Feb. 23, 2016 - Freedomain Radio - Stefan Molyneux
45:30
3212 Don't Trust Politicized Science | Jason Richwine and Stefan Molyneux
The politicalization of science has brought about many false conclusions and greatly hampered serious intellectual debate. Jason Richwine joins Stefan Molyneux to discuss affirmative action myths, the impact on immigration on domestic unemployment, the Mariel boatlift controversy, the true cost of amnesty, government employee compensation and much much more!Jason Richwine has a Ph.D. in Public Policy from Harvard University and is an analyst and contributor writer for National Review. Dr. Richwine's doctoral dissertation on "IQ and Immigration Policy" was the subject of media controversy in 2013, an can be read in it's entirety at: http://www.fdrurl.com/iq-and-immigrationFor more on Jason Richwine and his work, please go to: http://www.jasonrichwine.comFreedomain Radio is 100% funded by viewers like you. Please support the show by signing up for a monthly subscription or making a one time donation at: http://www.freedomainradio.com/donate
He's a public policy analyst in Washington, D.C. He has a Ph.D. in public policy from Harvard University.
And your undergrad was mathematics in what else?
Political science.
You know, I just thought I'd combine those in the public policy.
Right.
So he's got STEM and the touchy-feelies.
So he is a good, good combo.
Now, Jason, you've done a lot of work on immigration in particular.
And if I can sort of...
Paste your overlying theme that people really take a one-sided view of immigration.
The costs and the benefits are generally not calculated into public policy decisions.
What do you feel is missing from the mainstream debate on immigration?
Well, there's a lot of things missing, I would say.
I mean, it's part of a sort of a broader theme that I've been trying to work on in my own writing about how the media and science don't have the best of relationships.
In fact, science has become politicized to a degree where it's hard to believe anything these days that you read when it just happens to fit into somebody's political agenda, you know, to have a particular finding.
I think one good example with immigration is that the economic impact is both positive and negative.
It depends on exactly what you're looking at.
So, for example, take the impact on wages.
So there's been this big debate lately about, does immigration affect the wages of natives?
Well, yes, it does in the sense that if you have more people coming in with the same skills, it's going to generally lower the wage of people who share the same The same skills are looking for the same types of jobs.
Now, that doesn't mean that immigration is bad.
That just means that that's one downside of it.
In fact, the lower wages actually go hand in hand with the economic benefits, which is that you have lower costs of production because the wages have gone down.
So again, it's these pluses and minuses.
How we weigh those up depends a lot on our own political perspective, our own values.
But so often, what you find is that The media will essentially try to portray things as absolutely win-win-win.
There's no downsize to whatever their particular agenda is, and immigration is really a perfect example of that.
Oh, and that is really frustrating for those of us who are trying to get a more balanced perspective on the issues.
Because, of course, if it's all win-win and it's all shiny rainbows and ponies and everyone gets a free car, then the only reason you would impose immigration is because you're a bigot, a psychological bigot, or a racist.
If it's so universally glowing, then you must be a dastardly person for opposing it.
And one of the things that drives me kind of crazy is this is not even Econ 101, that when you have an additional supply...
I think one of the things that you've talked about, and it's a very famous study, and please don't be afraid to get seriously wonky with our audience, they're pretty technical, but the study in Miami with the Cuban refugees, which has been held up for a long time as the rapier point death shot for anybody who says that increased immigration drives down wages.
I wonder if you could break down The limitations, to put it mildly, that you see in that study.
Well, right.
So it's the old Mariel boat lift.
So basically sometime in 1980, I think it was like April, Fidel Castro basically said, you know, if you want to leave Cuba, you can do so via the port of Mariel.
And so it was something like 125,000 Cubans who ended up leaving over a really short period, just a matter of months, I believe, in the summer.
And a lot of them ended up in Miami.
And so you might think, well, If we're going to find a wage effect, we should be able to find it there.
And the initial study by David Card found no effect, essentially.
And this has been held up ever since as an example of how immigration really is this complete free lunch for everyone.
Now, just recently, George Boras, who was my former advisor in graduate school, looked again at the data and found that when you look at the wage impact on Native high school dropouts in particular actually was quite a large effect, at least what he finds.
Now, The difficulty here, though, as you mentioned the drawbacks, is that, number one, the sample sizes we have of Miami in 1980 are awfully small, and a lot of the debate about Borjas' paper has been about whether or not we can believe such small sample sizes.
That's one thing.
Another problem, though, is that we don't actually know exactly how the impact should play out.
If there is indeed this big wage impact, should we see it In 1981, 1982, 1985, it's hard to say.
We don't really know because we do know that wages tend to be what we call sticky downward.
