The Impact of Immigration in the United States Labor Market - Essay Example

United s and other western nations have experienced a resurgence of immigration for many years since the end of World War II. According to the United Nations estimates, about 3 percent of the world’s population resides outside their country of birth (United Nations, 2002). United States is one of the traditional choices for many immigrants from developing nations. It is not surprising now that a lot f debate has been in the public domain as to the impact of increased immigration, especially in the United States. Of particular concern, however, are the increased unauthorized immigrations along the United States’ borders of Mexico and other neighboring countries. United States is known for its long history of immigrations. For nearly a half a century, United States has experienced the largest and most sustained illegal immigration in the country’s history. While the illegal immigration phenomenon has constantly changed demographic landscape of the country, it has also generated a lot of debate as far as economic and social structure of United Sates is concerned. Of most concern is the large number of immigrants from the Latin America, which are largely unauthorized. The American public has been awaken to the reality that immigration from Latin American countries to the United States has moved to regions or states which, traditionally, had never experienced any of such phenomena before. The worry among the American public is compounded by the negative impact of such unauthorized immigration, which has subsequently changed the social fabric within the communities. While there is a general perception that illegal immigrants from Mexico have fuelled the dropdown of wages of the less educated Native Americans, some researchers disagrees. Those against this general perception state that this notion is wrongfully overstated, as many of the so called illegal immigrations offered cheaper labor to small businesses which led to their expansions. Significantly, this debate has motivated a beehive of research activities among scholars. Research attempts have been made to document how the immigration has affected the United States labor market in the last few decades. In line with these studies are the various policies that have been instituted and enforced in certain states. Some have caused controversy for the last three decades, igniting debates on their ramification on the general economy of the United States. Some of these policies are like enforcing barriers along the expanded border of United States and Mexico as well as identifying and removing unauthorized immigrants in huge numbers. It can be noted that the number of illegal immigrant deportees have doubled in the last ten years. But do these policies add value to the United States labor market and economy? California, known for its history as the one of the biggest hosts of immigrants in the last three decades, is one state that can provide the actual picture of the phenomenon. According to the national statistics, wages in California State fell by 17% since 1980. However, Ohio, unlike California, has no significant history of illegal immigrants for the same period of time. But a recent national data indicates that Ohio had one of the highest wage falls of 31% between 1980 and 2004, double that of California. As the debate rages on the need to overhaul the United States’ immigration laws, various economists and pundits have constantly sounded the alarm that illegal immigrants are bad for the economy as they compete for jobs that should be reserved for the natives. But a simple data from the two contrasting states of California and Ohio indicate that this notion is misguided, as the Americans wages decline is far beyond the illegal immigration as a factor. Moreover, immigrants with high level of skills and have the ability to adapt quickly to their host state can create significant benefit to the economy. On the contrary, immigrants with no skills in demand are likely to find it difficult to adapt quickly subsequently increasing pressure on the public assistance programs and fuel inequality between racial and ethnic communities. The paper seeks to summarize and analyze the on-going debate on the impact of immigration in the United States’ labor market and, subsequently, economy. The main turning point for the increased large-scale immigration to the United States from the developing countries started after the 1965 Amendments to the Immigration and Nationality, which opened the door for more immigrants. It must be noted that before 1965, national-origins quota system restricted the number of immigrants who entered the United States per year. In this program, visas were awarded applicants from each country based on the then ethnic population of the United States as of 1920. The consequences of this quota system saw over 60 percent of the beneficiaries come from mainly Germany and United Kingdom. However, the 1965 Amendments, together with some other subsequent minor legislation, did away with the national-origins quota system. The amendments set higher standards for immigrants, based on the new objectives of reunification of families. Today, the United States grants majority of visas to individuals who already have relatives reside in the country. The increased restrictions on visa allocations have significantly increased illegal immigration as the immigrants seek to pursue the American dream. Of more concern, however, are the increased immigrants from Mexico, who use the porous American borders to enter the country illegally. The trend of illegal immigration started began way back in 1960s after the bracero program was terminated. Bracero program involved agricultural workers from Mexico, who offered low wage labor to the farm owners. This program was discontinued after the Americans public