Effects of Immigration on the U.S. Economy

Introduction

The effects of immigration on the American economy encompass three distinct parameters. First, immigration expands the American GDP (economy). That factor benefits the immigrants more than the natives because immigration does not necessarily lead to the increase of wages for the natives.

Second, the immigrants with little education drain the national net fiscal while those with high education and income benefit the net fiscal. Last, immigration affects the opportunities of employment and wage structures of the natives. The less paid Americans are greatly affected because the directly compete for wages and employments with the immigrants.

Impacts on Economy

The avid debates on the impacts of immigration on the U.S economy primarily border labor. Colloquially, most immigrants are employees of low-skill job categories, which only face competition from the poor and less learned Americans. They boost the country’s economy by providing cheap labor and investing in less labor-demanding and automated firms.

Findings show that the natives get an additional $100 a month by competing with the immigrants for the same job opportunities. However, those low wages paid to the natives slices the production cost, which can further reduce prices for the native consumers. As result, certain industries such as agricultural production, construction and restaurants perform poorly.

Another issue with the immigrants is the reliance on the national services. Given that they receive their wages in cash, the immigrants do not pay taxes to the federal government. Furthermore, they earn low wages that would not even cause a significant change to the economy.

There have been several arguments that U.S. government fork out large sums of money to provide them with welfare, health care, food, and education. The government provides these services because any child born in the U.S. is a citizen. While some of the wages earned by the immigrants still go back to the economy, the price for the native consumers still faces a cut.

Economy Boost

The recent studies reveal that the immigrants provide a slight boost to the economy. A report by the OECD stated that the fiscal boost by the immigrants is less than 0.5 %. For example, they provided 0.03% increase in the American economy in 2011.

Jobs and Wages

The immigrants have made positive contributions to the natives. Notably, they play a vital role in the government’s work force as well as the economy. As such, they affect the employment and wages of the natives in a positive way.