2005 March 28 Monday
Steve Sailer: We Need More Robots, Not Illegal Aliens

Steve Sailer just bought a Roomba robotic vacuum cleaner so that one of his children could get a rabbit even though another of his children is allergic to animal fur. Steve uses his Roomba as a starting point to examine labor shortages as an incentive for very beneficial innovation.

Recall that a 1997 National Academy of Sciences study  found that an immigrant with less than a high school education will on average cost the taxpayers $100,000 more in government spending over her lifetime than she will pay in taxes.

One lesson of history since the start of the Industrial Revolution 250 years ago is that countries don't advance economically by importing unskilled workers to "do the jobs that natives won't do," but by substituting machines for human labor.

For example, because the Roman Empire exploited countless slaves conquered in foreign wars, it lacked incentives to increase labor efficiency through mechanization. Productivity never took off, and eventually the civilization collapsed into poverty.

In contrast, Britain, which, until the second half of the 20th Century, had far more emigrants than immigrants, had the right incentives for an Industrial Revolution.

As I pointed out here a year ago [Japanese Substitute Inventiveness for Immigration], the Japanese have become obsessed with the promise of robots.

It is extremely disappointing to me when I read some supposed expert or commentator arguing for more immigration claim that the United States will be short x many million workers 10 or 20 years from now. There was a time in this country when the standard response to labor shortages was to look for ways to automate. American business developed the automated factory to the point of becoming an envy for the entire world. The term "Yankee ingenuity" embodied a major part of America's image at home and abroad.

Nowadays throwing more labor at a problem is the first solution proposed in political discussions. Schools perform poorly? Hire more teachers. Crime too high? Hire more police. Why not automate instead? Most teachers are mediocre. Why not film the very best teachers and let everyone watch the best? We could simultaneously improve quality and lower costs! Why not develop more automated means to detect and track criminals and to protect assets from being stolen? Why not stop letting in people who commit crimes at high rates and deport the foreign criminals who are already here? We should innovate our way to a better society rather than import labor that pays little in taxes while imposing medical and other costs.

People who have 8th grade educations bring more costs than benefits. Few Hispanic immigrants are going to be technological innovators. They come from societies that are notably lacking in scientific and technological achievements. In America as a group they do poorly in school across generations. They are not going to supply many engineers to develop more efficient factories or better product designs. They are not going to produce many medical researchers.

Cheap labor decreases the incentive to automate. Businesses derive a short run benefit to their bottom lines but at the cost of delaying efforts to improve productivity and quality through automation. Innovations that automate production can improve quality and lower costs more effectively than cheap imported labor.

Even with a large pool of cheap foreign labor, there will always be some increases in harvest labor productivity. Capital or machines are normally substituted for workers when wages rise, but there may be reasons to substitute capital for labor that aren't related to wages. For example, as water became scarcer and more costly in the 1980s and 1990s in California, more farmers turned to drip irrigation it uses less water and, almost as an afterthought, also saves millions of hours of labor. Similarly, picking wine grapes by machine can improve the quality of the wine in hotter areas because the machines can harvest at night, so most of California's wine grapes are now picked by machine.

But the basic truth still holds foreign farm labor keeps wages low and serves as a disincentive to mechanization. In fact, the wages of farmworkers have been decreasing over the past decade. A March 2000 report from the Labor Department found that the real wages of farmworkers have fallen from $6.89 per hour in 1989 to $6.18 per hour in 1998. A new guestworker program, or continued official encouragement of illegal immigration, is likely to continue this downward trend in farmworker wages. This may seem superficially appealing to farmers, but from a competitive point of view, vying with low-wage countries on the basis of labor costs is a dead end no modern society, will ever be willing to reduce farmworkers' wages enough to match those paid in third world countries.

Toyota, faced with the competitive threat of cheap Chinese labor, has opted to pursue development of robots that will allow Toyota to compete while still retaining production facilities in Japan. We can relearn from the Japanese an attitude our society used to accept as a given: Continuously increasing productivity is the path to higher living standards, not the importation of low skilled laborers who drive down the hourly labor costs of the lower classes while simultaneously sticking American taxpayers will big bills for police, jails, medical care, and other costs.

