>And I think there’s a more general point here. There are lots of ways to enrich specific groups of people with supply-side restrictions. If you don’t let foreign computer programmers move here, that boosts earnings for native programmers. If you don’t let people build new houses, that boosts the wealth of incumbent homeowners. If you don’t train more doctors, that boosts earnings for doctors. If you ban port automation, that boosts earnings for longshoremen. But you can’t make the country as a whole richer with these piecemeal handouts for everyone — the more you try to add up supply constriction, the poorer everyone gets.
This makes way too much sense but too many Americans are self centered and short sighted to support politicians with general policies like this unless they appeal to them personally. People want to feel like they are personally getting something, or are being protected. It drags down everything else imo. The catering to specific groups also inevitably means that you will leave a group out and then they will get butthurt.
With decades of experience in the tech industry, including managing onshore and offshore contract ("outsource") engineers, I think Matt is incorrect when he makes this statement:
"The worker’s work is just so much more valuable to the outsourcing company if he can be located in the United States that it’s worth paying him dramatically more."
Au contraire, the contracting company can charge the hiring company more for an onshore engineer, whether or not that person is indeed more productive or valuable than their offshore colleagues. And the combination of US laws, competing employers, and employee expectations forces the company to pay the onshore engineer more during the onshore engagement.
Also keep in mind that global differences in compensation have decreased dramatically in the last couple of decades, so the 2x (or less) is more likely now than 6x.
Working in Big Tech has shown me how dependent it is immigration. I would say around 2/3 of my team is foreign-born, mainly from India and China. I haven’t quizzed everyone on their immigration status but most people are/were using H1Bs. Incidentally, several of my coworkers have had to move to Canada because they later lost the H1B lottery, but they manage to do the exact same job from there, but with much lower wages.
I understand the employees are tied to an employer. If they really have valuable skill, we should want them to stay and make it easier to do so. With family.
One thing about the "unskilled": they are not just random unskilled people. In many cases, they are people that have the drive and determination to endure hardship to go to a foreign country where maybe they do not even speak the language. As such, they display more determination than people who live in depressed areas of the US but won't move to where the jobs are.
Is this purposely obtuse? Who cares that the H1B doesnt decrease average wages, which includes the dude doing retail in nebraska? It obviously reduces both wages and demand for americans in that field... which leads to more unemployment and reduced wage growth overall.
Averages always dilute the effect of anything, thats a meaningless comparison
Speaking of housing scarcity, Matt, I'd be curious about your thoughts on raising the capital gains exemption for homes (currently $250,000 for singles and $500,000 for married couples). To be sure, the direct beneficiaries would be rich people, but in wealth metro areas, I suspect there are lots of affluent seniors who are "retiring in place," using up big homes that would better serve the needs of young families, in part because they don't want to sell and take the tax hit. If they pass the home to their kids when they die, the tax bill disappears. So should Congress raise this limit in the reconciliation bill this year? To at least keep up with inflation?
It occurred to me that the best way to improve the H-1B visa program would be to ditch the random lottery and simply allocate the 85k visas to the highest salaried 85k applications. This would effectively serve as a merit screen without requiring any extra administrative labor.
The “highest bidders” would be the highest value uses of the visas. This would accomplish the same goal as raising the salary floor, but even better.
I think a key thing is to make it easier to switch jobs once in the country. Restricting demand reduces price, so we should expect H1-B visa holders to make less than the market wage (this is the "indentured servant" line), creating an incentive to hire H1-Bs over citizens or green card holders (if you've learned how to navigate the system). A more radical reform that codes as pro-immigration but I think in practice would be pro-native* as well would be to assign the visas directly to the person, not the job.
In light of this post I can't help but think of the now ill-fated Trudeau administration. I know Slow Boring is a US focused publication (except for the Hapsburgs I guess,) but I hope we'll see a guest post on our northern neighbors.
Good article. Where there is an obvious shortage of workers in a necessary field it makes sense to import workers. We have a nursing shortage that without a huge immigration of Filipinas would put hospitals in very bad shape.
But in my field of endeavor, medicine, I see a corrosive effect of favoring high end workers simply because public policy fails to educate enough qualified Americans.
I see the US tradition as taking the poor huddled masses like my grandparents coming in 1910 working in sweatshops and having their grandchildren rise through the ranks.