In other words, employers don't like to actually lower your nominal wage.
People get really upset when your wage gets cut.
But what they will do, and they're very happy to do, is not give you wage increases.
So your real wage goes down over time.
And if that's what's going on, then it's perfectly reasonable to expect I think we're good to go.
A third wonky point here is, what cities do we compare Miami to?
Obviously, there's things going on in Miami, there's things going on in San Diego, things going on in New York.
How do we get a perfectly good control group?
And the answer is, we can't.
We just have to hope that it works out well.
So for all those reasons, I would say that this is not really the perfect study the way people have portrayed it.
Yeah, and a couple of things that came to my mind on reading the study and your critique of it is, of course, there are people who are coming over who aren't going to go into the workforce, you know, women with small kids and so on.
There are other people who come over who end up staying with family, not going into the workforce.
Other people, of course, come over.
I think your point is that minimum wage, of course, is going to protect the downward depression on the wage prices.
So there's lots of things, but it seems really hard to say, well, there's an increased supply of something that's going to have no effect.
on price.
And of course, it is going to be a tiny slice because, you know, as the point has been made often, journalists and politicians don't seem to mind immigration, but that's because journalists and politicians are not coming across the border and competing with people.
So it seems that you'd have to throw out a lot of the supply and demand curve in order to be able to rebut this.
And it seems like people go through a lot of pretzel-like contortions to do so.
That's right.
I think you might be referencing that old Ted Cruz commercial where he had those people in suits coming across the border.
I forget who they were supposed to be, but if they were journalists and green energy advocates and things, you'd think that elites might have a different perspective on immigration because they're the ones being competed with.
But I think to take this down to the most basic sort of theoretical level, We know that businesses love immigration and there's got to be a reason for that.
If there's no impact on wages, if it has no impact on their ability to produce, they're not going to be so nearly enthusiastic about it as they are.
I did a piece on the agricultural lobby maybe six months ago or so.
And it's interesting how they had put out a report which was remarkably frank about the fact that the reason they want more guest workers for agriculture is because the wage has been going up.
That's a big problem for them.
I think the starting wage for picking mushrooms and things is like $11 an hour.
Remember, this is out in the hot sun.
And they quoted a farmer saying he doesn't understand why he can't recruit more natives.
After all, they pay about the same as a Walmart cashier.
And you think the idea that those two jobs are comparable, out in the hot sun bending over, picking up mushrooms, as opposed to being in this air-conditioned office environment.
But anyway, the point is that they were complaining that the wage had gone up by something like 0.8% per year, something like that.
And this was just intolerable to them.
And They even actually cited other low-skill jobs like maids and janitors and things.
Those jobs have not seen a comparable increase.
Those jobs have actually had decreases in the overall wage in the last 10 years or so.
And the agricultural lobby is saying, we want that too.
We can't stand to have these high wages.
And so, yes, I mean, obviously, I mean, why do they want so many more workers?
Why do they want guest workers?
Because it lowers the wage.
Now, in fairness, it is true that there is a crisis of labor force participation among natives.
There is a remarkable number of people, working age adults, perfectly healthy people, who are not in school, who are not looking for work, not working.
That's a big problem.
And that goes beyond immigration.
It's not just immigration causing that problem.
That's legitimately something...
That we need to deal with as a society.
But I think that by having all these guest workers come in, we're putting a band-aid over the problem.
I mean, imagine if we honestly could not find people to clean our pools or rake our leaves or mow our lawns.
If the rich could not find people like that, they would suddenly take a much greater interest in why natives have such a low labor force attachment the way they do today.
You know, let's actually confront that problem rather than pretending it doesn't exist Well, I mean, I was a software entrepreneur for many years and ran the R&D department of a company I co-founded.
And, you know, if I put on my sort of amoral hat, then this sort of H-1B visa program where you bring people in who really can't negotiate very well because they're kind of bound to their employer.
And, you know, one of the big problems in IT is that the most talented people are the really annoying people who leave to start their own companies.
You know, like, And so if you can sort of surf like the way that the medieval serfs were tied to their land, if you can tie people to their jobs, you can really put the grind on them.
And the harder you work people, the faster you train them and the more intelligent they are, the more they're going to stab you in the back by going out to compete with you, which of course is perfectly fine in a free market.
And so, even in this sort of area of the H-1B visa program, which I know started, you know, with like, let's get the Nobel Prize over to teach a seminar at NYU or something like that, and it's really expanded.
Businesses are incredibly behind that, and the idea that that does not displace or drive down the wages on negotiating opportunities for native workers is incomprehensible to me.
