Economic Impact of Immigration in the US - Literature review Example

Economic Impact of Immigration in the US College: Economic Impact of Immigration in the US Introduction The history of immigration in the world is long and with consequential impacts on the global economy. Unlike in the past while people crossed borders illegally due to harsh conditions in their own countries, today migration has taken a legal face. As globalization becomes a reality, people are moving from one country to the other in search for education, job or business opportunities. Consequently, there has been a high inflow of foreigners in developed countries, raising questions on the impact of immigration in the affected countries. For instance, in the US, there are over 40 million immigrants in America coming from different regions of the world. The economic impact of immigration is a topic that has attracted a lot of attention in the public domain. In the US, economist have held a long debate on whether immigrants impact on the US economy is positive or negative as part of their strategy of defining immigration policies. While some authors express the high cost of settling immigrants and their social influence as demerits, others see immigrants as a cheap source of labor and hence a potential for industrial expansion. From a critical point of view, it is clear that immigrants in the US have negatively impacted on the US economy. A wide range of scholars have contributed to the controversial debate of the economic impact of immigrants in the economy of the US. While it is clear that immigration has both benefits and demerits to the US economy, research has yet to weigh the two effects and provide a conclusive response on its overall impact. The purpose of this article is to evaluate how immigrants have affected the US economy so as to shed some light on the matter. By focusing on previous literature by other authors, it is possible to draw a clear picture on the possible impacts of both legal and illegal immigrants in the US. An analysis of the various literature propositions will close the gap that still exists in the unresolved debate. The article will also show the role that the US government has in ensuring that the immigrants contribute to economic growth of the country. Literature Review The US is one of the countries in the world that has experienced the highest level of foreigner inflow in the world. In the year 2012, the population of the Immigrants was about 41 million in the United States. Statistics show that over 20% of the world immigrants reside in the US, making it a host the largest share of immigrants globally. Immigration into the US started w ay back in the 19th century, and is still evident in the present times. In 1850, the US had over 2.2 immigrants amounting to about 10% of the US population. The inflow of Mexicans and Europeans resulted to 5% increase in the US foreign-born by the year 1890. This led to the development of new immigration policies to control the inflow of foreigners into the US. In 1921 and 1924, the US government legislated regulative laws restricting inflow of foreigners into the country, hence decelerating the rate of inflow. By the year 1970, the government had reduced the proportion of aboriginals to 5% of the total country population. However, in 1970, there was a rapid increase in the population of Latin American immigrants and Asians (Nwosu, Batalova & Auclair, 2014). Evidently, the population of foreigners is increasing in US due to the globalization effect that has opened opportunities for people to move to new countries. From statistics, 37% of the US immigrants entered between the year 2000 and 2002. The immigrant composition has been an important matter of attention to the public as this alludes to the potential of the immigrants to contribute to the US economy. From the 2012 US immigrant statistics, 18.7 million of the foreign born were naturalized citizens while the rest, about 54%, were legal immigrants, illegal immigrants and others on temporary visas and temporal workers. The majority of immigrants in the US on basis of race include whites, Asians and blacks comprising of 48%, 25% and 9% respectively. The existence immigrants born in the US is an important factor. In the process of Assimilation, most of the immigrant born in America has acquired registration in US, hence becoming legal US citizens. Among the 41 million immigrants in the US, only about 29% of them have attained the college level education (Nwosu, Batalova & Auclair, 2014). The different characteristics of the US immigrants have great significance on their ability to contribute to the economic development of deterioration of the US economy. In the recent past, there has evolved a controversial debate on how the US immigrant population have contributed negatively or positively to the economy of the country. Scholars have particularly focussed on the contribution of the immigrants to the growth of the US economy in terms of labour input. Since the beginning of immigration in the 18th century, the immigrants have formed a constant supply of labour in America. In the 1890s, when the Mexicans moved to America due to war and economic depression in the country. The US took advantage of the aboriginals to support their industrialization process. In the industrialization era, the US was faced by the challenge of finding abundant cheap labour until when the immigrants entered in the country. Since the immigrants were considered illegal entrants, the government and the US citizens isolated them. They could not access social facilities or even any form of finances. Consequently, working in the US industry for a low pay was the only solution to their financial challenges (Nwosu, Batalova & Auclair, 2014). On this ground, it is clear that the immigrants were crucial in the economic development in America, as industries form the largest source of revenue in the country. However, there has risen a counter argument on the contribution of the immigrants to the labour. The opponents of the former argument argue that immigrants have brought about competition in the labour force, leading to an increase in unemployment in the country. The immigrants who take up jobs in the industry sector prevent natives from acquiring the same opportunities. From a close look, the US working age has increase by 10% in the last five years, leading to a rise in the demand for employment (Bohn, 2010). However, the