Topic being: “Is immigration an economic benefit to the host country?”
Read through it, below, and tell me what you think.
Rourke, Issue 11 presents the question: “Is immigration an economic benefit to the host country?” According to Julia Preston for the NY Times, the number of illegal immigrants in the United States fell from 12 million in 2007 to about 11.1 million in 2009 (Preston, A20). The Department of Homeland Security Office of Immigration Statistics reports that there are 12.6 million legal permanent residents in the U.S. as of January 2010 (Rytina, 1-4). These two groups account for a little more than 7.5% of the total US population (“Google public data explorer”). In the Rourke Issue, Dan Siciliano writes for the yes position, with the belief that immigration provides many benefits for the United States, including cultural benefits and economic benefits. In his article, “Immigration: The Positive Impact,” Siciliano explores the impacts of immigration on wages and job-outlook, and reviews the overall fiscal cost of immigration. He concludes that without immigration, our workforce is doomed to “fall well short of the numbers needed to meet the emerging demands for labor.” (Rourke, 182). In the no article, “Immigration: The Negative Economic Impact,” Barry Chiswick, a critic of the benefits of immigration, explores the need for a low-skilled immigrant labor force and the laws surrounding immigration, then contrasts the first mass immigration of unskilled workers in the 1880s to 1920s with the current flow of unskilled workers immigrating into the United States. Chiswick concludes that immigration policy is at fault for the problems arising, and legal immigration negatively impacts the US economy, while illegal immigration further increases the problems.
Immigration is a result of globalization. Shimko says that globalization is a process by which states of the world are increasingly being merged into a single global society and economy (Shimko, 191). Globalization is shifting focus from international affairs to intra-national affairs. To unify the world’s economy, barriers to international trade are being reduced, such as tariffs, export fees, and import quotas. As this occurs, borders between states are becoming blurrier, and people are beginning to move about as well—to follow jobs, family, “the pursuit of happiness”. In the article, “Globalization, Immigration, and Education”, Marcelo Suarez Orozco writes that “globalization is about deterritorialization, not only of markets, information, and symbols, but also of large and growing numbers of people” (Suarez-Orozco, 345-366). The Liberal International Economic Order (LIEO) is a key part of global free trade—which assumes that when there is a free market, everyone benefits. Trade becomes more efficient; people can easily meet their own needs, which ensures more stability and peace for states. Economic globalization cannot occur without also the globalization of labor. To keep up with the changing demands of society, immigrants are moving to areas where they are needed to do jobs to keep society running. Immigrant workers are continuously pedaling the economic bicycle.
An important point Dan Siciliano makes in his article, “Immigration: The Positive Impact,” is that it is necessary to look at more than immigrant labor supply and demand applied to economic growth or you’ll miss the value of what immigrants bring into an economy. Not only is it important to look at how immigrants fill low-skilled jobs, but also it is important to look at how they create jobs. Siciliano points out the differences in “static” and “dynamic” models (Rourke, 179). Static models, which are the simplest and most frequently used by critics of immigration, assume immigrant workers are only increasing labor supply, which doesn’t account for the “multi-dimensional role that immigrants play as workers, consumers, and entrepreneurs” (Rourke, 179). The static model doesn’t take into account these multi-dimensional roles and assumes that the supply of jobs is decreased by immigrant workers, which causes higher demand for jobs, and leads to lower wages for all workers. Siciliano says that this assumption “bears little resemblance to the economic reality” (Rourke, 179). The impact of immigration on wages is not as simple as the static model suggests—research shows that wages of US-born workers with a high school diploma relative to wages of US-born workers without a high school diploma remained constant between 1980 and 2000 (Rourke, 179). So, while unskilled, low-wage workers born in the US might experience the ugly thought of “more competition for jobs”, immigration largely benefits those with high school diplomas or more education. Immigrant workers tend to have less formal education and are younger, which puts them in perfect position to fill the gaps created by an aging population. Immigrant workers are complementary to the native-born labor force (which is growing older and more educated) because they fill the low-skilled jobs and allow native-born workers to be more productive. The static model incorrectly assumes that immigrants and US-born workers are interchangeable—the differences in educational and age profiles between immigrants and native-born workers allows them to “fill different niches in the labor market” (Rourke, 179). The static model fails to account for immigrants as consumers, and consumerism creates jobs from spending and investing. Siciliano points out that the consumer purchasing power of immigrants is huge—hundreds of billions of dollars in 2004. Immigrant workers are putting this money into our economy, and the static model does not account for this. The dynamic model takes into account economic contributions of immigrants and paints a more realistic picture of immigration effects on economy—immigrants spend their wages in our economy, which increases demand for labor by creating new jobs, which in turn, increases wages relative to demand. An immigrant labor force results in a larger economy and higher employment for all. Without a continued flow of immigrant labor force, according to Siciliano, we will not have the workforce necessary to meet the demand for labor, and economic growth and increased standard of living in the US will come to a standstill.
