Does immigration have negative effects on the United States Economy?

Does immigration have negative effects on the United States Economy? (MLA Format)

Immigration has been the topic of discussion since the era of President Bush’s administration. Different groups of people have had their differing views on the topic and have led to a decade long debate. Politicians and media houses have been the main catalysts of highlighting the negativity of immigration while on the other hand, researchers and advocacy groups have shone the light on the merits of the same. The main point of contention has been the way illegal immigration has been strenuous to the economy. But is this truly the case? Or is it just a plot by the ill-intentioned politicians to phase out a chunk of the population that does not have voting rights? Or simply a plan by the media houses to churn out controversy in order to have more attention which translates to a better bottom line? Although at first impression it might seem that the illegal status of immigrants might cause a negative outcome in a country, this negativity does not necessarily have to be related to the economy.

First off, many people do not quite get the difference between the term migration and immigration. Migration is moving from one place to another. Immigration however, refers to moving into a new place. In other words, migration is ‘moving away’ while immigration is ‘moving into’. In this case, we are dealing with the people that move into the United States.

Contrary to popular belief, immigrants are from all over the world and not only from Mexico like the media likes to point out. Sure the Mexicans have the bigger share but in total, the immigrants from other parts of the world combined account for 52% of the total immigration whereas those from Mexico sum up to 48% (Rivera-Batiz 8). These percentages cover both illegal and legal immigrants. Some might argue that immigrants pose the same issues regardless of their origin, but this is another big misconception. Mexican immigrants have been reported to have lower education attainment that the Non-Mexican ones. Rivera-Batiz in his paper stated that a Mexican immigrant has an average of 6.3 years of education while a Non-Mexican has 10.4 years. Needless to say, the gap poses a significant difference in the tasks and jobs that the two types of immigrants can handle and compete for (Rivera-Batiz 9). Many Mexicans cannot speak in fluent English which affects their chances of landing decent job. This is why some of them result into illegal dealings of drugs and other unwarranted activities hence effectively damaging the image of immigrants as a whole. On the other hand, Non-Mexican inflows are more educated and 25% of them hold professional occupations as opposed to the 9% of Mexicans in the same posts (Rivera-Batiz 11). Due to these major contrasts, media houses and politicians should not judge all immigrants based on the assessment of the Mexicans only.

 In total, there are 11.7 million immigrants as of the year 2010. This number keeps growing at the rate of 500,000 new immigrants per year. In line with this, the total number of foreign-born people in the country has grown to 40 million. Out of that number, 21 million of them are part of the country’s workforce (Borjas 12). It might look like a huge number but for a country as big as USA, immigrants only represent 5% of the labor force. Perhaps this seemingly small percentage is the reason some politicians tend to think that the country would continue to thrive without them. However, as it will be described later, some industries such as construction, agriculture, food processing and many others would suffer severely from their absence.

There are many myths that surround the debate on immigration especially the illegal kind. Chief among them is the use of government subsidized services (Planas). Politicians keep insisting that illegal immigrants strain the economy by utilizing services that are paid for by the native tax payers. This is a misinformed concept only designed to advance political agendas. The fact of the matter is that illegal immigrants lack the legal residency documents needed for them to qualify for these subsidized services hence they do not burden the economy. Moreover, it has been recorded that illegal immigrants do actually pay taxes. Most of them do this through salary taxation from their employers which adds up as payroll taxes while others make the effort to file their tax returns regularly.  In fact, Steven Gross, Chief Actuary at the Social Security Administration admits that immigrants have paid over $100billion into social security over the last decade. These payments have increased to $13 billion annually with only $1 billion withdrawn per annum. This translates to immigrants paying more than they are consuming to the economy.

Other groups accuse the immigrants of lowering the wages of the competing native workers (Planas). The economic law of supply and demand dictates that the price of a commodity will always decrease if the supply outdoes the demand. This is the case with immigrants; they are in great supply so they employers need not pay them high wages. Ironically, the seemingly low wages are actually significantly higher relative to the payments the immigrants earned in their respective countries of origin. Anti-immigration groups use this logic to suggest that the native workers are forced to take this lowered wages and some of them even lack jobs completely since the immigrants have already occupied them. In contrast, majority of native workers are highly skilled and do not compete for the same jobs with the low-skilled immigrants. Actually, only a small percentage of native workers, who are mainly high school drop-outs, compete for the low skilled jobs that immigrants populate. These drop-outs are the only ones that have to deal with the lowered wages, As Borjas states, the difference in wage reduction between natives and immigrants is only 2-5%. This is a very small percentage that cannot be equated to the rage the anti-immigrants are pressing on the issue (Borjas 5). The people who benefit the most from the immigrant employment are the business owners. They get a ready labor force at a reduced rate than those of natives. The total the gains received from immigrant employment by business owners amount to $128 billion, this figures is greater than the $118 billion reduced from the wages (Borjas 5). Ultimately, the good outweighs the bad.

