Introduction
As globalization and industrialization continue to influence the development of megacities and urban centers across the world, the attention of civilians on immigration for socioeconomic purposes has increased (Eakin 2). An influx of mass population resulting from mass immigration trends has a significant influence on the national economy.
Although immigrants are a potential source of labor workforce that companies require in enhancing their productivity and improving national economy, maintaining immigrant population is costly to any nation. Since the gold rush era, the United States remains considered as a nation of immigrants.
Currently, the United States is undergoing financial crisis, with the economic growth stagnating at 2%, and the public debt escalating to $16 trillion, probably due to its national expenditure of the massive population (Immigration Policy Centre 1). Recently, the United States has been undertaking immigration reforms purposely to improve its economic welfare. Hence, this essay seeks to examine the underway immigration reforms and their economic impact on the United States.
Major Immigration Reforms Underway
There has been an evolving controversy regarding the presence of legal and illegal immigrants in the United States, with the Native Americans complaining about the economic impacts of managing the growing national population (Bennett 12).
For approximately two consecutive decades, the American government has been struggling to mitigate unauthorized immigration from several nations across the world. Contemporarily, the federal government of America is seeking to improve the immigration policies in response to the dwindling economy (Gamboa 7).
The intended reforms in the American immigration issue include the development of a competent immigration policy that is capable of controlling the immigration trends. As part of the 1986 Immigration Reform and Control Act (IRCA), the federal government seeks to renew immigration policies using new approaches (Center for American Progress 2). The Senate house of the United States in June 2013 passed the immigration reform bill that seeks to shape the American economy through managing illegal migration into America.
The emergence of immigration policy from the comprehensive immigration reform primarily seeks to implement a flexible legal immigration platform that would leverage the economic situations of the United States (Gamboa 12). The government of the United States is on a quest of embracing a comprehensive immigration reform that seeks to legalize immigration and allow immigrants to acquire permanent citizenship (Eakin 1).
The notion is that through a flexible system of immigration that allows legal movement of potential workforce in the United States, its economy would grow. The Americans are defiant to the prevalence of immigrants in the United States with fear that immigrants would perhaps displace Native American workers.
The comprehensive immigration reform that their Senate house has proposed seeks to improve employment protection for both the immigrants and the Native Americans (Gamboa 8). The comprehensive immigration bill provides the undocumented or unauthorized immigrants with the opportunity of securing American citizenship that would enhance their legality in residing in the United States.
Reforms and Their Positive Economic Influence
The foremost aspect of any national economy is stability in the Gross Domestic Product (GDP), which is normally the market value of products or services offered within a country. The national GDP depends on the employment status of the nationals and the levels of industrial growth in the nation (Immigration Policy Centre 1).
Considered among the most significant global economies, United States companies are foremost to its industrialization and its economic growth. Legal acquisition of citizenship to unauthorized and undocumented immigrants would probably instill confidence among immigrants, most of whom are potential foreign investors (Eakin 1). Immigrant investors would increase commercial activities by bringing in unique innovations that would expand the American economy.
The United States economy has frequently relied on commercial taxes levied on industries to generate national fiscal revenues that contribute to GDP growth. As Center for American Progress (1) notes, economists in the United States have estimated that the intended comprehensive immigration reform would increase the GDP by approximately 0.84 percent.
A 0.8 percent increase in the United States economy translates to a ten-year accumulative GDP growth of about $ 1.5 trillion. The amount encompasses $1.2 trillion value of national goods and service consumption and $256 billion from new companies expected. Apart from GDP growth, legalizing immigration, as economists argue, has the power to enhance employment, improve national wages, and boost investments (Center for American Progress 1).
With the inception of the comprehensive immigration reform, America expects the number of companies operating within the United States to increase from 45 to 75 new multinational companies (Eakin 7). Growth of new investments and increase in the number of companies is likely to stiffen industrial competition and amplify employment opportunities and conditions, including payment expectations (Bennett 4).