What the selective high end immigration does is take the cream off the top of countries that themselves don't have enough doctors, creating a brain drain. Often in countries that tend to have less social mobility than the US (at least previously, we have had decreasing mobility of late) often these people come from the privileged classes who could do well in their own country, and they create in this country a priviliged immigrant class with resentful Americans who have to take the low end jobs.
In the case of medicine, there are plenty of qualified American applicants, just not enough slots, Being the wealthiest country in the world, you would think that we would not need to rely on poor countries to steal their doctors.
On the other hand, on the low end, construction, farming, could not exist without foreign, primarily Mexican labor, and this affords immigrants who would have very difficult lives in their home country access to the American dream as opposed to the wealthy engineers and doctors from abroad. We may need the HB1s in the short term, but imo it is malfeasance to not train our own people for these jobs.
I couldn’t agree more. I think Canada made a few mistakes with their immigration changes, but one of the biggest and most underdiscussed was over focusing on “high skilled” immigration. When coupled with their housing crisis and inability to build, you had Canadians competiting against similar economically situated immigrants for housing. While I still think the country still may have benefited from them, it drove alot of resentment and alot of the issues we see with diploma mills.
What Canada didn’t do was also allow “lower skilled” immigrants to work in healthcare, childcare, agriculture, construction, and other “less skilled” fields.
I dislike the argument to switch to a fully points based or skill based system precisely because we also need a whole lot of people working in construction and other sectors too. And there are lots of immigrants who would be net contributors who aren’t just in programming.
Dave, yes, and I think the consequences is that you have a poor less skilled American or Canadian cohort, ex factory workers. miners etc. on the low end and resentful of the rich foreigners like you see in Vancouver buying up all the property and forcing out the locals.
I see immigration as both beneficial to the country, so I am OK with allowing certain skilled labor that is in a shortage, even on the high end, though it is the responsibility of the country to train enough high end workers, but also that immigration should be compassionate and bring people out of the poverty of their countries as with my grandparents.
I work in the software engineering field, and a lot of the people I directly work with are on H1-B Visas. If H1-B did not exist, the result would not be lesser-qualified native born Americans taking the jobs instead, it would be the jobs, themselves, moving to India or China, allowing the company to hire the more qualified people where they are. And, what jobs did remain in the U.S. would likely pay less because the quality of the average person taking them would be lower. So, if the idea that limiting immigration is suppose to boost the pay of native-born employees, it doesn't (at least not in the tech industry) - if anything, it would have exactly the opposite effect!
In the manufacturing world, government can counter the above argument with tariffs. But, you can't tariff software, and even if you could, our products are used all over the world, and the retaliatory tariffs that all the other countries would enact in return would just make it difficult for our company to sell its products anywhere.
One question is why aren't we training enough people. On the one hand you have a student loan crisis where everybody that majors in some less needed major, sports marketing, whatever, can get loans only to default on them when the salary is not there for that major, while we are not training enough software engineers.
I don't favor scrapping the loan program, but we need more government support for needed specialties and less for those that will not support the expense of the education.
I'll note that CS majors are now (from memory) somewhere between 3-5x of the student body proportion at Stanford as they were in 2006. So we are definitely trying. The growth _in demand_ has just been insane.
I think if sports marketing majors were smart enough to graduate with a CS degree they would. Despite the protestations of the "just learn to code lol" crowd there is a baseline of talent needed to enter the field.
Not sure what CS is. I dont oppose bringing in people with needed skills, but I think more important is adjusting our educational system so that we are training enough people for the needs of the country.
I see it as problematic in the well paying specialties that we are bringing in people from abroad rather than training Americans for those jobs.
CS=Computer Science sorry. I saw your comment in another thread that in the medical field could use lower-performing (3.6 vs 3.7 GPA) US students instead of foreigners. As a consumer of medicine I would prefer to be treated by a smarter immigrant vs. a stupider person that happens to be American by your mileage may vary.
What you are being treated with includes dumber Americans who couldnt get into a US medical school so went to the Caribbean or the other common end run to go to osteopathy school which numbers equal to the foreign grads.
I dont know that there is any metric to compare intelligence of foreign grads, there are different systems and metrics but yes we could cherry pick the entire worlds smartest people and let them run the country like Saudi Arabia does, but I have the notion that we ought to take care of ourselves, and I don't think that somebody with a 3.6 average is unqualified. Let the Indian doctors treat their own country where there is one fifth of the amount of MDs per capita.
