Impact of Refugees in the Economy

Impact of Refugees in the Economy

There are millions of refugees across the world, and it has sparked widespread concern about their economic impact on their host countries. According to the report by the United Nations High Commissioner for Refugees (UNCHR), there are close to 22.5 million refugees across the world.  The arrival of refugees in several nations leads to a competition of resources that are scarce such as land, social amenities, food and water with the local population. Presence of refugees over a varied period lead to substantial demand on social services, natural resources, housing, employment, energy, transport, health and education, food and natural resources.

Presence of refugees increases population, which leads to growth levels of economies in developing countries faced with declining birth rates. In the United States of America, Michigan has been one of the top destinations by refugees and the region has been able to replace its lost population. The United State is also home to a vast number of entrepreneur refugees who have been able to generate close to 4.5 billion U.S. dollars in business income. Other countries that are leading destination for refuges apart from the United States of America are Canada and Australia.

The refugees play a very critical role in the labour force of a country. The United States has been termed as safe heaven by various refuges since the year 1776 when it was found, and they fill several job positions that are needed. Near extermination depicts that the refugees in the United States of America have a high employment rate compared to the population of U.S. born citizens. From the year 2009 to 2011, the male refugee population experienced a 67 % employment rate, while the native-born U.S. male population experienced a 60 % employment rate. On the other hand, refugee women have a similar rate of employment as the native-born U.S. females.

The relatively increased employment rate among refugees is a reflection of the labour market. The depiction is the participation of the whole population that is foreign-born has high odds of being employed, unlike the native-born population. Refugees also have a high chance of working age of 25 to 64 years than the other immigrants and the U.S. population. Therefore, when the refugees’ high rate of employment and the presence of substantive work age population are combined, it signifies that they have a considerable potential to be vital contributors to local economies they are participants.

Several industries have sourced refugee labour force in the United States of America. The manufacturing sector is leading with 20.3 per cent of its total workforce being refugees, followed by 14.2 per cent in health care and 10 per cent in general services. It is a common phenomenon of employed refugees to seek other jobs from their current ones because they shift to jobs with high wages. Refugees often move to white-collar positions from service and blue-collar positions. The process of shifting occurs after close to ten years of service, and it is common in Hmong, Burmese and Somali refugees in the United States of America.

Several Burmese refugee populations in America from several studies became engineers, lawyer’s administrator and executives. The study elucidated that the Burmese population had a higher percentage of 24 % of securing professional capacities than employees born in the U.S., which was at 16 %. On the other hand, it was revealed that the Hmong, Burmese and Somali refugee population focused on social work, arts and overtime teaching. Therefore, the shift of white-collar jobs by refugees signified that they make the substantive investment to human capital such s English and education ability. The population is also a huge factor in the shifting labour demand in an economy.

Refugees who arrived in the United States of America in 1980 had endings of over 20 % than economic immigrants of a similar year. These refugees surpassed the economic immigrants by 11 % on the number of hours spent to improve their language, according to Cortez (2004). It signified their improved earnings by 26 % and their ability to speak English improve by 10 % after ten years compared to 1980. Therefore, refugees can realize the advantage of investing in developed skills that are vital in securing better jobs and earnings.

Human capital investment is very critical when it is done over time. The willingness of refugees to make critical investments in human capital makes them experience increased levels of earnings. According to Duleep and Regets (2007), family-based immigrants experienced a high earnings growth rate than employment-based immigrants because of their level of investment in developing new skill at a greater rate. The action of investing in new skills by house based immigrants is also present in refugees. However, the refugees are able to access immediate employment despite experiencing high growth rates in their earnings, unlike the natives. \

Several debates about the effect of immigration on the levels of employment by the natives despite the presence of several studies on immigration impact on labour economy. The Syrian refuges also have several labour implications in Jordan as the war has lasted for over a half-decade. Jordan is hosting close to 2.5 million refugees making the country to be among the top refugee destinations. The refugees present in Jordan as in persistent search of having sustainable living conditions since they faced with precarious living conditions according to Better (2017). Therefore, there has been an influx in the job market since refugees are in search of jobs to have better living conditions.

The Turkish labour economy has also been affected by the presence of Syrian refugees since the year 2004. Significant impact has been experienced in the informal sector, unlike the formal one. The inflow of refugees resulted in several displacements of the Turkish locals from several informal jobs. The influxes of refugees also lead to a decrease in wages in informal sector jobs because of excess surplus present in the market. However, the impact of Syrian refugees was minimal on the formal sector. Therefore, Syrian refugees increased the levels of unemployment in the informal sector and increased employment levels informal sector when a micro-data set is used.

