Wednesday, November 2, 2011

Free Trade Is Beating Labor Mobility

It's disappointing to learn that Nick Clegg and David Cameron are trying to keep skilled non-EU immigrants (basically, people like me) out of the UK.

Restrictions on the trade of goods seem to be less severe and more easily overturned than restrictions on labor mobility. We buy a lot of stuff from China and Mexico, but Chinese people and Mexicans have to jump through all kinds of hoops to come here, and in many cases they aren't allowed to. And that's well over and above the larger costs of transportation. Container shipping for goods is cheap, but if people come over that way something has gone horribly wrong. So transit costs are higher for labor mobility than for mobility of goods, and on top of that, governments add extra regulatory barriers.

I'm seeing this as an instance of the organized power of businesses to influence regulation, which the rest of us as poorly organized individuals don't have.


Ursula said...

I think the problem with this comparison is that the importation of people has drastically different and weightier consequences for the state than does the importation of goods. (Although you do undoubtedly see the influence of big business on immigration policy as well; large tech employers like Microsoft and Texas Instruments basically set the agenda for H-1B tech visas, etc. etc.)

Neil Sinhababu said...

You're definitely right about the weightier consequences on the immigration side. What's weird, though, is that a lot of these weighty consequences are highly positive ones. I guess when the positive consequences benefit influential actors (like the H-1B stuff you describe), this is represented in policy. Otherwise, you just get more restrictions.