immigrants have taken over job opportunities that the natives would have benefited from. Additionally, the inflow of immigrants and the increase in the population of immigrants with college level education has resulted to job competition. Next, the assimilation of immigrants in US has paved way for equal opportunities for the natives and foreigners to compete for employment. On this note, there is a notion that the immigrants have affected the natives in a negative manner. Statistics show that majority of the immigrants have taken over 20% of job opportunities that the natives would have profited from. From this point of view, it is clear that the immigrants have brought about competition for jobs, hence negatively impacting on the economy of US. Secondly, another significant issue on the impact of the immigration on the economic aspect of the US is in tax contribution. The amount of tax contribution is an important factor while evaluating the contribution of different populations to the gross domestic product. Immigrants contribute very little on the tax since they work within the manual labour force. Only employees with higher than diploma level of education contribute to the largest portion of the income tax. However, those who argue bring the concept of immigrant surplus to support the fact that immigrants are an economic burden to the country. They point out that since the US immigrant surplus is less than 1%, it is clear that most of the government utilizes most of the tax they contribute to settle them. On this ground, it is clear that the US immigrants make little contribution to the US economic growth. From a different angle, the non-natives contribute to about 11% GDP growth in the US every year due to their contribution in labour force, especially in the industrial sector (Camorata, 2013). Economic analysts have revealed a new approach to analyse GDP growth by focussing on the net growth of the country rather than the gross growth. The US immigrants’ contribution to the GDP is much less than its consumption. It is clear that the government spends a lot of money each year in settling the immigrants who have acquired nationalization. From this point of view, the negative impact of foreigners in the American economy far much outweighs its positive impact. Theorists have pointed out to various ways that the immigrants contribute to deflating the US economy. The immigrants’ access to social services in the US has contributed to huge losses in the country’s economy. The arise of the second generation of immigrants allowed some foreigners acquire full US citizens, allowing them to access all social services including medical services, schools and insurance policies. Despite contributing minimally to economic growth, it is clear that the immigrants use a lot of government resources. Clearly, the immigrants’ consumption of US resources by far exceeds their contribution. The US government spends about $15 billion on settling, assimilating and funding social services for immigrants (Sumption & Flamm, 2012). This high fiscal drainage is a big loss to the economy of the US country that comes along with the accommodation of foreigners. Resultantly, the inflow of immigrants in US hurts the economy of the country. A realistic theoretical model analyses the fiscal burden that the government shoulder on the immigrant based on their level of education. The US government spends about $89 thousand per year for immigrants without high school diploma and $31 thousand for those with high school diploma. These figures point out that there is a great disparity on the amount spent on immigrant depending on their levels of education. In fact, analytical texts show that immigrants with education higher than college level contribute about $105 thousand per year in the economy of the US economy (Camorata, 2013). This brings about the idea that it is not immigrants that contribute to the economy degradation but those who have no formal education. Therefore, the US government may be blamed for not taking responsibility in empowering the immigrants to ensure that they contribute to the economy as much as the citizens do. Evidently, the US government has been slow in initiating the absorption of the foreigner into the US economic system, hence experiencing low income from these minority groups. In addition, a direct relationship has been drawn between the increase in the level of crime in US and the rise in the immigrant population in America. Since the immigrants live in poverty stricken regions and have little access to social amenities, they end up in crime to meet their financial needs. Crime has a significant negative impact on the economy as it results to lack of security, which is crucial for investment. Discouraging investment results to reduction in the economic growth of business in the country, and hence a big blow to the US tax revenue (Camorata, 2013). Since the majority of crime perpetrators in US are foreigners, it is clear that immigrants have reduced the economic growth rate in the US. Isolation in the contribution of the legal migrants and unpermitted immigrants is crucial in defining the economic impact of this group. There exists a possibility that illegal immigrants contribute less to the economy since they have no right to government services as compared to the legal citizens. Intelligent reports show that illegal immigrants enter in US with ill motives such as perpetuating crime and terrorism. Consequently, the increase in crime level in the US due to inflow of immigrants pin points the negative impact of immigrants to the US economy. Criticism has emerged against the prevalence of the notion that immigrants contribute to economic deterioration in the US. The critics argue that the US has been biased in its measurement of the economic benefits of the immigrants to the US (Kerr & Kerr, 2011). For instance, while the government has measured its economic spending on immigrants, it has downplayed the contribution of this minority group to the labour force in the country. Secondly, the US government has failed in its role to present the immigrants with a platform to contribute to the economy of the country. Therefore, there seems to be unexploited potential of the immigrants and that the government has a responsibility to support the immigrants to ensure that they make contribute to the growth of the US economy. Analysis From a close observation, the negative economic impact