Immigration in the US has been on the rise and can be dated back to the 15th century when there used to be massive human trafficking to the United States and the end of World War II. Today, the United States is home to the largest immigrant populace in the world. This immigration has sparked debates in the United States with a section of the leaders terming it as illegal. Much of these debates are centered on culture as well as the economic effects. Furthermore, the labor force has also become a center of focus when it comes to immigration. The rough estimate from the department of immigration in the US stands at 44 million both legal and undocumented immigrants in the United States today (Borjas, 13).
However, their impact on the economy owes two perceptions, that is, it can either be positive or negative. Somehow, the overall perception is that the immigrants assume the jobs that have been compromised by the Americans. The Americans do not want to compete for the same jobs with the immigrants and therefore, there has not been a significant change in the wage rate. Nevertheless, for a low-skilled job, the immigrants lower the wages by close to five percent. Additionally, the Americans who compete for these jobs with the immigrants will receive $26 dollars weekly if the immigrants were to be severely cut. Nevertheless, in this research, I will consider the economic benefits of immigration in the United States. The central focus is the economic benefits of immigration to the United States.
Adequate Labor Supply
Immigration increases the supply of labor and consequently, keep the average wages from falling over a long-term. Due to immigration, the firms increase the investments due to increased labor supply. The increment in investment offsets any reduction in capital per working head. A research conducted by the US census bureau indicates that the immigrants are always considered imperfect substitutes for labor offered by the Native Americans in the labor markets. The implication is that they do not offer stiff competition to the Americas for the same jobs. As a result, there is a minimum pressure on the native wages (Ottaviano, 17). The new immigrants are only considered to offer competition to their counterparts who had settled earlier in the US since they compete for the same jobs. They experienced a significant reduction in the wages forms the surge of immigration. Other contrasting studies also show that immigration has raised the averages of the native-born Americans close to ten years ago. Due to the increased labor supply, the industrial sector in the US has increased its employability and consequently, production. High production may imply high consumption and thus increased dollar supply in the markets. The immigrants also spend their wages by purchasing American made products. This means that if there is high labor supply as a result of immigration, then there is high consumption since the immigrants can now achieve the purchasing power to obtain these products. As a matter of facts, the industrial revolution in America was propelled by the cheap labor offered by the immigrants.
High Levels of Innovation
Immigration has led to increased levels of innovation in the United States. As mentioned earlier, the presence of immigrants in the US has created an opportunity for the less skilled native-born American workers to shift focus from the jobs which are competitive by the immigrants in order to specialize in their work. This specialization in the job market has led to several inventions in technology hence increasing productivity. It will, therefore, mean that everyone including the less skilled Native Americans finds a space in developing the economy of US. As a result, there was no significant change in the trend components building up the Log-Capital labor ratio as from 2013 according to the US Bureau of Labor Statistics. As immigrants continued to splash in the US, the change in labor ratio was negligible because even the less skilled Native Americans were factors of production in the US (Hanson, 29). With regards to the education level of the immigrants, there are two types of immigrants, the immigrants without the high degree and those on the other end with college or postgraduate degrees. The immigrants with postgraduate and college degrees play a pivotal role when it comes to technological innovations than their native counterparts. Moreover, some of the immigrants who are highly educated, still face communication hitches and so they are less likely to take jobs that require strong communication skills, and as a result, they are mostly absorbed in the scientific and technical jobs that do not require high communication skills, increasing the levels of technological innovations. Therefore, the immigrants have a positive impact on the fiscal budget due to increased technology in production processes.
Increased Gross Domestic Product and National Income
Immigration has resulted in an increase in the overall gain to the Gross Domestic Product (GDP) and national income as well as generating positive wage effects for low skilled native- Americans. A resultant effect of the labor supply is the increased levels of production as mentioned earlier. This only possible if the immigrants themselves possess production skills which will enable them to be part of the production processes in the US. As a result of increased labor supply, there is increased GDP and the national income at large. In terms of the wages, the wage losses for the unskilled native workers is usually less than the wage gain for the highly-skilled workers producing net benefits. The increased demand for the immigrants’ labor also tends to drive up the wages. As mentioned earlier in this research, the low-skilled Native Americans would find an opportunity to socialize in their areas of production (Furchtgott-Roth, 5). By so doing, their wages increase resulting in a positive deviation in the Gross National Income (GNI). As a result of the positive effects in the economy, there are some laws which have been drafted to incorporate the immigrants in the daily economic running in the US. The law allows for the issuance of temporary visas to newly skilled immigrant workers. However, the issuance is limited to 86,000 immigrant workers annually. This law suggests that even the government of the US is convinced to some extent that truly there is benefit accrued as a result of the immigrants.
The viewpoint that challenges my thesis is that the lower wages paid to the immigrants can consequently lead to lower prices for American consumers in the industries such as restaurants. This could lead to such industries incurring losses (Ottaviano, 18). This argument perhaps will present a different view and possibly contribute to the disadvantage of having immigrants in the US. This argument is however baseless and lacks credit. This is because if we have an immigrant influx in the US, there would be increased labor supply as mentioned and increased innovations. The results of all these are increased wage rates and increased production of goods and services. Taking an example of the agricultural sector from where the hotel industry generates of its raw materials, increased labor supply would imply increase production and consequently cheap prices for the products since they are produced in surplus. So there would be a balance between cost of production and the returns.
To conclude my research, there are several sources that I used in this work which were of great importance. The sources included the peer-reviewed sources, the data existing in the United States database for the Bureau of Labor Statistics and the US Census Bureau. All the information provided in this research are therefore regarded as reliable and merits the authenticity with regards to their sources. All the sources used in this research work supported the idea that the immigrants in the US benefit the nation in many ways. They increase the labor supply to the industries and firms, the increase the levels of technological advancements in the US and they contribute towards a positive GDP growth rate and a positive National Income indicator (Hanson, 50). However, through this research, I encountered various challenges which conclude communication barrier among the immigrants themselves which limited the information retrieved. Some of the industries where these immigrants worked were also far apart which contributed to high financial demands. This research, however, did not take into considerations, the various data analysis of the immigrant from the establishment of the national origin quotas with the Immigration Act of 1924 to date. This weakness was identified and will form the basis of future research on this topic.
- Borjas, George J. Heaven's door: Immigration policy and the American economy. Princeton University Press, (2011): 11-17
- Furchtgott-Roth, Diana. "The economic benefits of immigration." Issue brief 18 (2013). Pp 4-6
- Hanson, Gordon Howard. The economics and policy of illegal immigration in the United States. Washington, DC: Migration Policy Institute, (2010): 23-54
- Ottaviano, Gianmarco IP, and Giovanni Peri. "Rethinking the effect of immigration on wages." Journal of the European economic association 10.1 (2012): 15-19.