The arithmetic fallacy

One of the arguments brokered against immigration is that an influx of immigrant labour reduces average wage levels within a country.

Let’s say that the average height of a professional basketball team is 6 feet and 2 inches. Now a team of primary kids enters the field, plunging the average height to 5 feet. However, the pros aren’t at any disadvantage now, despite the group’s average height being lower. They can still utilize their full height while dunking.

An influx of immigrants does drop average wage. But at an individual level, it has been shown that everybody earns a slightly higher wage – the immigrants are paid better than their home country (which is why they migrated in the first place), and this influx frees up the locals secure better positions – such as leading a team of freshly recruited immigrants.

Say the average wage in a town is $50,000. The influx of immigrants brings this average down to $45,000. But despite this, the local average might rise to $55,000 with the avarege immigrant wage being $25,000. Despite the average wage going down, everybody, including the locals, is better off.

The flipside happens when a rich millionare moves into the town. This person alone could single-handedly increse the average income by $10,000, without anybody being better off.

You fall for the arithmetic fallacy if you merely consider the average numbers without paying heed to individual numbers.

Inspiration: Open Borders