Well, you remember the story about Disney workers and broadening H-1Bs where they had broadened H-1Bs to explicitly to substitute out their current workforce and even pay their current workforce to train the people who were taking their place.
I mean, you can imagine how that would be a rather frustrating experience.
But you also made a good point, though, about H-1Bs.
A lot of people have this vision of skilled immigration as meaning PhD chemists and biologists and people who are going to found, you know, $50 million companies, the ultimate cream of the crop.
That's not what an H-1B is.
An H-1B is someone who has a college education.
Lots of people in America have college degrees today, and a lot of them have degrees in things that, frankly, are not worth very much, especially in the humanities.
Having a college degree today is not An indication that you are Einstein.
And I think the evidence is pretty clear that what happens with H-1Bs is simply trying to lower the prevailing wage.
And as I said, that's not necessarily a bad thing because that's the main way in which immigration increases income overall because it lowers the cost of production and therefore makes consumer goods and services cheaper.
All I'm trying to say is that those cheap goods come at a cost of lowering the wages of people who, you know, we would not want really to lower the wage of because of the distributional concerns.
So, as I said, pluses and minuses here.
You know, let's actually talk about both rather than pretending it's a win-win.
Yeah, and, you know, I always, you know...
Follow the money is a pretty good place to start and as you point out, if it did not benefit business, if immigration, particularly temporary immigration, did not benefit business, then why on earth are they lobbying so hard?
That's to say, well, I know their business model a lot better than they do and they're just making these mistakes.
It's like when I get into debates with people about IQ and ability and people say, well, it has no relationship to the abilities.
And it's like you really should talk to the U.S. military who's been using it for about 100 years because that would be a massive security concern about the efficacy of fighting forces if IQ meant nothing.
Now, to switch gears a tiny little bit, you've talked about criticisms of science, of course, as we started.
And I want to get a little bit more into detail about that.
But diversity and the value of diversity in higher education.
Diversity has just become one of these mantras.
And, you know, I swallowed the Kool-Aid for many years, you know, just, yes, multiculturalism, diversity is our strength and so on.
And the company that when I hired people, it was all very multicultural.
And that was all worked out really well.
But you have some issues with some of the data that claims to support the value of diversity in higher education.
I wonder if you could help break that down for us.
Yeah, I would say I have issue with people making very strong claims for which there is no data to support them.
That's the big problem, and it's especially problematic when it's done by scientific organizations under the guise of science, when really it's a political statement.
I wrote about this recently because the Supreme Court had taken on that Fisher case where it was talking about whether or not it was constitutionally permissible to use race in order to pursue diversity.
And part, sort of the basis of the case was this claim not really discussed that much that diversity, we just know, improves the academic climate on campus.
And I said, well, let me look at the research on that.
I mean, that sounds a little fishy.
It just happens to be, you know, conveniently for them that this is the case.
And so you look into it, and I did, and I found that, you know, as expected, the case was extremely overblown.
I mean, one thing that I think they have fairly well established is that in diverse groups, You have less tendency to succumb to groupthink.
But the reason for that is because people trust each other less.
There's less trust in cooperation.
And so obviously you think, okay, well, maybe there's a plus there, but there's also got to be a minus, I mean, if you have less trust in cooperation in groups.
And that part doesn't get really discussed nearly as much.
And so my point only is that, you know, this is something that you really can't claim that this is an unqualified good.
The research is just not there.
But if you look at the briefs filed by scientific organizations, remember, this is not just some random scientist saying, here's my view that's openly political.
This is a scientific organization, and You would hope that they would stick only to the data.
They would just say, here's what we know, here's what, you know, maybe the research is pointing this way, we're not sure, and so on.
But no, no, that's not what it is.
If you look at these briefs, I mean, you've got value-laden language, you have very tendentious literature reviews.
They excoriate contrary research they don't like.
And I think the biggest problem, actually, is just this unbridled confidence they have in their results, and that's not befitting a scientist.
We should be cautious and skeptical, and that's not what they are because it's so politicized.
What really bothers me about all this is that this is one case that I know of.
I took the time to do the research, and I already have a certain basis of knowledge here, so it wasn't that difficult.
And now I know how politicized it is.
And I've seen other examples of this, too, in other areas in which I have some expertise.
How in the world can I then go to some area that I don't have expertise in?
And read a political statement.
Oh, this is all fine.
This is good science.
There's no reason for me to doubt this at all.
You know, I can't.
I can't do that anymore.
A lot of people do, by the way.
You know, they call it the...
Michael Crichton called it the Murray-Gilman amnesia effect.
He said, you know, we open up a newspaper about some topic we know well, and we laugh at how ridiculous...
Ridiculously bad the article is.
