Is the “China Shock” Even a Thing?

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Gallup’s Jonathan Rothwell conducted a study toward the end of last year that found “those who view Trump favorably have not been disproportionately affected by foreign trade or immigration, compared with people with unfavorable views of the Republican presidential nominee. The results suggest that his supporters, on average, do not have lower incomes than other Americans, nor are they more likely to be unemployed.” Now, Rothwell is back with another study suggesting that the supposed “China Shock” is actually overblown. Rothwell writes,

…[O]ne important achievement of [Autor, Dorn, Hanson, 2013] is its innovative methodology and framework, which has allowed scholars to better understand how import competition affects local areas. Nonetheless, my analysis and extension — which greatly benefited from Autor et al.’s coding and data — conclude that their findings about the harm from import competition at the community level are not robust, beyond the manufacturing sector, and, even then, only in the later period. At the individual level, and consistent with results from Autor et al. (2014), I find that workers in import-intensive industries have a strong attachment to the labor force and are as likely to be employed as workers in other industries.

…Though [Autor et al.’s] paper makes an enormous methodological contribution and provides further and robust evidence that Chinese imports—rather than only technological change—reduced U.S. manufacturing employment, the evidence presented here suggests the paper’s most important findings do not withstand further scrutiny.

…If China had remained a communist country and closed to trade, it is quite likely that manufacturing workers around the world would have enjoyed higher wage growth. While manufacturing job loss probably would not have been as significant, the increased competition from China did not create labor market conditions that appear dramatically different than what workers face in other industries such as retail, restaurants and engineering firms. In fact, the evidence is clear that manufacturing work remains a source of relatively high pay, long tenure, and low layoff risk, despite the intensity of import competition (pg. 20).

What is likely surprising to many, Rothwell found that

for the 1990-to-2000 period, there is no evidence that import competition resulted even in manufacturing job loss. Indeed, many of the manufacturing-specific models show that import competition resulted in a large increase in the average wages of manufacturing workers. The positive wage effect is evident outside of the manufacturing sector, particularly for noncollege educated workers and males. Taken literally, these models show that import competition during the 1990s caused a substantial increase in wages for the average worker. These models also show that import competition increased employment growth for college-educated, nonmanufacturing-sector workers and population growth for people aged 35 to 64.

Of the 45 models with significant effects in the stacked regression, only five retain significance in the expected direction during 1990 to 2000, and each of these pertain to transfer payments. These results could be explained by the population growth of pre-retirement-age workers, as health problems and risk of retirement are increasingly sharply with age. Overall, it appears that import competition in the 1990s was, if anything, largely beneficial to the average worker in the local areas most exposed to competition (pg. 18).

A new job market paper deals another blow to the “China Shock” theory. Using microdata from the US Census Bureau, the author

showed that the employment of US manufacturing firms rose in response to increasing Chinese imports in US output markets. More exposed firms expanded employment (i) in manufacturing, as they hired production workers whom they paid higher wages, and (ii) in non-manufacturing, by adding jobs in R&D, design, engineering, and headquarters services. In other words, China caused a relative expansion of US employment in firms operating in industries that experienced the largest growth in Chinese imports. I argued theoretically, and provided reduced-form evidence, that this was possible through firms’ reorganization toward less exposed output industries, in which the US had a comparative advantage relative to China. In these output industries, firms expanded skilled employment by taking advantage of falling production costs due to increased offshoring to China.

The evidence provided in this paper indicate that the employment losses at the establishment level, measured by the previous papers (Acemoglu et al., 2016; Autor et al., 2013), were compensated by the employment gains that resulted from two sources. First, within-firm reorganization allowed US manufacutring firms to escape the negative impact of the China shock; US manufacturing firms reorganized their activities in many dimensions in response to the China shock. On the one hand, they reorganized their US activity from exposed to non-exposed US output markets. On the other hand, they reorganized their input sourcing as they replaced domestic suppliers with foreign suppliers and increased foreign direct investment. Second, employment at US manufacturing firms expanded in response to the combined effect of increased Chinese imports in US output and input markets. This is because increased imports in the input markets put downward pressure on US manufacturing firms’ cost of sourcing material inputs. Thus, the China shock to the firm’s input markets acted as a favorable cost shock that compensated for some or all of the negative impacts of the increased output market competition.

