The House of Representatives are intending to increase the number of visas issued for skilled labor such as engineering and science and this has exploded into an election issue for the candidates. Specifically, the idea presented by Republicans is a new type of green card specifically for science, technology, engineering, and math graduates who have received doctorates from US universities. Republicans and Democrats are of course both fighting over this bill as each one wants its own version imposing its own values into the proposition. For example, Democrats have written their own version that is similar but includes a diversity visa program.
We know from class that in general in the short run with fixed capital and land immigration tends to lower wages but while wages fall, specific factors like capital and land rise which in turn increase their rentals. In the long run however firms tend to move around their capital which can change the effect of immigration on both wages and rentals. In fact additional labor may find itself absorbed entirely and the K/L ratio may not change. What do you guys think about this? These points on wages seem to be to be more focused on mass amount of unskilled labor and not small amounts of skilled labor. Will the amount of educated individuals getting these new visas be enough to make a dent in wages? What difference, if any, does it make that these are skilled labor instead of unskilled? According to the Rybczynski theorem immigration will lead o an increase in the output in the labor intensive industry and a decreasing in the capital intensive industry. Would this be the opposite because these immigrants are skilled?
Hughes, S. (2012, September 17). Fight over tech worker visas in congress. Retrieved from http://blogs.wsj.com/washwire/2012/09/17/fight-over-tech-worker-visas-in-congress/
From what we discussed previously in class there would need to be quite a few of these skilled workers to make a difference like the way unskilled workers would. Since unskilled workers immigrate more than skilled since their wages are relatively low wherever they are in the world. I believe it makes a difference in the fact that the competition for skilled labor increases and lowers wages. I would have to think regarding the Rybczynski theorem it would for sure be opposite since it takes more capital for these workers. Was there anything in the work visas proposal that stated they would only allow x amount of these visas or are there an unlimited amount offered a year?
ReplyDeleteThis seems very similar to what was discussed in the beginning of chapter 5 which talked about the emigration of Russian Jews to Israel after 1989. These emigrants were highly skilled when compared to the existing Israeli population. Normally, it would be expected that wages would decrease in the short-run (specific-factors model. Moreover, as you have stated in the long-run a shift in the economic resources would absorb the increase labor and there would be no change in wages (Heckscher-Ohlin model). But what actually happened in Israel was an increase in wages for the highly skilled workforce. The textbook state that the reason this happened was because of the ability to trade in the international market which leads to a greater demand than in autarky.
ReplyDeleteIn relation to the United States, it is hard to say what would happen to wages. If there is high demand for certain products and industries such as technology in foreign markets then an wages might actually rise for these highly skilled workers. In turn this might actually help low-skilled laborers because there might be an increase demand for simple manufacturing/assembly jobs because of new technological advances created by the increase in highly skilled labor.
On the other hand, if there is not enough global demand for the output created by these high-skilled laborers,the wages should follow the specific-factors model and decrease.
I think the inflow of skilled labor to the US will change the US efficiency. Assuming these skilled laborers are entering R&D, the total number of E&D workers will increase and that most likely will lead to an increased productivity of land and capital. I would also agree that the models we have studied in class seem to focus on non-skilled labor over skilled.
ReplyDelete