2013 February 25 Monday
Singapore To Cut Use Of Low Skilled Foreign Labor

If only the American elites would see the wisdom of such a move.

Companies must pay higher levies for lower-skilled foreign employees over the next two years and cut the proportion of overseas workers in some industries, Finance Minister Tharman Shanmugaratnam said in his budget speech yesterday.

The Singaporean government wants to double the growth rate of labor productivity. Makes sense. More than anything productivity determines living standards. Bringing in millions of low productivity workers, as America has allowed, lowers living standards. Lower productivity workers make less money, pay less in taxes, and get more help from the government because, for example, they can't afford to pay for their own medical care. The result? The formerly great state of California is a shadow of its past glory. Liberal Democrats celebrate. Rational minds should be appalled.

Americans should turn away from college majors that cost more than they ever earn back. Americans should turn away from the idea that imported labor will solve any of our problems. More productive machines and better software will increase productivity. Low priced unskilled labor will only decrease the incentives for innovation and purchases of capital equipment.

Share |      By Randall Parker at 2013 February 25 09:21 PM 


Comments
Mike M said at February 26, 2013 6:38 AM:

You've confused things. The output of others, whether they be low productivity or high productivity types or just plain lazy versus those with a strong work ethic, does not take anything from me. Rather, it affords me another option in the marketplace. The fact that we allow (and encourage) Washington to take the fruits of our labors and give it to those who didn't earn it for them to consume is another matter. If we eliminated these welfare and entitlement programs and made each citizen responsible for himself, how would the fact that some other worker produces less - whether due to his low level of skills or simply his piss poor work ethic - affect you? If indeed, the mere fact that they are low skilled negatively affects you (aside from the government redistribution of your wealth to them), then it is an equally valid point that those workers who are more highly skilled than you have the right to expel you from the US!

Why is it a problem in and of itself that low productivity workers make "less money"? Raising the minimum wage should solve that problem! If low productivity workers per se is the problem, maybe we should outlaw young, black males.

The problem isn't whether or not we ALLOW low productivity workers to exist here (whether they come from abroad or are products of choosing a dumb college major). The problem is that we give "workers" (or perhaps I should say non-workers) INCENTIVES to remain low productivity workers by rewarding them with government subsidies and punishing high productivity workers (the evil, greedy rich) with more taxes.

Andrew Neather said at February 26, 2013 12:21 PM:

It DOES affect you, [ParaPundit edited this to remove an insult aimed at another commenter], for the simple reason that a nation's GDP, and hence its living standards are determined by the productivity levels of its workers. If the labor pool is simply incapable of doing high end work, then high end industries won't exist, and the overall amount of wealth (and hence money, money that should percolate eventually to you), will be diminished. Hence, virtually everyone in Bangladesh is poor, even the 'professionals' and not just the peasants. Don't you know anything about surplus value, [ParaPundit edited this to remove an insult aimed at another commenter]?
- Also the more poor there are, the more they will vote themselves *your* wealth.

There's nothing but nothing worse in this world than a dick that that thinks himself 'intelligent' but is not - they are the REAL dangerous bastards.

Mike M said at February 26, 2013 8:24 PM:

Hey Andy, your need to resort to vulgar insults rather than put forth a coherent argument is evidence of your ignorance and immaturity. I'm quite happy to have the option of seeking goods and services from low skilled - and hence low cost - workers IF I choose. As long as you and I are not forced by the government to pay for "entitlements" for low skill foreign workers, their presence has ZERO effect on the presence of high end industries. Your rant - I can't call such an immature and simple-minded screed an argument - presupposes that the presence of additional citizens who happen to be low skilled somehow eliminates the already existing high skilled workers. It doesn't!

I do agree with one of your points. There is nothing but nothing worse in this world than a dick that that thinks himself 'intelligent' but is not, dick.

Paul Rain said at February 26, 2013 8:48 PM:

Mike, the criticism was entirely valid, 'numbnuts' or not.

