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The second Hypothesis: The presence of immigrant workers is a positive force and benefits the U.S. economy Research Paper

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Updated: Jul 5th, 2019

Immigrants are a growing part of the labor force. - graph

Source of data – United States Census Bureau 2012

The economy of the United States grew over the last ten decades due to the impact of the immigrants in the labor industry. As a group providing cheap labor and specialized skills, immigrants’ contribution to the economy of the United States has doubled in the last ten years.

In fact, as indicated in the above graph, the number of immigrants within the civil labor force reached 23.1 million. Reflectively, this number represents 16.4 percent of the total labor force as of the year 2010. Despite constituting 13% of the total population, immigrants’ contribution in the growth of the United States economy has been seen in the agricultural, construction, housing, health care, real estate, education services, and mining and food services industries. Reflectively, these industries are the backbone of the American economy.

As a matter of fact, at present, the immigrants in agricultural and mining industries have surpassed the 30% mark as provider of labor in these labor intensive spheres of production. Besides, the census results indicate that immigrants have become a driving force in the labor market for high-skilled workers in the field of information technology. Within this technical field, immigrants constitute 23% of the civilians employed.

Moreover, immigrants also supply labor in large proportions in industries that require mass low-skilled employees. From 1970 to 2010, it is apparent that the contribution of the immigrants in the labor force, thus the economy of the United States has grown steadily. As the values indicated in the graph show a steady rise in the percentage of immigrant workers in the United States economy from 4.9% in 1970 to 16.4% in 2010. Despite being only 12.9 percent of the total population, they represent 16% of the total labor force.

Thus, as indicated in the above statistic graph, the presence of immigrant workers is a positive force and benefits the U.S. economy since immigrants possess skills that could enhance the U.S. labor market. Specifically, their contribution is noted in the agricultural, mining, IT, construction, and manufacturing industries which require special skills that these immigrants posses.

Relationship between median income and foreign birth

The graph below shows the relationship between median income and foreign birth.

Explanation

The graph above shows a cluster diagram of median income and foreign birth. A straight line can be drawn from the cluster diagrams. The straight line (upward sloping) in the diagram implies a positive relationship between median income and the rate of increase of foreign birth that is, an increase in foreign birth leads to an increase in median income. Further, from the graph we can deduce that immigration has significantly increased the presence of foreign born workers in the United States as shown by the increase from 0.0% to 45.0%.

Various studies have been carried out to show the effect of immigrants on the U.S economy. Most of the studies focus on the effects of immigrants on employment, wage rate, total productivity and overall impact on the US economy. These studies give varying results. Some indicate that immigrants cause a negative impact while others shows that immigration has a positive impact on the US economy.

For instance, some stories indicate that immigrants compete for job opportunities with the native. Various economists who have analyzed the labor market in the US reveal that immigrants have no large effects on the US employment and wages of the US natives.

A recent study conducted by the Federal Reserve Bank of San Francisco revealed that “immigrants expand the economy’s productive capacity by stimulating investment and promoting specialization thus producing efficiency gains and boosts income per worker” (Federal Reserve Bank of San Francisco 1).

In addition, the study showed that there is no significant effect of immigration on net job growth for US born to work in the long run and the short run. The study further revealed the economy has taken in the immigrants and the foreign born by growing job opportunities rather than putting out of place employees in the US. Further, presence of immigrants increases availability of cheap labor in the country.

This encourages business to expand their capital expenditure. The net effect is an increase in output per worker. This effect of increase productivity and thus increase in income is felt in the long run because the firms have ample time to adjust their scale of production (Federal Reserve Bank of San Francisco 1)

It is evident that increase in immigrant and foreign born results to increase in productivity in the economy. Increased productivity implies an increase in household median income. It also implies increased gross domestic product of the country and increased per capita income. This relates to the second hypothesis of the study which states that the presence of immigrant workers is a positive force and benefits the U.S. economy. Immigrants possess skills that could enhance the U.S. labor market.

Works Cited

Federal Reserve Bank of San Francisco 2010, . Web.

United States Census Bureau 2012, Graphs. Web.

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IvyPanda. (2019) 'The second Hypothesis: The presence of immigrant workers is a positive force and benefits the U.S. economy'. 5 July.

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