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Enough chairs to go around: Immigration and employment

Most of us would have played the game of musical chairs when we were younger. The game is simple. There is a fixed amount of chairs and there are always more people than chairs. Music plays and the players circle the chairs. When the music stops everybody tries to sit on a chair and those who fail are eliminated from the game. Whilst I have nothing against this game, having derived much entertainment and joy from it as a child, it is problematic when people view the labour market as a game of musical chairs.

The musical chairs analogy came from an Athenian economics professor named Antigone Lyberaki in a recent IQ2 debate on EU immigration. She was arguing against the motion that “Europe should shut the door on immigration” and made the point that most politicians misunderstand the relationship between immigration and employment. Many politicians view the labour market as a game of musical chairs. Lyberaki pointed out that the distinguishing feature is that in musical chairs the number of chairs is fixed whereas the number of jobs in an economy is not fixed.

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Should you be studying?

From discussing the possibilities of making tertiary education more accessible, I now segue to the other side of the debate: Are there too many people getting university degrees, and are they worth it?

The issue is exacerbated in the US, where the stakes are so much higher. A college education not only incorporates all the learning during the years of your degree, but is also the quintessential cultural experience of every middle-class youth: from madly rushing fraternities, to playing beer pong at the pre-football match tailgate party, to sharing the best places on campus for an all-nighter before finals – there comes a time in every man’s life, and college is not that time. But behind all the fun are the hours spent working and the years of family planning to accumulate the college fund necessary to pay for the degree.

Peter Theil, American entrepreneur, venture capitalist, hedge fund manager, first outside investor in Facebook and all-round success-story offers his two cents:

“Education is a bubble in a classic sense…It’s basically extremely overpriced. People are not getting their money’s worth…And at the same time it is something that is incredibly intensely believed; there’s this sort of psycho-social component to people taking on these enormous debts when they go to college simply because that’s what everybody’s doing.”1

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The Profitable Orientation

“It is no longer economically viable to continue manufacturing here.” These are words which we have become increasingly desensitized to, and now expect from large companies in many industries. Resentment towards the faceless foreign factory workers who stole our jobs has largely died down, and has been replaced by arguments over how best to protect those remaining jobs (think, car subsidies).

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