Sociology Research Paper free essay sample

How and Does Immigration Affect the American Economy? A Review of the Literature Joshua Kashani, Ahmad Khalil, JD Lindayag, Francis Ignacio Sociology 4 Professor Hoshiar October 3, 2012 Immigration and the Economy ii Immigration and the Economy ii Does Immigration Affect the U. S Economy? A Review of the Literature In this day of age, many Americans are having a hard time looking for jobs due to the economy. The area of concern that we are researching is the effects of immigration on U. S. job employment rates and whether it’s heavily affecting US citizens or not. There are four conflicts which we decided to cover, which are, wages, education, race, and also supply and demand for U. S. workers (Peri, 2010; Anrig, 2004; Camarota, 2010; amp; Smite, 1997). The reason why we decided to research this topic is to provide information on how immigration either a positive or negative effect to the employment rates here in America. With that said, our hypothesis is that immigration will have a negative effect on American workers due to the fact that they will have more competition to the mass immigration over the past decade. The rest of this literature review will be split up into four sections, discussing the four conflicts we have chosen followed by a conclusion. 1 Does the education level depict who is affected more severely by immigration? 2 Does immigration impact wages? 3 Does immigration increase supply of labor create a demand for less American workers? Are different races (location) affected differently by immigration? Effects on Wages Illegal immigration has a dramatic effect on wages in the lower class area of the American economy in many different ways (Caramota, 2005). One way that immigrants affect wages is by working for less money once they arrive to the country (Caramota, 2005). Most of the time the level of education of immigrants is much lower than the level of education of native United Sta tes citizens (Caramota, 2005). This means that if Immigration and the Economy iii Immigration and the Economy iii n immigrant and a native were both working in the same career, the illegal immigrant would tend to earn less money than educated natives, â€Å"in other words immigrants are poorer than natives, but they generally earn wages that commensurate with their skills, which as a group tends to be much lower than natives†(Caramota, 2005, para. 3). Since illegals are willing to work for less money, business owners would rather hire an illegal than a native because they can save a lot of money for the business by doing so (Caramota, 2005). Because the United States has a minimum wage requirement in each state, legal citizens are not able to compete with illegal immigrants by accepting lower wages (Caramota, 2005). Also, since there is a salary tax that every U. S citizen has to pay to the government, natives would be doomed financially if they were taxed on earning wages under the minimum wage requirement (Caramota, 2005). Many employers view immigrants as better employees and it is very common that small businessmen and women will disclose that they favor Hispanic and Asian immigrants over native workers (Caramota, 2005). There are natives who aren’t earning wages since business owners favor hiring immigrants (Caramota, 2005). Consequently, the threat of further immigration will continue to put a downward pressure on wages (Caramota, 2005). Subsequently, immigrants are eager to work for less money and that is always going to keep the wages down in the lower end of the labor market (Caramota, 2005). Even though immigrants bring down wages for those less skilled jobs, â€Å"these wages do not vanish into thin air (Caramota, 2005). Employers now have more money either to pay higher wages to more educated workers or to retain as higher profits†(Caramota, 2005, para. ). The money is being distributed differently due to immigration (Caramota, 2005). The money that is supposed to be spent towards helping the poor is going to the rich (Caramota, 2005). The total earnings of natives without a highs school degree are roughly thirteen-billion dollars lower due to immigration and the total earnings of those with a high school degree are roughly nineteen billions dollars higher, which is a total gain of six billion dollars (Caramota, 2005). Most of the money that the natives without a high school degree lose is in occupations where they have the largest immigration arrival (Caramota, 2004). This also means that these areas are where there is the highest unemployment rates occur in the native job market. There is also a direct correlation with the unemployment of natives and the employment of immigrants (Caramota, 2004). From 2000 to 2004,† the number of unemployed adult natives increased by 2. 3 million, while the number of employed adult immigrants increased by 2. 