Apart from increasing GDP through industrial taxation, industrial growth due to the immigration reforms would improve wages of both native and immigrant workers. A country with high average salary among its employees generates high revenue from national taxation.
Comprehensive immigration reform is likely to improve the wages of American workers and that of the newly legalized immigrants to about $4,400 annually for the less-skilled workers and $6,185 annually for the skilled laborers (Immigration Policy Centre 1). Regarding the same wage issue, the initial assumption of the anti-immigrants was that immigrants displace native workers and depress national wages.
Nonetheless, economists have recently established that immigrants sometimes have the ability to enhance wages of the native workers (Bennett 12). Immigration typically increases supply and demand of labor, and consequently enhances labor competition and augments remuneration depending on the competency of workers.
The large pool of immigrants as experienced over the years in America, encompass the majority of the low-skilled workforce, and this is advantageous to the native-born Americans (Gamboa 15). Growth in the workforce usually spurs industrial growth, increases employment, boosts investments, and enhances some increase in average national wages, which is beneficial to the national economy of the United States.
Economists believe that the national economy largely depends on the relationship between labor and capital demands. Enactment of the immigration policy would augment the supply of labor to the American economy, as the legislation would probably loosen the annual immigration limitations (Eakin 5).
Labor and capital demands encompass an evaluation of labor output, most excellent capital stocks, and labor intensity. Economists believe that an increase in the supply of labor force enhances economic growth, doubles labor productivity, and improves the national economy due to improved national revenues (Gamboa 11). As aforementioned, the economists expect that the inception would significantly enhance the national expenditure on products and services generated within the United States.
The $1.2 trillion on additional consumption of products and services would occur because of the increased wages on the native and the immigrant workforce (Eakin 9). High wages among workers increases their personal income, and thus, enhances consumer spending on services/products, consumer preference, and consumer buying power that further enhances GDP.
The intended comprehensive immigration reform has the likelihood of increasing the population of the United States from the present 10 million to approximately 16 million in 2025 (Immigration Policy Centre 2).
Apart from the tax generated from each citizen, legalized workers residing in America would have the capacity and confidence to open bank accounts, purchase living homes, initiate considerable business investments, and all these contribute to economic growth (Immigration Policy Centre 2). Apart from spending on purchasing materials, industrial products, and other direct services, the extra 6 million immigrant workers are likely to spend on improving their human capital.
The wages of legalized immigrants would help augment the American economy, as immigrants would confidently invest in their human capital (Center for American Progress 2). Expenditure on aspects of human capital such as education, on-job training, and research and development are important as it improves productivity of workers and consequently generate taxes.
Negative Consequences of the Immigration Reforms
Currently, it has been evident that mass numbers of the American immigrants have been pushing the government to incur unexpected expenses as they consume much of the national budget (Bennett 6). Research reveals that the United States spends more on humanitarian support and on immigrants than on its own people, which contributes to the current economic crunches.
The United States spends approximately $113 billion annually in controlling illegal immigration at the local, state and even in the federal levels (Gamboa 6). Illegal immigration is probably among the causes of the strained United States economy as the immigration cost is currently between $11 billion to $22 billion (Center for American Progress 2).
Although these reforms will probably ameliorate the United States economy to a certain extent, legalizing immigration may even cause severe economic harm. Attempts to mitigate illegal immigration in America through earlier IRCA amnesties have existed and more worrying is that they had turned to be unsuccessful.
The United States had previously attempted its first approach to make immigration lawful in the year 1986 when its government introduced the IRCA. Although legalized immigrants would spur capital income and industrialization that significantly reduces the cost of bills and federal budgetary, negative economic impacts are unavoidable (Eakin 7).
A significant economic concern is that the legalization beneficiaries have hardly had any favorable employment opportunities in America. The comprehensive immigration reform would increase the number of unskilled laborers to compete for employment opportunities in America (Immigration Policy Centre 1).