All of these suggest that the China shock impacted US manufacturing employment in a more nuanced way than simply increasing output market competition at the establishment level, which captures only the losses that resulted from the shock. Reorganization at the firm level and the combined effects of input and ouput market shocks can lead to net job creation. However, this may not involve the same workers in the same industries, in the same regions of the US or the same establishments of the firm (pg. 51).

When one considers the other benefits of trade, it becomes increasingly clear that globalization is not the demon it has been made out to be.

O Canada: Bastion of Western Liberty?

Over the years, I’ve heard people of a certain political persuasion argue that the United States should be more like their northern neighbor Canada. And over the years, I’ve enthusiastically agreed, but mostly for different reasons. A recent article in The Economist captures a few of those reasons:

Donald Trump, the grievance-mongering Republican nominee, would build a wall on Mexico’s border and rip up trade agreements. Hillary Clinton, the probable winner on November 8th, would be much better on immigration, but she has renounced her former support for ambitious trade deals. Britain, worried about immigrants and globalisation, has voted to march out of the European Union. Angela Merkel flung open Germany’s doors to refugees, then suffered a series of political setbacks. Marine Le Pen, a right-wing populist, is the favourite to win the first round of France’s presidential election next year.

In this depressing company of wall-builders, door-slammers and drawbridge-raisers, Canada stands out as a heartening exception. It happily admits more than 300,000 immigrants a year, nearly 1% of its population—a higher proportion than any other big, rich country—and has done so for two decades. Its charismatic prime minister, Justin Trudeau, who has been in office a year, has welcomed some 33,000 Syrian refugees, far more than America has. Bucking the protectionist mood, Canada remains an eager free-trader. It was dismayed by the EU’s struggle to overcome a veto by Walloons on signing a “comprehensive” trade agreement that took seven years to negotiate (see Charlemagne). Under Mr Trudeau, Canada is trying to make amends for its shameful treatment of indigenous peoples, and is likely to become the first Western country to legalise recreational cannabis on a national level. 

The article acknowledges that Canada’s geographic location, history, and the like are important factors for its political decisions above, but it nonetheless makes an effort to find against the populist rhetoric within its own borders:

Canada not only welcomes newcomers but works hard to integrate them. Its charter of rights and freedoms proclaims the country’s “multicultural heritage”. Not every country will fuse diversity and national identity in the same way that Canada does. Indeed, French-speaking Quebec has its own way of interpreting multiculturalism, which gives priority to the province’s distinct culture. But other countries can learn from the spirit of experimentation that Canada brings to helping immigrants find employment and housing. Its system of private sponsorship, in which groups of citizens take responsibility for supporting refugees during their first year, not only helps them adapt but encourages society at large to make them welcome. The UN High Commissioner for Refugees has called on other countries to copy it.

Canada has been managing its public finances conservatively for the past 20 years or so. Now in charge of a sluggish economy, Mr Trudeau can afford to give growth a modest lift by spending extra money on infrastructure. His government has given a tax cut to the middle class and raised rates for the highest earners to help pay for it. These economic policies deserve to “go viral”, the head of the IMF has said. Canada has a further economic lesson to impart in how it protects people hurt by globalisation. Compared with America, its publicly financed health system lessens the terror of losing a job; it also provides more financial support and training to people who do. And its policy of “equalisation” gives provincial and local governments the means to maintain public services at a uniform level across the country.

Perhaps most important, this mixture of policies—liberal on trade and immigration, activist in shoring up growth and protecting globalisation’s losers—is a reminder that the centrist formula still works, if politicians are willing to champion it. 

Of course, it’s important to point out that Canada “remains a poorer, less productive and less innovative economy than America’s.” Trade among provinces is still problematic and the “peace, order and good government” that is “enshrined in its constitution” may be “inadequate without an infusion of American individualism.” But when Canada outpaces the U.S. in economic freedom, it may be worth looking at the things they get right.