Despite seeking jobs, several refugees have been able to start businesses in countries they reside. In the United States of America, refuges have an elevated entrepreneurship rate compared to the population of U.S. born. Close to 181,000 refugees entrepreneurs in the year 2015 were able to generate close to 4.6 billion as business income in the United States of America. The business developed by these refugees can create a business in that provide services, goods and employment to thousands of natives and foreign in a country. Several sectors in the United States of America have been hugely invested by refugees they include general service that experiences 26.1 %, transportation with 10.7 % and retail having a total of 11.2 % refugee investment.

Presence of a vast area that experiences significant entrepreneurs who are refugees signify that the group is able to adapt to several economic needs in places they live. Economists have been able to identify that young business are responsible for the creation of jobs. Therefore, the act of establishing a business by refugees is a valuable economic trait. Close to all new business that is being established across the world. These businesses are responsible for nearly the entire new job opportunities that are created. Additionally, new enterprises that are being set result to 20 % of total job creation. An average of 1.5 million jobs every year for the past thirty years has been created by firms that are less than a year old.

Thousands of refugees across the United States own several small businesses. On the other hand, there are renowned businesses that have been built over the years by refugees in the United States on America including Google by Sergey Brin, Paypal by Max Levchin and WhatApp by Jan Koum. The spirit of entrepreneurship depicted by refugees is an illustration of their level of willingness to contribute effectively to their local economies.

Several Syrian refugees are present in Istanbul, which is the Turkish economic hub with the figure nearing half a million. The primary reason for the increased number of refugees is because of their colossal urge to participate in the Turkish economy. The refugees have been able to develop the Turkish economy with not only the labour surplus but also entrepreneurial skills. The number of companies being established and those with Syrian partners in Turkey has grown tremendously since the year 2012, according to Esen and Binath (2017).

Companies close to 1777 new companies were formed in Turkey in the year 20016 from 157 in the year 2012. The data reveal significant participation of Syrian population having a share of 28 % in the number of companies owned by foreigners. The presence of several Syrian companies has to lead to an increased level of servicers, goods and job opportunities being offered to the Turkish economy. Other areas that are highly inhabited by Syrians and receive a huge economic boost by the population include Sanlıurfa Hatay and G.antep provinces.

Refugees possessed close to 56.3billion U.S. dollars as disposable income in their year 2015 in the United States of America, making them strengthen their local economies. The refugees often begin with low levels of earning in their first years, which develop gradually to a significant level after ten years. Refugees in the U.S. have the potential of earning close to 67, 000 US dollars after a varied period of twenty-five years. The growth of the household income by refugees is a good depiction of their ability to invest in areas they thrive in such as human capital and white-collar jobs. Refugees who have been able to stay in the U.S. for a long period such as Russian and Vietnamese communities have high average incomes than recent arrivals of communities such as Bhutanese, Iraqis and Somalis.

Despite queries of burdening the welfare state, several people question the net gains to citizens when resources are extended to foreign nationals in need. It is because of uncertainties about the impact of these refugees on taxes. Often, it is expected that everyone pays taxes if they are in a certain country. In America, refugees have had a huge impact on taxes. For instance, researchers found that between 2005 and 2014, refugees and asylees here from 1980 on contributed $63billion more to the government than they used in public services. It means as much as refugees use services; they still contribute abundantly to the economy in the form of tax. This thus is a positive impact.  Refugees are entrepreneurial, and therefore the businesses generate more business income which brings more taxes to the economy of a country. In the working-age bracket of 26-64 years pays taxes as per the laws of the state thus tax contribution by refuges is more; it is because they have high employment rates at this age bracket than the U.S. –born citizens.

Also, refugees tend to stay in a host country for an extended period on time, making them contribute high amounts of taxes. They provide a momentous net contribution to the economy through the taxes they pay throughout their stay. It reverts the belief that they overburden the economy due to a reliance on social amenities. Therefore, it is advisable to allow refugees to stay for a long while as their income starts to flow over time as they are able to generate enough household income. Generally, tax contribution by refugees should not be underrated since it is signed by the goods they purchase, services they render and the business they establish. Increase in tax levels of a host country by a refugee is a huge economic boost by this group.

It is fallacious to ignore the economic contribution brought by refuges because of their low levels of income. However, there are several restrictions that face refugees in the countries they settle in because of stringent laws, policies and native oppression. The Noble lecture by Martin Jr. Luther king is supposed to be a guiding principle on how human beings are supposed to treat each other despite having different origins.

Martin Luther King Jr. says that it is important to love each other despite the presence of several human weaknesses. There are several factors that lead to the presence of refugee influx in a country which as a search for better opportunities or war. However, the presence of a moral compass that points to loving each other creates a holistic environment to better humankind.  Despite the presence of competition for resources by refugees, they have a huge economic boost to a country and area that hosts them.