The Impact of Mexican Immigrants on the Economy of the US - Research Paper Example

?Introduction Economics of immigration is one of the most interesting s giving its overall complexity as well breadth of the overall impact itcan have on the national and international economy. Over the period of time, complexity of the immigration and its economic impacts has increased thus giving rise to significant political and cultural issues. The widespread differences between the education and level of wealth between the immigrants and the native population therefore created strong political conflicts within such economies. The current economic downturn in developed economies like US and UK has also raised the question of whether immigrants are taking over the jobs of others or not and whether more indigenous economic resources are being diverted for the benefit of immigrants. One of the most important reasons as to why I chose this topic therefore is to understand the dynamics behind the economic impact of immigrants on the economy. The reason why I m choosing this topic is based on the assumption that the flow of qualified, skilled as well as unskilled labor actually contribute towards the economic progress of any country. The typical topic of my paper therefore is to assess the impact of Mexican immigrants on the economy of US. One of the major sources in this regard is the work done by Robert J Shapiro on the impact of immigration on the wages of the American workers. Though this work is not specific to Mexican immigrants however, it provides a general overview of the impact of immigration on the economy. Empirical and Theoretical Evidence There are many studies which have either supported the role of immigrants in any economy or rejected their impact on the economy. Shapiro’s study suggest that less than 57% immigrants come from Mexico or Latin American countries therefore making Europe and Asia are the major areas from where the recent immigrants are migrant towards America. (Shapiro). It is however, important to note that the major influx of immigrants in American came during 1881 and 1924 when more than 25 millions people immigrated to America for better future and new prospects. However, this flow was restricted after that period and due to changes in the immigration laws, the new flow of immigrants started to emerge after 1965. Since the last decade of 20th century and in the first decade of 21st Century, America is believed to have received more than 1 million immigrants mostly from Mexico and other Latin American countries. (Bodvarsson and Berg) The evidence of the economic earning of the immigrants in US showed somewhat erratic results as during 1970s’ an ordinary immigrant, on average, earned 1 % more than the native citizens however, this trend shifted during 1990s when natives were earning almost 15% higher than the immigrants. This decline in the wage rates and earnings of the individuals therefore also reignited the long debate as to whether the immigrants should be allowed to enter into the country. This was owing to the fact that lower wages demanded by immigrants also lowered the wages for the native citizens. (Borjas) Some studies suggest that the immigrants tend to cluster themselves in certain geographical locations and live in groups. It was estimated that during 1990, more than 70% of the population of the immigrants lived only in six different States of US. This concentration of immigrants therefore also gives rise to the unique interpretation of the fact that immigrants tend to concentrate themselves in regions with most prospects to get jobs or related work. Studies however, also show that due to this concentration, the overall impact of the immigrants on the wage rates for the native citizens is relatively small. Though there is a strong correlation between the wage rates of both however, this correlation is showing relatively small differentials in the wage rates of the immigrants as well as the native citizens. (Borjas, 2001) There are also two important perceptions about the immigrants and their impact on the economy. The firms or producers view immigrants as source of cheap and inexpensive labor therefore they prefer to hire them. However, native citizens see them as potential challengers to their jobs and therefore view them unfavorably. The gains made from employing the low cost labor therefore could vanish for the losses incurred by the economy as a whole for the loss of jobs of the indigenous population. However, since immigrants also serve as consumers therefore their increase in number generally serve the economy though immigrants save more than they earn. The increase in the aggregate demands due to increase in population therefore can result into economic growth for the destination country. (Smith and Edmonston) Results The available studies on the economics of immigration are diverse in nature however; there are still some areas which require further research. One of the key areas which existing research studies are lacking is measuring the impact of different immigrant groups on the economy. Most of the studies have attempted to map the impact of immigrants on whole rather than focusing on understanding the impact of individual communities on the economy of the geographical areas where immigrants are mostly concentrated. Since Mexicans are one of the largest immigrant communities in US therefore assessing their impact on the economy would be more beneficial. In order to accomplish this task, it is suggested that a regression analysis may be performed on the economic growth of any area where the number of Mexican immigrants are higher. This would allow measuring the impact of the same on an individual economy of the place where the overall concentration is higher. Though this approach may not enable to comprehend the overall impact of Mexican immigrants on the whole US economy however, it can help to distinguish the impact of one particular community of immigrants on the economy of that particular area. Further, it is also suggested that the impact of the wage differentials and the nature of profession of the Mexican immigrants to be measured. This will allow understanding the concentration of Mexican immigrants in particular segments of the economy while at the same time allowing developing better understanding regarding the overall wage differentials between the natives and Mexican immigrants. Conclusion Economics of immigration is considered as one of complex areas in economics owing to multiplicity of different issues arising due to the process of immigrations. Immigrants not only have the economic impact but they also bring in the cultural diversity as well as the political complications. It is also argued that the immigrants tend to live in small groups and concentrate on different geographical regions rather than spreading themselves around the country. The patterns of immigration in US are relatively erratic in nature with major influx of the immigrants took place during the first half of the 20th century. However, during the last decade of 20th century as well as in the first decade of 21st century, there is a renewed increase in the number of immigrants. This is also against the fact that most Americans now view immigrants as unwanted and a burden on the economy. The economic impacts of immigrants include impacts on the wages, aggregate demand as well as housing and other related aspects of economy. Mexican immigrants form one of the largest immigrants chunk in US however, few studies have specifically attempted to study the impact of Mexican immigrants on the US economy. The overall impact of the Mexican immigrants has remained largely undocumented therefore there is a need to further probe this issue and highlight the overall impact of Mexican immigrants on US economy. Bibliography Bodvarsson, Orn Bodvar and Hendrik Van den Berg. The Economics of Immigration. Theory and Policy. London: Springer, 2009. Borjas, George J. Heaven's door: immigration policy and the American economy. New York: Princeton University Press, 2001. —. Issues in the economics of immigration. Chicago: University of Chicago Press, 2000. Shapiro, Robert J. The Economics of Immigration Are Not What You Think. 26 May 2010. 25 July 2011 . Smith, James Patrick and Barry Edmonston. The immigration debate:studies on the economic, demographic, and fiscal effects of immigration. Washington: National Academies Press, 1998. Read More