It is funny that the system we have now often compels foreign med grads to spend a year or two in poor areas in the US where they are coming from countries that are many times poorer and underserved medically.
To claim that Americans are not smart enough to supply their own doctors is an odd claim. Are we the new Saudi Arabia where we are incapable of supplying our needs and just rely on foreigners.
I am not anti immigrant. I would rather take poorer Mexican laborers who also are greatly needed here in the trades and can go from being in poverty to middle class, vs usually well to do foreigners who would be well to do in their countries but can make 250K a year here.
It seems from your comments that you work in the medical field, so what you're asking for is protection from immigrants who are willing to work for less money. The traditional backlash against immigration is not from doctors or tech bros but from blue-collar American workers for the same reason (source: https://youtu.be/APo2p4-WXsc?si=z4yQRxbLXJjFjaVv&t=60).
As a consumer, not a provider, of medical services I want more immigration of doctors probably for the same reason you want more immigration of tradespeople - you can hire someone that's more qualified for less money than if you were limited to hiring only American workers.
Matt makes a factual error here. He says if an immigrant worker makes more than an average wage they cannot be reducing the average. Not true. If the immigrant worker is making less than an American worker would than that data point is lower therefore reducing the average (which includes the lower data point even if that data point is higher than the average).
The last paragraph makes the case for ye olde Neoliberalism, but I do want to point out that Matt (and a lot of current/ex-Voxers) continued claim that the AMA/physicians lobbies are blocking increases to the physician pool are just wrong.
I think the fact that there are about 30% more residency slots than there are American medical graduates, that are filled by foreign trained physicians, both foreign grads, or American grads of Caribbean schools, makes little sense.
We need to increase the number of American medical graduates. I wouldn't totally shut down foreign residents as some of the most qualified researchers come from abroad, but I see no logic in the richest country in the world not being able to train their own citizens, many of whom are forced to go to inferior schools abroad because it is too competitive here and they have maybe a 3.6 instead of a 3.7 or come from a state with few schools.
I can't figure out how to paste in graphs, but in the first link, there are multiple graphs that show we've significantly increased the number of medical school graduates. This was done by increasing both the size and number of medical schools. My medical school graduated 60 in 2007, 100 in 2011, and enrolls 200 today.
It's expensive and time-consuming to build medical school capacity, especially the all-important clinical training portion. So while we do that hard work, the medical system is held together by foreign grads - especially in rural and low income areas. I'd rather have more foreign physicians who do at least part of their training here than none at all.
Pras, agree, it is expensive. And in the near term, yes, we will need foreign grads.
But, we are not a poor country. If Antigua can supply us MDs you would think that the US could.
Now, in the short term, yes, we will need foreign grads, but my point is that we need to spend that money and train our supply of MDs rather than indefinitely relying on the rest of the world to supply our doctors. A rich country like the US should be exporting doctors.
That we are increasing the number of grads is good, but is it keeping up with the growth in residency slots which itself are driven by the countries needs for MDs and our increasing population, particularly of the elderly.
I think this underestimates the concern about employer-sponsored visas granting employers control over employees' residencies, and therefore tremendous non-wage leverage. That's Sanders' "indentured servants" line. Beyond the issues in and of itself with this for the worker, it's also another downward pressure on the positions of workers generally within these fields, as a segment of the workforce will always be more precarious and unable to join in on coordinated demands.
I don't have much to add, but to mention that in my experience, the alternative to H1B is not going to be "businesses hire American" -- it's "businesses offshore even more."
Matt’s claim that equality is improved only considers labor wage distribution. The obvious big concern is the transfer of power from native born workers not just to foreign born workers, but to capital. With wealth inequality already at staggering levels, further shifting power from skilled labor to capital seems like it would make inequality worse
>And I think there’s a more general point here. There are lots of ways to enrich specific groups of people with supply-side restrictions. If you don’t let foreign computer programmers move here, that boosts earnings for native programmers. If you don’t let people build new houses, that boosts the wealth of incumbent homeowners. If you don’t train more doctors, that boosts earnings for doctors. If you ban port automation, that boosts earnings for longshoremen. But you can’t make the country as a whole richer with these piecemeal handouts for everyone — the more you try to add up supply constriction, the poorer everyone gets.
