May 27, 2013

Peter Schaeffer FTW

Tyler Cowen at Marginal Revolution ponders:
Do low wages for unskilled workers weaken the case for more immigration? 
by Tyler Cowen on May 26, 2013 at 12:36 pm in Economics | Permalink

And gets absolutely schooled in the comments by Peter Schaeffer. Here's the most stunning:
Yet another nail for the coffin. U.S. health care expenditures are around $12 per hour for the entire economy. The minimum wage is $7.25 per hour. If a minimum wage worker paid 100% of his income in taxes (or health care premiums), America would still lose $4.75 on health care costs alone. 
And Tyler wants to flood American with low-skill immigrants to drive wages down further (presumably after repealing the minimum wage)? Is this meant to be a parody of ‘privatizing profits and socializing costs’? Perhaps it is. 
Of course, it can be argued that low-skill immigrants don’t cost $12 per hour in health care costs. As long as they are young and single that is true. However, low-skill immigrants have children and grow old just like everyone else. Even if they don’t cost $12 per hour in health care costs now, they will cost far more than $12 per hour in the future. 
The welfare state and low-skill immigration don’t play nice. One or the other has to go. Since the welfare state is only expanding, it should be obvious that mass immigration has to end.

Peter goes on to give his sources for this $12 per hour estimate later in the comments.

In defense of Tyler, there's a non-negligible chance that he's playing a double game here, offering a parody of autistic economic theory in the hopes that his commenters will destroy his argument so he can help get the truth out without him having to worry about being Richwined.

But, I'm probably overthinking ...

P.S., "FTW" sounds obscene but it's actually ancient Hollywood Squares jargon, e.g., "Paul Lynde, for the win!"

70 comments:

dearieme said...

"there's a non-negligible chance that he's ...": I doubt it. I'm a fan of his but on this point he seems to have a complete blind spot.

I must say that though I can see that it's easy to make cases for selective immigration, I think it inconceivable that there's a good case for unselective mass immigration into any prosperous, welfare state, universal franchise, liberal democracy. Not if you want it to stay as such.

FredR said...

Peter Schaeffer has been leaving high-quality comments on blogs I read for a while, but for some bizarre reason doesn't have a blog of his own.

Anonymous said...

Priests and rabbi's - or "academics" and "economists" as they call themselves these days - are impervious to mere logic and reality.

Anonymous said...

Who is Peter Schaeffer?

Anonymous said...

US economy a naked woman.

In an interview on the fringes of the Astana Economic Forum in Kazakhstan, Mundell did not pull his punches. One of the chief architects of Reaganomics and a lifelong advocate of trade liberalization, Mundell now raises a large question mark over the continued viability of free trade. “The United States can’t keep a completely open system if the rest of the world is less open,” he said. “The United States may have to take a leaf out of the book of Japan, China, and Germany, and have protectionism inside the system.”



“It has been a mistake to let U.S. manufacturing run down so low. While other nations have industrial policies to maximize their trade benefits, the United States leaves itself open like a naked woman. A big problem is with nations that may prove to be future enemies.”


This was in Forbes, and linked to by Instapundit. The times, they are a-changing.

dearieme said...

Just about related to the immigration issue, Steve: I don't know whether this link will work in the US, but I thought it might interest you.
http://www.bbc.co.uk/radio/player/p009mf3s

Dr. Phillips said...

I must say that though I can see that it's easy to make cases for selective immigration

There is? Let's see you make a case for selective immigration.

David said...

"Autistic economics." That's a good one. Gonna use it.

lk said...

Tyler Cowen is a Straussian.

eah said...

In defense of Tyler,...

Mr Sailer, expend your energies elsewhere/more productively. Lipstick, pig, etc.

Jeff said...

George Borjas already determined that in full compliance with the laws of supply and demand that immigration reduces wages. The liberals, however, don't like it: http://econlog.econlib.org/archives/2007/03/borjas_wages_an.html

The comments are always most illuminating. Too bad this is such a depressing topic.

