Nightcap

  1. The United States signed at least 29 treaties between 1789 and 1815 Rachel Herrmann, Age of Revolutions
  2. A glimpse of another kind of economy Nick Nielsen, Grand Strategy Annex
  3. The world after Covid-19 Branko Milanovic, globalinequality
  4. Old Christian icons in communist Bulgaria Terry Orr, Not Even Past

Nightcap

  1. Four types of labor and the epidemic Branko Milanovic, globalinequality
  2. Republicans, Democrats, and coronavirus Ronald Brownstein, Atlantic
  3. War with Iran: Regrets only Irfan Khawaja, Policy of Truth
  4. Taiwan’s robust constitutionalism and coronavirus Wen-Chen Chang, Verfassungsblog

Nightcap

  1. The waning fortunes of classical liberalism John McGinnis, Law & Liberty
  2. The worst people of 2019 Liza Featherstone, Jacobin
  3. Putin’s Russia, 20 years on Marc Bennetts, Politico
  4. The cubicle archipelago Scott Beauchamp, American Affairs

Nightcap

  1. America’s proud legacy of liberty Peter Berkowitz, RealClearPolitics
  2. Why Marx was against individual rights David Gordon, Mises Wire
  3. How “Afrofuturism” reshaped science fiction Scott Woods, Level
  4. Labor and the art of becoming Antwaun Sargent, NYR Daily

Nightcap

  1. What the Germans are reading R Jay Magill Jr, American Interest
  2. American conservatives have an assimilation problem Shikha Dalmia, the Week
  3. The technology trap Chris Dillow, Stumbling & Mumbling
  4. It’s not China that’s bellicose, it’s the CCP Aaron Sarin, Quillette

Watson my mind today: labor markets

And how ‘bout them Dodgers, hunh? Actually, how about each division’s top team? That’s a lot of winning!

— A partial response to Marx’ claim that managers are expropriating the value produced by the workers while providing nothing themselves: “The study showed that managers didn’t just influence the results their teams achieved, they explained a full 70% of the variance. In other words, if it’s a superior team you’re after, hiring the right manager is nearly three-fourths of the battle.”

— Boudreaux wonders what supposedly-enormous transaction cost prevents firms from offering workers a choice of pay packages – buying more parental time for a lower wage, for instance. One commenter notes their firm does just that, letting workers buy back vacation time. This is also, of course, standard practice in much of academia, where faculty are allowed to reduce their teaching load in exchange for a salary cut – usually funded by a research grant.

— Sumner on how labor market reforms (including cutting unemployment benefits) helped Germany and Israel to lower average unemployment rates and increase economic growth.

— But there appears to be a great deal that only deregulation will not be able to change. A new paper by Berger and Engzell finds correlation between the European-country-of-origin of people in modern US and the level of inequality and intergenerational mobility. Institutions persist for a very, very long time … again. (Homework: How does this apply to the reparations debate?)

— Another new paper by Fone, Sabia, and Cesur finds that higher minimum wages increase property crime arrests – contra expectations – so that “a $15 Federal minimum wage could generate criminal externality costs of nearly $2.4 billion.”

— A history of civil asset forfeiture tells how the British Crown’s attempt to encourage the Royal Navy to enforce trade restrictions and tariffs became so widely used in modern America.

— Summers and Sarin show that wealth taxes will take in much less than their proponents hope.

Legal Immigration Into the United States (Part 13): The California Hourglass Class Figure

Discussions of the impact of immigration on native labor often have a 19th century, quasi-Marxist flavor. Implicitly, they seem to posit a large undifferentiated working class, on top of which sits a small middle, or professional class, itself crowned by a tiny capitalist class. (Today, it would be the absurd “1%.”) With this scheme, the capitalists, employers all, only want cheap labor, of course, and they keep importing immigrants to compete with native workers and thus keep wages down. In the meantime, the latter vacillates between resentment of foreign born wage competition and class solidarity cutting across nationalities and immigration statuses. The middle class, of course, opportunistically sells its political influence to one or the other main classes. Such a class structure is compatible with a good deal of hostility toward immigrants. The larger and/or the more organized, that native working class, the better expressed its hostility toward immigrants, the more likely that hostility will become institutionalized. At the extreme, it turns into the “Herrenvolk democracy” pioneered by the labor union-supported South African apartheid regime. (We are and were nowhere near that point in California. I evoke apartheid to indicate an extreme theoretical destination for such a movement, not by way of prediction.)

But when the class arrangements are not in such a conventional pyramid shape, attitudes toward immigration can be counter-intuitive. Imagine a society where the middle class is both very large and subjectively indistinguishable from a putative capitalist class because every member of the former sees himself as a good candidate for the latter (and correctly so, to a considerable extent). A society where the formal ownership of the means of production is widely dispersed through the mechanism of stock options gifted to employees. Imagine further that what remains of the old middle class has become numerically and socially insignificant. In particular, small merchants have nearly disappeared, replaced by salaried employees of large chains. The old professionals, doctors and lawyers, and the like, have lost their special standing in the close proximity of educated, prosperous mind workers.

At the same time, a combination of vertical mobility in the growth economy for some of the native working class, of physical movement out of the high rent areas associated with prosperity for others, and of increasing immigration, has created a largely foreign-born working class. The combativeness of this foreign working class is impeded  by its low cultural competence and by the fragile legal status of many of its members.

The remarkable thing about this scenario is that few of the remaining native-born appear to feel threatened by immigrant competition. Those who are actually in competition with low qualification immigrants are too immersed in the prominent issue of immigrant numbers to gain a coherent voice. The middle/upper class itself has an immigrant component but that component constructs itself slowly and at a predictable rate because the federal government easily limits via the granting of visas the admission of those not carried by family relationships. Note that this has been largely the case for immigrants from India, China, and Europe.

I am describing here a vertically asymmetrical hourglass class structure with a large upper component, a possibly larger lower component, and not many in-between. To the upper component, the lower immigration-based masses comprise so many hewers of wood and drawers of water. What’s more, they do not compete in the same rental markets or in the same leisure areas (In my local terms, the middle/uppers do mountain biking in the redwood forests while the working stiffs go to the Boardwalk.)

Some immigrants from poor areas bring with themselves a superior capacity for high density occupancy of humble housing premises, even for downright crowding. They don’t’ stop property values from rising. The more of them there are, the lower the prices of services that the uppers must consume in large quantity because they spend a great deal of time at work. The same work situation that motivates Google to offer its employees decent free food at all hours insures that there will be a high demand for providers of common services. Even low-level tech Google employees don’t do their own laundry! (Personal observation.)

In that labor situation, you would expect little prejudice against immigrants and a high willingness to open the gates to more of them. Note, that illegal immigrants, specifically, make the best helots because they are often in no situation to complain or to demand anything. Or, they are simply not clear as to what their rights are, or what’s prudent in this connection. A “sanctuary” state, promoting a defense of all immigrants couched in the language of generosity, is what you would expect to arise here, and even flirtations with the notion of open borders. I have just described northern-central California today, of course. Other high-tech nodules across the country conform.

[Editor’s note: In case you missed it, here is Part 12]