Immigration is Essential for American Economic Development
Immigration is Essential for American Economic Development
Immigration is one of the critical issues that frequently rock the United States political and economic arena. According to Abramitzky & Boustan (2017), the United States is a haven to the most significant number of immigrants in the world, yet they fail to integrate into the American civilization properly. Immigrants face the quagmire of negative perception from a large quantity of American society. However, they make several contributions to the US, which makes them a significant part of the progress of the American economy. This paper seeks to prove that immigrants are essential for American economic development.
Immigrants are a source of labour to the American market. A study by Borjas (2019) showed that in 2016, 16.6% of workers in the United States were foreigners. Millions of workers across the United States work in multiple positions in large firms, homes, and small businesses. The widespread view among American citizens is that immigrants ‘steal’ their jobs from them, but the fact is that industries take advantage of the cheap labour provided by immigrants. A study by Hirchsman (2014) indicated that most immigrants, mainly from Mexico, are lowly educated. Low edification means that they ask for fewer wages, which firms see as an advantage to cut costs, thus hiring them. Either way, their employment means that they contribute to the productivity and profitability of these firms, which in turn, through the payment of taxes and Corporate Social Responsibility activities, contribute to the economic development of the United States.
Additionally, immigrants act as supplements for industries facing worker shortage in the United States. According to Correa-Cabrea (2018), the construction industry, for instance, is on the verge of a significant lack of labour due to the strict non-immigration policies enforced by President Donald Trump. Some industries are heavily reliant on immigration workers, such as construction, due to the low availability of native workers willing to engage in them. Construction is a significant contributor to the US economy, with a 4.1% give to the GDP in 2018. Correa-Cabrea (2018) reports that cities like Houston, Texas, are bracing themselves for an acute shortage of workers in the construction industry due to the deportation of immigrants. Harsh immigration policies may, therefore, negatively impact the industry, and as a result, on US economic development.
Immigration also leads to a rise in the minimum wage offered to both native and local workers. According to Hinojosa-Ojeda (2012), a comprehensive immigration policy would raise the wage level for the whole US economy, which would benefit immigrant and non-immigrant workers. Orrenius & Zavodny (2008) stated that the fastest-growing group of minimum wage workers was immigrants. Zavodny (2014) also noted that an increase in the minimum wage raises the hourly wage gained by low-skilled employees, regardless of whether they are natives or immigrants. In their efforts to combat the misuse of non-native workers by organizations, various States raise the wage-floor earned by low-skilled workers who are mostly immigrants, and such leads to benefits for both American and non-American citizens. The effect is an improvement in health, productivity, and living standards for these workers, therefore contributing to the economic development of the United States.
Immigration is one of the utmost contributors to innovation in the US economy. Immigrants hold several patents in academic institutions and other sectors in the United States. American universities are continually searching for talent across the globe due to increased competitive pressure (Hirchsman, 2015), and immigration simplifies such. It is, therefore, evident that negative immigration policy would significantly impact the pace of innovation in the United States (Hanson, 2012). For instance, in the year 2013, 51% of patents in the United States were non-local. The strict protection of non-intellectual property by US law is an immense contributor to the large number of foreign-owned patents filed locally; therefore, the country should make it its aim to enhance its immigration policies. One of the most significant innovations in US history by an American immigrant was the telephone, brought to be by Alexander Graham Bell, who was an immigrant from Scotland. His invention has since immeasurably contributed to the US economy in the form of communication and information dissemination. Sergey Brin, one of the founders of Google, which is the largest search engine in the world, was also a Russian born immigrant to the US.
Foreigners moving into the United States are not necessarily low skilled workers, an influx of highly educated personnel move to the United States each year in search of better opportunities. Skilled immigrants have assisted in the formation of multiple engineering and technology startups that contribute immensely to the American economy and society, as observed by Wadhwa et al. (2008). Great examples of firms that were started by immigrants include Tesla, the famous electric automotive firm that was founded by Elon Musk, himself a South African immigrant, and Uber, which was started by a Canadian Immigrant Garret Camp. Both firms currently fly the American flag high and have significantly impacted the global economy. Uber provides millions of jobs to American citizens from all classes and created a revolution in the transportation industry. Tesla is arguably the world’s leading manufacturer of electric vehicles, and both firms pay vast amounts of taxes to the US government. Such is an excellent indicator of immigrants’ contribution to American economic development.
Subsequently, small and family-owned businesses owned by immigrants contribute immensely to the American GDP. According to Fairlie (2012), the business ownership rate in the US by immigrants stands at 10.5% compared to 9.3% for native US citizens. Irastorza & Peña-Legazkue (2018) also noted that immigrants undertake higher levels of economic activity than non-immigrants. Such could be attributed to the idea of self-employment sounding more appealing among immigrants, who have lesser opportunities for getting hired in contrast to natives. Fairlie (2012) likewise indicated that immigrant businesses are more likely to export their goods to foreign countries, standing at 7.1% concerning a 4.4% export rate among non-immigrant owned businesses. The export of local goods means an occurrence of domestic production and manufacturing and the creation of an international market and, therefore, the growth of local industries. The higher economic activity among such businesses leads to an improvement in the economic development of the United States.
Immigrants also attract foreign investment to the United States. A study by Hernandez (2018) indicated that for every 1% of the foreign population moving to the United States, 50% of firms in their homeland are willing to follow them to their location. Some international firms in the US may also feel more comfortable hiring workers from their birthplace. When such firms set up operations in the United States, they pay taxes and relevant fees, in addition to the employment of native citizens and an improvement in infrastructure. Such contributes immensely to the betterment of the American economy. A large population of immigrants is an incentive for any firm to set up shop close to a source of cheaper skilled labour, therefore contributing to an increase in the GDP of the located State. The entry of new firms also stimulates competition and entry of new products into the market.
Additionally, by spending their wages on locally manufactured products such as food, electronics, and vehicles, immigrants ensure an increase in demand, supply, and production quality. Additionally, the size of the American market for products increases, thus leading to increased competition among firms, which acts as an advantage for consumers. Local firms also grow in size, therefore gaining a competitive advantage. Additionally, firms that specialize in product manufacture, as well as the distribution of products found in immigrant homelands, help promote the growth of the US economy. They provide employment, as well as increase product variety in the market. Such revokes the hold of particular monopolies on the market, which contributes to American economic development.
Immigration to the US is now tougher, primarily due to the new policies enacted by current US President Donald Trump. It is, however, essential to conducting adequate research on the impact strict immigration procedures would have on the US economy. Migrants are a significant part of the growth of the country. The US has, and will always be an immigration center; the withdrawal of immigrants would undoubtedly lead to a decline in the absolute performance of the economy. Regardless of immigrant workers being considered a threat to low skilled native workers, they do possess abilities necessary for economic growth, and well-versed immigration policies may help solve this problem. With contributions to sectors such as entertainment, education, construction, communication, and a broad consortium of industries in the US, the value of immigrants may be under-recognized but is unquestionably high. It is, therefore, right to state that immigrants contribute immensely to the development of the American economy.
References
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