of US immigrants far much outweighs the positive impacts. Some of the positive impacts of the immigrants include the provision of cheap labour that is crucial for US industrial sector. Over 60% of the US immigrants work in the manual labour and other capacities that the natives do not prefer to take (Bohn, 2010). On the other hand, the US natives take up formal jobs, which the immigrants lack the necessary skills to fit. The fact that the immigrants’ contribution in the industrial sector is unmeasured makes it hard to quantify the economic benefits of this group to the US economy. From this point of view, it is clear that the immigrants’ labour force is complementary to the US labour force, rather than competitive. From this point of view, it is clear that the US non-natives contribute to the economy of the country without competing with the US natives. On the other hand, there are many way in which the immigrants negatively impact on the US economy. To begin with, the US government spends more than $15 billion US dollars in settling and providing social services to the immigrants. The government spending is much higher than the tax income remitted by this group, hence leading to deficit in the economy. Secondly, immigrants contribute to high crime in the US, hence negatively affecting the business investment morale in the economy (Greenstone, Looney & Marks, 2012). Therefore, immigrants discourage investment hence affecting the economic activities in the country. The above points support the idea that immigrants considerably deteriorate the economy of a country. Important to note is that there is a significant difference in the economic and educational level between the natives and the immigrants. Notably, the contribution of any citizen of a country is directly proportional to their level of education. In US, immigrants with tertiary education have a significant positive impact on the US economy, while those with lower education or no education have a negative contribution (Bohn, 2010). This implies that if the government would raise the proportion of non-natives with higher than college level education, its GDP value would grow further. Therefore, nationalization strategies would be beneficial to the economy of the country. From a personal point of view, it is the plight of the immigrants in the US that limits the contribution of this minority group to economy growth. Inability of the immigrants to access education makes them engage in crime, hence negatively impacting on the economic growth of the country. Secondly, the country has a high proportion of non-citizens, hence making it hard for them to access education, which is crucial if this group has to contribute to the economic growth. In addition, US immigrants wail in poverty, making it hard for them to access social amenities, preventing them from becoming active citizens of the country (Greenstone, Looney & Marks, 2012). Therefore, the US government has neglected their responsibility of ensuring that immigrant contribute to economic growth of the country. Lastly, the employees’ low wages makes it impossible for them to pay significant tax to the US government, and hence the little contribution of the US tax revenue from this group. From this angle, the US government is partly to blame for the negative contribution of the immigrants to the economy of the country. Conclusion In conclusion, there is enough evidence to support the idea that US immigrants hurt the US economy. The US immigrants lead to job completion, high government spending and increase in the level of crime. Therefore, the US economy has suffered in the effort of accommodating immigrants. However, it is clear that the major reason why the immigrants have negatively influenced the US economy is dues to the inability of the government to close the wage, education and social gaps that limit the potential of the immigrant to contribute to the economy of the host country. It is clear that immigrants with higher education levels contribute immensely to the growth of the US economy. On this ground, the US government has to uphold its diversity management duty by upholding the dignity of their immigrants. To begin with, it is recommendable that the US government design new nationalization policies to foster economic growth in the country. While nationalization strategies may be expensive in the short-term, they will give the immigrants the chance to access acquire formal education and contribute to the economy of the US. Secondly, nationalization will allow the people to access social amenities, hence making life affordable for them. Consequently, immigrants will not engage in crime in an effort to fend for their needs. This will guarantee security for the investors, adding to the tax income in the country. On the other hand, it is crucial for the country to control illegal immigrant in the country. While immigrant may contribute to the economic wellbeing of the country, it is clear that illegal immigrant may hurt the economy due to externalities such as crime associated with such illegal entrants. In brief, the immigrants’ contribution to the economy of the US will largely depend on the ability of the government to support them, assimilate them and make them meaningful citizens of the country. References Bohn, S. E. (2010). The quantity and quality of new immigrants to the US. Review Of Economics Of The Household, 8(1), 29-51. doi:10.1007/s11150-009-9066-5 Camorata, S., (2013). The Fiscal and Economic Impact of Immigration on the United States. Center for Immigration Studies. Retrieved from:< http://cis.org/node/4573> Greenstone, M., Looney, A., & Marks, H., (2012). The US Migration System: Potential Benefits Reform. Retrieved from:< http://www.brookings.edu/~/media /research/files/papers/2012/5/15%20immigration%20greenstone%20looney/05_immigration_greenstone_looney.pdf> Kerr, S. P., & Kerr, W. R. (2011). Economic Impacts Of Immigration: A Survey. Finnish Economic Papers, 24(1), 1-32. Nwosu, C., Batalova, J. & Auclair, G., (2014). Frequently Requested Statistics on Immigrants in the US. Migration Information Source. Retrieved from :< http://www.migration policy.org/article/frequently-requested-statistics-immigrants-and-immigration-united-states> Sumption, M., & Flamm, S., (2012). The Economic Value of Citizenship for Immigrants in the US. Retrieved from :< http://carnegie.org/fileadmin/Media/ Publications /mpi_econ_value_citizenship_01.pdf> Read More