Political Economy of International Migration - Essay Example

? Political Economy of International Migration Introduction United s is the most affected economy over the last several centuries mainly because of illegal immigration. Arguably, illegal immigration has been supported by US corporations, and hence the Federal government’s all efforts to mitigate the undocumented immigration went in vain. The immigration flow was intensified with the emergence of globalization and thereby the elimination of cross border trade barriers. However, recent survey results indicate that the volume of illegal population in the US has begun to decline. According to an estimation by the Center for Immigration Studies (as qtd in Preston), there were roughly 11 million illegal immigrants in the US in 2008 whereas they were estimated to be 12.5 million in number in 2007. In the United States, a statistical methodology called residual method is employed to estimate the number and economic effects of undocumented immigration in the country. Under this method, the number of foreign-born US residents (but not US citizens) is estimated. From this figure, the total number of legally present immigrants is subtracted using administrative data and assumptions. The residual represents the size of the unauthorized immigrant population. This paper will identify a specific issue related to immigration and develop a possible policy recommendation to address the identified issue. US immigration history While analyzing the US immigration history, it is identified that people increasingly immigrated to the country over the last centuries which in turn made US an agglomeration of different cultures. As Borjas points out, the number of documented immigrants permitted in the country by the Federal government was increased from 2.5 million in 1950s to 9.1 million in 1990si; and n the meantime, the US also experienced a significant increase in the number of unauthorized immigrants in the country (2). US corporations had supported and encouraged illegal flow of immigrants to the country because those immigrant groups were willing to work at low wages. The formation of the Immigration Reform and Control Act (IRCA) 1986 was a major event in the history of US immigration as it granted amnesty to nearly three million undocumented immigrants who were residing the country at that time. As Borjas reports, as a result of such liberal policies, the size of unauthorized immigrant population in the US reached roughly 5 million in 1996 and it grew to 10.3 million by 2004 in spite of strict cross border enforcement (2). Illegal Mexican immigration has played a crucial role in increasing the size of undocumented population in the US over the years. In 1950s, Mexican immigrants accounted for 12 percent of the total immigration flow to the US whereas they represented 25 percent of the total immigration by the beginning of 1990s. In 2004, illegal Mexican immigrants residing in the US were estimated to be 57 percent of the total unauthorized immigrant population at that time. Other major groups of immigrants in US are from Latin American and Asian countries. Effects of undocumented immigration on wages and employment The unauthorized immigration to the US can have devastating effects on the country’s economy. In his book ‘Mexican immigration to the United States’, Borjas reflects the view that the illegal immigration flow would worsen the economic status of the poor whereas it may benefit middle class and upper class Americans. Since the illegal immigrants are ready to work at cheap rates, US corporations are likely to exploit them more and this situation in turn would reduce the wage rates of working class American population, broadening the socioeconomic gap between rich and poor. In the words of professor emeritus Unger, University of Columbia, when there are illegal immigrants cheaply available for work, employers are likely to exploit them instead of increasing wage rates to attract legal citizens. As a result, wage rates for certain sectors of US population are kept depressed and employment opportunities for legal US citizens also declined. Researches like Butcher and Piehl point out that the immigrant population snatches job opportunities from the natives and the situation may often persuade natives to commit crimes. A study by Borjas et al “suggests that a 10 percent immigrant-induced increase in the supply of a particular skill group reduced the black wage by 4.0 percent, lowered the employment rate of black men by 3.5 percentage points, and increased the incarceration rate of blacks by almost a full percentage point” (Borjas et al). Due to the increased flow of immigrants to the US, uneducated native born US workers are forced to directly compete with the unskilled immigrant population. Evidently, illegal immigrants have an edge over native born workers in the employment spectrum because illegal immigrant workers are cheap labors. As