The issue of immigrants stealing jobs from native workers is another myth that requires a deeper scrutiny. On face value, it is understandable to see why lower paid immigrants would be a better selection for employers relative to native workers. However, immigrants usually occupy the jobs that most Americans are not willing to take on. Therefore, they pay a complementary role to the high skilled American workers (Davidson). For instance in a construction site, architects and trained constructors conduct their activities with the help of immigrants that do the heavy lifting and cleaning of the site. These two extreme ends complement each other in an efficient way that ultimately raise the GDP of the USA by saving the business owners the high wages that they could have been forced to pay even for the mundane tasks of as heavy lifting. If the wishes of the anti-immigration activists were met, the country could suffer a significant drop in cheap and readily available labor force. Industries such as food processing and construction would be affected severely. This would lead to the situation that American manufacturing plants faced. Nowadays, most American companies take their manufacturing overseas to countries like China such as Apple and its iPhone manufacturing, for example, has employed 700,000 Chinese production line workers despite being an American company, their major reason for this was that the supply of such workers in America was limited and they charged higher wages for an equivalent quality of production as that of China (Roth 8). These Asian countries have a huge pool of cheap labor that work in manufacturing lines every day. The absence of this labor in the west led to an alarming percentage of manufactures to outsource, the same consequent would befall the immigrant populated industries in USA, in the end of the day, the repercussions would greatly affect the country’s GDP to a downward trend. The United States simply doesn’t have enough supply of native workers to satisfy the low skill labor demand. The country simply needs the immigrants and those that oppose this straightforward logic are shortsighted and oblivious to the happenings that befell the manufacturing sector of their nation.

Since there exists extensive economic benefits of having immigrants in the United States, it is wise to make policies that favor their presence. Traditionally, the country has been trying to enforce prevention strategies that were targeted on restricting entry of new immigrants as well as deporting those with no documentation. These prevention strategies have cost the government a lot of resources and yet the immigrants still find ways to gain entry. Increasing the resources to enforce the prevention strategy would cost more than the benefit the government hopes to gain. The best policy then would be to find ways of converting the illegal inflow into a legal one.

Currently, the immigrants’ labor adds a whopping $1.6 trillion annually to the U.S which presents 11% of the total economy. There is also an immigration surplus of $35 billion which represents 0.2% of the GDP (Borjas 4). Factor in mind that there are some industries which depend on immigrants as their life line. Surely, with these considerations, it would be smarter to make policy’s that accommodate the immigrants instead of rejecting them (Hanson 5). This fact leads to the call of action to the policy makers to coexist with immigration by turning the illegal flow of immigrants into legal flows.

Some might argue that there already exists legal ways of gaining residency in the U.S. These ways include the green card as well as the temporary visas. The issue with green cards is that they are rare and they are almost completely unavailable to low skilled workers (Hanson 4). Temporary Visas on the other hand are only limited to 85,000 people annually (Roth 9). This is a far cry from the demand of low skilled workers in the nation. Additionally, illegal inflows follow the economic trends. That is, when the economy is booming and there is availability of jobs, there are more immigrants coming in, when the economy falls, the inflows respond accordingly. Unfortunately, this is not the case with the current legal options available. In institutions of higher learning, it has been recorded that Doctorate courses of engineering and physical sciences have more foreign-born students than natives (Roth 7). Consequently, immigrants are coming up with more startups that have the potential of bringing in billions in revenue than the natives. Currently, 15 companies with billion dollar revenue potential are launched every year in the U.S.  Economist Liton predicts that this number will raise up to 75 by the year 2018 if policy reforms are made in time, a move that would almost double the country’s GDP (Roth 7). Immigrants have already proved their entrepreneurial skills through companies such as Elon Musk’s Paypal and Tesla, Sergey Brin’s Google, Andrew Grove’s Intel among others (Roth 7).  If immigrants are given easier options of obtaining residency more companies of these magnitude could be started in the future.

