[gagagaridze]

Originally posted by CrONoS


I don't see how lower cost can help rising wages in short & medium term. What I see is lower wages for the entire society in short term. In aggregate, yes. But only because you'll have added a bunch of low wage earners.

That comparison is meaningless. Compare the native Canadians before and after. If you double the population of Canada while keeping the same exact skill distribution then I know of no reasonable economic theory which predicts massively lower wages.

Even if total capital remains the same (unlikely) then there is a transitory capital shallowing, increasing the profit to wages ratio. However, if international capital is allowed to flow then I don't see why capital to labour wouldn't remain constant. The only possible objection is that natural resources would become scarcer, increasing rents. I'd like to see some quantitative analysis of this.

Now, imagine that instead of the same skill profile immigrants represent lower skills (including the soft skills of social knowledge, language etc). Now the group of native Canadians is a high-skilled set living in a society where per capita skills are scarcer than before. Their wages go UP (in aggregate). The only objection is in the overlap region. If you are a low-skilled native Canadian then you are living in a society where unskilled labour per capita is in greater supply. Your wages might go down, but by les than everybody else's went up. This is the theory of comparative advantage (immigration just increases the size of the tradable sector; it doesn't change the basic idea). If you want, compensate native Canadians with a per capita immigration displacement disbursement.