A Note on the Economics of Immigration
This morning on the radio the talk show host made the following claim (as best I can recall), “And the free marketers will tell you that the illegal immigrant workers make for cheaper products. But look at Las Vegas, there was a time when the rooms there cost $14, now they cost $300. You’re getting ripped off!” The implication here is that the free marketers are lying to line their own pockets. There are a number of problems with the above nonsense the one of which is that most people who are in favor of the free market don’t own hotels in Las Vegas.
The biggest problem is that the price of a good is not determined by supply alone–i.e. costs. The price of any good is determined by supply and demand. Let me repeat this since it seems to be lost on many people. The price of any good is determined by supply and demand. Thus, while labor costs might go down somewhat, it is also entirely possible that demand has increased or other factors of production have gone up so that in the end the price is higher. Take for example Las Vegas. What was there to do in Las Vegas say 25 years ago? Go watch one of the Rat Pack, maybe do a little gambling and that was about it. Now what is there? Theme parks, ginormous malls, a manmade lagoon where pirates battle it out, and erupting volcano, IMAX theaters…in short a great big amusement park with gambling and shows by various performers. Gee…could demand be higher in terms of non-gambling related activities meaning that the resorts and hotels have to raise the price of a hotel room?
It is this kind of brain-dead idiotic nonsense that tends to turn me off to the anti-immigrant movement. When one puts forward dumb arguments that with just a little bit of thought are seen to be rather dubious at best; it is hard not to think that perhaps a big part of the reason for opposition immigration is xenophobia and/or racism. So a word of advice to those of you who are opposed to immigration, sit down and think through your economic arguments. In fact, take a page from the Evil Overlord List, run them past a five year old child any flaws in the argument should be immediately excised. In fact, I’d recommend sticking just to the national security issue, it doesn’t require these kinds of dopey arguments.