This makes way too much sense but too many Americans are self centered and short sighted to support politicians with general policies like this unless they appeal to them personally. People want to feel like they are personally getting something, or are being protected. It drags down everything else imo. The catering to specific groups also inevitably means that you will leave a group out and then they will get butthurt.
With decades of experience in the tech industry, including managing onshore and offshore contract ("outsource") engineers, I think Matt is incorrect when he makes this statement:
"The worker’s work is just so much more valuable to the outsourcing company if he can be located in the United States that it’s worth paying him dramatically more."
Au contraire, the contracting company can charge the hiring company more for an onshore engineer, whether or not that person is indeed more productive or valuable than their offshore colleagues. And the combination of US laws, competing employers, and employee expectations forces the company to pay the onshore engineer more during the onshore engagement.
Also keep in mind that global differences in compensation have decreased dramatically in the last couple of decades, so the 2x (or less) is more likely now than 6x.
Working in Big Tech has shown me how dependent it is immigration. I would say around 2/3 of my team is foreign-born, mainly from India and China. I haven’t quizzed everyone on their immigration status but most people are/were using H1Bs. Incidentally, several of my coworkers have had to move to Canada because they later lost the H1B lottery, but they manage to do the exact same job from there, but with much lower wages.
I understand the employees are tied to an employer. If they really have valuable skill, we should want them to stay and make it easier to do so. With family.
One thing about the "unskilled": they are not just random unskilled people. In many cases, they are people that have the drive and determination to endure hardship to go to a foreign country where maybe they do not even speak the language. As such, they display more determination than people who live in depressed areas of the US but won't move to where the jobs are.
Is this purposely obtuse? Who cares that the H1B doesnt decrease average wages, which includes the dude doing retail in nebraska? It obviously reduces both wages and demand for americans in that field... which leads to more unemployment and reduced wage growth overall.
Averages always dilute the effect of anything, thats a meaningless comparison
Speaking of housing scarcity, Matt, I'd be curious about your thoughts on raising the capital gains exemption for homes (currently $250,000 for singles and $500,000 for married couples). To be sure, the direct beneficiaries would be rich people, but in wealth metro areas, I suspect there are lots of affluent seniors who are "retiring in place," using up big homes that would better serve the needs of young families, in part because they don't want to sell and take the tax hit. If they pass the home to their kids when they die, the tax bill disappears. So should Congress raise this limit in the reconciliation bill this year? To at least keep up with inflation?
It occurred to me that the best way to improve the H-1B visa program would be to ditch the random lottery and simply allocate the 85k visas to the highest salaried 85k applications. This would effectively serve as a merit screen without requiring any extra administrative labor.
The “highest bidders” would be the highest value uses of the visas. This would accomplish the same goal as raising the salary floor, but even better.
I think a key thing is to make it easier to switch jobs once in the country. Restricting demand reduces price, so we should expect H1-B visa holders to make less than the market wage (this is the "indentured servant" line), creating an incentive to hire H1-Bs over citizens or green card holders (if you've learned how to navigate the system). A more radical reform that codes as pro-immigration but I think in practice would be pro-native* as well would be to assign the visas directly to the person, not the job.
*all citizens + green card holders
In light of this post I can't help but think of the now ill-fated Trudeau administration. I know Slow Boring is a US focused publication (except for the Hapsburgs I guess,) but I hope we'll see a guest post on our northern neighbors.
Good article. Where there is an obvious shortage of workers in a necessary field it makes sense to import workers. We have a nursing shortage that without a huge immigration of Filipinas would put hospitals in very bad shape.
But in my field of endeavor, medicine, I see a corrosive effect of favoring high end workers simply because public policy fails to educate enough qualified Americans.
I see the US tradition as taking the poor huddled masses like my grandparents coming in 1910 working in sweatshops and having their grandchildren rise through the ranks.
What the selective high end immigration does is take the cream off the top of countries that themselves don't have enough doctors, creating a brain drain. Often in countries that tend to have less social mobility than the US (at least previously, we have had decreasing mobility of late) often these people come from the privileged classes who could do well in their own country, and they create in this country a priviliged immigrant class with resentful Americans who have to take the low end jobs.
