Immigration and the Effect on the Economy Essay

In this research paper I will prove that illegal and legal immigrants are not burdens on the U. S. economy. I will prove this by providing facts on the positive impact to the United States educational system, the job industry, and public assistant programs. Immigrants pay taxes, shop, and buy real estate all of these are positive impacts to the economy. Immigrants that come to the U. S. for an education and graduate and become our doctors, scientist and computer experts are better accepted. They are contributing to the economy and at the same time benefiting the citizens of the U. S.

How many natives want their doctors or scientist that have created cures for illnesses or that come up with the latest computer program to go back to their own country? A very, very few of natives would say that. The U. S. is a melting pot. Education is the key to success in the United States. Immigrants know that education is the way to get ahead and make their dreams come true in this country. The U. S. is run by the government and different employers and employees. Immigrants hold very important roles in our economy. Jobs that do not require high school diplomas and jobs that require college degrees, such as bachelor degrees or better.

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Immigrants that have college degrees in math and science programs are very important to our economy. Ralph E. Gunter, Ph. D. states that In 1975, the United States ranked third in the world in the percentage of students who received degrees in science and engineering. In 2005 the United States was 17th in the world. By 2008, more than 90% of all scientists and engineers in the world were living in Asia. Bachelor’s degrees in science and engineering make up 60% of the total degrees earned in China while only about 30% of the degrees in the United States in 2004 were in science and engineering. In China in 2005 350,000 engineers graduated. para. 4) Immigrants that have a college degree in a math or science fields have more legal opportunities to enter the country. There are still not enough visas issued even for these immigrants that would be a plus to our country. For immigrants that hold positions that do not require a high school diploma have no legal way to immigrate in to the United States. A higher level of education and training accomplished by immigrants is one of the major components of an economic competitiveness strategy for the state and the nation, a strategy that will benefit both the native born residents and the immigrants and their children.

Foreign students are a benefit to the economy as well as to our colleges and our corporations. Foreign students give American experience with different cultures sense it is less likely that Americans will go out of the country to get an education. This will give Americans experience that they will definitely use in their careers rather it is in business, medicine/science, or our government. According to U. S. Department of Commerce (2007), “Educational exchange is one of the leading American service export industries. ”(p. 108).

According to the Open Doors 2006 survey “The 564,766 students that were enrolled in the 2005-2006 academic year contributed almost $13. 5 billion to the U. S. economy. ” (p. 108) The Open Doors 2006 survey also notes that “California and New York were the states that benefited the most due to the large number of foreign students the states received $2. 1 billion and $1. 8 billion. High skilled immigrants account for almost half of the PhD. engineers, life scientist, physical scientists, and math and computer scientist in the U. S. ” (p. 109) The only visa that may be a close fit is the “H-2B” visa.

Many of the jobs that rely on H-2B workers are in rapidly growing industries that need increasing numbers of workers. They are given to 66,000 immigrants each year. As a result, in 2003, 2004, and 2005, the annual allotment of 66,000 visas ran out by March. This caused a lot of problems for businesses that depend on these workers. An estimated amount of immigrants that enter the U. S. each year are between 700,000 and 800,000. (“The Facts: Immigration and The Economy” 2006, para. 2) There are still not enough visas issued even for these immigrants that would be a plus to our country.

Fareed Zakaria a political scientist believes that if the U. S does not start issuing visas faster we will lose our competitive edge in the world. The point is rather visas are issued or not immigrants will enter the United States in search of a better life. The impact on our economy for low skilled jobs is the most impacted by immigrants. The natives that are high school dropouts are the most affected. However it is very small. According to Adam Davidson “The wages of low skilled high school dropouts are suppressed by somewhere between 3 percent and 8 percent because of the competition from immigrants both illegal and legal. Davidson (2009) “Illegal Immigrants and the U. S. Economy” (para. 4). Some economist admits for the normal high school dropout, if there were no job competition from immigrants that natives would get around a $25 a week raise. Illegal immigrants do take jobs that would go to natives. But illegal immigrants that work also create demand that leads to new jobs. There will be great economic benefit from the arrival of young immigrants into a mature workforce where a lot of retirements will occur in the next twenty years. The main reason for immigration is financial.

It is normal human desire of people to partake in the economy and in doing so better their own monetary state. Smith (2006) According to James Smith a senior economist at the Rand think tank in Santa Monica, California, states that since 1980 all immigrants have boosted GDP by $10 billion per year. At least 20 years ago only rich people were able to afford to have grounds keepers or landscapers. Because of the supply of landscapers the prices went down this created an area of the economy that had not been considered. The entry of low waged workers allowed companies to invest in new equipment and create new jobs.

They buy food, cars, and cell phones. They get haircuts and go out to eat. Illegal immigrants most of the time take jobs that natives look down on, such as meat packing and agriculture. If there were no illegal immigrants to take these jobs businesses would most likely shut down. According to Philip Martin a professor of agricultural economics at UC Davis gives estimation that if immigration entry at this time a net of about 500,000 people per year were cut by 4o percent, the average American family would spend about 2. 5 percent more on fresh fruit and vegetables.