Clearly, this reporter knows nothing about this topic, even though he's writing authoritatively.
Then we turn the page and read an article about something we don't know much about, and we just assume that everything we read is true.
That's amnesia.
I like to think that, given my own experiences, and I've had a lot of them with the media, that I no longer suffer from that amnesia.
But I think most people do, and To the extent that they don't, to the extent that they have internalized what I've internalized, they're right to be skeptical of the science.
It's not delusion.
It's not know-nothingism.
It's a rational response to highly politicized research.
The degree to which the media is interfering with rational and empirical debates that are highly necessary in society.
I mean, they're basically like people are trying to do complex math with the media shouting random numbers into their ear.
It's really, really tough.
And, you know, this is one of the things when people say to me, well, you seem to be somewhat pro-Donald Trump.
And it's like, yeah, I know that he's got policies that would make free market people's heads explode.
But the good thing is, at least he's calling out the media.
And that is something enormously overdue, because people live in this media cave, and it really is like, you know, the old platonic idea of, you know, you're in the cave, you're not looking at the things themselves, you're not looking at the fire, you're looking at distorted shadows on the wall.
The media manipulates, and science seems to be following along, and the media doesn't have any interest in informing people, but generally in controlling things.
Their responses, particularly their emotional responses.
You know, it's the old mob creating the Frankenstein that everyone can chase and think they're doing good.
But I don't want to get on too much of a sideways rant about the media.
And for those who don't know the backstory to some of this affirmative action stuff, we have, I think, some colleges, of course, assign racial pluses and minuses according to ethnic groups.
So they, of course, you have Asians, particularly from China and Japan.
they have scores subtracted in their college applications and whites I think hovering around the median and blacks have their scores inflated in order to get blacks who score worse into college so that it represents the diversity mix of the general population This of course follows the IQ stuff that we touched on last time we chatted around Asians having higher IQs whites being the medium and blacks standard deviation on average below and
Now, of course, people can say, well, they're discriminated against, and they come in, and then they do as well, except they don't, right?
So the blacks who come in don't do as well.
So without a doubt, the argument is that if you, in general, let in a population that is...
Less competent at higher academics that higher academics will improve.
But if that is the case, why not just let everyone in?
You know, just everyone who applies, just let them in because that's going to improve things.
I mean, lowering the quality of people in school on average and that adding to higher quality in colleges seems – I mean, why would you even have standards to begin with?
Yeah, I would like to have Harvard face that proposal, you know, or Princeton or Yale say, yeah, just let people in at random.
It should be fine, right?
No, they're not going to say no.
But let me say something about this affirmative action case that's sort of more on the point of policy rather than on the legality or the science of it, is that In the early part of the 20th century, the Ivy League schools were careful to limit the number of Jews who were admitted.
And today, that policy is looked back upon as one of the great crimes of human history.
I mean, obviously that's exaggerating, but that's oftentimes the way it's portrayed.
The exact same thing is being done to Asians today in the Ivy League.
And somehow, somehow, it's viewed as not only okay, but progressive.
And I would really like someone to address exactly why, or what the difference is between limiting the number of Jews, who are very high performers nationally, Always, but also back then.
And a limiting number of Asians today who are also very high performers.
What is the difference?
I've never heard a good explanation.
I think we all know the explanation is that when there are divergences at particular levels of intellectual ability between the races, it's either racism or it's something else.
And the standard explanation for the last, I don't know, half century or more has been that any divergences in any group between ethnicities and genders and so on at any level of ability must only be due to prejudice, particularly on the part of white males.
And there's no other conceivable explanation.
And therefore, whatever you have to do to make the numbers equal, you have to do.
And because the only thing that would result in differing numbers of, say, blacks and women's women at the highest levels of achievement must be sexism or racism, which which can't be allowed to stand.
And, of course, that tension between the empirical data that Charles Murray and a lot of other people we've had on the show have explicated from the left and from the right.
Eric Turkheimer and James Flynn have been on the show.
And the tension between what we would like, which is everybody to be the same across the IQ curve, and what the empirical data for over 100 years has shown, that tension is, I think, being challenged considerably by increased data.
But boy, there's a lot of old guard out there.
You know, that old saying of the sciences that old guys never...
They never accept the new paradigm.
You just have to wait for them to die off.
And there does seem to be a lot of people heavily invested in this egalitarianism across the IQ spectrum, which just doesn't seem to be supported.
There's a chance here, maybe a slim chance, but a potential chance to get some more data on this question of admissions and to get a better sense of the degree of ethnic discrimination going on.
I don't know if you've heard of Ron Unz and his petition to try to get on the Harvard Board of Overseers.