Your second paragraph came close to part of the solution, though there are plenty of people of all races that any country would be wise to kick out.

Mike M said at February 27, 2013 7:34 AM:

Paul, no it wasn't. Andy has posed a logical fallacy known as a false dilemma. What he posits is that either (A) we add low skilled workers to the economy and eliminate high end jobs, or (B) we prevent low skilled workers from entering and keep high end jobs. The problem is his premise, that the presence of low skilled workers somehow makes the current high skilled workers vanish. If Andy's assumptions were true and his bigotry was applied to the course of US history, we would be a poor nation. The US developed as an economic powerhouse, not because we excluded unskilled people, but because we gave unskilled people the opportunity and incentive to become highly skilled and wealthy. The problem (aside from the fact that the xenophobes have misidentified it) is that we have gone from the land of opportunity (and personal responsibility) to the land of guaranteed outcomes - which ultimately entails that everyone's outcome (except perhaps the political class) is poor.

Despite being called a melting pot, we are NOT a homogenous nation. There is much income and wealth inequality - and we should be thankful for that! Jose's being unskilled and poor does not mean that I must be poor - unless (as I very clearly stated) government redistributes my wealth to Jose. With traditional incentives in place, Jose has the opportunity and incentive to go from being unskilled and poor to skilled and rich - that is how an economy grows - by increasing our human capital. But for my individual purposes - as long as the government imposes no demands on me to support Jose and it holds Jose accountable for his actions and wants - Jose's productivity is not my concern.

By changing the incentives (rewards and penalties) for producing or not producing - taxes and welfare/entitlement programs - our government has done plenty to reduce the productivity of our nation's domestic workers without having to worry about foreign workers.

PS - As I'm sure you're aware, my second paragraph indicated that Andy is a know-it-all dick.

asdf said at February 27, 2013 1:17 PM:

Jose can vote for those benefits. So to divorce welfare/entitlements from the number of voters that are on the dole (which only increases the more unskilled there are) is a false premise.

Also, Jose can not go from being low productivity to high productivity. The average IQ of Jose's race is low, meaning there is no place for him in the modern economy. There is no retraining him to be useful Robots or machine equipped higher IQ workers are better them him at everything. Even comparative advantage doesn't matter because there is a base cost to employing Jose (keeping track of him so he doesn't steal, etc) that exceeds his meager productivity.

J. said at February 27, 2013 5:36 PM:

their presence has ZERO effect on the presence of high end industries.

Economists dispute the causes of the "resource curse", but the phenomenon is real. Do you agree?

Randall Parker said at February 27, 2013 8:23 PM:

Mike M,

A graph of per capita income versus IQ across nations shows a much larger benefit than simply the additive effect of more productive workers. Clearly, lower IQ people lower the productivity of higher IQ people. This presents a challenge to Open Borders libertarians that they steadfastly ignore. Dumb people impose external costs on smart people.

This problem is not just due to the welfare state. Though of course poor dumb people do vote for the welfare state. They also vote for bad ballot propositions, vote against good ballot propositions, and make worse choices for political candidates. They are less able to detect official corruption and less likely to care. They have shorter timelines and are less able to model negative consequences of short term thinking.

Also, dumb people eat up lots of time of smart people. They've got to be policed, investigated, tried for crimes, helped when they get into trouble, and otherwise distract away from other activities by their intellectual superiors. A smaller fraction of smart people are available to do engineering and science when they are surrounded by dumb people.

Dumb people cause more car accidents. They choose lower quality goods and therefore reduce the need for stores to stock higher quality products.

The presence of dumb people increases the physical distance between smart people and therefore reduce the complexity of webs of business relationships between smart people.

The presence of lots of dumb people lowers the cost of manual labor. This reduces incentives for innovation to automate manual tasks.

All of these effects must be large or else a graph of per capita income versus IQ would not have such a large positive slope.