Jeff said...

If medical costs include the ~$10,000 annual social security (or something similar) stipend for having a learning disabled child, then I very much bet our immigrants are at least at $12/hour healthcare.

Most Americans are probably unaware that if your child is identified as learning disabled, the federal government gives you money. Obviously, this program could be used to good effect for those families who truly need it. However, in practice, it is highly abused and immigrant children are over represented in the program.

The costs of the program are far beyond the stipend and include massive staff overhead, teacher drain and the cutting of sports and music programs.

I read the other day that America doesn't invest enough in science. This is completely false. America is making the largest scientific investment in the history of mankind. We are investing trillions of dollars to fault test the theory that race and intelligence matter. Science, based on billions of data points, has shown us that race matters in social outcomes. Our society is trying to prove that science wrong. To suggest this is anything but an investment in science would be a mistake. Jason Richwine produces data to show that result X is likely to result from inputting Y people into America. In our grand science experiment, we shoot him down, then double-down on Y inputs in hopes of arriving at the converse of result X.

Not a good experiment, but an experiment, none-the-less.

Michael said...

My google-fu also failed on a site for an economist named Schaeffer. I hope at least for a link to his CV.

Alice said...

Tyler Cowen doesn't understand Newtonian mechanics as shown by his being baffled that a machine could toss a penny and get heads with >99% accuracy. He doesn't understand probability theory either as evidenced by same. He consistently errors in Bayesian probability where he speaks as if P(A given B) = P(B given A) while neglecting the sample spaces of A and B. He seems to think probability is causal rather than a statement of ignorance of the system.

Given that these are tools he invokes daily, these errors demonstrate some significant impediments to his thinking clearly about anything. They also demonstrate his overwhelming hubris. I got banned for pointing them out after I finally decided nothing he said was parody.

Anonymous said...

Steve,

There's no way an immigrant family of 4 uses $24,000 a year in health care costs.

Your assumptions are totally idiotic, which makes your claim that Tyler got "schooled" especially funny.

Anonymous said...

Wagner's 200th this year.

http://www.youtube.com/watch?v=nI9Nbt7oJG0

Anonymous said...

The welfare state and low-skill immigration don’t play nice. One or the other has to go. Since the welfare state is only expanding, it should be obvious that mass immigration has to end.

Note that Tyler Cowen is an employee of George Mason University, a public university in Virginia. George Mason University also receives federal funds in addition to Virginia state taxpayer money. Cowen has been advocating for immigration while living off taxpayer money.

Anonymous said...

http://m.theweek.com/article.php?id=244716

Wallington or Wash Street?

carol said...

Yeah Shaeffer was awesome, classic beat down of MR's "argument":

1. Max immigration.
2. ????
3. Jobs for everyone!

Anonymous said...

"Oregon law school graduate beats back $50,000 in student loans"

http://www.oregonlive.com/education/index.ssf/2013/05/oregon_law_school_graduate_bea.html

"The financial advice gets repeated as a mantra: Student loans are the one form of debt that can't be forgiven, even in bankruptcy. But a Klamath Falls man has proven that's not always true.

Mike Hedlund waged a 10-year legal battle to force his lender to discharge most of the $85,000 in federal student loans he built up while earning his 1997 law degree from Willamette University in Salem. He argued that, even when working full-time and living frugally, he could not repay that much money and also maintain a minimal standard of living for himself and his family.

Last week, in a decision that could affect debtors in eight states, a panel of the Ninth Circuit Court of Appeals in Pasadena, Calif., ruled in Hedlund's favor.

It upheld a bankruptcy judge's ruling that Hedlund proved all three factors necessary to have $53,000 of his debt forgiven: He made a good faith effort to repay the money; he can't earn enough to both repay the money and maintain a basic standard of living; and his inability to earn substantially more is likely to persist.