He has a slate of five people.
He's attempting, basically, if he was able to get his group onto the board, is to get a lot more information about exactly who's applying to Harvard, who's getting in, getting more transparency.
And so I personally decided to sign the petition that you have to be Harvard graduate.
So if you are...
You can sign a petition.
And I'm not entirely sure about this entire agenda, but I thought that the more transparency, the better.
And so I would love to get that kind of data.
And as you said, maybe that kind of data will help people have a better understanding of exactly what the differences are and how they're affecting emissions.
Well, and I just wanted to put one other point that I've mentioned before on the show, but I think which bears repeating, is what is really frustrating with putting underqualified, say blacks, and it's true of other ethnicities, but putting underqualified blacks in and pushing them through to get a degree dilutes the value of the degree for the truly talented and intelligent blacks who can make it no matter what.
And that, of course, is the challenge.
And one of the things I think that's been happening It's because when an employer looks at a potential black graduate, that employer doesn't know if they got there because their numbers were padded, at least in the initial part of getting into the college, or because of just natural innate ability, which is obviously happening in the black community.
That means, I think, that more intelligent blacks are looking at college and saying, well, people aren't going to be able to differentiate me from the people who were there by statute, who were there for reasons of hitting the numbers.
And so it makes a college degree less valuable for the more intelligent blacks, and it dilutes the value of the degree as a whole.
And it's going to, of course, as these things tend to do, I think, work against the higher education of blacks and success of blacks in various fields.
Yeah, I mean, I agree.
And I think, you know, it's not necessarily even a racial issue.
I mean, the mismatch theory that people talk about is, you know, anytime you sort of put someone into a higher level than they may be qualified for, regardless of whether they're white or black or whatever, you know, it might be good for that person or it might not.
I mean, you know, it...
I guess it's hard to think that being able to put a credential on your resume seems like it's always a good thing.
But overall, if you get stuck in a situation where you can't really handle yourself, it could ultimately be counterproductive.
To me, so much of what college is today is just a signaling device.
I can't recall any employers who actually ask for a list of the courses you took in your grades.
I mean, maybe they still ask for transcripts.
I don't know.
But oftentimes they just say, we want a college degree.
And oftentimes you look at jobs and, you know, like I've been employed in a few different organizations where I've looked at the job listings for, you know, an entry-level research assistant, you know.
And oftentimes that person basically just is a Googler, you know.
And you say, why does that person need a college degree?
But nevertheless, in the job description says, you know, must have college degree.
And I think notably, it doesn't even say what the degree has to be in.
You know, you might think, well, if you have to have a college degree, shouldn't you also specify a major or a topic?
But no, I mean, the reason is that employers look at a college degree and say, okay, that means you're You have a certain level of intelligence.
You have a certain level of persistence and perseverance, and you're mature.
And there are easier ways to measure those kinds of things.
I mean, tests of all kinds.
Well, I mean...
You know, the data that I've seen is that there's almost nothing better than an IQ test for figuring out the long-term success of employees.
You can do that in about two hours as opposed to four years of college.
You know, it's wretched.
And this was the case when I was at Hira.
We had challenges, you know, getting and keeping the best people.
And then all we did was we created our own intelligence test and gave that to people whether they had a degree or not.
And it was way better.
At predicting long-term success.
Or there's even a shorter one, which you can just do in about 20 minutes, which is just symbology and so on, and pattern recognition and all that.
And that stuff is way better than references.
It's usually way better than past work experience, and at least is comparable to a college degree.
And, of course, a sane society would look at that and say, well, let's just use the thing that takes two hours rather than the thing that takes four years and has the same predictive ability.
But, of course...
I think since the 70s or so, it's been at least legally questionable to use IQ tests in hiring, again, partly because of the racial or ethnic disparities.
That's right, yeah.
I would just add, actually, the experience of law school always seems to frustrate me a lot, too.
I have a lot of friends who went to law school who paid huge amounts of money and spent three years in law school.
And actually, a couple of them did not even become lawyers, which is really unfortunate.
But even if you did, I mean, like, you have to have a JD, right?
You might think that the bar exam by itself, like, shouldn't you just be able to pass the bar and then, you know, become a lawyer?
But even on top of that, what I hear is my friends would spend three years in law school.
Right?
And then they finally graduated.
I said, oh, congratulations.
You know, now you're ready for your law degree, ready to become a lawyer.
And they say, well, actually, I'm still going to school.
I'm taking a class on how to pass the bar.
And I think, I mean, what were you doing those last three years?
Right?
Yes, I understand the bar does differ from state to state, but still, you'd think you'd be able to find time in your three years of law school to figure out a way to pass the bar without having to take that extra class.