The Future of Technological Advancement

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Not the most profound example, but it works.

Many critics today believe the notion that the days of economic growth and technological innovation are behind us. Yet, Oxford’s Ian Goldin and Chris Kutarna argue that these critics are mistaken. The critics, they argue, imagine “technological innovation to be like pulling balls from an urn, each ball representing a new idea. In the beginning, the urn was full and the spheres were large, but each time we’ve gone back to the urn, we’ve had to reach deeper than the last, and the spheres have dwindled into marbles.” In their view, however,

this metaphor, while intuitive and compelling, is backwards (Goldin and Kutarna 2016). Innovation is more like mixing compounds in an alchemist’s lab. Each compound is an existing idea or technology, and in the beginning we had just a few – maybe some salt, sugar, and common liquids. But then we tried mixing them together, and some of them reacted with one another to form new compounds…This metaphor is far closer to the present experience in research laboratories. Across the sciences, the pace of discovery is generally rising, not falling. For reliable evidence, consider the pharmaceuticals industry (a good litmus test because it invests more into R&D than any other industry, except aerospace). The year 2013 set a new record for total drugs launched world-wide (48) – a record that was promptly beaten in 2014 (61). With another 46 drugs launched in 2015, the last three years have been the industry’s three most productive in its history. Recent major discoveries include new weapons against heart failure, which in an aging world is now the leading cause of death; immunotherapies, which help to defeat cancers by boosting the body’s own immune response; and a viable pathway to effective Alzheimer’s medications within a decade. In part thanks to the accelerating pace of pharmaceutical achievements like these, average life expectancy across advanced economies is now rising an unprecedented four to five hours per day.

Goldin and Kutarna defend their view in a way that would make Julian Simon smile:

The broader cause for these emerging paradigm shifts is the inflation in human brainpower that has taken place over the past 25 years. Thanks to giant medical successes against childhood disease and aging over the past quarter-century, the present global cohort of adults is humanity’s largest and healthiest ever. It is also the best-educated. In just a generation, illiteracy has fallen from nearly half to just one-sixth of humanity. In 30 years, we’ve added three billion literate brains to our ranks. Meanwhile, the rapid expansion of higher learning in Asia means that the number of people alive right now with a university degree is greater than the total number of degrees awarded in history prior to 1980. Most importantly, the present generation is history’s best-connected, thanks principally to a quartet of big events – the end of the Cold War, waves of democratisation across Latin America, much of Asia and sub-Saharan Africa, China’s emergence from autarky, and the advent of digital communications.

Neither history, nor the present-day pace of scientific discovery supports the notion of diminishing returns to technological innovation. The challenge for growth economists is that analytic models are poorly suited to capture, and set society’s expectations for, these impending disruptions…Growth economics is powerful. At its best, it is an empirical science that helps determine how to lift human wellbeing – one of civilisation’s most important tasks. But it is unable to capture the dynamism of our new age of discovery for a reason. Much that matters is still beyond its sight.

We need an economy and a government that support dynamism and provide fertile ground for innovation.

The Basics of Syria’s War

There’s an excellent write-up in The New York Times titled “Straightforward Answers to Basic Questions About Syria’s War.” Foreign policy is not my strong suit and so articles like this are extremely helpful. The questions answered include:

  • Who is the Syrian civil war?
  • How did the war happen?
  • Which countries are involved?
  • Why is the war so bloody?
  • Why is it divided by religion?
  • How did the Islamic State form?
  • Why is the refugee crisis so large?

Check it out. It goes nicely with Vox‘s video below.

Economic Freedom of the World Report: 2016

The Fraser Institute just published its Economic Freedom of the World 2016 Annual Report. The degree of economic freedom is measured using 5 broad areas:

  1. size of government (expenditures, taxes, enterprises)
  2. legal structure and property rights
  3. access to sound money
  4. freedom to trade internationally
  5. regulation of credit, business, and labor

The ten most economically free countries are:

  1. Hong Kong
  2. Singapore
  3. New Zealand
  4. Switzerland
  5. Canada
  6. Georgia
  7. Ireland
  8. Mauritius
  9. United Arab Emirates
  10. Australia (United Kingdom was tied with Australia)

One of the most important findings of past reports that is once again confirmed in the latest is the following:

The share of income earned by the poorest 10% of the population is virtually the same from the least (2.45%) to the most (2.75%) free countries. It is unaffected by economic freedom. But, as shown above, the amount of income earned by the poorest 10% of the population is significantly higher in freer countries. In other words, the poorest of the population are better off in countries that are more economically free.

