Increases in Wages for the US Workers - Assignment Example

Answers to the article questions Why does the article say that increased immigration may actually be associated with increases in wages for US workers? Compared to the immigrants, US workers will be paid more. Expanded labor force due to increased immigration will make businesses to increase their investments to take advantage such a large labor force. Companies will invest and expand to reap higher profits that new and expanded labor force allows thus providing new opportunities for the domestic workers as well.

American workers will gravitate to their area of comparative, communications-related occupations, whereas immigrants will stick to physical labor and manual tasks. This will increase the growth rate of the economy thus pushing wages higher for the domestic workers Do you expect the wage increase to be larger in the short run or the long run? Why? The wage increase will be larger in the long run. Absorption of foreign labour into the work force is likely to cause a decline in average wages in the short run because most of the new immigrants laborers will be paid less than the domestic workers, however, this decline will only be temporary.

Wages would rise greatly in the long run because businesses will begin investing to take advantage of the increased labour force. Why does the article say immigrants might actually increase worker productivity in the US? Increased immigration results in an influx of new laborers with a wide range of skills thus promoting specialization. Highly skilled immigrant laborers would generate more productive innovations thus expanding the productivity. Who does the article say is likely to gain the most from immigration?

Who is expected to gain the least? Why? Highly skilled and unskilled American workers are likely to gain the least from immigration because they will face stiff competition from their respective new immigrants. In addition, their relative income would decline by 0.3% because they are easily replaced by new immigrants. The rest of the workers in the remaining slices are likely to gain the most because their relative income would rise by 0.5%.