The US has always had an internal struggle with immigration
and as we spoke about in class, especially in the 1920’s; the quotas imposed on
immigration in the 1920’s, simply for the reason of ethnic purity, ended up
being very harmful to our economy.
Today we find ourselves in a similar situation in which our
current president has made restrictions on immigration. These restrictions harm
us is multiple
ways:
The first being that immigration increases the population,
which increases the productivity of all factors, subsequently raising the
rental rate and benefits the home country as high- and low-skilled workers’
wages decrease slightly in the short-run.
The second is that with these immigration barriers and an
unsteady flow of immigrants, economic growth will be slower. As more and more
Baby Boomers exit the workforce and Americans have slower birthrates, we need
people to enter the workforce; that is where immigration comes in.
Pew Research states that within the next 15 years or so, the number of
working age adults will be up 13.5 million from 11.1m to 24.6m. If we did not
see this influx of immigrants, we would see a contraction of the bucket diagram
where the wage would rise due to employers’ demand of workers increasing; the
rental on capital/land would decrease and so would the marginal productivity of
these factors. This wage hike is only in the short-run, however in the
long-run, you can see how devastating this effect would be; if immigration is
restricted, this is exactly what will happen: the bucket diagram will contract,
and we will feel these effects.
The third is how these restrictions deter some brilliant
minds, as well as needed workers. With immigration having the greatest
effect on low-skilled and high-skilled labor, we find that these restrictions
end up deterring those with college level or above education, and lower than
high school education. This practically means that we could be deterring some
of the most brilliant doctors (or whomever) and that could have major affects
on our labor-force regarding R&D and even discourage future generations of
brilliant minds from entering those fields. However, as we looked at iso-cost
lines in class we can see that this might not necessarily be a bad thing, as
the US could focus on producing components and offshoring or outsourcing
R&D; although with this the US might be paying a little extra because they
wouldn’t be benefiting from the wage decrease and wouldn’t get the claim on
any patents for work that they outsourced.
If the US continues to produce immigration restrictions,
they might want to look at the disadvantages, before they repeat history.
Personally, I don’t think that they should put up more trade restrictions or
even maintain those that they have, because I think it harms the economy in
three ways: it declines the re-population rate, slows the economic growth of the
economy, and deters brilliant minds, as well as, discourages future generations—all
while potentially losing out financially.
Mark, I think you make several good points here to back up your assertion that immigration restrictions are bad. I would have loved to hear more on the discouragement of the domestic population to go into the work force. Why do you think this is? Do you think it could be because of the decrease in short-term wages, or is it more of a prejudice thinking in folks not wanting to work in a labor force that is saturated with immigrants? With unemployment rates being the lowest they have been in a long time, is there any reason to believe that at this point we need to open up for more immigration? I think it is interesting to think about when a good time is to open up immigration before that workforce starts to decline due to an aging population.
ReplyDeleteThis topic was very interesting, and your stress on immigrant restriction is true in that with more people coming in our it help increase all factors. Another interesting point was the fact that immigration increases rental rate but decrease wages. For another topic you could point out the disadvantageous of immigration restriction into a country and see what effect that has, then compare.
ReplyDeleteThis post and the reasons you bring up are very interesting and thought-provoking. Immigration is definitely a hot-button issue and something that will be eternally debated on. As somebody with no political ambition, I believe that immigration is something that can have a positive impact on the American economy as a whole. The three harms that you bring up are very true. But, what happens when employment rates are as low as they could realistically get? Do we still open up the flood gates and allow an unchecked amount of people to immigrate in? No doubt a difficult task, but does the concept of a 'quota' on immigration sound like it could possibly work?
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