By: Dyin Read, Illuminati Military Director and Know Nothing Digest Contributor.
Research has shown that a great number of immigrants with low levels of education are currently involved in the United States labor force. There is a frequently made claim of immigrants displacing native born laborers from the job market in the media. Is this just fake news or are they stealing our jobs? Economists using individual data covering occupational task intensity across the United States during 1960-2000, shows native-born and foreign workers with low education levels providing quite different labor skill sets (Peri, 2007.)
The new economics of labor migration makes wage rates in the migrant-related employment sectors more equal between countries. The wage rates in high paying countries go down as the wages in lower paying countries go up. There are wage savings benefits to the formerly higher paying country firms and wage payment increases for formerly low paying country firms. Labor migration has been documented throughout history to be an economy-developing feature of country evolution (Pugel, p.359, 2016.)
The complexity of migration as an economic institution comes from directly competing workers in receiving countries, but at the level of least skilled laborers, being threatened by immigrant labor. World-wide labor output is increased by migration of workers, yet large swaths of workers often complain about the prevalence of a wide spread lack of a livable wage. The tendency to focus on one aspect of migration in isolation to all others is prevalent in historic attempts at understanding the impact on sending and receiving countries. In light of the frequent blaming of immigrants for job loss, wage loss, and unemployment, it is often ignored that currently the United States is receiving the biggest consistent flow of immigration in our country’s 240+ year history. In 1970 the number of foreign born citizens was under 5 percent of the population. By 1990 the number of foreign born citizens rose to above 9 percent of the population (Camarota, 1998.)
Analysis of global labor markets show that sending countries lose future tax payments the emigrants would have paid had they not left the country to work elsewhere. This is known as the “brain drain” of a country or region when taken into account what the country or region has paid to educate the individuals that learned at public expense and moved away for better job opportunities (Rozzelle, 1999.)
There is an often, unrecognized benefit to emigrant-worker sending countries classified as voluntary remittances. These remittances are monetary gifts from workers abroad to their family back home in the emigrant-worker sending country. Employers in immigrant-receiving countries gain more than current citizen workers lose, as do the consumers receiving the produced products or services. Other aspects or effects of migration are difficult to measure through accounting and direct monetary economical-analysis. Migrant workers take knowledge benefits with them from the sending country to the receiving country. This is a cost/benefit that is difficult to quantify monetarily through standard GDP numerical speculation. The cost/benefit of migrants transferring congestion from sending countries to receiving countries. The overcrowding of a receiving country is less of a burden on the public services of the sending country.
The benefits and costs from migration are similar to those felt from free trade. There are benefits derived from an increased labor force to hire from in migrant receiving countries. There are costs to domestic low-skilled workers to who must compete for the same jobs but with a larger low-skilled labor force to compete with. There are gains in opportunities for domestic firms to supply high skilled workers and exports to developing economies. With free trade, the sending and receiving countries can change places for different market segments. This enable countries to attempt complimenting each other, in addition to just compete against each other.
In addition to complimenting each other through migration of low-wage workers to established economies and high-wage workers to developing economies and remittances from emigrants to sending countries, there is the migration of investment. Foreign Direct Investment could be considered the opposite of remittances. Instead of money coming into a country from the migrant workers abroad, FDI is money coming in from investors abroad to generate the growth of more revenue. Some if this new revenue stays in the country receiving the Foreign Direct Investment, but most of the revenue generated is returned to the FDI sending country (Pugel, p.375, 2016.)
As we have discussed, immigration increases the supply of labor in the receiving country. Critics rationally argue that immigration makes jobs scarce for native workers and that immigration will decrease wages. There has been research offered that discourages the held principle that immigration only really creates fierce competition at the bottom of the labor market. The truth is that, regional labor markets of the United States are not separate closed economies unto themselves, so we must recognize that capital and goods in addition to labor migrates between cities in this country. The migration of all these inputs of production spread the effects of migration throughout the United States (Camarota, 1998.)
• Rozelle, S., Taylor, E., DeBrauw, A., Migration, Remittances, and Agricultural Productivity in China, 1999, https://www.researchgate.net/profile/Alan_Brauw/publication/4726355_Migration_Remittances_and_Agricultural_Productivity_in_China/links/0912f511b0cf849b9d000000/Migration-Remittances-and-Agricultural-Productivity-in-China.pdf
• Pugel, T., 2016, International Economics 16th edition
• Camarota, S., 1998, The wages of immigrations, https://cis.org/Report/Wages-Immigration
• Peri, G., Sparber, C., 2007, Comparative advantages and gains from immigration, https://www.economics.uci.edu/files/docs/micro/s07/Peri.pdf