The cost and Benefits of Immigration

 

This week’s readings were focused on the factors that have influenced the changing dynamics of the different demographics within the United States. The readings discussed the exponential growth of the country’s GDP while, in comparison, the median household income has barely grown. Following this change in economic disparities, politics has become increasingly less representative of both economic and racial minorities, leading to unrest within the middle class. This situation has also been caused by the globalization which allowed the outsourcing of jobs particularly in manufacturing. Combining the technological advances, in the last two decades in particular, with the reduction of border barriers has meant that the middle class has been losing its standard of living, while the wealthy are becoming more and more dominant in politics and business. The chapter also discusses the American mentality towards individualism, freedom and religion which affects the country’s reputations within the international sphere.

Currently the topic of immigration has come to the forefront of the news in many high income countries throughout the globe, and often with negative sentiments towards the individuals who immigrate. It has been seen in the US towards Hispanics, Mexicans in particular; the UK towards Eastern Europeans, the polish in particular; and the Germans towards the Turks. However, during this anti-immigrant surge, locals are often forgetting the dependence on immigrants within the economy. Many of the countries which have been seeing a significant influx of immigrants, also have a severe aging population.Therefore, having immigrants of a working age coming into the workforce, is a huge benefit to the home country as it helps the dependency ratio.In 2013, more than 64% of immigrants were between the ages of 15 and 64, during a time in which dependents are growing, and having more working aged people is vital to a country’s economy.

Yet people are constantly complaining of the strain of immigrants on the US economy, in health care, the job market etc. Theoretically, economies are most prosperous in perfect competition, which among other factors requires having many competitors and no entry barriers. Economists would argue that people are rational, and therefore hire people who are most skilled for a particular job. Therefore, having immigrants essentially only increases competition and factors out the least efficient (or in this case, skilled) competitors. This implies that when immigrants have jobs in the united states, it is because they were better suited for that position then the other applicants, regardless of nationality. Therefore, looking at the country’s economy as the standard of evaluation on immigration reform, implies that removing the 11.3 million illegal immigrants in the united states, would not only cost the country $114 billion but would also reduce the efficiency of the country all together.

President Trump is hoping to curb immigration in the coming years, in particular low skilled immigration. While there is a cap on the number of people that can come into the country, due to resources, space, jobs and housing, the current increase in deportation of undocumented immigrants is costing the country much more then it is saving it. Therefore, regulation will have a much greater benefit on the United States then deportation, especially considering the threat of deportation has not been a significant deterrence for the millions already in the US. Rather than spending some much additional national revenue on deportation, Trump should find better alternative through initial regulation.

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