The Effect of Immigration on USA Economy - Essay Example

Immigration: When analyzing the impact of immigration in the United s, there are three major issues that need to be considered. The first issue is that immigration leads to an increase in the economy of United States. However, this is not an indication that everyone benefits. Even if the immigrants benefit from immigration, there is no evidence that indicates that a substantial increase in the per capita income of Native Americans is as a result of the immigration. The second issue is that, there is an evidence of fiscal impact (Hansen, 31). This involves the taxes that these immigrants normally pay to the government. Because of their presence in United States, immigrants normally increase the tax revenue of the government. This is because most of them engage in economic activities within the country. However, there is a general consensus that immigrants who are less educated, and earn low income, are a fiscal drain to the country(Davies, 380). Furthermore, immigrants who are highly educated, earning high income are a fiscal benefit to the government. The third issue is that immigration affects employment opportunities of workers who are born in America (Brumfiel, 459). A basic economic theory gives a prediction that immigration should lead to a gain for the native workers. To achieve this objective, there is a need of redistributing income amongst immigrants and native workers. It is therefore right to explain that immigration plays an important in increasing the economic growth of United States. Immigration helps in increasing the revenue base of the US government. Anderson (24) explains that the presence of immigrant workers in the US labor market leads to the collection of approximately 1.6 trillion US dollars per year (Davies, 379). The government may use this money to develop its economy. The government can spend this type of money on security, defense, labor, foreign relations, etc. However, Miller (13) argues that despite this contribution to the economy of United States, the Native Americans do not benefit. Of this amount, a large percentage goes to the payment of labor and other wages to the immigrant workers. In fact, the percentage stands at 97.8%. This is a massive percentage, and it leaves little room for the government to use this money for development projects. However, Dvorak (23) maintains that with proper planning and management, chances are high that the wage rate of immigrant workers can reduce. This is beneficial to the government, mainly because it would remain with money to use for development purposes. Policies such as the creation of minimum wages can help the government reduce the amount of wages that it pays to immigrants. The US government has set aside a minimum wage rate, that employers should pay ton their employees. This is in regard to the number of hours worked. For example, the current minimum wage rate is 7.25 dollars per hour. Anderson (36) argues against such kind of a policy, denoting that this is an interference of the economy by the government. All that the government needs to undertake is to develop the economy of the country. This would create job opportunities, hence an increase in the taxation revenue of the state. Furthermore, with an improved economy, chances are high that the economy may lack skilled workers to work in it. Immigrant workers may fill in the gap, and hence positively contribute to the growth of the American economy (Hansen, 37). However, concerns normally rise that immigrant workers would take jobs from low skilled workers, who are natives of America. The American economy is capitalistic in nature, with very little interference by the government. This means that the economy is very competitive, in terms of labor and doing business in America. It is therefore unfair to assert immigrant workers are a threat to the low skilled labor force in United States. This is because they ought to improve their skills for purposes of matching the skills that immigrant workers bring in United States (Brumfiel, 458). Furthermore, some of these immigrant workers are engaged in business activities within United States. This is beneficial to the US economy under two areas. The first issue is that it leads to an increase in the government revenues collected by the state. The second advantage is that it leads to a creation of job opportunities within the country. Therefore, the assertion that immigrants are a threat to low skilled workers in United States is false. This is because their presence helps in increasing job opportunities in the country. This is by the various investments that they are involved in. Miller (17) explains that the economic activities engaged by immigrants have an impact of employing approximately 5% of the US workforce. This is a massive number of people; hence it is inaccurate to explain that the immigrant provides unfair competition to the Native Americans. This is in consideration to the employment opportunities that immigrants create in the country (Brumfiel, 458). Furthermore, immigrants are able to provide market for the goods and products of Americans. For example, immigrants occupy more than 3 million rental houses in United