Share |      By Randall Parker at 2005 March 28 11:30 AM  Immigration Economics


Comments
Oscar said at March 28, 2005 2:57 PM:

I think this one stance of GWB's will do more to shatter the Republican majority of the last election than anything anyone else does.

Dimitar Vesselinov said at March 28, 2005 3:08 PM:

Robotic Nation Evidence
http://marshallbrain.com/robotic-nation.htm
http://roboticnation.blogspot.com

John S Bolton said at March 28, 2005 3:44 PM:

A lot of these discussions of fictitious labor shortages proceed on the disingenous and mendacious basis that the economy is stuck with the way things are done today. There would be huge increases in efficiency of resource use, if water were taken out of the abysmally low productivity, labor intensive agricultural use, and diverted to the enormously higher productivity urban use. The administration says willing worker, willing employer; but they propagandistically leave out of account the third party to that transaction in any sort of welfare society: the net taxpayer. Cheap labor is low income; low incomes do not allow for the avoidance of net public subsidy, except in rare cases. They are traitorously misrepresenting the truth, when they imply that it is only between the employer and recruited foreign employee. The net taxpayer has rights, and we owe loyalty to him when he is attacked by foreign criminals, rushing in on net public subsidy.

Stephen said at March 28, 2005 4:51 PM:
For example, because the Roman Empire exploited countless slaves conquered in foreign wars, it lacked incentives to increase labor efficiency through mechanization. Productivity never took off, and eventually the civilization collapsed into poverty.

I'm not sure the Roman empire is a good example because it presupposes that the empire was pushed back by others who were more productive, when in reality it was pushed back by peoples who were less "mechanised" than the Romans - ie various barbarian hordes.

(Of course, when we say "collapse" we're really talking about a gradual decline lasting 400 years from the empire's territorial peak. Indeed, some would argue that the empire never collapsed, rather that its still with us albeit in a highly evolved form - the catholic church.)

I think a better example might be the american civil war - industrialised north v less industrialised south? Then again, its not clear that the prevalence of slavery in the south correlates with lower industrialisation (ie if there had been no slavery, would the south have necessarily been equally or more industrialised than the north?)

Luke Lea said at March 28, 2005 4:52 PM:

What we have is not a labor shortage but rather an over-abundance of labor. Whe else have real hourly wages been falling? And business likes it that way because profits are higher.

As for causes, they are principally three: Immigration, most obviously; labor-saving technology, including the introduction of major home appliances starting in the 1950's, which allowed -- and then forced -- women to enter the workforce in large numbers; and trade with low-wage countries, who, in effect, export their surplus labor without actually moving here.

As for solutions, we might repeat the 19th century populist idea of legislating a shorter work-week, only this time to a four day week and a six hour day. Collective bargaining for highter wages is probably not a good idea under present circumstances, but we might consider a kind of collective bargaining for the 80 percent of the workforce who are classified as non-supervisory wage and salary workers. It would take the form a system of wage subsidies modeled on the earned income tax credit idea, only made automatically with each weekly or biweekly paycheck.

Randall Parker said at March 28, 2005 5:18 PM:

Luke,

Low income people have to work more hours because they get paid less per hour. Restricting them to work fewer hours will decrease their total income. Granted, restricting the number of hours people can work will raise hourly wages somewhat in the short run. But those workers will lose more from not being able to work as many hours.

Also, lots of them will respond by getting a second job. So you won't even decrease the supply of labor that much.

What we need to do is to stop letting in a half million illegal aliens per year and deport the ones who are already here. Plus, we need to place skills requirements on legal aliens and put an end to chain migration of relatives.

Randall Parker said at March 28, 2005 5:21 PM:

Stephen,

If the Roman Empire had freed slaves then a larger portion of its population would have engaged in market economic activity and done more technological innovating that would have given it an edge over the barbarians. The Roman Empire should have enjoyed a larger edge over competitors due to a larger internal market. But too few people were market participants.

Kurt said at March 28, 2005 7:50 PM:

Randall,

An excellent article and something that is not said very often.