3 million†(Caramota, 2004, para. 2). There is clear empirical evidence that immigrants are stealing wages from natives based on this study (Caramota, 2004). Immigration and the Economy iv Immigration and the Economy iv Education Issues Immigration is seen by many American citizens as a plague to the American economy. They feel that these immigrants are taking jobs away from American citizens, which can help Americans with the now struggling economy. Although many people feel that immigrants affect all workers, it doesnt. Immigrants mostly focus on and take the unskilled labor jobs that are often neglected by American citizens, at least only the highly skilled and educated American citizens. This leaves only the unskilled and uneducated American citizens to be effected, although the effect is minuscule and shows little harm to the unskilled and uneducated population either. From the studies of Pia M. Orrenius and Madeline Zavondny, researchers at the Federal Reserve Banks of Dallas and Atlanta, annual wages of low skilled and uneducated workers are seen to be slightly effected by immigration workers (Greg Anrig, Tova Andrea Wang, 2004). The wages are seen to be about 2. 4 percent below what they used to be before immigration workers came into place (Greg Anrig, Tova Andrea Wang, 2004). Service related workers and workers with professions have seen to have little to no influence on their wages due to immigration, It may even help and have a positive effect in this case (Greg Anrig, Tova Andrea Wang, 2004). Immigration and the Economy v Immigration and the Economy v But on the other side of the argument, an outspoken supporter of stronger immigration restrictions, George Borjas, a Harvard Economist, states that he has found many more notable and relative negative effects on the earning of unskilled American citizens. †¦ Between 1980 and 2000, when immigration increased the labor supply of working men by 11 percent in the United States, that influx reduced the average annual age of native workers by around 3. 2%. (Greg Anrig, Tova Andrea Wang, 2004) The drop in the wage of the American citizens really differentiated based on the education of the workers. Highschool dropouts, college graduates, high school graduates, and people with little college education all sa w a difference in drop (Greg Anrig, Tova Andrea Wang, 2004). Highschool dropouts had a drop of 8. 9% in wages, college graduates had a drop of 4. 9%, high school graduates had a drop of 2. %, and the change for people with some college was very minima (Greg Anrig, Tova Andrea Wang, 2004)l. At the end of the day most economists can come to the conclusion that immigration had dropped wages of American citizens with little or no education or skill, but for the rest of the American workers the impact shows very minimal to no effect at all (Greg Anrig, Tova Andrea Wang, 2004). Immigration and the Economy vi Immigration and the Economy vi Although immigrants do reduce wages for the less educated and unskilled the wages do not just disappear, but rather they get passed down by employers (Steven A. Camarota, 2005). Employers now use that money saved by cheap labor to give increased wages to the more educated and/or to keep in more profit (Steven A. Camarota, 2005). The National Research Council, in a 1997 study entitled The New Americans, estimated that immigration reduced the wages of workers with less that a high school degree by about 5 percent. These workers roughly correspond to the poorest 10 percent of the workforce. (Steven A. Camarota, 2005) Although it decreases wages for 10 percent of the workforce it causes gains for 90 percent of the other workers (Steven A. Camarota, 2005). Although, the impact is still very small on the educated workers due to the fact that because the workers at the end of the labor market make such low wages it only increases everyone elses wages very minimally (Steven A. Camarota, 2005). Increased Supply of Immigrant Workers When it comes to immigration, the myth is that immigrants are taking American Jobs because they are more willing to take lower wages and more work hours compared to Americans. This leads to less jobs going to Americans and more jobs going to the new immigrants looking for any job they can get. Yes it is good for business but the downside is that original US citizens get the lower end of the stick and have to deal with being out of work because immigrants are willing to â€Å"work for less† (Camarota, 2009) . But since they need to make money they are going after same jobs American natives which are â€Å"often thought to be majority immigrant are in fact majority native† (Camarota, 2009). A Immigration and the Economy vii Immigration and the Economy vii study showed that, â€Å"Between March of 2000 and 2004, the number of unemployed adult natives increased by 2. 3 million, while the number of employed adult immigrants increased by 2. million† (Camarota, 2004). That means all the unemployed adult natives is equal to amount of immigrants getting jobs and it was also found that half of those immigrants were from illegal immigration. With illegal immigration, these people are able to live in the U. S. under the radar and look for jobs which most people ha te doing. This might not seem as a problem but these hinder American businesses from growing because most of these jobs include house construction and gardening and these immigrants are willing to work for a cheap wage so it will be harder for an American business that does the same services to compete. Another statistic was that â€Å"the 900,000 net increase in jobs between March 2003 and 2004, two-thirds went to immigrant workers† (Camarota, 2004). While it may not seem like a big difference, two thirds being immigrants shows the competition Americans now have for even the most simplest jobs These declines in native jobs were more seen in states where there was a higher increase in immigrations and of these states it included â€Å"Los Angeles, Washington, D. C. , Dallas, Houston, New York, and Seattle† (Camarota, 2004). These locations are usually where immigrants go to because they are close to countries such as Mexico or even overseas such as England and other European countries. It was shown, â€Å"Between 2000 and 2004, the number of natives not working increased by nearly four million, from 30. 