QUOTE Myth 1: Immigrants take American jobs and reduce American wages. ... research ... has shown that “immigration has a positive net effect on native employment.” A study ... has shown that immigrants have a “positive impact on GDP per capita and a negative impact on aggregate unemployment ... Myth 2: Multinational corporations are shipping our jobs overseas. ... US employment in manufacturing is higher when foreign affiliate employment in high-income countries is higher ... foreign affiliate employment in low-income countries seems to have no effect on US parent employment. ... ...there is virtually no ... evidence ... that ... multinational firms adversely affect their workers. ... the opposite is the case. Foreign ownership raises wages by both raising labor productivity and by expanding the scale of production, and, in the process, improves the conditions of work. ... Myth 3: Government spending and hiring alleviates unemployment. ... data from 20 developed countries over three decades ... [shows] That increases in government outlays hamper economic growth and raise the unemployment rate. .... they don’t just establish a correlation; they use causality tests to find that government spending causes higher unemployment, not the other way around. Research by other economists arrives at similar results. ... recent study ... comes to the following conclusions: High rates of public employment, which incur substantial fiscal costs, have a large negative impact on private employment rates and do not reduce overall unemployment rates … Public-sector hiring: (i) does not reduce unemployment, (ii) increases the fiscal burden, and (iii) inhibits long-term growth through reductions in private-sector employment. Myth 4: “Conservative” economic policies lead to slower employment growth. ... researchers from the Federal Reserve have examined how ... classical liberal policies, affect employment growth. ... states with less government intrusion in the economy have faster employment growth. ... labor market freedom and a smaller state government, which are two components of overall economic freedom, are important determinants of employment growth across US states. ... economists ... examined data on the 50 states from 1981 through 2009. ... states with more economic freedom had lower unemployment, higher labor-force participation and higher employment-to-population ratios ... Myth 5: Government spending is good for economic growth. Research shows that in wealthy countries, further government spending leads to slower economic growth, ... the correlation [between government size and economic growth] is negative ... Research has shown that “important indicators of economic freedom such as openness to trade and small size of the government are robustly associated with poverty reduction.” ... In 2013, [an] economist ... published important research attempting to pinpoint the size of government ... that maximizes economic growth. Using data from 70 countries over the period 2000–2011 ... [it was] found that “annual per capita GDP growth is maximized at 3.1 percent at a government expenditure to GDP ratio of 26 percent; beyond this ratio, economic growth rates decline.” ... For reference, in the United States, government spending as a share of GDP was over 40 percent in 2012. ... Conclusion Claims should be backed by evidence. Unfortunately, people often forget to offer up data, and therefore claims that get repeated enough become accepted as “common knowledge.” Many people simply assume that the government can create jobs — or that one more employed immigrant means one more unemployed native — rather than bothering to look up the scholarly research on the matter. Ultimately, it is wisest to be skeptical about any economic assertions until their authors provide convincing evidence. UNQUOTE
Posted on: Wed, 19 Nov 2014 20:28:36 +0000
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