I agree with it totally.

PacRim Jim said at March 28, 2005 9:48 PM:

Fewer people, fewer workers needed.

Luke Lea said at March 29, 2005 7:57 AM:

Uh, hello, Randall: I believe you just committed the fallacy of composition. If one person works fewer hours, he will earn less. But if everyone works fewer hours, the effect is to reduce the supply of labor relative to capital, which may or may not reduce labor's total income. It will certainly increase labor's share of the total income percentage-wise. The forty hour week in place of the 72 hour week is what enabled this country to absorb the agriculutural revolution in the the 19th century (use of tractors, combines, etc) and, for a while, created a so-called middle-class society. It is important, also, btw, not to value the leisure itself as a form of income. Other things remaining equal, labor-saving technology hurts labor -- though clearly it also has the power to liberate him. This is one area libertarians need to look more closely at.

Proborders said at March 29, 2005 8:32 AM:

"France's assembly lengthens 35-hour workweek" by Laurence Frost is posted here. Laurence Frost's "France dismantles its 35-hour workweek" is posted here.

A 40 hour workweek (in the USA) might actually be quite optimum overall.

Randall, it is probably a good idea for all illegal immigrants to be fined by the US government. A several thousand dollar fine imposed on all illegal immigrants would probably discourage illegal immigration into the United States.

Derek Copold said at March 29, 2005 9:04 AM:

Actually, what we need to do is fine the piss out of employers, perhaps even enforce total forfeiture of their businesses. As a detection tool, we could offer amnesty to illegals who snitch on their bosses.

GUYK said at March 29, 2005 9:23 AM:

ProBorders: Fining a field worker several thousand dollars will not prove much because the average illegal field work does not have several thousand dollars. The ones to go after are the crew leaders who hire the workers and contract their labor to agribusiness. Another possibility is to fine the agri-business that uses illegals enough to get their attention.

Luke Lea: Business is in business to make a profit. I believe that labor is a commodity and the cost of labor should be allowed to rise and fall with supply and demand. A labor shortage will increase the costs. I certainly agree that the massive influx of illegals have kept the cost of labor at what is probably an artificial low. However, labor is a significant cost of doing business whether it be manufacturing or services. The fact that many businesses have chosen to manufacture offshore to beat high labor costs (as well as government mandated costs)
indicate to me the need for cheap labor in order to be competitive with Asian imported consummer goods.

I will support a guest worker program, especially for agri-business where thus far there are no machines available to do the work. But, there is a difference between a guest worker program and permanent green cards. Guest is just that-a guest. When the job is done they must go home until next season. Such a program coupled with heavy penalties for those who hire illegals might help to solve the problem.

I had hopes that the trade agreements ofa few years ago with Mexico might help provide enough jobs in Mexico to stem the illegal alien problem. However, the problem seems to be getting worse instead of better. In any event, something has to give. Daily Pundit has a new blog at www.dailypundit.com/all that addresses this issue as well as other issues that conservatives and libertarians want the administration to work on. This blog may be a place to start the pressure on the Bush administration to take action.

Randall Parker said at March 29, 2005 10:07 AM:

Luke Lea,

I am not committing a compositional fallacy.

First off, if people are made to work fewer hours then coordination costs go up in each employer. To get the same job done in the same amount of time more people must coordinate.

Second, again, many people forced to work fewer hours in a single job really will get a second job. So you do not decrease the supply of total labor by as much as you reduce a person's labor in a single job. So you impose an even bigger coordination cost than you get your supposed benefit from by decreasing the labor supply per job.

Third, we need the natives to work more, not less. We need fewer illegals so that more natives work. Each native who is poor is not very productive per hour worked and needs to work more hours to produce more stuff of what they want.

Fourth, a person who is made to work fewer hours per week will produce less in goods and services. Granted, reduced availability of labor will increase incentives for employers to substitute equipment for labor. But we already have a better way to reduce the supply of labor: Stop the influx of low skilled and low productivity workers. That gives us an added benefit of lowering the crime rate since those low skilled imports also commit crime at higher rates than the average American does.