One twist to the case: Hedlund was unable to make much use of his expensive law degree. He failed the Oregon bar exam twice in his first year out of law school, then locked his keys inside his car on the way to his third scheduled test, and so missed it entirely. He did not try again.

Instead, Hedlund got a $40,000-a-year job as a Klamath County juvenile probation officer, a job he still holds.

"I had planned on making $200 an hour instead of $20 when I agreed" to take out loans totaling about $100,000, Hedlund said."

Inane Rambler said...

If you read Tyler Cowen's tweets, you would know he is serious, even if wrong.

Anonymous said...

Peter Schaeffer's comments are absolutely stunning. Concise and well-documented.

Who is he? (I know he's Peter Schaeffer, I mean what is his background.)

Abe Fauxman said...

OT, I was drawn to this story as I'm looking for a modest pad to spend my well-deserved retirement.

Needless to say the borderline anti-Semitic pique stopped me dead in my tracks.

Quick, my Rolodex.

Anonymous said...

bringing them here isn't about economics in the 1st place. This seems more like a feature than a bug.

Jack Hanson said...

"autistic economic theory"

Strong early contender for best phrase iSteve 2013.

Jeff W. said...

Steve needs to hope that Peter Schaeffer does not get a blog. Not only is Schaeffer an excellent analyst and writer, he also supplies Finnish content. From Schaeffer:

"Finland and Iceland come close to what Steve is suggesting as a counter-factual. On all evidence, he is right. No cheap oil of course. However, the local economies aren’t doing badly and the level of social cohesion is unthinkably high by U.S. standards. No underclass in sight (imported or native) in either country.

"The low immigrant states of the upper-Midwest provide another set of data points. They invariably top the list of U.S. states in every measure of social effectiveness (low unemployment, high real wages, health insurance, low crime, good schools, etc). They also have very few immigrants."

Steve Sailer said...

Peter Schaeffer is a guy who leaves outstanding comments.

Anonymous said...

http://www.dailymail.co.uk/news/article-2330872/Discriminate-Discriminate-Doctor-Who-branded-thunderingly-racist-academics--conquers-Daleks-slavery--likes-cricket.html

Oh my!!!!!!

Anonymous said...

http://www.ft.com/cms/s/0/3b5311e6-c232-11e2-8992-00144feab7de.html#axzz2UXqFXnvB

Man who appointed Elena Kagan to Harvard Law School is about to...

c said...

"a panel of the Ninth Circuit Court of Appeals in Pasadena, Calif., ruled in Hedlund's favor."

That is significant, especially since the debtor is still working in a fairly decent job. The standard has been pretty high, where only an unemployed minority recovering addict could get the loans forgiven.

Anonymous said...

Is Peter Schaeffer the economist I found on Google at West Virginia University? He has written on immigrant assimilation.

Hunsdon said...

I really don't mean to be a sycophant, but Steve, you rock. And by rock I mean good guitar driven Southern rock, like the Allman Brothers or Molly Hatchet. (Then again, I'm a fan of the Allman Brothers and Molly Hatchet. I suppose if I was a "Beleiber" I'd say you rock like Justin Beiber. Umm. No. No I wouldn't.)

You could set up a paid subscription service called "Where in the world is Steve Sailer?" that offered links to your comments on other blogs, served up by e-mail daily . . . and I'd subscribe.

(Alternative title, as a riff off of Dr. Hook and the Medicine Show: "Who is Steve Sailer and Why Is He Saying Those Terrible Things About Me?")

Anonymous said...

“The United States may have to take a leaf out of the book of Japan, China, and Germany, and have protectionism inside the system.”

The irony is that Germany, Japan, and China industrialized via the "American System" model of protectionist industrialization which America used to industrialize against the British promotion of free trade.

Rohan Swee said...

OT but possibly of interest - an update on the author of The British Dream, which you discussed last month: "David Goodhart's book on immigration earns him snub from Hay festival".

Anonymous said...

