherent response.

Of course, this isn’t terribly surprising. People are rarely rational when their own self-interest is involved. No matter how wealthy or successful you are—and the people who are effected by H1-B increases are overwhelmingly among the better-compensated workers in the wealthiest country on Earth—it’s always possible to feel beleaguered. By world and historical standards, a software engineer making $80,000 a year is obscenely wealthy. Yet apparently many such workers feel it a grave imposition to be asked to compete on a level playing field with foreign-born workers, few of whom grew up with the privileges and luxuries that most middle-class Americans enjoy as a birthright.

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