8 million to 34. 8 million† (Camarota, 2004). With that statistic, it shows that with the increase in immigration more Americans are losing their jobs. With the decrease of American natives losing jobs, it also affects the American teen’s chances for getting jobs. Most teens look for jobs in retail or a department store such as a Wal-Mart. Studies show that â€Å"immigrants and teenagers often do the same kind of work† (Camarota, 2010) which means American teens have a harder chance of landing a job because immigrants are going for the same jobs. If you take a look these days, there are not that many teens working in these retail stores and these jobs are going towards older people, which mainly are immigrants. Knowing that fact that teens aren’t seen working as much, the statistic of â€Å"the number of U. S. -born teenagers not in the labor force increased from 4. million in 1994 to 8. 1 million in 2007. In the summer of 2009 it stood at 8. 8 million† (Camarota, 2010). The teen unemployment is â€Å"similar for U. S. -born teenagers from both high- and low-income households† which shows that immigration has a significant effect on all American Native teens and not just certain households. While many teens are stil l going to school and are starting college, â€Å"the fall-off in employment is similar for those in school and those who are not† (Camarota, 2010) so being in school or not doesn’t affect their chances of getting jobs. Even though this is good for immigrants it’s heavily impacting teens that are looking for jobs to make some money for themselves or maybe for even school. Over the past decade it was seen that â€Å"in occupations where teenage employment declined the most, immigrants made significant job gains† (Camarota, 2010). This shows that immigration has a heavy impact on the employment rates of Americans especially on American teenagers because they are both going for the same jobs. Immigration and the Economy viii Immigration and the Economy viii Immigration and Race Effects on Employment Ethnicity plays a big factor in wages and employment in the United States. Many jobs have been affected with immigration being a big problem in America. Even though Immigration and the Economy ix Immigration and the Economy ix it is a big problem, some jobs have not been affected with immigration. Middle level jobs and low level jobs are taking the hit for wages and employment with different ethnicities trying to be hired. â€Å"For service-related and professional workers, immigration has had little impact on wages. If anything, increases in the number of newly arriving immigrants actually have slightly positive effects† (Anvig, 2004). Other jobs such as manual laborers have no change on wages since it has no effect on ethnicity. â€Å"Your level of education has more of an effect on your salary than your race, gender, ethnicity, citizenship, English-speaking ability or location† (Gordon, 2011). The type of degree an individual has plays big factor on your employment and wages. For example, the higher degree the person has, the higher change of getting a big pay in the job that he or she is occupying. Ethnicity and sex also play a part in employment and wages but overall the type of degree a person has is what makes a difference. â€Å"Women in the most economically advantaged race groups, white and Asian, earn less than men in the most economically disadvantaged race and ethnic groups, black and Hispanic. † (Gordon 2011) Even though race plays a factor, a person’s sex is also a big factor on employment and wages. For example, White males and Asian males get the most on employment with $5 million when they have high-level education degrees. After White and Asian males, Asian women with a professional degree and White males with a Ph. D receive about $3. 7 million dollars. A black man with a professional degree earns a few more than an average white man with a master’s degree of about $3. 5 million dollars. â€Å"A white woman and a Hispanic man with professional degrees earn a little less than him ($3. 2 million and $3. 1 million, respectively)† (Gordon, 2011). Hispanic women and black women are at the bottom of the list for employment and wages. A white man’s bachelor’s degree is equivalent to a black woman’s professional degree of $2. million dollars. Followed by a Hispanic woman with a professional degree who acquires about 2. 