Peter Schaeffer is professor of agricultural and resource economics at West Virginia University. He earned his Ph.D. in economics from USC in 1981 but appears to be a Swiss immigrant as his first degree was granted by the University of Zurich.

Peter Schaeffer

AMac said...

Anonymous said...
Anonymous wrote (5/27/13, 3:13 PM) --

Steve,

There's no way an immigrant family of 4 uses $24,000 a year in health care costs.

Your assumptions are totally idiotic, which makes your claim that Tyler got "schooled" especially funny.


Anonymous, you rushed to comment prior to reading the entire OP, where Sailer wrote,

"Peter goes on to give his sources for this $12 per hour estimate later in the comments."

Steve is right. That comment of Peter Schaeffer's is timestamped May 27, 2013 at 10:41 am.

Steve Sailer said...

It's not the world's most unique name.

Anonymous said...

The article "David Goodhart's book on immigration earns him snub from Hay festival" is about a dust-up over the book "The British Dream: Successes and Failures of Post-war Immigration", David Goodhart, 2013. There's that phrase again:

"The British Dream raises the question as to whether someone who believes in quite so much exclusion and compulsion is any kind of liberal."


Must remember to roll eyes piously to heaven when surrounded in church by so many hideous contemptible sinners... The Dream! Do you Believe, Sinners????

Anonymous said...

Outline of an Economic Theory of Assimilation

By one Peter Schaeffer

It's probably not the same person but the economics of assimilation is something we on this blog should begin to think about.

Anonymous said...

Is agronomics the manliest PhD you can get? It's got to be up there.

Steve Sailer said...

Professor John Mueller holds the Woody Hayes Chair of National Security Studies at Ohio State:

http://isteve.blogspot.com/2006/08/woody-hays-chair-of-national-security.html

Anonymous said...

That's great. I had no idea an academic chair was named after him. That brawl he started with Clemson was awesome.

omg smh said...

Most who would write FTW in any context are not old enough to remember Paul Lynd or even Hollywood Squares (1966-2004). You should not seek association with these.

Forbert Pointer said...

Wow, $12 an hour per worker is an astounding number for health care costs. Those comments by Peter Schaeffer were home runs.

Education Realist said...

I knew what FTW meant! I watched many, many game shows in my misspent youth.

Anonymous said...

Re: Forbert Pointer et al:

1) Schaeffer caveated his number by noting that if they were all healthy they wouldn't consume that much, and

2) Do you understand the concept of an average?

Forbert Pointer said...

"Do you understand the concept of an average?"

Yes, I do, and I still find $12 an hour average, per worker per hour astounding for health care costs. These costs are also going to rise rapidly in the next few years, IMHO, just Google these words: Diabetes Epidemic

Anonymous said...

Can we have a discussion as to whether the $12/hour figure is plausible? It seems at first blush to be remarkably high.

If it is legitimate, then it should be introduced into the debate on immigration control.

Anonymous said...

There's no way it could be $12/hour.

Anonymous said...

I like this Peter Schaeffer.

Orthodox said...

How about education costs? A lot of school districts in urban areas are spending well over $10k per student. Even assuming an immigrant student creates no additional cost (translators, etc.), the marginal cost is going to be $4-5,000 even in small towns.

Anonymous said...

Can we have a discussion as to whether the $12/hour figure is plausible?

Sure, its plausible. It's based on the total annual healthcare costs and the total number of hours worked per year.

Anonymous said...

There's no way it could be $12/hour.


It could be and is.

Anonymous said...

Given the data on the low incomes/low tax-rates of "Hispanics" and their longer-than-average life-spans, they are going to demolish Social Security in another few decades. Of course that's not the sort of time frame the ruling class thinks about.

JeremiahJohnbalaya said...

Some of his more interesting comments (with supporting documentation) were regarding 1) welfare state (including hospitals and policing) not just supporting but actually subsidizing low-wage, particular agricultural, workers and 2) immigration leading to increased black crime (by way of lowered employment opportunities).

Anonymous said...

