Immigration Impact in the US Economy
Migration of people from one country to another is inevitable. This crossing of borders can be attested to several factors such as, search for better education, seeking refuge due to political instability in the host nation, hope for better standards of living due to poverty and economic hardships, government oppressions even religious intolerances. Migration, therefore, has an international impact affecting both host countries and the countries that they immigrate to as stated by Kerr and Kerr “Over 175m people, accounting for 3% of world’s population, live permanently outside their countries of birth” (Kerr and Kerr 2). There is an obvious impact brought about by migrations. This is best observed from an economical point of view. For instance, recent studies over the last two decades in the United States (US) have been able to give economic implications of immigration. These highlight both long term and short-term impacts.
In light of the current economic state of the country, higher priority is seen to be given to the short-term implications of migration, as opposed to the long-term effects. This is because the short term effects are seemingly seen and felt faster than the long-term ones. There are obvious questions that arise from assimilation of immigrants. Such questions are like how fast will the new labor be assimilated into the already existing local workforce? What educational level and skills level do they have? Are these impacts positive or negative given the current state of the economy? For the most part, these questions have remained unanswered. From recent comprehensive surveys, the implications for the short-term impacts have been established.
The effect of immigration is dependant of several variables within the economy. This difficulty is clearly seen in the variation of immigration numbers, productivity levels of those immigrants and the entry into competitive markets. For higher accuracy in immigration impacts, isolation was necessary. Production output was key when relating to variance in immigration numbers, such as does high inflow of immigrants mean higher production output and vice versa. Isolation for Border States was reviewed since the proximity to the border meant higher influx of immigrants compared to in-country states. The immigration settlement patterns still affect the measure of the impact of the economy, and are best seen through such differences. The comparison is made directly between the Border States and in-country states.
The measure of impact is seen through factors like, employment income and Goal Development Product (GDP). The higher the productivity levels of the immigrant employee, the higher their pay. This is because they are of high value to the company. The rate of employment growth is directly affected by immigration inflow. If the local American is not affected by the employment of the immigrant, then there are more employment opportunities. However, if there are lower employment opportunities and the number of immigrants getting jobs is still higher, then it is evident that some of the locals were edged out. This leads to a direct displacement of job opportunities for the Native American worker.
Immigration also directly affects the productivity of the firm and the employees’ income as it is dependent on the physical output per worker. This refers to the amount of equipment one can use within a given time. Higher adaptation increases the productivity meaning that investors can do this faster. Consequently, this results in faster expansion of the firm as employees are effectively maximizing the available resources. There is a clear ripple effect on other businesses, as they need to meet the growing demand of various firms. Another of impact of immigration is measured by the amount of hours an individual puts into the job. The increased number of hours worked by individuals across the country, results in a high labor output. This directly affects the wages thus creating higher average earnings. This acts as a motivation factor as more work is done within a day due to a higher wage pay. This has a greater impact in the economy as the collective work labor was higher.
Lastly, productivity of all factor combination is useful since it is used to gauge the efficiency by the combination of these factors over time the immigrants acquire several skills while improving in already existing set of skills. This leads to specialization of task specific jobs, as a result, increasing production efficiency. This is in regards to less skilled personnel as they learn on the job while they acquire new skills. As a result, this improves the range and quality of products. The more learned and qualified immigrant personnel contribute in the field of research, science and other technologically advanced fields. They contribute in innovative engineering and technologies and as a result, improve their way of life through innovations.
From the documented studies, three main patterns are crucial to mention.
Immigrants venturing into the market place do not crowd out the natives, as there is hardly any evidence to support this. Being a short-term effect, over a period of less than three years, there is very little displacement of native personnel from the job market as this indexing is close to zero. As a long-term effect, the employment of immigrants leads to a more positive impact on the economy as the number of hours put in per worker is similar. The bigger implication over seven years is that there are similar outputs for both the native personnel and the immigrants. This means that there is almost negligible competition for the same jobs.
Secondly, over a long period, there is a general increase in wage pay for the native personnel due to immigration laborers. Increase in wages is directly proportional to the increase in immigrant labor. Statistically,” For every 1% increase in labor force there was an approximate 0.26%.increase of wage” (Giovanni 10). These percentages increase over longer periods, a clear indication that wage increase resulted from a four times growth in workforce labor. This is a positive impact on the economy as it signifies improvement of existing livelihoods. This was seen during the years of 1990 to 2006. The sixteen-year difference confirms it as a long-term effect.
Thirdly, there is an increase in total output productivity, though this is evident in three phases, the short term, medium term and long term effects. Initially, due to high immigration inflow, there is low physical capital for every staff. Over time, they both increase proportionally and as a long-term effect, productivity increases since the firm grew along with its investments. During an economic meltdown, there are also implications to the economy. Usually these effects are realized on a short-term basis. There are more displacements of natives because of the total immigration as the economy worsens. Therefore, job opportunities are limited. Since there are little or no employment opportunities, there are minimal expansions, and as a totality, the productivity output is almost negligible
For there to be more economic growth, there needs to be stringent rules and regulations in the approvals of legal immigrants giving special attention to their educational skills. This will enable Native Americans to effectively compete with the immigrants since some of the immigrants may get jobs yet they are illegally in the country (Miami Herald 2013). Because of the immigration overhaul, both the economy and the illegal immigrants will eventually benefit.
Kerr, Sari, P., Kerr, William, R. “Economic Impacts of Immigration: A Survey.” Harvard Business School 09.013 (2011): 1-48. Print.
Giovanni, Peri “The Impact of Immigrants in Recession and Economic Expansion.” Migration Policy Institute (2010) 8-16. Print.
Miami Herald. “Economic impacts of immigration reform a plus.” Miami Herald. 22, June 2013. Web. 27 June 2013.