Abacus: An Economic Slant on Immigration

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In American society, one that has become well known for its heated political climate, immigration has eventuated as one of the most polarizing topics of discussion among politicians and the populace alike. With critics on the Donald Trump arm of the Republican Party disparaging the crime and poverty stereotypically associated with migrants from certain countries, and proponents of immigration valuing the diversity and cultural supplementation that people from around the globe bring with them to the United States, the matter has developed into a central focus of debate in recent years.

Like nearly all social matters, the movement of individuals from around the world into the US carries economic ramifications, some of which are more obvious than others. For example, many people are familiar with the concept that a higher influx of people into a country increases that country’s labor supply, which in turn makes the placement for the average job more competitive. From this point of view, immigrants are viewed in a negative light, as they are seen as individuals who are unfairly provided with employment given that they are not natural-born citizens.

However, a better question to ask pertaining to this particular issue is whether immigrants are truly “stealing” jobs away from citizens who were born and raised in the United States.

The issue is far more convoluted than many may presume. In fact, economists hold mixed opinions regarding the idea that immigrants take away jobs from domestically-born citizens, with beliefs divided among short-term and long-term outlooks.

Although immigration tends to have an adverse effect on the opportunities for native workers during the duration of a few years, especially if recession is persistent and jobs are scarce, research has shown that, over the course of several decades, immigration can have a positive impact on both jobs and incomes for all workers. After all, as many immigrant groups develop their livelihoods in America, they create their own foundations, which may come in the form of new businesses that must employ others.

Indeed, two separate research endeavors found small positive changes in wage gains for Americans workers as a result of immigration, with the gains primarily going in favor of individuals with high school degrees.

Despite the lack of definitive answers concerning the long-term effects of immigration on workers’ income, it is particularly intriguing to investigate which industries and jobs are most impacted by immigrants.

Many people have the perception that immigrants are constrained to jobs that require few skills and pay low wages and, to a certain extent, that is true: In 2014, the leading industries in the United States by worker share of immigrants included work in personal households, agriculture, accommodation, and food and apparel manufacturing, none of which are fields known for great benefits or career advancement.

Yet, the contributions of high-skilled immigrants should not go unnoticed. Research from the Migration Policy Institute in 2006 found that an increasing number of immigrants were well educated: the share of immigrants who had received a Bachelor’s Degree or higher rose from about a quarter in the 1980’s to 34% in the early 2000’s.

Immigrants have also worked in specialized fields, with about 20% of all doctors and computer specialists, as well as about 17% of engineering and science-related positions, occupied by people not born in the United States.

As studies show that immigrants in America can work in fields at each end of the opportunity spectrum, it is difficult to argue that their contributions to the economy are hardly different from those provided by natural citizens. After all, both groups include individuals employed in low-income jobs as well as in more lucrative positions.

If the United States were to shut off immigration entirely, there would likely be a worker shortage, especially during times of boom when businesses are eager to higher. A high inflow of immigrants can also serve as a source of needed labor as many employees from the Baby Boomer generation enter retirement.

Despite the many benefits immigrants bring with them to an economy, accelerated immigration in it of itself would not lead to utopia. In particular, certain segments of the general population are more severely affected by immigration than others.

Much research has been done in examining how immigration specifically affects low-skilled native workers, with several different analyses conducted from the early 1990’s to the late 2010’s showing various projections on the changes in future earnings for domestic workers as a result of immigration. According to the Brookings Institute, seven such papers were written over the time span, with five of them concluding that immigration would lead low-skill domestic workers to earn less over their lifetimes than otherwise. The other two papers showed small gains for such workers.

Despite any such investigations done in the present-day, many economists do not underestimate the influence immigration can have on the technological processes of firms in the future. For instance, in a paper produced for the National Bureau of Economic Research, Ethan G. Lewis noted that immigrants are 30 percent more likely than non-immigrants in the US to start businesses that employ at least 10 workers over any given five-year stretch.

Lewis distinguished the significance of entrepreneurship to economic productivity, believing that, as new and different businesses emerge, it would be imperative to conduct further exploration into such changes to study how the economy adapts.

While the topic of migration into the United States will remain a contentious debate for quite some time to come, an economic perspective on the issue shows that, just like for many of the important events of modern times, the matter is far more complex than many may realize.

From a self-serving point of view, one might view immigration in a different light than someone else depending on their economic situation. For example, a person who either expects enter into a gainful career in the future or who has already captured a remunerative position may view immigration positively, knowing that they would be unlikely to fall victim to various immigration policies. On the other hand, a lesser-skilled individual who may have trouble competing with immigrants and non-immigrants alike in the job market may be more pessimistic of certain policies.