The phrase "help industry" has many dimensions. The simplest of course is that by increasing labor supply and suppressing wages it increases profit margins, rewarding shareholders.
Another important function is that by having more workers overall in the US, it increases the productivity of the domestic industry itself, due to increased competition for jobs driving up the productivity of the average worker. This in turn makes the industry more competitive vs its equivalents in other countries.
The average worker (whether permanent resident or temporary/H1B) who doesn't have significant investments likely doesn't receive much of those productivity gains, since they mostly go to capital owners.
Long term, it boosts returns to capital while capping returns to labor, the same trend noted by Thomas Piketty some years back.
The economic impacts I described are looking backwards, not forward, and the data is pretty clear that long term returns on capital swamp the returns on labor (especially since the 1970s). STEM workers have been somewhat insulated from that due to the industries they work in growing in the past few decades faster than the labor supply. It's anyone's guess whether or not either trend will continue into the future.
> the question is less about productivity, but network effect, number of jobs, and quality of jobs.
I'd argue productivity and returns to capital are almost everything when it comes to what informs immigration policy from an economic lens. "Network effect" is a mechanism, not an outcome, and outcome metrics like "quality of job" or even "quality of life afforded by a job" are not a concern of such policies. On average, they might improve, or they might get worse, but productivity and returns on capital will always go up, whether they require workers or not.
Because what you are calling "local benefits to industrial expertise" is ultimately realized in the form of returns on capital.
Whether these benefits outweigh the costs is an open question.
When the tech industry's growth was very talent constrained as it was in the last few decades, arguably opening labor competition had the effect of increasing overall growth (mainly through new production invention). The list of immigrant technologists who have created new technologies and products - and jobs as a result - could probably fill an encyclopedia.
It's unknown whether that type of growth - the kind that creates more and better jobs - will continue, especially given recent developments in AI.
If the benefits going forward are largely going to be based on massive increases in labor efficiency, then it's not as clear that the benefits (mostly to capital) outweigh the costs (mostly to labor). Most business models in AI are predicated on replacing people, who are expensive, not making more or better goods. Sure, we'll get some neat robots along the way that actually make stuff, but that will likely be a small fraction of the money to be made.
Or perhaps we are at the dawn of a new era of technology which will make more and better jobs. We'll see.
That effect mostly comes from housing, non-housing capital has not had that big difference in returns. See https://www.brookings.edu/articles/deciphering-the-fall-and-...
Subtracting depreciation isn't a fair comparison. The example uses software as a short-lived asset. Has the monetary value of Google's search algorithms depreciated? They've been upgraded with routine investment, but the scale of the returns on their upkeep vastly outweighs the capital investment, otherwise Google wouldn't be so profitable.
Software of the internally-developed sort isn't even depreciable [1], so it's not clear how its value for these purposes would be determined (short of assuming it represents a percentage of the business's value).
Also, from the paper linked in your article:
> Once all compensation of employees at the sawmill is subtracted, the remainder is its gross capital income. Some of this capital income will be paid to lenders in the form of interest, some will be paid to the government in taxes on profits, and the rest may be retained on the balance sheet of the sawmill or distributed as dividends to shareholders. Gross capital income is thus a very broad concept, encompassing funds that are ultimately paid out to many different recipients—it is unaffected, for instance, by the split in financing between debt and equity.3 GROSS VERSUS NET: CONCEPTS An alternative to gross value-added is net value-added, which subtracts depreciation. This can be divided into labor and net capital income, the latter being gross capital income minus depreciation.
Everything which I have emphasized above are examples of returns to capital. Excluding them from consideration in this presentation is ignoring how a large amount of returns are channeled to owners of capital.
Debt-holders gain from interest and shareholders are enriched via dividends and share buybacks that never appear on the article's net income derived graph.
Of course, when you willfully ignore those huge tranches of returns, then housing looks like a major factor, because it is the common asset class that has been on a largely unchecked inflationary track.
Finally, your article from 2015 argues that the overall trend will reverse and labor's share of GDP will start increasing. Here's what has actually happened since then:
https://fred.stlouisfed.org/series/PRS85006173
The brief spike in 2020 was due to pandemic era redistribution policies like the child tax credit, among others. Since those have been repealed, labor's share has continued its prior trend downwards.
1. https://www.irs.gov/publications/p946#en_US_2023_publink1000...
When productivity goes up, that doesnt mean workers are making 10X as many houses or hamburgers, which capitalist are eating.
For me, this begs the questions of what exactly is being produced when we say worker productivity has increased, and where is it going? If it is "stuff" being produced, surely it should be evident somewhere, like massive exports hoarded stockpiles. Alternatively, the productivity is an illusion because there is a corresponding inefficiency or deadweight loss, like paying some service workers to create problems and paying others to fix them.
When my companies have produced more output from the same inputs (or the same output from less inputs in the case of mass layoffs), we return the cash to shareholders by way of a stock buyback or special dividend the following quarter.
Maybe in some companies they instead give workers raises or outsize holiday bonuses, but I’ve never seen this.
Power.
Political power: policies written to benefit the highest bidder.
Financial power: more leverage in being able to dictate terms of borrowing by workers - and being able to force the government to borrow from capitalists instead of levying taxes on them.
Physical power: Being able to buy/influence law enforcement (themselves a type of worker) to protect the capitalist's interests over those of other workers.