It's like this mandated three years of a huge amount of money and work All leading up to taking this bar exam, for which you have to prepare outside anyway.
I mean, it's...
Well, but you, I mean, of course, you know the rent-seeking involved in the legal profession.
The higher you can raise the entry to, the barriers to entry, and of course, the more debt you can put people in, right?
I mean, if you could just, you and I could walk in and take a bar exam, then we could charge a lot less and undercut everyone.
So the more debt you can put people in, this is true of the medical profession as well, the higher they have to charge people to pay off their debts, and thus the higher the We're good to go.
And you try to break it down by the education level of the teacher, and you don't really see much of an effect there at all, especially when you go to graduate classes.
A teacher has a BA, and then she goes and gets a master's degree in education or something, which is widely regarded as one of the least rigorous fields of study.
It seems to have no impact, but nevertheless, not only do they get them, but oftentimes they're paid or subsidized by the government to get those degrees, and then they're paid more after that.
Speaking of barriers to entry, Randy Weingarten, the AFT head, American Federation of Teachers, has proposed a bar exam for teachers.
Let's have this bar exam, which will ensure the best and brightest get into teaching.
It's a barrier to entry.
Make it harder and harder to become a teacher, and the more valued the current teachers become.
Well, I mean, as far as the intelligence of teachers goes, I mean, anybody can do a Google on this.
We'll put a link in below.
But when it comes to IQ tests across the various disciplines, the very highest, if I remember rightly, physics majors and then philosophy majors, and then it sort of goes down, and somewhere around the 12th level sub-basement is the education majors.
So the idea of getting the best and brightest, can we at least get people who can tie their shoes?
Now, I'm going to make a little bit of a leap here.
I'm going to spell it out.
This is a frog pond leap from lily pad to lily pad.
We're talking about government workers and we're talking about teachers.
And, of course, you have written recently on a Supreme Court decision that, you know, I try not to get sucked into the politics too much, but this one's got me all tingly because the Supreme Court does appear poised to strike down compulsory union dues for government workers, which seems to me like a truly seismic shift in American politics for a wide variety of reasons.
But, um...
You've done some work on this.
What are your thoughts on that?
Well, I mean, as far as policy, I think it's a great thing.
I mean, legally, I don't know.
I mean, I looked at the legal arguments on both sides, and yeah, you know, it sounds like they're really trying to reach for a policy.
But just sticking to the policy, I'm not a legal scholar anyway, so sticking to the policy, I think it is a great idea.
If you look at the states that have mandatory union dues for public workers, compare them to states that don't, what you find is the public sector premium, the compensation premium for working in government We're good to
go.
The unions get more money and therefore they have more money to use for organizing.
With government, the argument is basically that any lobbying they do in terms of their own pay packages is in a sense policy lobbying because it's a government policy as to how they pay their workers.
A lot of influence there.
I do think that government workers in general have a very sweet deal.
And there have been arguments that try to downplay that, but they really don't consider all the elements of the compensation package.
In fact, sometimes they just look at wages.
But I think it's fairly common knowledge that wages in the public sector tend to be lower than the private sector, but it's made up for in benefits.
And when you truly value those benefits, especially the defined benefit pensions, you know, the traditional pension, like Social Security, where you just get a check every month regardless, that is extremely valuable, especially these days with such low interest rates.
I mean, if you want a guaranteed rate of return on something today, what are you going to get, 2% or something like that?
But when defined benefit pension administrators decide what rate of return they're going to assume, right?
Remember, all the pension payments are guaranteed, but they have to assume a certain rate of return to determine their costs.
They assume something in the area of 7% to 8%.
So, in effect, you could say that people in a defined benefit pension are getting a 7% to 8% guaranteed return, which is a lot more than what you can get in the private market.
And that difference is a subsidy.
That difference means that if they don't get the return that they're expecting, it's taxpayers who make up that difference.
So to not include that subsidy of the guaranteed interest rate, which is what a lot of the pro-labor union papers will do, is to greatly undercount the compensation they get.
Well, and also it allows them to put a lot less money aside because they're assuming massive returns, which they're almost certainly not going to get, which means they can underpay into the fund, and that gap of underfunding means that they can charge less for a service that is going to pay a lot more.
As you say, the differences are going to have to be backfilled by the taxpayers.
Well, actually what happens is the unions will say with sort of a superficial correctness that if only the government had made its required contribution every year, we wouldn't be in this pension crisis.
And that's true in large part, you know, except that in order, what they know, what the labor unions know, is that in order for the government to actually make those contributions, to contribute enough such that you're going to guarantee there's not going to be any pension crisis, It would be politically impossible.
