In the past couple of classes we have discussed immigration and the effect that it has on American wages, and job opportunities. Though it is often seen as a bad thing for Americans and their wages, economic research proves that in the long run, as we discussed, that is not necessarily the case. Through the article posted below, I have come to a better understanding of why this is true.
http://www.americanprogress.org/issues/immigration/news/2013/08/29/73203/immigration-helps-american-workers-wages-and-job-opportunities/
The point that I found most interesting in this article, is the author's idea about manufacturing. When immigrants come into the United States to work, labor in the manufacturing sector is going to increase. Off-shore manufacturing will also decrease, and these two factors will benefit workers in the United States in the manufacturing sector. The demand (over the long-term) will rise for manufactured goods within the United States, thus increasing the number of manufacturing jobs domestically. Wages are then going to increase because of the increased demand for the manufactured goods produced domestically. The reason that a lot of American view this as a negative, is that this takes a lot of time to play out. Americans see immigrants coming into the country and working in their place. However, what they do not realize is that the immigration is causing an increase in the American terms of trade because of the increased output that has come with the rise in labor. The rise in labor also helps compliment the existing capital domestically. With the influx of labor and both high and low-skilled immigrants there is nothing but positive implications for wages in the long run.
An interesting point I found in this article is that when an abundance of labor enters the workforce, firms are able to absorb this and grow their business. Considering the United States is one of the most emigrated-to counties in the world, this could explain why so many American companies are as big as they are and were able to grow as quickly and as largely as they have. Without readily available labor, firms are not able to flourish.
ReplyDeleteI think the reason that this is such a huge issue for American families is because while it might work out in the long run, in the short run they have seen a decrease in wages. While they may be able to transition into a new sector that pays better, they still must go through the unemployment process, or at least try to find a new job, and in the meantime they are missing out on higher wages, and might not be receiving any at all. So while things might work out for the country in the long run, people can have opinions based on the short run because they need to survive day to day.
ReplyDeleteYou bring up some interesting thoughts in this post. This increasing jobs in the manufacturing sector is most likely in the long run. Many people might have issues with immigration because they see immediate decreases in wages in the short run. Also you discuss how the immigration can increase jobs in the manufacturing. Does this also increase wages? Another question I have is how does this impact other sectors maybe other sectors are seeing decreases in wages.
ReplyDeleteI read the link article and it mentions the same point as I mentioned in my post: the immigrants workers and native-born workers generally complement each other. They don't compete because of the different skill sets they have. However, the article mentions something that I didn't notice before and I found it very interesting, that is even though there are still workers that have substituted skill as the native-born workers, the firms can adsorb them by expanding. Also, the idea that immigrants can increase job in the manufacturing sector bring me some new thoughts about immigrants.
ReplyDeleteI read about investment Immigration called EB-5 visa. I compared illegal immigration. EB-5 granted 100% get a green card or American citizenship. But it caused over $500,000. I believe this immigration system will help America economy increase both high unemployment ratio and rural area. The other hand, also illegal immigration give America economy increase some lower payment job field.
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