A Chesapeake Bay crab picking company shut down for one year between 2003 and 2005 because of no workers. The company faced the possibility that even if it reopened it would never regain the market share that it lost. Small U. S. businesses depend on a steady flow of immigrants for jobs that are unpleasant or dangerous or require hard- to-find skills. Immigrants and public assistant programs are just as important to Americans as the job pool is. According to Camerota in 2004 17. 4 percent of immigrants and their children that are eighteen years of age or younger have Medicaid and 12 percent of Americans. This is a 5. 4% difference.

Compared to the social security tax revenue generated by immigrants that they will never be able to claim this is not that big of a difference. If welfare is defined as cash assistant programs according to Camerota’s research immigrant use is almost the same as Americans. The point is that immigrants contribute tax revenue just like Americans and in this case use the welfare system just the same. Camerota’s research also states that more than one third of immigrant households in Arizona, California and New York used some type of welfare program. These are large immigrant states so this also needs to be taken into consideration.

Immigrant entrepreneurs are very good for the economy. Immigrant owned businesses are seen in almost every city, from dry cleaners, restaurants, or small stores to large corporations. The long distant social and economic linkages impact and enhance trade and investment flow. Forty- seven percent of private venture-backed companies were started by immigrant entrepreneurs. Forty-six percent of the immigrant founders came to the United States as students, and half of these students started their companies within twelve years of entering the United States. Sixty-nine percent of the founders became U. S. citizens.

Start-up companies had an average of 123 employees. Forty percent reported annual revenues less than $1 million, and 4% had annual revenues exceeding $100 million. Immigrants impact the economy by paying taxes both property and sales. Most immigrants are young and they contribute more taxes than they use by using government services such as welfare. However because most immigrants are young they are still having children. These children are attending public school which is a cost to the public school system. A Supreme Court in 1982 made it law that illegal immigrant children must receive the same free public education. “The Facts: Immigration and The Economy” 2006, para. 12) This decision was made to avoid punishing the children for their parent’s choices. We should look at this as an investment because these children will one day be our future then it would not be seen as a burden to the economy. Immigrants that do not have social security numbers either use an Individual Taxpayer Identification Number or a fake Social Security Number. A study in 2005 said that illegal immigrants pay $6-$7 billion in Social Security taxes. (“The Facts: Immigration and The Economy” 2006, para. 5) These illegal immigrants will never be able to claim these taxes.

Another study states that legal immigrants will pay $611 billion in Social Security taxes over the next seventy five years. (“The Facts: Immigration and The Economy” 2006, para. 5). I have come to find that there are both positive and negative effects on the economy and because of this Americans are divided on the issue of immigration. Immigration provides net benefits to domestic residents. Illegal immigration affects different parts of the economy. Illegal immigration has both positive and negative effect on the economy. Depending on what state you are referring to the impact can be greater.

Economists believe that if an average of the entire U. S. the impact is very minimal. According to Harvard’s George Borjas the average American’s wealth is impacted by less than 1 percent because of illegal immigration. There are bigger things that impact the U. S. economy than illegal immigration such as the use of automation in manufacturing or the growth in global trade. These two factors affect the economy more by lower wages, prices and the health of the economy. The U. S. economy is affected positively more than negatively by immigration. Immigrants are making the job pole grow.

Immigrants contribute taxes that they cannot benefit from. According to Thomas Friedman, author, journalist, and three-time Pulitzer Prize winner, recently wrote: “Our greatest asset is our ability still to cream off not only the first-round intellectual draft choices from around the world but the low-skilled, high-aspiring ones as well…This influx of brainy and brawny immigrants is our oil well…and endless source of renewable human energy and creativity. ” “High-skilled immigrants account for about half of the Ph. D. engineers, life scientists, physical scientists, and math and computer scientists in the U.

S. ” (“The Facts: Immigration and The Economy” 2006, para. 13). I feel that Americans basically want their cake and eat it too. An immigrant rather legal or illegal is a benefit to the country then they are welcome but if not Americans want them to go back to their own country. Are we really that selfish? Don’t everyone deserve to have a decent life. Experts are saying that the big picture is being missed. According to David Card an economics professor at UC Berkeley said that (2006), “The reality of the immigration debate is it’s nothing to do with economic impact. ” “That’s just a smoke screen.

It’s all about cultural protectionism and fear of change. ” The Article “The Immigration Debate” claims, “ Effect on economy depends on view point” (p. 5). I feel that immigration is a win, win situation. Immigrants benefit by being able to pursue a better life for themselves and their families. The companies benefit by getting workers to work for lower wages. The rich or wealthy Americans benefit by having nannies, grounds keepers and maids for a cheap price. The natives that are truly in competition for jobs are blacks and Hispanics more than whites due to education and their large numbers and similar economic and social status.

The lower wages are because of the larger pool of workers. In conclusion Americans have to realize that legal or illegal immigration is not going to save our economy neither is it going to kill it. Immigration is what this country has been built on. Immigration will continue to benefit the U. S. economy by immigrants taking advantage of the education and training opportunities that are available for them. This will assist immigrants not to depend on the public assistant programs.


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