3 million dollars which is the equivalent of a white male who has a degree from a community college. Although education is makes a difference, many immigrants such as Hispanics, Asians, Indians, and any other race take over low level jobs that don’t a d egree or high level educations. Many follow a certain path they were raised as a child into adulthood from their culture or family background. Certain ethnicities have a stereotype of occupy certain jobs in the United States. For example, Hispanics occupy maid service or lawn mowing. Asians take over donut shops, nail salons, and dry cleaners. While Middle Easterns occupy gas stations and do taxi driving. Overall, ethnicity and sex play a big factor in employment and wages. Not everyone gets the same treatment from different companies and jobs. Each job can vary on employment for different ethnicities; location also plays a big factor for employment. For example, a person in a Hispanic/Asian/White/Black and that is bilingual has a higher chance of being hired. This is because it is very easy to communicate with a specific race and help with the company and opportunities. Immigration and the Economy x Immigration and the Economy x Companies hire certain individuals to help create business and opportunities for others. Due to this, certain ethnicities may be able to get a high pay than other races since a business may be dominated by an ethnicity. Despite education being the main factor on employment and wages for a business or company, ethnicity also plays a factor as well. A company wants to send a message and have a good representation with their employment. But at the same time, they must hire different races to not be racist to the community. Education, Sex, and ethnicity all play a role in employment and wages. It’s like a triangle, it all works together you need the other two if you try to specifically stick to one of the components. In today’s world, white males are the leaders in employment and wages due to their high education and personal preferences of companies. Even though it’s racist, it’s a common thing that’s happening all the time in America. Unlike other countries they have a dominated race and it will be vice versa where white males will be icked less due to the unavailability of speaking two languages. Immigration and the Economy xi Immigration and the Economy xi Summary There are many aspects of U. S employment that immigration affects. One of these aspects is that the increase of immigration less Americans are able to find jobs. Immigrants are taking jobs from the uneducated or lower class workforce, which would consist of college students and late teenagers. Another factor of immigration’s effect on employment would be race and sex of the immigrants coming into the United States. For example, a Hispanic woman from Mexico would more likely be working as a maid or a cleaning lady because of their Hispanic heritage the women in the household are always cleaning, therefore they are more fit for this job than native citizens. Education is another element that is affected by immigration. Uneducated workers wages have gone down because of immigration in the last decade. Education is an important factor in immigration because it creates a clear barrier between the natives and the immigrants. Finally, wages are ultimately affected by immigration greatly. In the lower area of the job market, which comprise of the poor, uneducated, or college students, the wages have decreased within the last couple of years. Since immigrants are willing to work for lower wages, many business owners are more eager to hire illegal immigrants over native college students or struggling citizens. Ultimately U. S employment has been critically impacted due to immigration. Immigration and the Economy xii Immigration and the Economy xii References Camarota, S. 2005, November 16). The Impact of Immigration on the American Workforce. Center for Immigration Studies. Retrieved September 18, 2012, from http://www. cis. org/node/553 Camarota, S. (2004, October). A Jobless Recovery? Immigrant Gains and Native Losses. Center For Immigration Studies. Retrieved September 18, 2012, from http://www. cis. org/articles/2004/back1104. html Greg Anrig (28, September 2004). Immigration, Jobs, and the American Econ omy. [ONLINE] Available at: http://tcf. org/publications/2004/9/pb491. [Last Accessed 19, September 2012]. Giovanni Peri (10, August 2010). The Effect of Immigrants on U. S. Employment and Productivity. [ONLINE] Available at: http://www. frbsf. org/publications/economics/letter/2010/el2010-26. html. [Last Accessed19, Sep 2012]. Steven A. Camarota (November 2009). Immigration’s Impact on U. S. Workers. [ONLINE] Available at: http://www. cis. org/node/1582. [Last Accessed 18 September 2012]. Steven A. Camarota, Karen Zeigler (May 2010). A Drought of Summer Jobs: Immigration and the Long-Term Decline in Employment Among U. S. -Born Teenagers. [ONLINE] Available at: http://www. is. org/teen-unemployment. [Last Accessed 18 September 2012]. Greg Anvig, Tova Andrea Wang (2004). Immigration, Jobs and the American Economy. [ONLINE] Available at: http://tcf. org/publications/2004/9/pb491. [Last Accessed September 18, 2012]. Immigration and the Economy xiii Immigration and the Economy xiii Micheal Greenstone, Adam Looney (2012). What Immigration Means For U. S. Employment and Wages. [ONLINE] Available at: http://www. brookings. edu/blogs/jobs/posts/2012/05/04-jobs-greenstone-looney. [Last Accessed September 19,2012].