In the case of medicine, there are plenty of qualified American applicants, just not enough slots, Being the wealthiest country in the world, you would think that we would not need to rely on poor countries to steal their doctors.
On the other hand, on the low end, construction, farming, could not exist without foreign, primarily Mexican labor, and this affords immigrants who would have very difficult lives in their home country access to the American dream as opposed to the wealthy engineers and doctors from abroad. We may need the HB1s in the short term, but imo it is malfeasance to not train our own people for these jobs.
I couldn’t agree more. I think Canada made a few mistakes with their immigration changes, but one of the biggest and most underdiscussed was over focusing on “high skilled” immigration. When coupled with their housing crisis and inability to build, you had Canadians competiting against similar economically situated immigrants for housing. While I still think the country still may have benefited from them, it drove alot of resentment and alot of the issues we see with diploma mills.
What Canada didn’t do was also allow “lower skilled” immigrants to work in healthcare, childcare, agriculture, construction, and other “less skilled” fields.
I dislike the argument to switch to a fully points based or skill based system precisely because we also need a whole lot of people working in construction and other sectors too. And there are lots of immigrants who would be net contributors who aren’t just in programming.
Dave, yes, and I think the consequences is that you have a poor less skilled American or Canadian cohort, ex factory workers. miners etc. on the low end and resentful of the rich foreigners like you see in Vancouver buying up all the property and forcing out the locals.
I see immigration as both beneficial to the country, so I am OK with allowing certain skilled labor that is in a shortage, even on the high end, though it is the responsibility of the country to train enough high end workers, but also that immigration should be compassionate and bring people out of the poverty of their countries as with my grandparents.
I work in the software engineering field, and a lot of the people I directly work with are on H1-B Visas. If H1-B did not exist, the result would not be lesser-qualified native born Americans taking the jobs instead, it would be the jobs, themselves, moving to India or China, allowing the company to hire the more qualified people where they are. And, what jobs did remain in the U.S. would likely pay less because the quality of the average person taking them would be lower. So, if the idea that limiting immigration is suppose to boost the pay of native-born employees, it doesn't (at least not in the tech industry) - if anything, it would have exactly the opposite effect!
In the manufacturing world, government can counter the above argument with tariffs. But, you can't tariff software, and even if you could, our products are used all over the world, and the retaliatory tariffs that all the other countries would enact in return would just make it difficult for our company to sell its products anywhere.
With the concomitant loss of productivity. You cannot argue that people in Asia (South & East) can be as productive doing work as on-shored.
(Yes, I too work in software, and the difficulties of coordinating and working with offshore teams are huge.)
One question is why aren't we training enough people. On the one hand you have a student loan crisis where everybody that majors in some less needed major, sports marketing, whatever, can get loans only to default on them when the salary is not there for that major, while we are not training enough software engineers.
I don't favor scrapping the loan program, but we need more government support for needed specialties and less for those that will not support the expense of the education.
I'll note that CS majors are now (from memory) somewhere between 3-5x of the student body proportion at Stanford as they were in 2006. So we are definitely trying. The growth _in demand_ has just been insane.
Edited to add "in demand".
So that's an additional, what, 250 kids a year? That's basically nothing.
Clarified my comment. I assume the same is happening across many places, so the supply side is changing, but the demand has been massive.
All of this may of course change as increasing AI capabilities & spread hit.
I think if sports marketing majors were smart enough to graduate with a CS degree they would. Despite the protestations of the "just learn to code lol" crowd there is a baseline of talent needed to enter the field.
Not sure what CS is. I dont oppose bringing in people with needed skills, but I think more important is adjusting our educational system so that we are training enough people for the needs of the country.
I see it as problematic in the well paying specialties that we are bringing in people from abroad rather than training Americans for those jobs.
CS=Computer Science sorry. I saw your comment in another thread that in the medical field could use lower-performing (3.6 vs 3.7 GPA) US students instead of foreigners. As a consumer of medicine I would prefer to be treated by a smarter immigrant vs. a stupider person that happens to be American by your mileage may vary.
What you are being treated with includes dumber Americans who couldnt get into a US medical school so went to the Caribbean or the other common end run to go to osteopathy school which numbers equal to the foreign grads.