economists point out, illegal immigration weakens the country’s unemployment rate and which in turn would adversely affect the income distribution in the US. According to a 2007 study, Mexico had a GINI coefficient of 46.1 whereas it was 40.8 in the case of US (qtd in Hass and Vezzoli). A lower GINI coefficient represents more equal distribution of income while a higher GINI coefficient represents more unequal distribution of income. Hence, it is clear that US’ GINI coefficient is not much satisfactory as compared to the GINI coefficient of Mexico. Undoubtedly, the poor income distribution level of the US despite the country’s higher economic growth rate can be attributed to unemployment issues resulting from increased immigration flow. It is important to analyze the representation of Mexican immigrants alone in various industrial sectors of the US (see table). Source: Center for Immigration Studies (CIS). Impact of Mexican Immigration on Wages and Prices in the United States. Web 11 Dec 2012. From the table, it is clear that the Mexican immigrants alone snatch many job opportunities from the native born workers. The chart clearly indicates that majority of the Mexican immigrants are employed in fishing, agriculture, and forestry sectors and they have also a strong presence in industries like manufacturing, construction, and personal services. Therefore it is clear that the Mexican immigrants alone displace a huge volume of employment opportunities that would otherwise be available to native US people. According to the Bureau of Labor Statistics, the notable wage declines experienced in major US cities over the period 1980s and 1990s can be ascribed to the increased immigration flow. Likewise, a study conducted by RAND in California asserts that the state faced severe challenges when high level immigration flow trimmed down employment opportunities available for unskilled natives. From a close evaluation, it seems that the poorest ten percent of the American workforce is dreadfully affected by the illegal immigration. According to Ryan, despite the Federal government’s vehement efforts to improve the country’s unemployment rate, nearly 5.5 million people are still unemployed in the US. At the same time, the author also points to the fact that the US is home to approximately 11.5 million illegal immigrants. In short, illegal immigration is causing great troubles to US citizens’ employment and their earning outcomes. Labor Markets Initiative Labor Markets Initiative is a comprehensive and policy focused initiative of the Migration Policy Institute at the national level for evaluating the role of immigration in the US labor market. As stated in its website, “the initiative is producing detailed policy recommendations on how the United States should rethink its immigration policy in the light of what is known about the economic impact of immigration- bearing in mind the current context of the economic crisis, growing income inequality, concerns about the effect of globalization on US competitiveness, the competition for highly skilled migrants, and demographic and technological change” (Migration Policy Institute). The MPI president Demetrios Papademetriou and the senior vice president Michael Fix lead this policy initiative. This project is also supported by a group of experts in immigration, labor economics, and welfare policy (MPI). The US’ labor market currently experiences turmoil mainly due to the impacts of the recent global recession. Growing income inequalities in the country caused by increased flow of immigration, especially unauthorized immigration, a transforming demographic environment, and a mounting need for highly skilled immigrants also contribute to the labor market turmoil (MPI). It is identified that the ongoing economic crisis can have a significant impact on immigrants and their local communities. Under this circumstance, the US regulators are confused about the kind of immigration policy needed to be implemented to improve the labor market situation. The regulators are also challenged by another difficult task. They are required to meet short term needs of the labor market in the context of current economic turmoil with long term policies that are crucial to drive economic growth during and after the recovery (MPI). In order to assist policymakers to address such challenges effectively, MPI is performing extensive researches on immigration and the labor market. As stated by the Migration Policy Institute, “the work includes zero-based reviews of policies to help the workers who may lose from immigration; admission policies consistent with our economic needs and social values; and a host of post-entry issues that fall into the category of immigrant integration” (MPI). The Labor Markets Initiative’s research works focuses on three key areas including impacts of the immigration on the national economy, immigration and the economic crisis, and policy responses for future