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Another Theory Of Corporate Lust For Immigration
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May 08, 2012, 03:05 AM
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Jack Strocchi offers another theory of why corporate elites favor immigration besides keeping labor costs down and labor unions weak:

There is no doubt something to the theory that the New Right wanted to Open Borders to crush wages. On the flip ideological side It`s clear that the New Left supported Open Borders to "elect a new people" and pad welfare rolls.  

But the most pressing reason to Open Borders is to boost retail turnover, particularly in household formation goods (including houses), particularly in the era of declining birth rates. The easiest way to turn a profit and amortize the cost of capital is to increase turnover, extra sales go right onto the bottom line.

Say you are the head of the American division of a big, fairly capital intensive toilet paper company with major operations in the U.S. You want sales to grow so you can run your already-built factories closer to full capacity. But demand per capita for toilet paper is flat. So, your best hope for growth is to add some capitas in the U.S. to buy more of your product: e.g., via immigration.

Now, the downside of immigration from your perspective would be if some of the immigrants started their own big toilet paper companies to increase competition against you. But, there are a lot of industries where this isn`t that big of a threat. 

Moreover, there are a lot of sources of immigrants where this isn`t that big of a threat. For example, importing into America the fraction of ambitious Swedes who are fed up with Sweden`s restrictions on their entrepreneurial energies could be a problem for established American corporate interests in the long run. On the other hand, importing unambitious Mexicans is not likely to produce much additional competition for the Fortune 500.

So, what`s not to like about immigration from the point of view of the Toilet Paper Barons?