Does Immigration Benefit The Economy
When the Presidential elections were in the undertaking in the United States of America, the Republican candidate said that immigration hurts the economy in one of his speeches, while his rival, said that both legal and illegal immigrants in the country contribute to the society (Borjas, G.B, October 2016).This difference in opinion has been a major topic of discussion for scholars for years now, and what is the actual measure or evidence that tips the scale towards either side? Immigrants bring with them, many traits and characteristics that help shape the present and the future. Problems that are caused by this phenomenon include unemployment for the lower wage workers, the immigrants becoming an expense for the government in settling and rehabilitation, them influencing the nation’s crime rates. While allowing immigrants in a country has its advantages in the long run, it does cause tension in the short run.
“When a supplier acts in a market, his foremost aims are to reduce his costs and maximise his profits.”(Sethi, D.K, Andrews, U, 2016). This is a widely accepted, simple textbook definition. Now, when the supplier wants to produce more, he either increases labour or cuts down the costs incurred to make the product. With this one can infer that if the supplier gets cheaper labour in the influx of new immigrants, he can hire them at the expense of the pre-existing labour, and other potential job seekers. In the period of 2000 - 2007, a study found that a 1% increase in the share of migrants in the UK’s working age population, lowers the average wage by 0.3%,(Lattore and Reed, 2009). Though this is a small deviation, calculated over the long run, it does impact the wages and pensions earned. The increase of new migrant workforces, will mostly have a large enough impact to affect other older migrant households. They are the closest substitutes to the new immigrant population in search of employment. To shift the focus to the new face of immigrants - Refugees; it is believed that the refugee population that entered in the last few years has constituted upto 0.4% of the European labor force, (BBC, October 2016). This source also states that the average wage is reduced due to the induction of new labor into the markets of the United Kingdom. Thus posing as a substitute for the lower-wage earning families.
Asylum seekers and immigrants go to another country in search of better job opportunities and regions that are experiencing high demand in labour. On the other hand, they can also immigrate due to political unrest or epidemics in their native countries. These immigrants can be termed as refugees. With the Syrian conflict, there has been a large influx of refugees into the regions of Europe and the Americas (UNHCR, August 2015). Now, since the Governments, that are a part of the 1951 Refugee Convention, have obliged themselves to provide immigrants with the basic necessities, it costs the Governments a significant part of its revenue.(UNHCR, 1951). In the year 2016, USA spent 36.5 million dollars to resettle refugees, (Proposed Refugee). Now there were reports that Germany was willing to spend almost 37 billion GBP to resettle refugees this year, (McFadyan, Jan 2017). This includes healthcare, shelter, food and other amenities. It is estimated that it takes roughly 6 and a half months to start working in the host countries situated in Europe, (BBC, October 2016). It is also to be noted that, even after this duration, many people still do not find employment, proving disdain to the efforts of the government.
Illegal immigration is not the only source contributing to the increase in crime rates, but a general influx of new people is also capable of doing the same. When there is an influx of new residents or immigrants in a country, it is not unusual that the newcomers are not familiar with the way the system works in the nation. For example, the United States legislature is divided into the state and the national legislature; giving way to different laws being active in different states of the nation. The United States had a cumulative average of 3.4% of their population recognized as illegal immigrants(Procon.org, December 2013). Illegal immigration is not the only source contributing to the increase in crime rates, but a general influx of new people is also capable of doing the same. There has been a recent spike in the crime rates of Germany, due to the large intake of refugees. According to chart 1.1(Khassam, R & Tomlinson, C, May, 2016), one can see that there has been a significant rise in crime, due to the lack of money and desperation.
When there is an increase in crime rate, it is directly proportional to the increase in government spending. The government, will relinquish its revenue a little, when it spends on the maintenance of its prisons and towards the police department as well. With an increase in crime rate influenced by a struggle for employment, immigrants contribute substantially to the crime rates, thereby rendering the benefits of immigration useless.
Immigration is a phenomenon that has existed as long as history has existed. Right from the times of the Industrial Revolution and the age of colonization, to the current dislocation of people from the middle east, there have been many reasons that caused it and benefits reaped. The recent times has seen refugees as immigrants, occupying and entering alien markets, causing the wage brackets for the lower end workers to drop, increase government spending on their rehabilitation, and even rupture the social life by increasing crime rates in the host nation. Though immigration served as a medium of increasing labour, the same benefits do not sustain over time.