"Most Americans are probably unaware that if your child is identified as learning disabled, the federal government gives you money."

That's one of several government programs that, in aggregate, keep the majority of African Americans above water economically. This is also why there's so little outrage by blacks against immigration: the black underclass isn't getting displaced by Mexican workers because it's not in the workforce.

You have to admire the watch-like workings of the Democrats' political economy. They can keep this whole thing spinning as long foreigners are willing to keep buying our debt.

Anonymous said...

That Peter Schaeffer comment about how the minimum waged are a massive health care liability on America was most shocking.
I've never been shocked by an economic statistic before, and the implications of that little factoid are enormous. And the way Peter Schaeffer just mentioned it off-hand, like that, ('arguing' with the usual worthless econo-retards), and the solid factual basis behind it, I was more than impressed.
As I said beore that little stastic literally frightened me than any other dire economic prediction that I've ever read by any number of Cassandras from Paul Ehrlich downwards. Basically its like standing rooted to the spot on a railroad track waiting for a 200 ton locomotive running at 100MPH to mow you down - that is the feeling it (should) engender in the mind of any thinking, intelligent person who actually has the mental capacity to understand such things.

- And Schaeffer examined just *one*, albeit a big one, low-skilled linked liability.

Anonymous said...

Well, look on the bright side.
If it wasn't for mass immigration, you wouldn't find another human being willing to wipe butt for $10 an hour.
Also there's the possibility of cheap whores fuelling the San Fernando Pornoville drying up. Just think how awful it would be if we couldn't access *free* unlimited, infinite on-demand porn?
Reemember the bad old days when you had to hunt around the local woods for a rain sodden (and worse), guiltily junked copy of Hustler?, remember when you had to cherish it and make it last all year?
Now on yer 7" tablet, (no sniggering at the back please!), you can peruse pornhub to your heart's desire unknown and unsuspected whilst mommy watches the soap operas on the other armchair.
What price do you put on that?

Anonymous said...

One little factoid that demolished forever the lies of the immigrationists, in my mind is this:

In one of his published works, the great Arthur Kemp revealed that the London borough of Hackney is the poorest and most deprived district in the UK (poorer and more deprived than the Outer Hebrides, remotest Cornwall, the Welsh mountains, the Scottish highlands etc), when measured by every single measure of poverty and deprivation that the stasiticians can devise.
Needless to say Hackey also has the distinction of being the most 'diverse' district in the UK.
By the way, nowhere in Hackney is more than a 30 minute walk form the City of London, supposedly the world's financial hub and the money-making machine of the UK.

And yet the immigrationists lie and lie and lie, shamelessly and incessantly about how imigration will 'boost economic growth' or 'pay for social security'.

sunbeam said...

Anonymous wrote:

"That Peter Schaeffer comment about how the minimum waged are a massive health care liability on America was most shocking.
I've never been shocked by an economic statistic before, and the implications of that little factoid are enormous. And the way Peter Schaeffer just mentioned it off-hand, like that, ('arguing' with the usual worthless econo-retards), and the solid factual basis behind it, I was more than impressed.
As I said beore that little stastic literally frightened me than any other dire economic prediction that I've ever read by any number of Cassandras from Paul Ehrlich downwards. Basically its like standing rooted to the spot on a railroad track waiting for a 200 ton locomotive running at 100MPH to mow you down - that is the feeling it (should) engender in the mind of any thinking, intelligent person who actually has the mental capacity to understand such things.

- And Schaeffer examined just *one*, albeit a big one, low-skilled linked liability."

Yeah. I think we are thinking the same thing. You can replace "immigrant" with people whose ancestors lived in America for centuries, of many different skin hues. If is so thrills someone, they can marvel at how high a percentage have skin hues darker than ivory.

You'd be missing the point. Most of America is really of very little use economically. Net losses to the bottom line in other words.

And it is going to get worse, much much worse. A whole lot of people who are comfortable now, and have an equally comfortable self-image of "worth" are going to get deported to Fishtown by way of implementation of current technology. Which keeps marching on, btw.

