Microeconomic effects of immigration in the US
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In the recent past, the immigration issues have raised political controversies in most states in the US. The increased labor supply from the immigrating populace has adversely affected the natives, leaving most of them unemployed. It is paramount to note that, the natives are well qualified for the opportunities, yet the employers prefer the immigrants because they offer cheap labor. The overall effects of the immigration are the attenuation of the wages in the labor market. Conversely, immigrants have positive impacts on the economy of the US. Most of the immigrants move in search of greener pastures. They are usually well skilled and educated, hence, they are moving into the US labor market meaning that the labor increases. Consequently, more products will be produced, raising the Gross National Output (Microeconomics: Immigration - VOER, 2016).
An increase in the immigrants is double edged in the labor market in the US. While it may result in the flux in the labor market, recent studies indicate that immigrants have resulted in the increased wages and betterment of the living standards for the natives. It can be argued that most immigrants are not as equipped as the natives are. Therefore, they do not compete for professional jobs. Rather, they increase competition in the unskilled job opportunities. The skilled natives are not affected at all by the immigration. Instead, they demand for higher pay as the market is flooded with unskilled laborers (Michael Greenstone & Adam Looney, 2012). To their advantage, they receive a better payment than would have been the case if there was no immigration.
Contrary, the unskilled portion of the native labor market in the US experiences the adverse effects of the immigration. The immigrants cause the flux in the labor market. Since they offer services are very cheap prices, the employers preferring the immigrants to the unskilled natives, hence leading to unemployment (Smith & Edmonston, 1997). The rate of unemployment is however not alarming as most of the natives are hired to be the supervisors for the immigrants. Only a small portion of the natives in the labor market get affected by the increase in the number of immigrants in the US.
On the same note of the labor market, wages and the living standards, immigration have been beneficial too. The flux of the cheap labor in the US labor market creates an environment suitable for the thriving of certain industries such as framing and restaurants that require a lot of manual work and less technical work. Additionally, the immigrants become potential customers for the products from these firms. Companies, therefore, benefit from immigration as they increased their customers, meaning increased, output, sales, gains and Gross National Products. Immigration has double impacts on the US labor market (Microeconomics: Immigration - VOER, 2016). Some worker benefits while others suffer.
In some instances, the immigrants who arrive the US are well educated and people who are well skilled, but opted to look for greener pastures due to poor payments in their home countries (Thoma, 2016). Such immigrants are advantageous to the economy of the US because they not minimize the cost of raising well-skilled labor. The economy benefits from brain-drain from other countries that cannot sustain their educated and skilled laborers. In addition, such people increase capital flow in the US economy by paying a significant portion of their income as taxes. The immigrants in such cases enhance the inputs and the national outputs without affecting the wages of the native workers in the labor market (Matthews & Matthews, 2016). Overall, the immigrants enhance the US economy by promoting the well-being of the natives through increased distribution of income.
Regarding the production of goods and services in the US economy, immigrants promote utilization of local labor in the production process. It encourages specialization in the production process, and at a cheaper price. The immigrants also affect the production process positively because they form part of the market where the products are sold. The involvement of the immigrants in the production process, however, has an adverse impact on the natives. It causes displacement effects. For example, if the native were producing a product in $4, prior to the arrival of the immigrants, they may be forced to shift to other places of work, if the immigrants can produce the same product at $2.5.
From a slightly different perspective, immigrants may be moving to the US for trading purposes. Instead of moving in to stay, the immigrants' intention is to involve in trading activities after which they move back to their home countries. In such cases, immigration is beneficial to the US economy as it promotes specialization. The companies in the US can produce more of what they can offer better; while at the same time enjoy new products that are produced in other countries (Ewing, 2013). In the trading activities, the business partners exchange ideas, hence promoting development. Immigration, therefore, benefits the microeconomy of the US, as it promotes the overall net gain by shifting the production resources towards more valuable resources.
References
Ewing, W. (2013). How Would Immigration Reform Help the U.S. Economy?. Immigration Impact. Retrieved 1 May 2016, from http://immigrationimpact.com/2013/11/01/how-would-immigration-reform-help-the-u-s-economy/
Matthews, C. & Matthews, C. (2016). The Economics of Immigration: Who Wins, Who Loses and Why | TIME.com. TIME.com. Retrieved 1 May 2016, from http://business.time.com/2013/01/30/the-economics-of-immigration-who-wins-who-loses-and-why/
Michael Greenstone and Adam Looney, T. (2012). What Immigration Means For U.S. Employment and Wages. The Brookings Institution. Retrieved 1 May 2016, from http://www.brookings.edu/blogs/jobs/posts/2012/05/04-jobs-greenstone-looney
Microeconomics: Immigration - VOER. (2016). Voer.edu.vn. Retrieved 1 May 2016, from https://voer.edu.vn/c/immigration/e22fca06/27ba9d1d
Smith, J. & Edmonston, B. (1997). The New Americans. http://dx.doi.org/10.17226/5779
Thoma, M. (2016). Economist's View: Immigration. Economistsview.typepad.com. Retrieved 1 May 2016, from http://economistsview.typepad.com/economistsview/immigration/
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