And the unions know that.
The government knows that.
And so what they've done is they've demanded something that was politically impossible to get.
Now that they don't have it, they're going back and saying, well, gee, you know, why didn't you just follow the law and do that?
It's a corrupt bargain all the way down.
And the sooner we get out of this mess and get public workers on the same types of retirement plans, The private sector workers have, namely a 401k.
The safer taxpayers will be.
Boy, there'll be some round-bottomed, irate people in the streets, because I know I've known some people.
I worked very, very briefly when I was very young for the government, and the people all around, it was, you know, like Zombie Central under fluorescent lights, because a lot of them were like, yeah, my job is meaningless, and yeah, I shuffle paper all day, but I'm just...
I'm holding out for that retirement so I can do what I want to do with my life.
And the idea that that might be cut after people have flushed decades of their life down a bureaucratic nonsense hellhole of ineffectiveness is going to make some people upset.
And one of the things that always troubled me about that is a forced association is a violation of freedom of association, which is why we know theft and rape are bad.
And the idea that you must be forced to pay a particular union in order to have a job seems much more exploitive than anything we evil capitalists could come up with.
And given the degree to which all of those forced union dues, I think 90-95% according to some statistics, go directly into the coffers of the Democrat Party.
This is why it seems like such a huge blow, because if this connection, which is forced union dues from workers flowing directly to the Democrat coffers, if that could be slowed, it's not going to vanish the moment the Supreme Court decision comes down, but if that could be slowed, and if immigration from Mexico or other sort of third-worldy countries can be slowed, That seems like you're taking out at least two of the three stools of what supports the Democrat Party.
The Democrat Party has generally, to me at least, admitted that they can't win in the marketplace of ideas, so they're bringing in low-info voters who are going to vote for them, and they're sucking money out of the workers in the government against their will.
And so if these two policies are slowed or reversed, or at least their increase is slowed, it seems to me that would be quite a blow to the Democrat Party as it currently stands.
Well, I mean, the initial evidence, at least, in places like Wisconsin, where dues are made voluntary, it does seem to have a pretty large effect on union membership and union dues paid, so I'm crossing my fingers on that one.
I think the biggest objection That I might have, I mean, sort of aside from sort of libertarian philosophy on union dues being mandatory, is that you mentioned like 90-95% of their political operations go to Democrats.
That is far out of proportion with the membership's views on politics.
I mean, a lot of union members are not Democrats.
A very healthy percentage are conservatives or Republicans.
And, you know, especially in the Midwestern states, this is oftentimes cited as a place Republicans really need to emphasize because you have a lot of You know, social conservatism or traditional values that might appeal to those people there.
So, you know, we're not talking about an ironclad democratic constituency, but nevertheless, their money, you know, would be going toward Democrats like that.
So, yeah, I think it is a problem.
Even teachers, you might think, oh, gee, teachers, sort of, you know, idealistic, white-collar women, you know.
Isn't this just a very democratic, liberal constituency?
No.
I mean, surprisingly, even the NEA's own surveys show, I forget the exact number, it's somewhere around 40% of teachers identifying as conservatives.
But believe me, their money is not going to conservative causes.
Yeah, and that is a violation of any sort of individual conscience with regards to the political process.
It is a shakedown for the Democrats, and the degree to which the Democrats are willing to accept that is the degree to which I think they reveal some pretty significant corruption, at least, to put it as mildly as possible, conflicts of interest in the interest of the workers.
Now, let's round the bend here since we did touch back on immigration.
So, six trillion dollars.
Now, That seems like a lot of money to me.
Six trillion dollars.
And cost of illegal immigration, the costs, passing the Border Security Economic Opportunity and Immigration Modernization Act of 2013 would have cost taxpayers more than six trillion dollars.
Could you help people understand that number, which is, what is that?
I mean, that's almost a third of the U.S. national debt.
It's a lifetime cost, as that's the paper I did at the Heritage Foundation with Robert Rector.
So given that it's over a 50-year period, I mean, well, it's still large.
Maybe it won't sound as large, but it is a large cost.
And really, I think actually the more important number is $5 trillion, which is the difference between the status quo and an amnesty.
That's essentially what that bill was, was an amnesty for the 11 or 12 million illegal immigrants.
And so the difference between that status quo would have been about $5.3 trillion, I think the paper was saying.
Now, the $6 trillion comes from the overall impact of immigration.
So that would be versus the status quo of all illegal immigrants not being here.
And so that's, of course, harder to do because, you know, what is the overall economic impact of immigration?
As we discussed earlier, it's difficult to say.