outcry because of the perception that it was restricting opportunities to the native workers. Congress moved swiftly and enacted the 1986 Immigration Reform and Control Act (IRCA). It is this legislation that gave amnesty to about 3 million foreigners who had entered the country illegally, and the subsequent introduction of a system of employer sanctions that was meant to cub any more illegal immigrant workers. However, studies have shown that this legislation did little to solve the problem, as more employers were lured by the cheap labor provided by the immigrants and used all means to conceal the identity of the illegal workers. For example, a 2004 data indicated that about 10 million illegal immigrants live in the United States, with Mexicans constituting the majority with well over 60 percent. More startling statistics is that the number of illegal immigrants getting their way into the United States increases by over half a million persons annually (Storesletten, 2000). The policy shift of the 1965 opened the door for a new dimension in the immigration activities. Although only half a million immigrants entered the United States in 1965, by 1990 about 1 million entered the country annually. Significantly, there were well over 3 million foreign-born workers in the United States’ labor market, representing approximately 5 percent of the total workforce. By the beginning of the 21st Century the over 15 million foreign-born workers represented about 13 percent of the United States’ workforce. Historical demographic settlement pattern of the immigrants suggests that they have tended to cluster in a small number of geographic areas. For instance, a state data indicated that 68 percent of the immigrants lived in the States of California, Texas, New York, Illinois, New Jersey and Florida. In fact, California alone was a host to about 30 percent of the total immigrants in the United States. However, the dawn of 1990s saw a spread out of immigrants from the traditionally immigrants receiving states to other parts of the United States. In this context, the labor market became more competitive as the impact of immigration continued to be felt. Adding impetus to the debate is the fact that some of the immigrants are highly skilled, while some barely have high school education. It must be noted that those without high school education are largely illegal immigrants who came from Mexico and other neighboring countries. Immigration and Labor Market: The Impact Analysis The continuously increasing immigration into the United States has led to intensified debate on the phenomenon’s effect on the US labor market. Ideally, immigration is expected to increase the supply of workers in certain labor markets. In his analysis of the impact of immigration, Card (2001) states that the limiting laws on immigration that were passed after the end of World War II were meant to keep the labor supply low, consequently keeping the wages high for the American citizens. This economic theory implies that opening the borders for more immigrants is more like lowering the wages of the workers in specific fields, prompting more competing workers. In such a scenario, workers with better skills are paid more. For instance, influx of foreign-born workers minimizes the economic opportunities of the locals, in that the latter faces more competition. Conversely, natives with high skills are likely to gain more. However, the significance of the immigration phenomenon is based on the nature of settlement for the immigrants in the United States. By 2000, for instance, about 38 percent of immigrants lived in major metropolitan states comprising of New York, Los Angeles, Chicago, and San Francisco. Significantly, only 12 percent of Native Americans lived in these cities of New York, Chicago, Los Angeles and Philadelphia. There has been argument that illegal immigrants have led to the dropdown of wages of lower cadre of jobs. This perception is lent credence by the increased covert media campaign against illegal immigrations, mainly from Mexico. Visible, illegal immigration has occupied core discussions and debates in the United States for the last four decades. Many have cited illegal immigration as one of the main cause of unemployment, dropdown of wages of high school dropouts and illegal activities such as drug trafficking. However, some have argued that the impact of illegal immigration is overstated, and that the state of unemployment for high school dropouts in the United States is something beyond one factor. Moreover, not all illegal immigrants are less educated. That is, some are highly skilled and significantly contribute to the American economy. States such as California have been cited as examples of those states which have experienced negative impact of immigration, as less skilled immigrants compete for jobs with the natives. Statistics shows that California, one of the states which have received some of the highest number of illegal immigrants for the last three decades, saw wages for the high school dropouts fell by about 17% between 1980 and 2004. However, Ohio, which has largely been devoid of illegal immigrants nearly doubled California’s drop by experiencing 31 percent drop in wages during the same period of time. Even as the debate on illegal immigration rages, it is clear that illegal immigrants causing drop in wages is an exaggerated debate, as the evidence is scanty, to say the least. Economic Impact of Immigration When United States experienced a surge in immigration from 1960s through 2000, the country’s labor market changed, consequently changing the terms of trade between workers and firms. Also affected were the incomes accruing to workers as well as the native residents of the respective states. One fundamental question that can be asked is whether this impact benefits United States’ natives. For one to be able to make