The initial statistics reveal that American has been facing fiscal deficiency due to increased budget and national expenditure that the unskilled workers consume. As evident from past incidents, immediately after enactment of the IRCA, unskilled immigrant workers have earned meager wages (Center for American Progress 1). Unless the comprehensive immigration reform establishes effective policies that would shun illegal immigrant, the American economy may face an economic downfall.
From the perspective of economic sense, it takes very little time to obtain a workforce than it takes to develop an investment. Legalizing immigrants would increase the immigrant population faster than investors would have developed their business in America (Immigration Policy Centre 1).
Economists estimate that approximately one million immigrants would be seeking citizenship in America annually unless the policy adopts effective immigration regulations to balance employment and population rates (Eakin 4). The increasing numbers of legalized immigrants who would be seeking for employment while hosted by their relatives would depend on the same national budget to survive.
By the time potential foreign investors would have invested completely in America, the pool of increasing immigrants would have already caused great harm to the American economy (Immigration Policy Centre 2). The policy may receive a sharp reaction from immigrants, especially for those who anticipate visiting the United States and a slow reaction from potential investors. Consequently, the employment demands would exceed job chances.
A growing population in any economy comes with its own unique national responsibilities that America must assess before enacting the comprehensive immigration reform bill (Bennett 3). The increasing population of undocumented immigrants has been causing economic constraints in America due to the issue of insecurity.
Increasing from 11 million to 16 million American immigrants would put the national security at stake and the federal government would have to strengthen national security (Center for American Progress 2). America has been spending heavily on quelling insurgency, terrorism, and crime within and outside its borders.
As immigrants increase the America’s population, it has been evident that the American Customs and Boarder Protection budget has been increasing swiftly by 92% from 2003. In 2003, the budget was at $6.0 billion, but it grew rapidly in 2009 to approximately $11.3 billion (Bennett 2). Although reforms may improve security and reduce such expenses by shallow margins, the extra 6 million immigrants expected to increase, would require an effective national security.
Personal Opinion
The United States is presently facing detrimental financial crisis, something that an established economy should not experience. Undocumented immigrants are the cause of economic stress in the United States as they spend millions of money that this government can utilize in other government programs.
While the issue of illegal immigrants hampering the United States economy may sound unethical given the cases of numerous histories of discrimination against immigrants, an intervention is essential. Mass deportation of illegal immigrants is more uneconomical and unethical than legalizing the immigrants. What is best for the United States now is to recover from its lost economic value and restore its global financial reputation, which matters in its survival in the global capital markets.
Since legalizing immigration is for the betterment of the United States economy, the senate should critically evaluate the comprehensive immigration reform bill, including its future implications before consenting on this bill. Effective means of controlling immigration itself is what will determine whether the comprehensive immigration bill will remain useful or will deem futile.
Conclusion
The long-anticipated immigration reforms may probably come from the proposed comprehensive immigration reform bill that seeks to legalize immigration and allow individuals to acquire permanent American citizenships.
It is possible that the reforms would spur GDP growth, provide employment opportunities, improve employee wages, and enhance investment in America. Legalizing immigration would instill investment confidence among potential investors, and this would enhance employment opportunities and increase wages to both highly skilled and lowly skilled workforce.
Nonetheless, such attempts of legalizing immigration have prevailed earlier through the IRCA but became futile with time. Any ambiguities in the enactment and implementation of the comprehensive bill may result in increased government expenditure in hosting and supporting the immigrants. Security is an issue to consider while attempting to legalize immigration, as America has historically spent immensely on national security.
Works Cited
Bennett, Brian. House Republicans consider their own immigration plan. 2014. Web.
Center for American Progress. The Economic Benefits of Comprehensive Immigration Reform. 2010. Web.
Eakin, Douglas. Study: Immigration Reform, Economic Growth, and the Fiscal Challenge. 2013. Web.
Gamboa, Suzanne. Republican trio: economic gains in immigration reform, citizenship not critical. 2014. Web.
Immigration Policy Centre. The Economic Benefits of Immigration Reform. 2010. Web.