Home » Economics » Immigration Effects on US Economy

Immigration Effects on US Economy

   Send article as PDF   

<p style=”line-height:200%”>Immigration refers to the movement of people from one country to another due to various reasons. The term closely intertwines with the migration. The difference between the terms is that in immigration, the applicants undergoes through the legal process to acquire the permission to move (Koopmans 24). In the US, immigration process has been at the peak since the 1970s. The phenomenon creates the zeal for more research work on the entry of foreigners into the economy of the state that is daily comprising of the immigrants. The paper gives a background on the perceived causes of the rising movement to the US, the positive income of such entries to the economy of US, and the associated negative impacts.</p>
<p style=”text-indent:.5in;line-height:200%”>Several people relocate from the native countries to look for the better jobs in the US. The reasons why laborers would work in the US include relatively high remunerations, easy access to credit, insurance, and other social welfare benefits (Wang and Fan 947). Also, the developed nations like the US heavily rely on the immigrant&#39;s workforce to fulfill the employment gaps due to the exemplary expertise of the aliens. Similarly, the aging population structure with low fertility rate prevailing in many industrialized nations reduce the replacement workers, hence the chance for more workers to assist in the replacement of the old employees. Some immigrants visit the US mainly for educational purposes. The nation gives more scholarship programs to different students all over the world in the form of green cards to join the competent institutions (Pries 65). The advanced technology and better learning materials attract the global students. After education, some students are absorbed in the US workforce while the rest goes back to the original home countries.</p>
<p align=”center” style=”text-align:center;line-height:200%”><b>Positive Outcomes of Immigration to the US Economy</b></p>
<p style=”line-height:200%”>Several migrants have the capacity to contribute in the US job sector. The working immigrants have a direct contribution to the economy given their output in their respective jobs. According to Ottaviano and Peril (22), a high correlation exists between the workforce and the GDP that determines the economic growth. The immigration has the demographic impact that increases the population size of the earning citizens and changes the economic trends of the state (Borjas 209a). Many US migrants, for instance, reduces the dependency ratios because many are at younger and working ages. Besides, they are economically active individuals as compared to the American natives who strive to realize the maximum economic growth.</p>
<p style=”text-indent:.5in;line-height:200%”>The migrants also improve the level of economic growth of US since the parties are highly equipped with skills and abilities relevant to the development (Borjas 209a). The expertise supplements the stock of human capital of the nation. The skilled immigrants contribute to the high economic growth by taking proactive initiatives to conduct the research and innovation, as well as the technological advancement. The change makes the US state at the top in holding numerous patents in various fields including science and technology. The inventive foreign settlers also create more opportunities that recruit the overwhelmed locals who are less skilled thus improving on the human capital. Moreover, some immigrants have also proved vital in coming up with innovative processes in the manufacturing industry where they go with different ideas of doing things (Borjas 211a). The innovation efforts have seen the country progress in the in its productivity and increase the level of imports that has helped maintain a favorable balance of trade.</p>
<p style=”text-indent:.5in;line-height:200%”>Previous studies on the US labor composition over the past ten years has unearthed that about 47% of the laborers are the immigrants (Portes 345). The significant portion of the workforce comes from other channels such as family, humanitarian, and the free- movement migration as opposed to the managed labor migration with a limited contribution (Borjas 1350b). The migrant employees create the market for the locally produced goods by increasing the domestic demand. The spending on the local foods, homes, TVs and other essential services generates the mechanisms of trade.</p>
<p style=”text-indent:.5in;line-height:200%”>Several immigrants are full of talents and diverse skills essential to increase the production. The 2011 survey of the top fifty venture capital funded companies identified at least one migrant founder of every corporation. According to Peri (350), the study added that several immigrants occupied the key management positions involving progressive research. The immigrants take the lead in producing the innovative patents at a double rate of the natives. The study complemented that the US settlers provide the proactive development ideas and expertise necessary to boost the production sectors. Furthermore, the economic theories have given an account of the high correlation between the level of innovation and the growth of GDP due to the increased productivity.</p>
<p style=”text-indent:.5in;line-height:200%”>The employed settlers in the US provide the tax that is vital for the development and provision of the essential social services. The tax from the migrants assists in the funding of the public infrastructure such as roads, water and other necessities (Borjas 210a). The working-age immigrants contribute in the positive contribution of the US&#39;s federal budget. Also, the foreigners in the US especially the working age imposes the reduced spending on the social security and Medicare (Rowthorn 572). The two sectors form the largest component of the federal non-defense spending.</p>
<p align=”center” style=”text-align:center;line-height:200%”>.<b>Negative Effects of Immigration on the US economy</b></p>
<p style=”line-height:200%”>There is a reduced net saving for the federal government. Some immigrants who are less educated survive on a low income as compared to the Native Americans. The situation makes the foreign settlers to give the insignificant monetary returns and taxes to the federal state (Dustmann 365). The population over-utilizes the government funded programs such as the Medicaid, SNAP, and other benefits. Under this scenario, the government overspends as compared to the accrued benefits in return from such citizens.</p>
<p style=”text-indent:.5in;line-height:200%”>In some circumstances, the migrants see the government incur the relatively high burden of tax. The immigrants who have low income earning and poor education background makes the government overspend to support the K-12 teaching system from the prekindergarten (Dustmann 364). Several non-native students are poor English speakers, an instance that compels the government to look for appropriate alternatives of assisting them. The state and the education system spend in the English teaching platforms to equip the migrant students with the preliminary learning language. In California with more low-income earners and the less educated, the government overspends more revenue that is unequal to the public services consumption. The phenomenon increases the short-term cost of the state budget.</p>
<p style=”text-indent:.5in;line-height:200%”>There is also high competition for the job opportunities within the US. Several studies have tried to highlight the impact of immigration on the employment of the natives, especially the semi and under skilled. The study by Rand Corporation identified that very many Native Americans were either underemployed or unemployed due to the US migration between 1970 and 1990 (Munshi 570). Some were reported to have withdrawn from the workforce due to the pressure from the immigrants. Other research by Christopher Smith found that the immigration reduces the chances of employment for the teenagers. The unemployment situation increases the poverty level, income disparities, and high crime rates. The prevalence of poverty and low level of education surrounding the US foreign settlers lead to the income disparities where that constitutes a broad gap between the rich and the have-nots. The situation would mean over dependency on the working population and the economically wealthy neighbors, thus retarding the level of economic growth.</p>
<p style=”text-indent:.5in;line-height:200%”>Overall, immigration emanates from the varieties of factors such as; the desire to get better job opportunities, free trade agreements between states, education purposes, and other personal reasons such as medical services. As a result of immigration, the following benefits have been continually experienced by the US; Innovation and improvement in economic growth, labor imbalance solutions, positive fiscal impacts, increased productivity, and human resource provision and the creation of markets for the locally produced products. The limitations that are associated with the migration includes; Reduced saving for the federal government, heavy tax burdens, and high competition for the job opportunities between the locals and the new settlers. The US state should, therefore, take precautions when giving the prospects for the new immigrants from other world countries. The selection criteria should be non-biased, considering the individuals with full capacities to improve the US economic development. Moreover, the attention should be shifted in controlling the number of immigrants to protect the job security of the native residents of US.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>

Scroll to Top