I dont know that there is any metric to compare intelligence of foreign grads, there are different systems and metrics but yes we could cherry pick the entire worlds smartest people and let them run the country like Saudi Arabia does, but I have the notion that we ought to take care of ourselves, and I don't think that somebody with a 3.6 average is unqualified. Let the Indian doctors treat their own country where there is one fifth of the amount of MDs per capita.
It is funny that the system we have now often compels foreign med grads to spend a year or two in poor areas in the US where they are coming from countries that are many times poorer and underserved medically.
To claim that Americans are not smart enough to supply their own doctors is an odd claim. Are we the new Saudi Arabia where we are incapable of supplying our needs and just rely on foreigners.
I am not anti immigrant. I would rather take poorer Mexican laborers who also are greatly needed here in the trades and can go from being in poverty to middle class, vs usually well to do foreigners who would be well to do in their countries but can make 250K a year here.
It seems from your comments that you work in the medical field, so what you're asking for is protection from immigrants who are willing to work for less money. The traditional backlash against immigration is not from doctors or tech bros but from blue-collar American workers for the same reason (source: https://youtu.be/APo2p4-WXsc?si=z4yQRxbLXJjFjaVv&t=60).
As a consumer, not a provider, of medical services I want more immigration of doctors probably for the same reason you want more immigration of tradespeople - you can hire someone that's more qualified for less money than if you were limited to hiring only American workers.
We seem to have a glut of software engineers at the moment.
Matt makes a factual error here. He says if an immigrant worker makes more than an average wage they cannot be reducing the average. Not true. If the immigrant worker is making less than an American worker would than that data point is lower therefore reducing the average (which includes the lower data point even if that data point is higher than the average).
The last paragraph makes the case for ye olde Neoliberalism, but I do want to point out that Matt (and a lot of current/ex-Voxers) continued claim that the AMA/physicians lobbies are blocking increases to the physician pool are just wrong.
Medical school graduates have been increasing for 20 years now (https://www.niskanencenter.org/the-planning-of-u-s-physician-shortages/) and the AMA has been calling for increasing the physician pool for a while as well ( https://www.ama-assn.org/press-center/press-releases/ama-president-sounds-alarm-national-physician-shortage ).
I think the fact that there are about 30% more residency slots than there are American medical graduates, that are filled by foreign trained physicians, both foreign grads, or American grads of Caribbean schools, makes little sense.
We need to increase the number of American medical graduates. I wouldn't totally shut down foreign residents as some of the most qualified researchers come from abroad, but I see no logic in the richest country in the world not being able to train their own citizens, many of whom are forced to go to inferior schools abroad because it is too competitive here and they have maybe a 3.6 instead of a 3.7 or come from a state with few schools.
I can't figure out how to paste in graphs, but in the first link, there are multiple graphs that show we've significantly increased the number of medical school graduates. This was done by increasing both the size and number of medical schools. My medical school graduated 60 in 2007, 100 in 2011, and enrolls 200 today.
It's expensive and time-consuming to build medical school capacity, especially the all-important clinical training portion. So while we do that hard work, the medical system is held together by foreign grads - especially in rural and low income areas. I'd rather have more foreign physicians who do at least part of their training here than none at all.
Pras, agree, it is expensive. And in the near term, yes, we will need foreign grads.
But, we are not a poor country. If Antigua can supply us MDs you would think that the US could.
Now, in the short term, yes, we will need foreign grads, but my point is that we need to spend that money and train our supply of MDs rather than indefinitely relying on the rest of the world to supply our doctors. A rich country like the US should be exporting doctors.
That we are increasing the number of grads is good, but is it keeping up with the growth in residency slots which itself are driven by the countries needs for MDs and our increasing population, particularly of the elderly.
I think this underestimates the concern about employer-sponsored visas granting employers control over employees' residencies, and therefore tremendous non-wage leverage. That's Sanders' "indentured servants" line. Beyond the issues in and of itself with this for the worker, it's also another downward pressure on the positions of workers generally within these fields, as a segment of the workforce will always be more precarious and unable to join in on coordinated demands.
I don't have much to add, but to mention that in my experience, the alternative to H1B is not going to be "businesses hire American" -- it's "businesses offshore even more."
These visas protect US jobs at this point.
Matt’s claim that equality is improved only considers labor wage distribution. The obvious big concern is the transfer of power from native born workers not just to foreign born workers, but to capital. With wealth inequality already at staggering levels, further shifting power from skilled labor to capital seems like it would make inequality worse