The rest of the report includes articles on gender disparity in legal rights, Venezuela, Ireland’s growth, and economic freedom in the United States.

Check it out.

The Economic Impact of NAFTA

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Trump wants to “renegotiate” or even withdraw from it. Clinton is up for “adjusting” it. With trade coming under fire (even from previous supporters), it is no wonder that NAFTA has taken some heat. But what do experts says about the economic impact of NAFTA? According to an excellent brief by the Council on Foreign Relations,

Economists largely agree that NAFTA has provided benefits to the North American economies. Regional trade increased sharply (PDF) over the treaty’s first two decades, from roughly $290 billion in 1993 to more than $1.1 trillion in 2016. Cross-border investment has also surged, with U.S. foreign direct investment (FDI) stock in Mexico increasing in that period from $15 billion to more than $100 billion.

Admittedly, “experts also say that it has proven difficult to tease out the deal’s direct effects from other factors, including rapid technological change, expanded trade with other countries such as China, and unrelated domestic developments in each of the countries.” And like any trade deal, there is debate over “NAFTA’s legacy on employment and wages, with some workers and industries facing painful disruptions as they lose market share due to increased competition, and others gaining from the new market opportunities that were created.”

But what has happened to the U.S. economy since NAFTA?:

In the years since NAFTA, U.S. trade with its North American neighbors has more than tripled, growing more rapidly than U.S. trade with the rest of the world. Canada and Mexico are the two largest destinations for U.S. exports, accounting for more than a third of the total. Most estimates conclude that the deal had a modest but positive impact on U.S. GDP of less than 0.5 percent, or a total addition of up to $80 billion dollars to the U.S. economy upon full implementation, or several billion dollars of added growth per year.

Such upsides of trade often escape notice, because while the costs are highly concentrated in specific industries like auto manufacturing, the benefits of a deal like NAFTA are distributed widely across society. Supporters of NAFTA estimate that some fourteen million jobs rely on trade with Canada and Mexico, while the nearly two hundred thousand export-related jobs created annually by the pact pay 15 to 20 percent more on average than the jobs that were lost.

Furthermore, “economists like Gary Clyde Hufbauer and Cathleen Cimino-Isaacs of the Peterson Institute for International Economics (PIIE) emphasize that increased trade produces gains for the overall U.S. economy. Some jobs are lost due to imports, but others are created, and consumers benefit significantly from the falling prices and often improved quality of goods created by import competition. A 2014 PIIE study of NAFTA’s effects found that about 15,000 jobs on net are lost each year due to the pact—but that for each of those jobs lost, the economy gains roughly $450,000 in the form of higher productivity and lower consumer prices.” Interesting enough, NAFTA may have “helped the U.S. auto sector compete with China. By contributing to the development of cross-border supply chains, NAFTA lowered costs, increased productivity, and improved U.S. competitiveness. This meant shedding some jobs in the United States as positions moved to Mexico, he argues, but without the pact, even more would have otherwise been lost.”

Many critics, however, focus less on the U.S. and more on Mexico. How has the country south of the border done since NAFTA?:

NAFTA gave a major boost to Mexican farm exports to the United States, which have tripled since NAFTA’s implementation. Hundreds of thousands of auto manufacturing jobs have also been created in the country, and most studies have found (PDF) that the pact had a positive impact on Mexican productivity and consumer prices.

