Restrictionists often argue that immigration suppresses native wages. How, then, do they explain the significant economist consensus in support of more expanded immigration? They rely on a mix of arguments such as the economist blind spot, elite conscience salve, and other attacks on advocates. The subtext of these, particularly the elite conscience salve, is that most open borders advocates don’t have to live the adverse effects of immigration. In this telling, open borders advocates, safe in their ivory towers from the unwashed masses, can declare open borders and shrug their indifference to the annihilation of their less fortunate fellow nationals.
As a factual matter, George Borjas (the man most quoted by restrictionists on economic matters) found that in the short run in the US, college graduates lose more from immigration compared to ordinary Americans, and lose less only compared to high school dropouts. I’m personally unconvinced by Borjas’s pessimistic estimates, and find the more optimistic estimates of the impact of immigration more convincing. However, that’s not a topic I want to get into in this blog post. Rather, in this blog post, I want to consider two stereotypically high-skilled profession types where people within the profession (including many who aren’t open borders advocates) actively advocate for more immigration of people who would specifically compete with them for jobs. I’m talking about academia and Silicon Valley, both in the United States context.
The case of academia
In the United States, academia is one realm where the current immigration regime is closest to free migration. Student visas are not always granted, but it’s easier to get a student visa than a H1B visa, and it’s definitely way way easier than getting an unskilled work visa (the H2A visa category). For post-doctoral and tenure track positions, academia has successfully been able to exploit a loophole in the H1B regime. The H1B regime states that a H1B work visa can be granted only if it’s convincingly demonstrated that no qualified American could be found for the job. In academia, it is usually pretty easy to set forth a collection of job requirements (such as papers on a specific subset of topics) that are satisfied by only one person on earth. It’s much harder to use this trick to hire people in other high-skilled jobs, and nearly impossible to use the trick for “low-skilled” jobs like restaurant worker or farm worker. The point is not just that the law has a practical loophole, it’s that immigration officials generally let people get away with it. Bryan Caplan explains this between 22:30 and 25:00 of his immigration restrictions video. And Caplan also notes in this blog post that academia already has de facto free immigration.
Despite this, it’s pretty rare for academics to complain about the immigration of competitors who lower their wages, take their jobs, and deprive them of their academic potential. In fact, in so far as academics do address the issue of immigration in academia, it’s usually to complain of the relatively rare situation where one or more of their fellow academics is denied a visa application. Academics seem to consider free migration in academia to be pretty much the desirable status quo, and any deviation from it to be a bad thing.
The case of Silicon Valley
Silicon Valley, the hub of tech startups in the United States, is a slightly different story. Relative to most potential immigrants, computer programmers with jobs at established Silicon Valley companies have a considerably easier time getting a work visa. However, foreign entrepreneurs who want to create startups have a relatively harder time, because of the lack of visas specifically for entrepreneurs, and biases in the H1B visa system towards large, established companies. Silicon Valley professionals are nearly unanimous in their view about these laws that help protect their jobs and maintain their wages: they oppose these laws vociferously. And this opposition comes not just from investors (who would obviously want the “cheap labor” of foreign entrepreneurs) but also from existing entrepreneurs (who should, by restrictionist theory, be keen to keep out the competition) and even established tech companies (which should, again by restrictionist theory, be keen to keep out competition from foreigners who might come and create startups that take away their market share). Freer migration of programmers and entrepreneurs to Silicon Valley is one of the few political issues that Silicon Valley people seem to be passionate about (second perhaps only to opposition to perceived attempts at Internet censorship). A couple of examples:
- The startup visa is an effort with wide Silicon Valley support to push for a new visa category (EB-6) for startup entrepreneurs from unused visas in the EB-5 (very rich investor) category.
- Blueseed (also mentioned on the migration arbitrage business opportunities page) is a company founded with the ambitious goal of bypassing the difficulties entrepreneurs have with getting work visas by setting up a ship off the coast of California whereby entrepreneurs can live and work on the ship and commute to the mainland using business/tourist visas. [DISCLOSURE: I was a small investor in Blueseed and I am acquainted with the founders.]
Why, oh why?