You don't need HAL to change everything. It's plain as the nose on your face, and in many ways is far more important than immigration is.

What puzzles me though, is why the powers that be are so gung ho for immigration. Surely they can see the same things? I really don't think it is so simple as votes, since I think we are only nominally a democracy anyway. Heck maybe all democracies in world history have been "nominal," I dunno.

After all, like Frank Zappa said:

“The illusion of freedom will continue as long as it's profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.”

Jason said...

Well hey, now I know why my hipster friends are saying FTW all the time. You continue to provide invaluable services, Steve. The photo of the two football players in the previous post just about made my morning coffee come out my nose, too. Don't take that advice about not associating with the young hipster FTWers, by the way. These are exactly the people we need Darkly Enlightened.

Jason said...

Well hey, now I know why all my hipster friends say FTW. You continue to provide invaluable services, Steve. That photo of the two football players just about made my morning coffee come out my nose, too. Don't take that guy's advice about not associating with young FTWers by the way. These are just the sorts we need Darkly Enlightened.

Udolpho.com said...

stevey steve, you're so droll!

Anonymous said...

P.S., "FTW" sounds obscene but it's actually ancient Hollywood Squares jargon, e.g., "Paul Lynde, for the win!"

How about the other expression on that show, "to block". For example on immigration, I will take Steve Sailer to block.

FWG said...

Anonymous at 12:49,

Bad thing about Pornhub is you only get 5 free views per 24 hours. Don't ask how I know this.

I do have to say that the people who are immigrating illegally are probably not the ones we want to see scantily-clad or not clad at all.

Londoner said...

I believe that Peter Schaeffer is the Professor of Kicking Ass at the University of Take No Prisoners. Poor old Tyler tried to join battle in the comments thread with a solitary, lame post, realised the size and power of the armies ranged against him and ran for the hills as fast as his legs would carry him. It was, as the kids say, a bit of a fail.

Anonymous said...

Well, I think yes service jobs sometimes should pay better. There was a time that a guy could earn more money selling appliances on commission at Sears than a guy packaging widgets at some factory. And there was a time in La before lots of Mexican immigrants did janitorial jobs that Blacks earn good money cleaning offices in downtown La. There wages I think would today be around 17 per hr not the 8.00 to 11 per hr today to do its since it was illegalization a long time ageo.

Anonymous said...

Well, when illegal immigrants first arrive like in Los Angeles and Santa Ana at the end of the 1970's many still didn't have kids as much, so they were thought as an economic benefit because they worked for lower wages. There was a company called Fabi-Kal that hired a lot of Hispanic immigrants, legal or illegal with a few whites to be the supervisors or machinists. It was a plastic bottle packaging company in Santa Ana that started about 20 cents above 3.00 hr in 1979. The same company in Michigan was unionized and paid higher wages. So, in those days illegal immigrants or even legal Mexican immigrants were thought a benefit since they worked for less and this is before they had as many children.

Anonymous said...

""Can we have a discussion as to whether the $12/hour figure is plausible?"

Sure, its plausible. It's based on the total annual healthcare costs and the total number of hours worked per year."



You've got to factor in the cost of dying in America. Almost all those immigrants are going to die in America. That's expensive.

Maybe intensive care averages over $10,000 a day. Just because you were poor during your working life doesn't make dying cheaper. Being old can be expensive as well. I saw an estimate somewhere that adding a year to a life near the end costs around $130,000.

Maybe the open borders crowd could draw up legal documents so these costs come out of the health care that would have been spent on them?

Anonymous said...

Believe it or not, Hispanic children of illegal immirgants that are born here and finished high school are now at a disadvantaged compared to Asian children of immirgants. There are still a lot of jobs asking for Spanish but a new trend in manufactoring or high scale Retail is requiring Manadrian since manufactoring companies deal a lot with China and rich Chinese visit places like South Coast Plaza to shopped.