Invisible Scientist said at March 29, 2005 1:41 PM:

Randall Parker:

While I agree that robotization will help the survival
of the United States by reducing the foreign trade deficit,
thereby maintaining some degree of independence for the
New World, I must emphasize that
someone brilliantly posted above, the relevant
link of Marshall Brain's article:
http://marshallbrain.com/robots-in-2015.htm

In this article, it is speculated that in the long
run, as robots become more and more advanced, robotization
will lead to massive unemployment regardless of how
much we restrict the illegal immigration. It is argued
that robotization will create a lot less jobs than it will
eliminate.

noone said at March 29, 2005 1:50 PM:

"I will support a guest worker program"

Ain't no such thing,once here they stay here(just ask the Germans).To call it a guest worker program is to perpetuate the fraud.Be honest.

"I believe that labor is a commodity and the cost of labor should be allowed to rise and fall with supply and demand."

That's a macro view,you ignore the micro view.People who once earned middle class wages and have seen their jobs go to illegals at minimum wage or less will not support that system.You'll end up with greater state regulation of the labor market,not less.
You simply cannot seperate the political and social from the economic.

"The fact that many businesses have chosen to manufacture offshore to beat high labor costs (as well as government mandated costs)
indicate to me the need for cheap labor in order to be competitive with Asian imported consummer good"

And that wil bring protectionism in some form.

We're fast reaching the point where the political class will have to choose sides and with 98% re-election rates,they won't be to concerned with your vote.
Folks have begun to notice that whenever "The People" make their "Will" known on this issue the political class slaps them down hard and fast.

Rick Darby said at March 29, 2005 2:58 PM:

I agree with noone on both counts. The words "temporary" and "legislation" are oil and water. Even the stupidest and most irrelevant laws, once passed, are virtually impossible to get rid of. No immigrant whose individual situation is improved by getting a "temporary" work permit is going to give up his advantages willingly, and collectively they will have the power (with a helping hand from big business and the liberal bleeding hearts) to keep from being repatriated.

The scary part of this is that the political/business establishment seems determined to go its own way, regardless of public sentiment. It is betting that opposition to immigrant cheap labor is too diffuse to matter politically, and that someone else will (eventually) pay the cost, not the people in power who stand to gain now.

When the president, both major parties (and apparently libertarians too), and business leaders all feel perfectly secure in ignoring the interests of both the working class and the middle class, how long can it go on? Until we are the Third World country that we are busy importing, I'm afraid.

Stephen said at March 29, 2005 3:20 PM:

An excess of unskilled labour can actually drive invention. The classic case is the 19th century cotton mill - Britain was the worlds no.1 producer of weaved cotton, the vast majority of which was exported. Its hard to underestimate the size and value of the cotton milling industry - Britain exported enough cotton to re-cloth every man woman and child on the planet every 8-months. Cotton exports made Britain rich and allowed it to afford an empire.

Anyway, the story goes that the US wanted to get some of the action, but they had a problem, cotton weaving machines required skilled labour and the US didn't have any. So, someone invented a weaving machine that could be used by unskilled labour, the US industry adopted it and were soon taking market share from the Brits. How did the Brits respond? Well, they didn't, they had enough skilled labour that they didn't need to innovate.

John S Bolton said at March 29, 2005 4:44 PM:

That misstates the overall tendency of technical progress, which rapidly reduces the need for unskilled labor.In the 19th century, 80% or more of the population consisted of menials. Today menials are in increasing oversupply, and this is demonstrated also by the way employers treat third world workers as utterly replaceable. What else could explain their extraordinary overrepresentation in temporary, seasonal, casual and day labor type positions? This shows how great the oversupply of menials caused by lassitude of immigration law enforcement has become; that employers treat them as utterly disposable and interchangeable, to be dropped at the slightest decline in volume of work to be done.

Luke Lea said at March 29, 2005 5:18 PM:

Randall: just one point:

Workers can work faster and more efficiently for shorter periods than for longer, just like sprinters run faster than long-distance runners. If pay is tied to output, this could result in higher pay and higher profits for employers, probably on the order of 40 percent (based on personal experience as an employer). That would more than offset in extra coordination costs, and doesn't take into account the increased use of machinery per manhour due to reduction in the supply of labor.