The recommendation would be to devise policies that accommodate immigration in a manner that fluctuates with the patterns of the economy. Legal options should be expanded to cover the immigrants that are already in the country. Moreover, to ensure that the current immigrants pursue these legal options, employers should be given incentives for hiring documented immigrants and fined for doing otherwise (Hanson 5). This would force the immigrants to legitimize themselves by seeking the expanded legal options of obtaining residency.

Further recommendation would be to convert the inflows into a revenue generating market for the country. Diana Roth suggested that employers willing to seek the services of foreign people could buy permits for bringing this people into the country temporarily or permanently (9). This way, immigrants could enter the country with guaranteed job positions and the country will have created a market for permits that currently doesn’t exist. The current green card and visa system of employers bringing in immigrants requires the business owner to prove that there isn’t local workers available and also that they have recruited U.S workers for the position before, as well as giving an assurance that they will not displace an American worker with the immigrant. To further worsen the situation, the whole process is time consuming and expensive enough to dissuade the employer completely.

In conclusion, the media and politicians have been spreading propaganda about immigration while basing their facts on limited information. Research has been done and there is almost a unanimous conclusion that immigration does not cause strain to the economy to the magnitude that the propagandists are implying. If at all, the economy is actually benefiting from the immigration. Many myths have been demystified on this paper by amplifying facts that immigrants actually pay taxes and they do not use subsidized government services. Also, they do not steal jobs from natives, they only compliment them. Further, the low wage decrease brought to low skilled native workers due to immigrants is outweighed by the gain enjoyed by business owners. In addition, many industries that form a core part of the economy depend on the availability of labor brought by immigrants. Even more, immigrants have made some of the country’s most prestigious companies that have immeasurably boosted the GDP. Due to all these factors, it has been recommended that the best policies concerning the topic of immigration would be those that accommodate them. The economy clearly needs them and the government could create new revenues by selling immigration permits as opposed to losing resources by enforcing prevention strategies at the borders. Ultimately, if the government embraces immigration with more legal options, the country’s economy and the immigrants would symbiotically benefit.

References in MLA format

Borjas, George. Immigration and the American Worker. A Review of the Academic Literature. Centre for immigration Studies. April 2013. Web. 12^th July 2016 <http://cis.org/sites/cis.org/files/borjas-economics.pdf&sa=U&ved=0ahUKEwid1oXR3uvNAhVLChoKHVx8AecQFggSMAM&usg=AFQjCNG_2JM9H2-uC0ZhLv5tHUmSbIdFBA>

Davidson, Adam. Do Illegal Immigrants Actually Hurt The U.S Economy? New York Times, 13 February 2013. Web. 12^th July 2016. <http://mobile.nytimes.com/2013/02/17/magazine/do-illegal-immigrants-actually-hurt-the-us-economy.html>

Hanson, Gordon. The Economics and Policy of Illegal Immigration in the United States. University of California, December 2009. Web. 12^th July 2016 <http://www.migrationpolicy.org/pubs/Hanson-Dec09.pdf&sa=U&ved=0ahUKEwid1oXR3uvNAhVLChoKHVx8AecQFggOMAE&usg=AFQjCNErEURHJgkvAadkYwVHmACw8wm_Xg>

Planas, Roque. 5 theories about the Economic Effects of illegal immigration you shouldn’t trust. Huffpost, 17 February 2015. Web. 12^th July 2016. <http://m.huffpost.com/us/entry/6700148.html>

Rivera-Batiz, Francisco. Illegal Immigrants in the U.S. Economy:A Comparative Analysis of Mexican and Non-Mexican Undocumented Workers. Columbia University, March 2001. Web. 12^th July 2016. <http://www.columbia.edu/~flr9/documents/Rivera-Batiz_iilegal_immigrants_us_economy.pdf&sa=U&ved=0ahUKEwid1oXR3uvNAhVLChoKHVx8AecQFggQMAI&usg=AFQjCNHYQeCCK90p_8AqeJVmtYuXkV06HA>

Roth, Diana. The Economic Benefits of Immigration. Manhattan Institute for Policy Research. Febuarry 2013. Web. 12^th July 2016. <http://www.manhattan-institute.org/html/economic-benefits-immigration-5712.html