NAFTA was “the continuation of a decade of economic liberalization that saw [Mexico] transition from one of the world’s most protectionist economies to one of the most open to trade. Mexico had reduced many of its trade barriers upon joining the General Agreement on Tariffs and Trade (GATT), the precursor to the WTO, in 1986, but still had a pre-NAFTA average tariff level (PDF) of 10 percent. Mexican policymakers saw NAFTA as an opportunity to both accelerate and “lock in” these hard won reforms to the Mexican economy.” Unfortunately, “Mexican unemployment also rose, which some economists have blamed on NAFTA for exposing Mexican farmers, especially corn producers, to competition from heavily subsidized U.S. agriculture.” However, many experts argue that

Mexico’s recent economic performance has been affected by many non-NAFTA factors. The 1994 devaluation of the peso drove Mexican exports, while competition with China’s low-cost manufacturing sector (PDF) likely depressed growth. Unrelated public policies, such as land reform, made it easier for farmers to sell their land and emigrate. As UCSD’s Hanson has argued (PDF), Mexico’s struggles have largely domestic causes: poorly developed credit markets, a large and low-productivity informal sector, and dysfunctional regulation.

Overall, as economist Douglas Irwin summarizes,

NAFTA has promoted the growth of a middle class in Mexico that now includes nearly half of all households. And since 2009, more Mexicans have left the United States than have come in. In the two decades since NAFTA went into effect, Mexico has been transformed from a clientelistic one-party state with widespread anti-American sentiment into a functional multiparty democracy with a generally pro-American public. Although it has suffered from drug wars in recent years (a spillover effect from problems that are largely made in America), the overall story is one of rising prosperity thanks in part to NAFTA.

I expect anti-foreign bias from voters. The problem is that smart politicians will say stupid things to appeal to these voters. I just hope the policies don’t match the rhetoric.

The Future of Chinese Christianity

Multiple books over the last decade have focused on the rise of Christianity in China. In the newest edition of First Things, there is an incredible essay by Chinese writer and activist Yu Jie titled “China’s Christian Future.” Jie points out that “in 1949, when the Communist party defeated the Nationalists and founded the People’s Republic of China, Christians in China numbered half a million. Yet almost seventy years later, under the Chinese government’s harsh suppression, that population has reached more than sixty million, according to Fenggang Yang, a sociologist at Purdue University. The number grows by several million each year, a phenomenon some have described as a gushing well or geyser. At this rate, by 2030, Christians in China will exceed 200 million, surpassing the United States and making China the country with the largest Christian population in the world.” Jie names two major events that led to this rise: “the Cultural Revolution launched by Mao Zedong in 1966 and the Tiananmen Square massacre instigated by Deng Xiaoping in 1989. Countless innocent lives were lost as a result of these two cataclysms, and the people’s belief in Marxism-Leninism and Maoism was destroyed. These events opened up a great spiritual void, and the Chinese began searching for a new faith.”

Following the 1989 massacre, “Deng Xiaoping thought the key to keeping the regime in power was to make a select few wealthy. He made their economic dream of getting rich come true while sacrificing the political dream of many to live in a free society. Like a drug, however, money’s hold on people could only last so long. Man cannot live on bread alone. Beyond his material needs lie spiritual ones as well. Government leaders sensed a crisis, too. They started rummaging through the Confucianism and Buddhism they had tossed out, hoping to reclaim the former moral authority of these traditions for the party.”

But this supposed renewal of Confucianism isn’t what it seems:

Today…party officials clutch at Confucius like a drowning man clutches at straws. Without ever having apologized for what they did to destroy Confucianism, they now set up so-called Confucius Institutes around the world, no expense spared, to foster their agenda. The institutes offer financial assistance to scholars of China in the West, inviting them on luxury tours of the country in exchange for favorable reviews of the Chinese government. By the same token, they blacklist those critical of the administration and send their names to Chinese embassies around the world, which in turn deny them visas. The Confucius Institutes are political tools for maintaining power, not genuine sources for cultural renewal. Had the Communists not dug up his grave, Confucius would be spinning in it.

The growth of Christianity has made the Chinese president see it as “a threat: It is the largest force in China outside the Communist party. In China, home churches outnumber government-sponsored churches three to one. Against home churches that refuse to cooperate, the government has waged a large-scale cleansing campaign in the eastern coastal province of Zhejiang, particularly in the city of Wenzhou, known as “China’s Jerusalem,” where 15 percent of the population is Christian. In two years, more than two hundred churches in Zhejiang have been demolished, over two thousand crosses removed. The scene of the cross being removed from a church in Ya village, Huzhou city, on August 7, 2015, was typical.”

