Showing Page:
1/4
Impact of Immigration Policies on the Economy of America
Immigration is one of the most important issues of discussion when talking about the
economy of United States (U.S.). The major concerns of immigration related problems in
U.S. are listed below:
Exact composition or size of the immigrant population is not known
Effects of immigration on the workforce and economy
Impact of unauthorized immigration
Increased number of migrant children not accompanied by any adult that arrive the
Southwest border of U.S.
Our main concerns from these problems is how much is the contribution of immigrants (both
legal and illegal) to the economy of U.S. and how the immigration policies are negatively
impacting the economic growth of the country.
There is estimation that around 12 million immigrants in the U.S. are undocumented and
determining their involvement in economic growth of the country is very difficult, i.e. they
might be impacting the economy in a positive way or in a negative way. If one looks at the
rate of immigration, there has been tremendous increase since 1960s. It is estimated that
about 300,000 immigrants entered U.S. illegally while about one million entered legally
during each year of 1990s. This led to tremendous population growth in the country; thereby,
increasing the demand of food and space in the country.
The immigration policies in the U.S. were formed on the basis of quota system. The current
immigration policies in the country allow considerable number of immigrants to enter the
country illegally. The Immigration Reform and Control Act (IRCA) of 1986 is the base of
Showing Page:
2/4
current U.S. policy on illegal immigration. This policy has made it illegal for hiring employs
immigrated through illegal means and also expanded the enforcement on borders.
It has been argued that immigration is advantageous to the economy as employers can hire
new immigrants at lower wages; thereby, promoting the gain of consumer as labour costs
would decrease and so the prices of goods and services. However, these lower wages have
overall reduced the pay scale of jobs particularly unskilled jobs due to which Native
Americans have to face problems as they have to compete with immigrants for getting the
jobs and have to work on lower wages in order to get the job.
The undocumented immigrants in U.S. usually send the money to their home countries as
remittance but they also spend some portion of their earning; thereby, promoting the
economy of the country. However their proper share in the economic growth is hard to
calculate. Now since the immigrant population has increased considerable in the country, the
requirement for basic living, i.e. food and space has also increased. This has bad impact on
the economy of country. Food items that are grown in the country for being exported out to
other parts of the world are used for fulfilling the demands of country population; thus, the,
trade earnings from food export has decreased. More goods and services are needed to be
produced for meeting the population’s requirement.
Another important unknown factor of the undocumented immigrants in the U.S. is their
involvement in government services. Since these workers get their salaries or wages in the
form of cash, they are no tax deductions. These workers are serving as a barrier in the growth
of economy, although not majorly, by enjoying all the benefits in the country without paying
taxes.
Under a baseline scenario, fiscal policy is set so that the debt/GDP ratio is kept
constant, newly arriving immigrants have the average characteristics of the current
Showing Page:
3/4
foreign-born population, and the speed of assimilation to natives’ wages and family
structure is the same as in the past. (Smith and Edmonston, 1997)
The American economists argue that formation of a more liberal immigration policy would
be advantageous for the whole economy of U.S. Barack Obama, the U.S. President, has
announced reform parts of the U.S. immigration system for boosting the economy of the
country. According to his proposal, about four million of illegal immigrants in America
would be given legal status along with reformation of visa process so that high-skilled
technology workers can also get chance to work in America.
An American economist has estimated this will give a boost to the economy in short term by
increase labour income to $6.8 billion and tax revenues to $2.5 billion. Further this can create
around 160,000 jobs in the country. In long term, there has been estimation of increase in the
gross domestic product (GDP) from 0.4% to 0.9% by implementing the proposal.
Many economists however argue that bringing more technically wise people from around the
globe may increase the risk of getting employed for the native citizens of the country but in
view of other economists this has no impact on Americans employment opportunities. As
according to Prof. Peri “Most of the economic literature suggests that when you bring in more
high-skilled workers, that benefits everyone. They generate more productivity, and they don't
displace other workers.”
Another way of supporting the economy of the U.S. is to look at the wages and salaries
earned by the immigrants and the income which they earn from the businesses owned by
immigrants. They should be made to pay taxes to the federal government of the country to
help in their economic growth and makes their share of living in the country. However the
exact impact of undocumented workers on the economy of the country is not known and it is
a topic of debate amongst the economists.