You keep ignoring the external costs of dumb people while I and others keep pointing them out to you. I understand where you are coming from. I read my way in and out of Objectivism and Libertarianism. I think they are flawed models for looking at society. They ignore external costs that necessitate controls on borders.

Mike M said at February 27, 2013 10:30 PM:

asdf -

My premise is indeed correct. The problem is that our government, which includes SCOTUS, has abandoned the Constitution that was meant to protect individuals and individual rights from a tyrannical majority. My premise is that the government should not redistribute the wealth of productive workers to Jose, or Joe, and his friends - whether they be immigrant low productivity workers or US born low productivity workers and by stopping such redistribution it will remove the incentive for Jose and Joe to be non-productive. Now, if you want to insist that we've crossed the Rubicon in terms this tyrannical majority keeping in power those who will redistribute wealth from the producers to the non-producers (and I am not saying that that is an incorrect assumption), I agree with you. However, that was clearly not my premise. If however, your implication is that because we have passed the point of no return with regards to wealth redistribution and hence you view foreign low skill workers as simply that many more slackers competing for government handouts, it appears that you favor your own countrymen screwing you rather than being screwed by some foreign import. I favor neither, but find it particularly disturbing that my own neighbors would sell me out for a few pieces of silver.

I do take issue with your bigoted assumption that Jose (an assumed hispanic) cannot go from low to high productivity because of his "race". I will grant you that the "average" IQ is lower for hispanics than caucasians, but there are many hispanics, and indeed many blacks, who have higher IQs and higher skills and education than many caucasians. Indeed, as Asian economies emerge, your assumptions regarding IQ and productivity mean that there will be no place for caucasians in the modern economy. I think you place too much reliability on talent (IQ) and not enough on determination, persistence and work ethic. As a former owner of a multimillion dollar business, I'll take a hard worker with low skills over a highly skilled slacker any day.

I also think your assumption that foreign low skill workers are more of a threat (to the US economy) than US born low skill workers is incorrect. The US born low skill workers - a better term would be low productivity citizens as their low productivity, which is really what we're concerned with, may be due to low skills or low efforts - are the ones who elected and re-elected the current redistributionist-in-chief. As I stated previously, it is the incentives (taxes that punish the producers and welfare/entitlements that reward the slackers) that is the root of the problem of low productivity. If we fix the incentives, we eliminate (or reduce) the low productivity worker problem.

Mike M said at February 27, 2013 11:10 PM:

Randall - So, which dumb people do we get rid of? Clearly our current policies gives both foreign and domestic non-producers incentives to remain here or come here and be non-productive at the cost of punishing productive persons. It appears that you (and asdf) are convinced that IQ ( or some measure of intelligence) is the final determinant productivity. My argument is that given the proper incentives (which I have discussed ad nauseum) and holding people personally responsible for their own upkeep and actions, productivity will increase. It matters very little to me whether one is non-productive because he is dumb or lazy. The real issue is productivity and that I contend is based more upon incentives and non-cognitive factors that it is on intelligence. While I do understand the drain imposed on society by people who are less productive, I believe the history of the US prior to the progressives' gradual takeover demonstrates that opportunity, when coupled with proper incentives, yields the greatest productivity. Trying to engineer a smarter society by whatever means has never met with much long term success.

In terms of dumb people voting for dumb things besides the welfare state, I think I've expressed my view before that voting should have some restrictions, e.g. some measure of one's skin in the game such as owning property, etc.

As for graphs of per capita income versus IQ, is it so difficult to recognize that correlation is not causation and that perhaps the low intelligence is explained by the low income (with the resultant poor nutrition, absent parents, poor schools, etc.) rather than the other way around? It's also a fact that many, if not most, of these low income countries are characterized by institutions that favor predation over protection of property rights. Now, if you want to argue that they have these types of governments because they are dumb, then you must also explain the type of government that has dominated China for the past century despite the high IQ of Asians.