Yet, the transforming power of the Christian gospel is nonetheless continuing to spread throughout China. It has changed the lives of both the essay’s author and millions of others throughout his native country. Check out the rest of this powerful story in the full article.

GDP Per Capita: United States vs. Everyone Else

Economist Mark Perry has put together an eye-opening chart based on data from the Bureau of Economic Analysis and the World Bank that compares GDP per capita (PPP) in the United States (state-by-state) and other countries, including those of Europe. As Perry explains,

Adjusting for PPP allows us to make a more accurate “apples to apples” comparison of GDP per capita among countries around the world by adjusting for the differences in prices in each country. For example, the UK’s unadjusted GDP per capita was $45,729 in 2014, but because prices there are higher on average than in the US (for food, clothing, energy, transportation, etc.), the PPP adjustment lowers per capita GDP in the UK to below $40,000. On the hand, consumer prices in South Korea are generally lower than in the US, so that increases its GDP per capita from below $28,000 on an unadjusted basis to above $34,000 on a PPP basis.

And what does he find?


“As the chart demonstrates,” Perry writes,

most European countries (including Germany, Sweden, Denmark and Belgium) if they joined the US, would rank among the poorest one-third of US states on a per-capita GDP basis, and the UK, France, Japan and New Zealand would all rank among America’s very poorest states, below No. 47 West Virginia, and not too far above No. 50 Mississippi. Countries like Italy, S. Korea, Spain, Portugal and Greece would each rank below Mississippi as the poorest states in the country.

The Cato Institute’s Daniel Mitchell adds a few more points, including the OECD’s Individual Consumption Index:

He concludes,

None of this suggests that policy in America is ideal (it isn’t) or that European nations are failures (they still rank among the wealthiest places on the planet).

I’m simply making the modest — yet important — argument that Europeans would be more prosperous if the fiscal burden of government wasn’t so onerous. And I’m debunking the argument that we should copy nations such as Denmark by allowing a larger government in the United States (though I do want to copy Danish policies in other areas, which generally are more pro-economic liberty than what we have in America).


Good stuff.


European Labor Laws and Radical Islam

The Boston Globe made this interesting observation last week in the wake of the terrorist attack in Brussels:

Long before Tuesday’s terror attacks in Brussels, it was clear that Belgium had become a breeding ground for Islamist extremists. Hundreds of Belgian Muslims — as many as 500, according to one estimate — have gone to Syria and Iraq to fight for ISIS, making Belgium by far Europe’s leading supplier of foreign jihadists. Last November’s horrific slaughter in Paris was masterminded by a Belgian radical, Abdelhamid Abaaoud, and at least four of the men who carried out those attacks were from the Brussels district of Molenbeek. One of them was Salah Abdeslam, who was captured in Molenbeek, after an intense manhunt, on March 19.

For Islamist imams and terrorist ringleaders, such neighborhoods — heavily Muslim, densely populated, with high unemployment and crime rates — have proved fertile territory for recruiting violent jihadists. “There is almost always a link with Molenbeek. That’s a gigantic problem, of course,” Belgium’s prime minister said after the Paris atrocities.

The article continues by explaining that “Muslim communities are not inherently predisposed to violence. The presence of a sizable Muslim population in a non-Muslim-majority country does not inevitably presage jihadist bloodshed or demands for the imposition of sharia. It is true that some 650,000 Muslims live in Belgium, but five times as many — 3.3 million — live in the United States. Why hasn’t America become a hotbed of Islamic extremism? Why aren’t American Muslims by the thousands flocking to fight for ISIS, Al Qaeda, and other terrorist organizations?” Drawing on Pew Research data, the columnist points out that the “United States has been far more successful at assimilating and integrating Muslim immigrants into American society and culture than has Western Europe.” And this is all despite the wars in Afghanistan and Iraq. In other words, “America’s melting pot still works.”