Showing Page:
4/4
References
1. Gittleson, K. (2014, Nov 25). US economy: will immigration reform help the recovery?.
Retrieved from http://www.bbc.com/news/business-30182934
2. Hanson, G.H. (2001, June) Immigration and the U.S. Economy: Labor-Market Impacts,
Illegal Entry, and Policy Choices. Retrieved from
http://www.frdb.org/be/file/_scheda/files/copy_0_paper2_23jun01.pdf
3. Matthews, C. (2013, Jan 13). The Economics of Immigration: Who Wins, Who Loses and Why.
Retrieved from http://business.time.com/2013/01/30/the-economics-of-immigration-who-wins-who-
loses-and-why/

Unformatted Attachment Preview

Impact of Immigration Policies on the Economy of America Immigration is one of the most important issues of discussion when talking about the economy of United States (U.S.). The major concerns of immigration related problems in U.S. are listed below: • Exact composition or size of the immigrant population is not known • Effects of immigration on the workforce and economy • Impact of unauthorized immigration • Increased number of migrant children not accompanied by any adult that arrive the Southwest border of U.S. Our main concerns from these problems is how much is the contribution of immigrants (both legal and illegal) to the economy of U.S. and how the immigration policies are negatively impacting the economic growth of the country. There is estimation that around 12 million immigrants in the U.S. are undocumented and determining their involvement in economic growth of the country is very difficult, i.e. they might be impacting the economy in a positive way or in a negative way. If one looks at the rate of immigration, there has been tremendous increase since 1960s. It is estimated that about 300,000 immigrants entered U.S. illegally while about one million entered legally during each year of 1990s. This led to tremendous population growth in the country; thereby, increasing the demand of food and space in the country. The immigration policies in the U.S. were formed on the basis of quota system. The current immigration policies in the country allow considerable number of immigrants to enter the country illegally. The Immigration Reform and Control Act (IRCA) of 1986 is the base of current U.S. policy on illegal immigration. This policy has made it illegal for hiring employs immigrated through illegal means and also expanded the enforcement on borders. It has been argued that immigration is advantageous to the economy as employers can hire new immigrants at lower wages; thereby, promoting the gain of consumer as labour costs would decrease and so the prices of goods and services. However, these lower wages have overall reduced the pay scale of jobs particularly unskilled jobs due to which Native Americans have to face problems as they have to compete with immigrants for getting the jobs and have to work on lower wages in order to get the job. The undocumented immigrants in U.S. usually send the money to their home countries as remittance but they also spend some portion of their earning; thereby, promoting the economy of the country. However their proper share in the economic growth is hard to calculate. Now since the immigrant population has increased considerable in the country, the requirement for basic living, i.e. food and space has also increased. This has bad impact on the economy of country. Food items that are grown in the country for being exported out to other parts of the world are used for fulfilling the demands of country population; thus, the, trade earnings from food export has decreased. More goods and services are needed to be produced for meeting the population’s requirement. Another important unknown factor of the undocumented immigrants in the U.S. is their involvement in government services. Since these workers get their salaries or wages in the form of cash, they are no tax deductions. These workers are serving as a barrier in the growth of economy, although not majorly, by enjoying all the benefits in the country without paying taxes. Under a baseline scenario, fiscal policy is set so that the debt/GDP ratio is kept constant, newly arriving immigrants have the average characteristics of the current foreign-born population, and the speed of assimilation to natives’ wages and family structure is the same as in the past. (Smith and Edmonston, 1997) The American economists argue that formation of a more liberal immigration policy would be advantageous for the whole economy of U.S. Barack Obama, the U.S. President, has announced reform parts of the U.S. immigration system for boosting the economy of the country. According to his proposal, about four million of illegal immigrants in America would be given legal status along with reformation of visa process so that high-skilled technology workers can also get chance to work in America. An American economist has estimated this will give a boost to the economy in short term by increase labour income to $6.8 billion and tax revenues to $2.5 billion. Further this can create around 160,000 jobs in the country. In long term, there has been estimation of increase in the gross domestic product (GDP) from 0.4% to 0.9% by implementing the proposal. Many economists however argue that bringing more technically wise people from around the globe may increase the risk of getting employed for the native citizens of the country but in view of other economists this has no impact on Americans employment opportunities. As according to Prof. Peri “Most of the economic literature suggests that when you bring in more high-skilled workers, that benefits everyone. They generate more productivity, and they don't displace other workers.” Another way of supporting the economy of the U.S. is to look at the wages and salaries earned by the immigrants and the income which they earn from the businesses owned by immigrants. They should be made to pay taxes to the federal government of the country to help in their economic growth and makes their share of living in the country. However the exact impact of undocumented workers on the economy of the country is not known and it is a topic of debate amongst the economists. References 1. Gittleson, K. (2014, Nov 25). US economy: will immigration reform help the recovery?. Retrieved from http://www.bbc.com/news/business-30182934 2. Hanson, G.H. (2001, June) Immigration and the U.S. Economy: Labor-Market Impacts, Illegal Entry, and Policy Choices. Retrieved from http://www.frdb.org/be/file/_scheda/files/copy_0_paper2_23jun01.pdf 3. Matthews, C. (2013, Jan 13). The Economics of Immigration: Who Wins, Who Loses and Why. Retrieved from http://business.time.com/2013/01/30/the-economics-of-immigration-who-wins-wholoses-and-why/ Name: Description: ...
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.
Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4