Returning to one of my original themes - I would rather fix the incentives problem and "force" both US and foreign non-producers to either "do or die" than give in to the hope that if we just keep out the foreign slackers we can keep redistributing wealth to our domestic slackers and everything will be OK. To me, that's not solving the problem. It's simply hoping to delay it - and our current lack of success with keeping out illegal immigrants is evidence that keeping out the foreign slackers with physical barriers won't work. Like I've said before, if we take away the free cheese, the rats won't come.

PS - I appreciate your new policy of allowing posts to stand when they call ME names like numb nuts, prick, dick, bastard, etc.

Mike M said at February 27, 2013 11:13 PM:

By the way, when we get rid of all the dumb, low skilled workers, who do I hire for menial tasks such as mowing my grass? (My dog at the last robot)

Mike M said at February 27, 2013 11:28 PM:

J - regarding the "resource curse" - correlation is not causation. Many of these countries with abundant natural resources have crappy political institutions that is the root of their problems.

Randall Parker said at February 28, 2013 9:02 PM:
given the proper incentives

They vote against the proper incentives.

is it so difficult to recognize that correlation is not causation and that perhaps the low intelligence is explained by the low income

This is why adoption studies, twins studies, and the like are so useful. They show the large heritable component for IQ. Look at China. Not long ago it had very low per capita income and still much lower than Mexico. Yet does anyone doubt where China's per capita income is going to be versus Mexico 20 years from now?

PS - I appreciate your new policy of allowing posts to stand when they call ME names like numb nuts, prick, dick, bastard, etc.

I am spending very little time on my blogs because I'm working very long hours to compensate for all the bad trends I write about. I don't have time to write enough posts, let alone police rude people in the comments. I'll see if I can get to comments clean-up this weekend.

asdf said at March 2, 2013 9:02 AM:

"My premise is indeed correct."

If your premise is correct, why did it fail? Why has it inevitably failed in every human society?

Vauge notions of restricting voting don't cut it #which will never happen in our society and even when it existed ultimately got torn down#. If a low productivity group exists, and someone #politician or not# can gain power from mobilizing them as a mob, it will inevitably happen. Human history shows it nearly always happens on a long enough timeline. That's my "premise", and I've got a perfect record with it.

"but there are many hispanics, and indeed many blacks, who have higher IQs and higher skills and education than many caucasians."

This is irrevelant to the aggregate.

"Indeed, as Asian economies emerge, your assumptions regarding IQ and productivity mean that there will be no place for caucasians in the modern economy."

I worry about this a great deal, as do many people in the know. I can tell you from experience it scares the bejeasus out of many workers.

"I think you place too much reliability on talent #IQ# and not enough on determination, persistence and work ethic. As a former owner of a multimillion dollar business, I'll take a hard worker with low skills over a highly skilled slacker any day."

Why is this a choice? IQ and conscientousness #hard work, discipline# are highly correlated traits. In general the smarter you are the harder working you are. This is shown by study after study. Various theories for this are put forth #mostly having to do with high IQ aiding in lowering time preference#.

I think its a mistake to assume that the frantic efforts that come with trying to escape poverty #as might be the case for the mexican day laborer doing your landscaping# carry over once the person is no longer in fear of poverty. To still work hard when you already have enough to eat seems to be correlated with high IQ.

Randall Parker said at March 3, 2013 10:48 AM:

Mike M,

You should read the research on psychometrics. Check out this graph and table from Linda Gottfredson. Also, read read the PDFs of some of her research papers. She's very approachable btw. I've gotten useful answers out of her about psychometric research in the past.

P said at March 5, 2013 10:36 AM:

Mike M has aspergers or close to it. Not an insult (although probably not comfortable to hear, sorry Mike). But to everyone else -- do not expect him to change his mind, and realize that he is a perfect representative of the majority of lolbertarians who are mentally incapable of understanding why, for instance, Somalia is a basket case and Sweden is not.

"The output of others, whether they be low productivity or high productivity types or just plain lazy versus those with a strong work ethic, does not take anything from me."

LOL


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