Sue Kirchhoff and Barbara Hagenbaugh explore the impacts of immigration to the US economy in the article, “Immigration: A fiscal boon or financial strain?” This article focuses primarily on Bush’s proposal to provide immigrants with special work visas of up to six years and discusses immigration as a dynamic model, taking into account consumerism from immigrant workers. Critics say that immigration puts fiscal strains on state and federal government, and that Bush’s work visa proposal will instigate more illegal immigration, thus exacerbating the fiscal issues that accompany it. Immigrants are moving into cities, while U.S.-born workers are seeking suburbia. Kirchhoff and Hagenbaugh argue that immigrants are revitalizing cities that would otherwise have lost the population necessary to function by increasing the labor force, which leads to tax payment and fuels economic growth. A study done by Pia Orrenius and Madeline Zavodny of the Federal Reserve Bank of Atlanta found that “immigration only slightly reduced wages for low-skilled, low-income US-workers while increases wages for higher-skilled, higher paid native workers” (Orrenius & Madeline, 2a). “Without immigration, employment would not be growing as quickly,” according to Pia Orrenius. Studies of long-term demographic trends support the necessity of immigration, and advocates say immigration is vital to maintaining U.S. standards of living because they are filling the gaps in the labor force due to changes in demographic trends. Ideally, Bush’s proposal would allow workers to be here legally, which would require them to pay into the tax system like native-born workers, and thus reduce their economic leeching of social service programs. Kirchhoff and Hagenbaugh argue that the US economy is projected to create 22 million jobs by the end of the decade, but only has a projected workforce growth of 17 million, according to the U.S. Chamber’s Donohue. Perhaps the economy could adjust to labor shortages through higher wages or increasing productivity, but it could not happen over a short period of time. With the availability of immigrant workers, who are here and doing jobs for lower prices, while contributing to our economy as consumers, Kirchhoff and Hagenbaugh believe that overall, using immigrants for a low-skilled labor force has a positive impact on society.
Like Dan Siciliano, Sue Kirchhoff, and Barbara Hagenbaugh, Peter D. Salins believes that immigration is a necessary component of the labor market in the United States. In his article, “Take a Ticket,” he calls immigration “benign in nature”, and says that everyone, “from liberals who see open immigration as a basic ingredient of the universalist American idea to conservatives attached to free markets and open international border” would band together in resistance against any proposal to curtail immigration (Salins, 13). Immigration policy reform, with the creation of an application process for a limited number of immigrants to apply for immigration into the U.S. each year, is what Salins believes could fix the problems associated with immigration, calling the immigration scare “genuine panic”, not a “genuine problem.” The immigration rate is still below the immigration rate from 1830-1930, and the percentage of foreign born in the US has fallen, too, since 1940. The volume of immigrants has risen steadily, but when compared with the national base population, these numbers aren’t so significant. While foreign-born workers only make up 11% of the population and 14% of the labor force in the US, they still “account for more than half of total workforce growth from 1996 to 2002” (Kirchhoff & Hagenbaugh). And when the workforce grows, there is more economic output, which leads to more economic wealth. Critics call immigrants a drain on public services, especially in the public school systems, where taxpayers spend approximately $5,000 per child (even though immigrant parents pay much less than this in income tax). Salins argues that immigrant children actually help public schools; as they start filling schools, their immigrant parents are providing the labor force for the surrounding areas, and assuming the dynamic model of economics, are putting wealth back into the economy by purchasing goods and services, and creating more demand, thus creating more jobs or leading to higher wages for high-skilled workers. As Salins points out, immigrants are moving into inner-city areas (probably because the standard of living is low and its all they can afford), “filling a vacuum left by native urban households that have been fleeing suburbia for more than 40 years”. In direct comparison with what Kirchhoff and Hagenbaugh mentioned, these immigrants are revitalizing the decaying cities US-born workers fled. As far as increasing job competition between low-skilled US-born workers and the low-skilled immigrant workers in the decaying inner city populations, studies show that unemployment rates of low-skilled US born workers fell following immigrant influx (Salins, 14).
