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Dr. Norm Matloff: Business Channel Doesn`t Understand The Concept Of Price
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March 07, 2009, 02:45 AM
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Dr. Norm Matloff writes:
A reader brought to my attention today`s panel discussion on the Power Lunch program on CNBC, viewable here.

The discussion concerned Sen. Grassley`s request to Microsoft that the firm give American workers retention priority over H-1Bs in layoff decisions, as well as the recent enactment of the Grassley/Sanders restrictions on hiring of H-1Bs by TARP recipients.

All six discussants took it for granted that employers hire H-1Bs because they are of superior quality.  Even though one of the six seemed to be supportive of Grassley, as the discussant`s techie brother had been laid off, even this one did not question the notion that the H-1Bs "must" be better ("five times more productive," one said) than the Americans.

It did not occur to a single one of these discussants, nor to host Bill Griffeth, that price might be a factor, i.e. that employers hire the H-1Bs simply because they are cheaper.  It boggles the mind that a major business channel, CNBC, could show ignorance of such a fundamental principle.  Griffeth in fact has run news items on H-1B as cheap labor  in the past, so he at least knows that there are people who assert that H-1B is about cheap labor.  Odd that he didn`t speak up.

My colleague, UCD economics professor Giovanni Peri, actually showed the same ignorance. He`s a great guy, and will be quite successful I believe, but it`s even odder to see such an attitude from him than from a bunch of business journalists.  See here.

Clearly, ideology can be blinding.

Norm