accurate measurements of the economic gains arising from immigrants, it is important to analyze all the possible channels in which immigration affect the entire economy. First, immigration increases trade activities thus changing the prices of goods and services within the affected regions. Immigration also changes opportunities for employment, One important fact that can be taken into consideration is that immigration is has had its positives, as well as negatives. Perhaps one can argue that reduction in wages, pressure on the available resources and increased demand for care from state by increasing disadvantaged immigrants gives a negative image about illegal immigration. Another perspective is that for the last three decades, majority of the illegal immigrants in the American workforce never completed high school, thereby undercutting the positions of the American high school dropouts as they were more willing to work on the lower wages. However, a critical look at the phenomenon suggests that certain businesses would not be in existent if there was a complete ban on illegal immigrants for the last three decades. Lower wage demand by the foreign workers meant that many businesses had enough personnel to expand their businesses, thus creating more employments. For example, the poultry industry in Nebraska and the Strawberry farming in California largely benefited from the immigrants workforce. Today, American economy is largely run by technology and innovations. This means that America can do well with highly skilled immigrants. United States is a country that has thrived on the diversity of its population. America cannot hide from the fact that it has tremendously benefited from the illegal immigrants for the past decades. However, an important fact is that times have changed, with technological skills becoming more necessary than any other form of skill. It would be, therefore, necessary to have certain criteria for admitting immigrants into the United States. Card, D. (2001). “Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration,” Journal of Labor Economics 19, 22-64. Hamermesh, D. (1993). Labor Demand. Princeton: Princeton University Press. Samuelson, P.A. (1964). Economics, 6th Edition. New York: McGraw-Hill. Storesletten, K. (2000). “Sustaining Fiscal Policy through Immigration,” Journal of Political Economy 108, 300-323. Policy Paper Imagine that you are a policy analyst in an organization (such as county agency, state government, or political institute). Writing a good report is one of the most important skills you need to be successful in such a position. There are several different styles of writing (i.e. professional report, policy memo, academic paper). In this class, you will write a policy paper, focusing on a specific dimension of a policy analysis. These are the option you may consider. Please pick one (A, B, or C) and write a final paper. Due date December 11, 2012. Post on Moodle. A. Defining a Policy Problem Policy analysts have learned that it is extremely challenging to define a policy problem in an agreeable format. You may attempt to structure a policy problem in this assignment. My questions for this assignment are: (1) what is a problem that the policy you chose aim to address?; (2) why is it a problem from whose perspective?; (3) what is a major policy or program that the U.S. has established to address the problem?; (4) is the policy or program appropriate to address the problem you defined?; and (5) why or why not? Recommendations are optional. B. Identifying and Evaluating Alternatives It is inevitable that policy analysis has a qualitative aspect especially when we think about policy alternatives and selection criteria. You may want to think about policy alternatives to address your policy problem and evaluate them based on policy criteria selected. Be critical and clear on explaining trade-offs. Your final paper should include a Criteria and Alternative Matrix (CAM). You can add qualitative or quantitative evaluation on alternatives. Recommendations should be reasonable and persuasive. C. Performing Cost-Benefit Analysis Despite of well-known issues, cost-benefit analysis is used as one of useful policy tools to make a policy decision. If you want to do a quantitative and analytical project for a final paper, you may pick this option. Come up with two or three compelling alternatives to address a policy problem on which your team decided to focus. Identify tangible/intangible costs and benefits (at least 10 items, but no more than 20 items for costs and benefits). Perform a cost-benefit analysis. Consider and discuss discounting. Report the result with shortcomings, limitations, and weaknesses. The policy paper should be single-spaced, 12-point font, and no more than a total of 5,000 words (excluding references, tables, and figures). A cover sheet should be included with your name, title, course number, date, and word count. There should be a minimum of 10 references in the paper. Your references should include government documents, peer-reviewed articles, and books. A maximum of 6 web articles will be counted as references. All in-text citations and references should follow APA citation format. Policy Memo You will practice writing a short and concise policy memo, which is a common communication medium in public agencies. As a policy analyst, you will be in situations where you have to write a memo for policy makers or stakeholders. The policy memo should include key information you want to communicate to them. Use your policy paper to write the policy memo. You should be able to touch on and highlight key points in the paper and write a short memo directed to relevant decision makers or stakeholders. The memo should be single-spaced with 12-point font. Submit the memo with your final copy of the policy analysis paper. Due date December 11, 2012. Post on Moodle. Read More