States. This represents approximately 4% of the rental income to various home owners. Their consumption patterns is not only limited to rental incomes, but to food substances, clothes, cars, etc. Companies and business organizations are normally attracted to markets that have a large number of people (Davies, 377). This is the reason countries such as China, and India have managed to attract a large number of Multi-national companies. These companies are interested to the large number of people who are found in these countries, and they view them as their potential market. In explaining this point, Anderson (36) denotes that in the year 2010, the total amount of money that immigrants earned was 1.1 trillion dollars. This means that their purchasing power during this period of time was approximately 1.1 trillion dollars. Through these purchases, the immigrants play a role in maintaining the operations of business organizations in the US. Hansen (28) predicts that by the year 2015, the purchasing power of Asians and Latinos would reach approximately 775 billion dollars, and 1.5 trillion dollars respectively. The following table and graph indicates the number of illegal immigrants who came in the United States between the periods of 2005 to 2011, (Courtesy of Procon.org) Year Number 2005 10, 500,000 2006 11,550,000 2007 11,780,000 2008 11,600,000 2009 11,750,000 2010 11,600,000 2011 11,500,000 Procon.org, 5. The role of immigrants in formation of companies is depicted in the ownership of Fortune 500 business organizations. More than 40% of these companies were formed by an immigrant. Furthermore, hiring immigrants is beneficial to employers, and this is because they would pay a less amount of money in terms of welfare contributions to the government, and other related costs. Immigrants also contribute greatly to science and technology. Anderson (51) explains that immigrants account for 29% of all scientists found in United States. Miller (17) further explains that 50% of people holding PHD in mathematics and computer science are immigrants. Furthermore, in the 1990s, immigration was responsible for the development of cutting edge technologies, adopted by companies. This is because a third of the technological patents that was found in the 1990s belonged to immigrants. These innovations contributed greatly in increasing the GDP of the American economy by 2.4% during the period of the 1990s. Miller (23) further explains that immigrants have played a role in starting 25% of American companies. This includes companies such as Yahoo, Sun Microsystems, eBay, and Google. Immigration also helps in improving tourism. Tourism and travel industry is the biggest export service industry in the United States. For example, in the year 2012, the government of United States was able to get$ 168.1 billion, in the tourism and transport industry. This industry was able to support and create 7.7 million work opportunities in the country. This is in the year 2012. This number is very high, making tourism and the transport sector to be important industries in United States. Furthermore, the importance and impact of this industry would continue to grow, and this is mainly because of the evolution of newly industrialized economies, such as that of India, Brazil and China. These countries have a robust middle class, whose vacationing character is of great importance to United States. With proper immigration policy, the US government can attract these visitors, whose countries make up approximately 40% of the global population. Immigration therefore plays an important role in promoting tourism in United States. In conclusion, immigration is a very sensitive topic in United States. This is because many people fear that immigrants play a negative role in the American economy. There is a false conception that immigration leads to unfair competition of the available job opportunities in United States. However, this is not the case. This is because immigrants have a positive impact on the economy of United States. Most of them start small businesses, which plays a role in employing Native Americans. Furthermore, these immigrants come with skills that are difficult to find in the United States. This is the reason that most of them hold PHD degrees in science and mathematics, contributing to the creation of cutting edge technology. Works Cited: Anderson, Stuart. Immigration. Santa Barbara, Calif.: Greenwood, 2010. Print. Miller, Debra A. Immigration. Detroit: Greenhaven/Gale Cengage Learning, 2010. Print. Top of Form Bottom of Form Dvorak, William. Immigration in the United States. New York: H.W. Wilson, 2009. Print. Bottom of Form Hansen, Randall. "Immigration & Immigration Reform in the United States: An Outsiders View." The Forum (2009). Print. Top of Form Bottom of Form Brumfiel, Geoff. "Researchers Rage at Tightened Restrictions on US Immigration." Nature (2003): 457- 58. Print. ProCon.org. "Illegal Immigration, Population Estimates in the United States, 1969-2011." Illegal Immigration Solutions. Pro Con. Web. 31 Oct. 2014. . Davies, Ian. "Latino Immigration and Social Change in the United States: Toward an Ethical Immigration Policy." Journal of Business Ethics (2009): 377-91. Print. Read More