As a critic of immigration benefiting the economy, Barry Chiswick focuses on the characteristics of immigrants that are beneficial to the economy in his article, “Immigration: The Negative Economic Impact.” Obviously, high-skilled immigrant workers have characteristics of higher education and proficiency with technology that leads them to higher wages. Just like other proponents of liberal immigration policy, Barry Chiswick points out that most illegal immigrants are low-skilled workers with low levels of education, so they obviously earn low wages. However, the similarities end here, as Chiswick criticizes liberal immigration policy from a realist perspective, with the assumptions of a static model (and does not include immigrant consumerism)—that an increase in supply of low-skilled labor force results in more competition for the low-skilled jobs, which results in lower wages for the jobs. But, this will in turn increase productivity (and thus wages) of higher-skilled workers because they have to spend less time on the menial jobs—which shifts the distribution of wages, because low-skilled will be making less while high-skilled are making even more. Because the immigration of high-skilled immigrants will likely lead to a reduction of income inequality between low-skilled workers and high-skilled workers, high-skilled immigration is said to benefit the economy, while low-skilled immigration has a negative impact on the economy because it does the opposite. Chiswick also argues that the positive impacts of high-skilled immigration do not outweigh the negative impacts of low-skilled immigration. He supports immigration of high-skilled workers, if it is done properly; he thinks the current legal immigration system needs to be changed to one of a points based system, dependent upon immigrant workers skills and ability to contribute positively to our society. Chiswick, like Peter Salins, believes that there is an optimal number of immigrants that needs to be found. The US legal immigration rate is currently ¼ of the ratio it was in the early 1900’s, and Chiswick says “there is no clear evidence that the US has exceeded—or even reached—its immigrant capacity” (Rourke, 189). If the optimal number of immigrants could be determined, immigration policy could adapt to this number and form more stringent enforcement of laws to reduce undocumented migration and encourage more high-skilled legal immigration. And more high-skilled legal immigration would decrease the burden that illegal immigrants put on our economy.
As Jim Motavalli criticizes the liberal US immigration policy in his article, “Can Immigration Save the Cities?”, he points to a specific case of immigration influx, in Wausau, Wisconsin, beginning in the late 1970s. The influx of Hmong immigrants created financial strain in Wausau, which has now, for the most part, been put at ease because the Hmong have been integrated into Wausau’s mainstream. Supporters of immigration believe that because most immigrants arrive at a young age, they contribute to the economy for decades in various ways—paying taxes, filling jobs, paying into Social Security—and often remain ineligible to receive the social service benefits they pay for. However, critics at the National Academy of Sciences conclude that the net economic benefits of immigration are insignificant when compared to their impact on taxpayers. Because immigrants tend to cluster in certain areas, like the Hmong in Wausau, social and environmental problems arise rapidly in these areas, “but if immigrants dispersed across the country they would be a drop in the bucket (Allen Hammond).” Motavalli ventures into the environmental impacts of immigration, and reports that immigration is a huge part of US population growth, and thus, consumption of resources, which affects the economy. He also says that, “almost 1 in 4 births in the US is to an immigrant mother.” While it may be true that without immigration, the US population growth level stays at replacement level, a surge in population could have a significant impact on not only the US economy, but the world as a whole, and the Census Bureau predicts a population of more than one billion Americans by 2100. Motavalli firmly grasps a realist perspective on immigration, with his belief that immigration causes economic instability, and to protect our country (ourselves) immigration policy needs to be reformed.