Much of this is surely cultural. But are there any economic factors involved? Journalist and Reason analyst Shikha Dalmia thinks so. “The standard explanation,” she writes, “is that Europe has admitted more Muslims than it can afford to integrate…Failure to spend money on integration means consigning these refugees to segregated Muslim ghettos or banlieues without jobs and without prospects — other than their monthly welfare check — where they become sitting ducks for radicalization.” But this narrative is flawed:

Immigrants don’t need job programs. They need jobs. And, for a variety of reasons, Europe provides much more of the first and America much more of the second. Europe has an army of social workers in various NGOs whose job is to prepare immigrants for jobs. Not so much in America, which may be partially why America has a far better assimilation track record than Europe. Jobs offer immigrants not just a paycheck, but also an entry into their new society, providing them with both the means and motive to learn its language and customs, all of which eliminates the need for formal programs. What is striking in any conversation with Syrian refugees in America is just how ready and willing they are to take just about any job, no matter how lowly or arduous…Yet many European countries have gone out of their way to deny or severely limit job opportunities for asylum seekers and refugees.

…Even after refugees obtain work permits, their upward mobility is greatly restricted in Europe, thanks to the exceedingly rigid labor market in many countries. The unemployment rates of France and Belgium are nearly twice that of the United States. This dismal job market affects immigrants much more than the native born, thanks to Europe’s tough minimum wage laws and other labor regulations that protect incumbents at the cost of newcomers…Europe’s tough hiring-and-firing provisions, demanded by labor unions, are poison for immigrants. Why? Because immigrants inevitably involve more risk and uncertainty than natives, and if employers can’t fire them, notes George Mason University’s Alex Tabarrok, they won’t hire them either. It is not surprising that Muslims in France, which has some of the most protective labor laws in the industrialized world, are two-and-a-half times less likely to receive job interviews than non-Muslims.

This counterintuitive explanation is worth considering.



After the Cultural Revolution

One of the most surprising things about Cixin Liu’s award-winning science fiction novel The Three-Body Problem was its direct and unflinching portrayal of China’s Cultural Revolution. The descriptions of bloody civil war and widespread oppression of academic intellectuals was not what I expected from a novel that was first published in China, and the specific dialogue as student protesters harangued a physics professor for daring to teach special relativity was at once chilling and fascinating. In some ways, there are elements of the excellent sequel (The Dark Forest) that are even more haunting. The way that an author who is so willing to stare the political doublethink of the Cultural Revolution directly in the face has no qualms about positively describing the important role that political officers would play in a modern (presumably less totalitarian) Chinese military shows, to me, how deeply embedded some of the assumptions that led to the Cultural Revolution still remain. So many things that do not seem political to use are that way purely because nobody has bothered to politicize them. But physics, like anything else, can be and has been politicized.

And then just a couple of weeks ago, I saw this fascinating article in Foreign Policy about an obscure Chinese folk singer (Yang Le) who was allowed–on national television–to sing about the personal costs to his family of the Cultural Revolution. The article notes that “Yang’s song likely made the cut, even earning accolades in a November 2015 article by Communist Party mouthpiece People’s Daily, by focusing on emotion rather than details, telling a family rather than a political story, and declining to place blame.” Here is a video for you to watch, and then the lyrics (translated into English by Foreign Policy) after:

When I was small
A family of six
Older brothers and sisters, I was the youngest
Dad was handsome and brave
Mom was young and beautiful
They worked earnestly, and were kind-hearted

After the Cultural Revolution, only five were left.
Dad suffered a wrong, he passed on first.
Mom had no choice, she married someone from a different place.
My siblings went up to the mountains and down to the countryside.

From that time on, our family was dispersed.
Brothers and sisters to the four corners of the earth.
At each holiday, we could only send distant greetings
Distant greetings
Distant greetings

Many years later, looking back again,
Brothers and sisters, no need to comfort each other
We all remember, Dad wanted us to be honest and kind
We should never change
We remember, Mom wanted us to be strong
And happy
Even today
We sing Dad and Mom’s favorite song
Strong and happy
Kind and honest
We sing Dad and Mom’s favorite song
Good and kind
Living happily