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Comment by GlennS | Hacker News Reader

> As a bonus you can replace cheeseburgers with labor and they will say "lump of labor fallacy".

The trouble with this simple and seeming obvious hypothesis and labour (by which I assume you mean immigration) is that labour sits on both sides of the equation.

If you increase the supply of labour, then you're also increasing demand of all the things the immigrants consume, which means you're increasing the demand for labour.

(How much you're increasing each side of the equation - and how long each side takes to adjust - left as an exercise for the reader.)

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> then you're also increasing demand of all the things the immigrants consume, which means you're increasing the demand for labour.

How much of what you consume is even produced domesticly anymore? Take a look around the room you are in. The immigrant now with more money may decide to buy themselves a iPhone and that probably helps someone in China who would like a job assembling them but it still drives down the cost of labor locally. Much of the services immigrants use domesticly will be low margin, like grocery stores and restaurants adding little to the domestic economy.

Exactly the same arguments apply against claims that low-skilled migrants have much impact on wages though. They tend to work in low margin industries which compete internationally against imports from countries which pay lower wages, the existing domestic workforce has little negotiating power or ability, and often the jobs they take are either already at a minimum wage level so their existence literally can't depress it any further, or can't be filled at any reasonable wage level.

Not all their additional consumption goes to the US economy and they only pay a little bit of tax, but they don't need to have very much impact on consumption and production to offset the impact of their slightly lower wage demands.

The high margin that Apple makes is domestic (if you are talking US. Europe is a different matter). Foxconn isn't getting that margin.

Plenty of people in the US were involved in getting that iPhone to the person who bought it. Hardware and software engineers at Apple, distribution center employees, truck drivers, customer service reps at the AT&T or Verizon store where many people still buy their phones. Even some of the internal parts of an iPhone are manufactured in the US.

Just because many goods are assembled internationally does not mean that buying those goods does not stimulate the US economy in any way.

> labour (by which I assume you mean immigration)

Why would that be the assumption? Labor supply varies due to all sorts of things - childcare availability; education and skills; internal migration, which ties into things like housing markets; population growth and demographics; productivity and availability of capital; with remote working, even things like access to high speed internet affects the available labor pool... it's not just 'how many warm bodies are inside the border?'

> Why would that be the assumption?

I thought the phrasing of the person I was replying to implied they were grinding that particular axe.

Of course there are more complex things to discuss here, and in practice reality here is not yet modelled successfully with maths, so we certainly won't figure it out with verbal reasoning.

I was just a bit disappointed with their obvious-yet-probably-not-correct argument, and felt maybe I could respond in a way that made them think it through a bit more.

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