immigration reform (MPI). This initiative also pays particular attention to the welfare of low skilled or low waged workers in the long run. Policy recommendations The better policy for the elimination of unemployment issues in the US caused by illegal immigration is to curb unauthorized employment in the country. In the report Policies to curb unauthorized employment prepared for the Migration Policy Institute by Sumption, the author states that foreign born people are encouraged to cross the US border illegally mainly because illegal immigrant workers are able to easily find a job in the country. The author adds that the issue of illegal immigration and resulting unemployment problems in the country can be abolished only if US companies stop employing undocumented workers. Sumption suggests three mechanisms to control the unauthorized employment in the US and they are employer sanctions and status verifications; facilitating legal immigration; and labor market reforms and enforcing labor standards. Threat of fines or legal proceedings is a better way to persuade employers to abstain from hiring undocumented immigrants. While implementing such a legal provision, regulators must provide employers with a proper mechanism to enable them to review their workers’ immigration status. It has been observed that illegal immigrant workers are forced to work long hours. Therefore, if the government can effectively prevent unauthorized immigration through policies like employer sanctions, more native workers can share the unfilled job vacancies. From the view point of Sumption, it is also better to limit the size of the informal economy and to strengthen the core labor regulations instead of focusing on the employment of illegal immigrants. This policy change may reduce the cost and flexibility benefits that employers expect from hiring unauthorized immigrants. Furthermore, strict law enforcement is inevitably essential to stop illegal immigration and unauthorized employment. Conclusion From the above discussion, it is clear that the issue of illegal immigration has been a challenge to the United States for many centuries. Support from US corporations assisted illegal immigrants to find jobs and stay in the country despite strict border enforcement. Evidences suggest that undocumented immigration has had severe impacts on the country’s wage structure and employment landscape. The illegal immigrant workers were willing to work for long hours at cheap wages and hence the US employers are happy to employ those people. However, this situation reduced the wage rates for unskilled native workers and gradually resulted in an increase in the number of unemployed natives. Over the time, unauthorized employment fuelled the unequal income distribution in the country and the situation caused to raise crime rates among unemployed natives. Despite 5.5 million unemployed natives residing in the country, the US is still home to nearly 11.5 million illegal immigrants. Employer sanction is identified to be a potential policy initiative to curb unauthorized employment and to prevent undocumented immigration. Finally, the Labor Markets Initiative is a recent policy focused initiative taken by the MPI to review the effect of immigration in the US labor market. Works Cited Borjas, George J (ed.). Mexican Immigration to the United States. Chicago: University of Chicago Press, 2007. Print. Butcher, Kristin F and Piehl, Anne Morrison. “Crime, corrections, and California: What does immigrations have to do with it?” California Counts, (2008), 9(3): 1-24. Borjas, George et al. “Immigration and African American employment opportunities: the response of wages, employment, and incarceration to labor supply shocks”. National Bureau of Economic Research, 2006. Web 11 Dec 2012 http://www.nber.org/papers/w12518.pdf Hass, Hein and Vezzoli, Simona. “Migration and development lessons from the Mexico-Us and Morocco-EU experiences”. Working papers, 22. IMI. 2010. Web 11 Dec 2012 http://www.imi.ox.ac.uk/pdfs/imi-working-papers/wp-22-hein-simona Migration Policy Institute. Labor markets initiative. Web 11 Dec 2012 http://www.migrationpolicy.org/lmi/ Preston, Julia. “Decline Seen in Numbers of People Here Illegally”. The New York Times, July 31, 2008. Web 11 Dec 2012 http://www.nytimes.com/2008/07/31/us/31immig.html?partner=rssnyt&_r=0 Ryan, Christopher, P. “Real Unemployment Rate: 5.5 Million Young People Are Out of Work, in a Major Crisis For the US”. Policymic, web 11 Dec 2012 http://www.policymic.com/articles/16020/real-unemployment-rate-5-5-million-young-people-are-out-of-work-in-a-major-crisis-for-the-us Sumption, Madeleine. Policies to curb unauthorized employment. Migration Policy Institute, 2011. Web 11 Dec 2012 http://www.migrationpolicy.org/pubs/unauthorizedemployment-2011.pdf Unger, Stephen J. “Immigration: Who wins? Who Loses?” Feb 27, 2010. Web 11 Dec 2012 http://www1.cs.columbia.edu/~unger/articles/immigration.html Read More