In the article, “Does Immigration Harm the Poor?”, Steven Camarota explores immigration’s effect on wages, and concludes that the net effect of immigration on U.S.-born low-skilled workers and taxpayers is, in fact, substantial. When analyses of wages between U.S. born workers and immigrant workers were done by the National Research Council, it was found that 44% of the decline in wages for U.S.-born low-skilled workers (high-school dropouts) were due to immigration. This means 13 million workers experienced immigration-induced wage reductions, which corresponds to $13 million a year. Camarota says that, “each dollar lost or gained is more valuable to those with low incomes because they have less money to begin with” (Camarota, 25). Camarota also notes that because blacks are 33% more likely to lack a high-school degree, they are more adversely affected by immigration than whites. Another population affected by immigration is the welfare population, because 2/3 of these people lack a high-school degree. The NRC also concluded that immigrants consume more public services than they pay in taxes, so immigrants are a fiscal burden on state governments. In this study, it was found that immigrants have a negative fiscal impact for three reasons: they have more children, so they consume more in educational services; they are poorer so they receive more in state and local income transfers; and lastly, they have significantly lower incomes, so they pay less in taxes (Camarota, 28). These three reasons are why immigrants are considered to negatively impact state economies. Low-skilled immigrants tend to be net burdens, and high-skilled immigrants are almost always a net benefit—this is because individuals with few years of schooling tend to have low earnings, thus pay less in taxes and use more public services. Like Barry Chiswick, Steven Camarota concludes that “to reduce fiscal burden from immigration, we must select immigrants with more education and higher earnings” (Camarota, 28).
Supporters of immigration and liberal immigration policy believe that a steady immigrant labor force is vital to the survival of America. Dan Siciliano points out the necessity of looking at a dynamic model of immigration, which includes consumerism on behalf of immigrants. While immigrants are living and working in the U.S., not only are they providing a cheap low-skilled labor force, they are also feeding their wages back into our economy, providing growth. Kirchoof, Hagenbaugh, and Salins agree that immigration benefits the economy, specifically discussing the importance of immigrant workers revitalizing cities that would otherwise continue decaying as Americans continue shifting into the suburbs and out of cities. Salins believes that immigration reform—in the form of limiting the quantity of immigrants we take in each year—could pacify arguments between both proponents and critics of immigration. Most critics of immigration look at a static model of immigration, and find that immigrants end up being an overall fiscal drain. Barry Chiswick, Jim Motavalli, and Steven Camarota disagree with proponents of immigration, noting most importantly the quality of immigrants that the economy would benefit from. Like Salins, Kirchhoff, and Hagenbaugh, Chiswick agrees that immigration policy should be reformed—but believes that the losses outweigh the benefits of low-skilled immigrants, and they should be left behind, only allowing high-skilled workers to immigrate. Motavalli notes that low-skilled immigration causes economic instability, because immigrants tend to cluster in one area instead of dispersing around the economy. Camarota explores the reasons why low-skilled immigrants burden the economy rather than help it, and concludes that low-skilled workers with few years of schooling tend to have low earnings, thus pay less in taxes and consume more public services. These three critics all believe immigrants with more education and thus higher earnings should be selected to contribute to society, and that immigration policy reform is the key to success. I believe that all of the people mentioned in this paper make good points. I also believe that immigration policy reform is necessary, if only to create agreement between realists and liberals, so that time and funds can be spent on more important things. Low-skilled immigrants perform jobs that would otherwise be left unfilled; without them, there would be no foundation for higher-skilled workers to build on. We should find the optimal number of immigrants that the U.S. work force needs, and then find the immigrants to fill the jobs accordingly, both high- and low-skilled.
The bottom line is that, yes, immigrants take jobs away from low-skilled, high school dropouts. But, it is also known that 75% of the America’s state prison inmates, 59% of federal inmates, and 69% of jail inmates did not complete high school. (Harlow). So what does this mean? Tax dollars are being spent on social welfare programs, and tax dollars are being spent on prison inmates. Prisoners are in jail for failure to comply with U.S. laws. Immigrants come here in search of a better life, willing to do whatever it takes to work in the land of dreams. Yet everyone is spending time and resources fighting the “immigration problem”. It seems to me the root of the problem lies within the education system. The U.S. education system is failing its youth. With more than 15% of youth ages 16-24 dropping out of school each year, over six million students do not graduate high school. If these students could somehow be motivated to finish high school, they would end up working higher-skilled jobs, earning more money, and probably not caring if immigrants were coming in to do low-skilled labor. We could be saving money in two ways, in both prison tax dollar revenue, and in all of the costs associated with fighting immigration (border patrol, etc.). And if we saved all that money, we could work on our debt. All while progressing into our natural rut of becoming more educated and advanced in America.
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