I mean, one could go on and on and on with all the indirect fiscal effects that might be caused by immigration, both good and bad, right, as we discussed.
So what we looked at was the direct fiscal effects with the $5.3 trillion representing the difference between As of today versus the amnesty, which I think is a fair thing to do.
A lot of the criticism came in as, well, gee, you didn't look at the economic benefits of immigration.
And as I said, I mean, first of all, that's baked into the cake to a large degree because we're looking at a status quo where they're already here.
The only difference is it's amnesty versus non-amnesty, eligibility for all these social welfare programs for which they were not eligible before.
But even if...
We weren't looking at that status quo.
We're just looking at the overall impact of immigration.
As I said, there's lots and lots and lots of indirect effects here.
I could list, you know, a dozen of them for you that, you know, potentially, I don't know how...
Please do.
Please do.
Well, I mean...
I mean, I don't want to put you on the spot, but, you know, I don't...
I like it when these things are broken down myself.
For the negative side of the ledger.
Okay, so we have this wage impact.
If you lower the wage of natives, some of them are going to drop out of the labor force, right?
Well, what is the cost of the additional welfare benefits that they will have to go on if indeed they do drop out of the labor force?
What is the cost of bilingual education in schools?
What is the cost of people moving out of neighborhoods because they feel like they're no longer welcome culturally in that neighborhood because people don't speak their language?
What is the cost of churches becoming more segregated because some want to have Spanish language versus English language?
Again, you could go on and on with this kind of thing.
I'm sure somebody out there has tried to put a number on some of those things.
You could do it if you want.
But it's funny that our critics never talk about those sorts of indirect effects.
They want to talk about the one indirect effect they like, which is the idea that because you lower the wage, you're increasing the productivity.
You get this small...
I wonder why these people don't, in order to take the bullet and help the national economy, cut their own wages in half.
I mean, if it's so great for the economy for you to cut your wages or for other people's wages to be cut, why don't you take the bullet and take the sacrifice and cut your own wages?
But no, no, no, it's always other people who have to take that bullet for you to get cheaper gardening services.
Yeah, I would say actually, you know, along those lines, I think most of the empirical evidence seems to suggest that the wage goes down faster the higher the skills of the worker.
So if you do bring in lots of PhD chemists and biologists, you know, their wages will be affected a lot more for whatever reason.
You know, the elasticity of demand of price for their wages is considerably larger than it is for lower skilled workers.
So, you know, if you want to make that argument, you can also add that point to it, that they would really be doing something for the economy.
But if only we had more people who are the type who write for The New York Times or The New Yorker or The New Republic or advocate for saving the whales or green energy.
We need more of those people, more of those people.
That's what I think.
Well, and something which is probably a bit of a softer cost, but has crossed my mind a couple of times is I think about the baby boomers, of course, the post-World War II generation.
So huge numbers of kids, but you had lots of time to plan for the infrastructure that you needed to build, right?
So, you know, the kids were all started being born and immediately the schools start being built because they're years away.
You know, this is when stay-at-home moms were much more common.
So they were, you know, five years away from having to start going to kindergarten.
I don't even know if kindergarten was around there, but they had A lead time.
And then they had lead time to build more sewage systems.
They had lead time to build more neighborhoods and more roads or whatever it was that needed.
But if you sort of, in a sense, flick a switch and legitimize a whole bunch of people, that is a massive influx of people who are going to use particular infrastructures which you don't have lead time to build.
It's not exactly a soft landing.
And the more quickly you need to do things, usually the more expensive they tend to be.
That's right.
I mean, that's a basic critique of mass immigration is that, you know, I'm not someone who worries especially about population in general.
I think, you know, the fact that, you know, there are 315 million Americans today is not hugely problematic compared to the fact there were only 150 million back in 1940 or whatever.
But I do agree that when you have mass immigration, when you have sudden changes, It can cause a lot of problems, especially short-term problems.
And again, you know, who's quantifying this?
Well, you know, we tried to quantify this to some degree.
I mean, you know, you take public goods like roads and you say, okay, you know, when you add immigrants, do you assign them the average cost of the road and the marginal cost of the road?
And there's sort of a debate about that.
But just the basic debate about the fact that we have to adapt to all this.
There's a sudden change.
It requires, you know, a rapid response that we may not be equipped for is a major critique of mass immigration.
All right.
Well, listen, I really appreciate your time, Dr.
Richwine.
I really wanted to recommend that people go to jasonrichwine.com.
It's a great blog.
And, of course, you're regularly writing for a variety of periodicals.
And your work is always stimulating, challenging, exciting, and very well written for a mass audience, which is no mean feat.
So thanks a lot, of course, for all the work that you're doing and your time today.
