Repost from the old site.
…And why every American who is not a businessmen should not.
This post will show how immigration is great for US business, but it’s bad for everyone else in the country. That includes everyone who doesn’t run a business, all of you, “What’s good for my boss is good for” worker-fools.
James Schipper has been laying out some excellent reasons in the comments threads about why immigration does not appear to make much sense for economics or society as a whole. In fact, mass immigration seems to be detrimental to your average person. His arguments seemed logical, but I had hardly heard them before.
But then I wondered, if it’s so obvious that mass immigration is bad for society and even for average income, why would business and the elites support it?
Turns out that business has no interest at all in the average income of workers. In the Third World, they are perfectly content to have millions starving or living in the streets every year, as in India. Or to have 90% of the population in poverty as Guatemala was for years and Haiti is now.
As long as the rich stay rich and business stays profitable, they don’t really give a flying fuck about anyone else and whether they are in poverty or not.
In Haiti, the elite has a monopoly on food sales, which they mostly import and mark up at very high rates. Since the poor have to eat or starve, they have no choice but to pay the high prices. So even a 90% poor country can still generate high profits for business. Fewer poor people would mean rising wages or more of returns going to wages than to owners. Of course, business always opposes rising wages and increased shares to workers.
Let’s let James show us just how supporting mass immigration is logical for businessmen:
The reason why the business community tends to support immigration is that more immigrants means more workers, more customers and more real estate users.
The essential question is not whether immigrants work for less than natives but whether the presence of immigrants makes labor cheaper than it otherwise would be.
I think that mass immigration has a depressing effect on wages, or else its prevents wages from rising as fast as they would rise without immigration. Lower wages do not necessarily translate into fatter profits because, by lowering production costs, immigration may lead to lower prices.
Slavery also lowered production costs, so the ultimate beneficiaries of slavery may have been the consumers of goods produced with slave labor.
More immigrants likely means that there will be economic growth, and that can mean increased sales. What matters to business is not per capita sales but total sales. Let’s illustrate this. We have a town with 500 people and a restaurant. Let’s assume that on average each town resident consumes 6 restaurant meals per month, so the restaurant sells 3000 meals per month.
Now 200 immigrants enter the town. They lower average income, so that each town resident now consumes 5 meals instead of 6. The restaurant still benefits from the population increase because it now can sell 3500 meals per month instead of 3000. if you are in the business of selling widgets, you are better-off selling 1200 widgets to 150 people than 1000 widgets to 100 people.
Suppose that no immigrants had entered the US in the last 50 years, would average real estate prices be as high today as they are? I doubt it. The more people you put in a given space, the more property is likely to be worth in that space. Immigrants have to live somewhere. Since business owns a lot of real estate, they benefit from population growth.
For business, the important thing is usually total economic growth, not per capita economic growth, let alone per capita consumption. For ordinary people, the important thing is per capita income growth and its distribution.
Let me illustrate demographic investment once more. We have a country with 400,000 high school students and there are 400 high schools. Schools last 100 years, so each year the country has to build 4 schools. Let’s assume that a school costs 50 million dollars. That means 200 million in building costs per year.
In addition, the country spends 5,000 per year on each student. Adding the building costs to that amount, the cost of each high school student is 5,500 per year if the student population remains the same.
Now we make the assumption that the student population increases by 4000 each year. Since there are 1000 students per school, the country has to build 4 more schools to accommodate the new arrivals. Instead of building 4 schools, the country now has to build 8.
In the first year after the growth in the student population, the costs per student are (404,000 x 5,000) + 8 x 50 million = 2,420,000,000/404,000 = 5,990. In other words, the cost per student has increased from 5,500 to 5,990.
The increment of 490 can’t be used for consumption. That is the effect of demographic investments. It reduces consumption. Education is an investment.
The establishment can also believe in a lot nonsense. Many members of the elite may believe in immigration because it makes them look cosmopolitan, tolerant and sophisticated, so unlike the unwashed who don’t like immigrants because they are unenlightened and bigoted. It is a coalition of plutocrats and political correcties that keep the flow of immigrants going in Canada and the US.