Even so, I agree that immigration needs to be halted, too.

Randall Parker said at March 29, 2005 5:52 PM:

Luke, You say:

Workers can work faster and more efficiently for shorter periods than for longer

Sometimes that is true. Sometimes that is false. A few considerations:

1) Some work requires getting a really complex model into your head and it takes a lot of hours to get to that point. Cutting off hours worked is wasteful in those cases.
    I'm a computer programmer. When I manage to get a really complex model of my program into my head and I'm being productive I want to go at it all day and evening and even late into the night. It takes a lot of work and a certain sense of "being in the groove" to get to that point. When I do then making me work fewer hours a day would be very harmful to my productivity. After many hours away from the program I'd have to come back to it and try to get it all in my mind again just right. That could take many hours to accomplish and I can't always do it.

2) Some work is useless if only partially completed. That is true of design work and also even of many blue collar tasks.
    I have a cousin who is a long haul trucker. The value of what he does is strongly related to how quickly he finishes a run. If he gets four fifths of the way from Texas to Oregon (and he called me up recently while about that far along) and just stops for a day he's tying up his rig and his cargo and preventing economic benefit from being realized from the first four fifths. Plus, he's stranding himself somewhere in mid California for no purpose.
    Put delays into the system and you will decrease the competitiveness of US companies as compared to foreign companies where the workers can work from beginning to end of tasks with fewer interruptions.

3) For some types of work the efficiency of the labor does not go down much after many hours.
    I worked as a telephone operator many years ago. I was just as quick processing calls after 9 hours as I was in the first hour. I never heard managers say that calls processed per hour went down much after many hours working.

4) Some work is far worse than useless if stopped part way thru.
    Imagine a complex surgery that takes many hours. Stopping 6 hours into an 8 or 10 hour surgery would leave a surgical patient to die.

5) A lot of people would rather work long hours per day instead of commuting to work for more shorter hour days.

6) A lot of people assign more value to money than to free time. Why force them to not work?
    If they are too poor to buy a house or a fancy car or to go on a vacation trip or to go out to fancy dinners why force them to sit around with no money to spend with lots of free time?

Proborders said at March 30, 2005 8:42 AM:

Derek Copold wrote, "Actually, what we need to do is fine the piss out of employers, perhaps even enforce total forfeiture of their businesses. As a detection tool, we could offer amnesty to illegals who snitch on their bosses."

Derek, fining employers who knowingly hire illegal immigrants is a good idea. Giving "amnesty to illegals who snitch on their bosses" (Copold, Derek) in general is not a good idea. Millions of illegal aliens could possibly earn amnesty this way.

GUYK, some illegal aliens do have assets of more than say 5 or 10 thousand dollars. Some illegal immigrants from Mexico might have few assets in the USA but might have more substantial assets in Mexico.

If a fine for being an illegal alien in the USA is 5 thousand dollars, the US government or a collection agency could try to collect the fine by seizing assets owned by the illegal alien in the US or abroad if the illegal immigrant doesn't pay the fine.


Luke Lea said at March 30, 2005 9:53 AM:

Randall,

I had in mind most routine wage work, in factories, construction, and the like, which is where my personal experience is. I am not for forcing people to work shorter hours necessarily, but rather requiring employers to pay overtime past a certain maximum workweek, as was done with the 40 hour week early in the last century.

See the last plank in the Born Again Democrat platform for the context in which shorter workweek makes the most sense. Provided the pay were high enough, two-thirds of the population might like to live this way, based on a Gallup poll I commissioned once.

This would have a positive effect on the market wage of people who want to work longer hours in an urban environment also, btw. Employers would likely earn less than they do nowadays on average, though more than they were making before Nafta and Gatt, which, after all, were matters of public policy signed off on by the elected representatives of the American people. There is nothing legally sacrosanct about profit and wage levels in the market when they are so heavily influenced by such policy decisions -- which is not an argument against markets so much as the natural distribution of income in a market economy. You can fiddle with the latter without doing away with the former.


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