So, why are academia and Silicon Valley so clearly pro-immigration? Why do they defy textbook restrictionist economics? I asked a version of this question on Quora, postulating three explanations:
- Tech work (respectively, academia, entrepreneurship) fundamentally has a lot more complementarities than “low-skilled” work, which means that new programmers (respectively, academics, entrepreneurs) increase the value of existing programmers (respectively, academics, entrepreneurs). In contrast, in industries with “low-skilled” work, substitution is a more dominant paradigm.
- Programmers and tech workers (respectively, academics and entrepreneurs) have a different (better) understanding of economics and hence find the “they take our jobs and lower our wages” line of argument less impressive.
- The profile of programmers (respectively, academics and entrepreneurs) is different in other ways, e.g., their moral or ethical outlook, their own immigrant background, personal knowledge of and friendship with immigrants etc., which makes them support programmer immigration independent of its effect on their wages.
Dan Dascalescu of Blueseed replied suggesting that a variation of (3) (namely, knowledge of actual immigrants who were decent people) was the main reason. If that is the case, then it turns on its head the restrictionist rhetoric of open borders advocates being out of touch with the realities of immigration. It would suggest that it’s the restrictionists who are out of touch with the actual effects of immigration. If (2) were the case, that would similarly indict restrictionism.
The interesting possibility is (1) — high-skilled work has more complementarities than low-skilled work, where substitution is the more dominant paradigm. I think that this is largely true, and forms part of the explanation, though not the full explanation (i.e., there is a role for (2) and (3) as well). In other words, high-skilled workers actually benefit a bit qua workers from high-skilled immigration, whereas low-skilled workers actually lose out a bit qua workers from competing low-skilled immigration. [Note that low-skilled workers may still benefit on net once we consider their role as consumers and factor that into the equation. And while many high school dropouts in the US have skills comparable to illegal immigrants from Mexico, most of the extremely poor people who might migrate under open borders would have considerably lower skill levels and may well complement, rather than compete with, the workers currently identified as low-skilled in the US. More at the suppression of wages of natives and US-specific suppression of wages of natives pages.]
The photo at the top of this post (credit: CNET) is of Facebook founder Mark Zuckerberg and Silicon Valley venture capitalist Paul Graham. Both support more liberal immigration policies. See also Vipul Naik’s post, Paul Graham on US immigration policy and high-tech programmers.
Vipul Naik founded the Open Borders website in March 2012. See also:
Vipul Naik’s personal statement
Vipul Naik’s description of open borders on his personal site
Page about Vipul Naik on Open Borders
Excellent analysis
I don’t have much reaction to this post, other than that it seems to make a lot of sense. My intuition is that #1 makes a lot more sense for academia, since academics by necessity thrive on a community of people who can engage with them and their ideas. It would be self-defeating to limit this community on something as arbitrary as nationality. It would be interesting to see whether historically academics have been as receptive to erasing arbitrary barriers to participation in academia, such as race or gender. I’m sure one can come up with examples that fit either side of the argument (e.g. Crick & Watson’s misogyny/racism vs G.H. Hardy’s embrace of Srinivasa Ramanujan).
One thing to note re Silicon Valley is that I’ve observed some whinging in certain online communities about immigrants stealing programming jobs (anti-H-1B visa sentiment is a recurring theme in such discussions on Reddit, although there’s usually someone presenting the voice of reason as well). My guess would be that highly competent developers and the tech entrepreneurs have the most obvious gains from greater immigration (again, tracking back to your hypothesis #1), and so they are most keen on it, while the median person in the tech industry would be less inclined to favour immigration, since their role may not obviously benefit as much from having immigrants to work with.
It does seem my intuition is inclined to favour hypothesis #1. I think #2 is probably true too, insofar as it has been borne out by social science research; probably it arises simply because these populations are more educated, so as we would expect, they are bit less economically illiterate than the population as a whole. #3 certainly sounds plausible to me, but I can’t think of a good way, off the top of my head, to verify it.
This entry has a subtitle “The case of Silicon Valley”. The first paragraph under that says, “this opposition comes not just from investors … but also from existing entrepreneurs … and even established tech companies …”
Is that the definition of “Silicon Valley people”? What about the masses of web developers and others who do the actual creation of the products and services? Why are they not included?
I suspect that those lower-level people will be less enthusiastic about H1B visas and foreign competition.