US Immigration Attitudes and Immigrants in America

Immigration is one aspect of globalization that has elicited an intense debate in recent times, with some countries being openly repulsive to migrants. This kind of reaction is based on varied concerns that mostly touch on competition for resources between natives and the immigrants.

In the US, the debate on immigration and the impact of migrants on the job market has been rife. Ideally, a significant number of the US populace view Latino immigrant workers as a threat. This is more so due to uncertainties about the impact of increased immigration on income distribution (Facchini and Myda 2006).

US Immigration, Immigrants, migrants
US Immigrants Demonstrate Outside a US Immigration Cell

Those opposed to immigration feel that the increase in foreign workers, who probably possess similar skill sets to those of natives, increases the competition for job opportunities.

In their view, this turn exerts a downward pressure on wages and threatens their chances of social advancement. They also feel that migrants put a strain on the national budget and social amenities, and contribute to a reduced quality of life for Native Americans.

Fiscal Burden Hypothesis of Immigration and Ethnocentrism

Attitudes towards migration have been found to be shaped by economic and ethnocentric concerns. The fiscal burden hypothesis states that wealthy natives are likely to oppose the immigration of low-skilled persons because these increase their tax burden. The fiscal burden hypothesis is, however, refuted by studies which show that wealthy natives are less opposed to immigration than low-skilled natives.

These findings support the labor market competition hypothesis which argues that individuals that are highly likely to lose jobs to immigrants are more likely to oppose immigration.

The fiscal burden hypothesis is validated by Clark & Legge (2009); Pettigrew,Wagner, & Christ, (2007). Low-skilled workers are more likely to earn low wages which exposes them to the pressure created by economic shortcomings. For this reason, they are highly vulnerable and are more likely to oppose immigration in cases where such immigration increases occupational competition (Scheve & Slaughter, 2001). 

Ethnocentrism, the preference for the ethnic or racial group to which on belongs, is also an important factor in determining attitude towards immigrants. Previous studies have established the significance of ethnocentrism in the opposition of immigration.

Studies focusing on White Americans have found a positive correlation between ethnocentrism and opposition to immigration. This correlation is stronger where attitudes about particular groups, notably Asians and Latinos, exist.

Generally, opposition to immigration in America is influenced by group-specific attitudes. This can be seen on American media where the coverage of immigration normally reveals an intense focus on Latinos. 

Immigration and Unemployment in the US

In the US, the labor market is undergoing rapid changes due to rising inequality and immigration. Immigration has been significant in shaping the labor force.

Similarly, the number and skill levels of immigrants affect the labor market’s profile. Orrenius and Zavodny (2013) noted that immigrants form over 10% of the United States’ labor force. Most of these generally possess low education qualifications.

However, there is a good representation of immigrants among higher education levels. In short, immigrants are best represented at the higher and lower education levels but are highly underrepresented at the middle level (Duncan and Trejo 2009).

As of August 2016, the US unemployment rate was 4.9%. The total number of people unemployed at that time was 7.8 million (Trading Economics, 2016).

Historically, the average rate of unemployment between 1948 and 2016 was 5.2%, with May 1953 recording the lowest rate at 2.55% and November 1982 recording the highest unemployment rate at 10.8%. Projecting into the future, the unemployment rate as of 2020 is expected to rise to 6% (Trading Economics, 2016). 

Is there Connection between Immigrants and Unemployment in the US?

Card (2009) opines that most of the immigrants into the US have limited education as well as skills, a fact that often sees them competing for the same type of jobs held by natives. Indeed, statistics show that the immigrant workforce is concentrated in the low-skilled segment of the country’s labor supply.

According to Card (2008), this disproportionate concentration of the immigrant workforce contributes to a trifecta of economic factors, namely technology, immigration, and trade, which many scholars blame for the significant increase in skill differentials that have persisted in the economy since the 1970s.

The significantly high number of immigrants in the low-skilled segment of the country’s labor force positively correlates to the decreased wages in the low-skill job groups. This decrease in wages negatively affects the native workers whose incomes and wages are subsequently depressed.

Low wages and income often lead to discouragement and most individuals in this lower segment of the labor supply quit their jobs in pursuit of better alternatives, with some withdrawing completely from the labor force.

In his investigation of the relationship between immigration and unemployment in Canada, Latif (2015) reports that immigration has varying impacts on employment in the short-run and the long run.

In the short-run, Latif (2015) indicates that immigration and unemployment rates positively correlate. However, the impact of immigration on the unemployment rate in the long run is negative, but insignificant.

On the contrary, the American Immigration Council (2013) posits that there is no direct correlation between immigration and unemployment. It argues that less restrictive immigration laws have the potential to empower immigrants who, in turn, would be encouraged to increase their investments in the country’s economy, spending and paying more amount of money in taxes.

These arguments raise questions that are worth pondering. For instance;

  1. What about immigrants who come to the US with exemplary skills and are more willing to offer their services at a relatively low wage rate?
  2. How do lower wage rates affect the competition for jobs, and how does this affect natives?
  3. Do skilled immigrants contribute to economic growth and, therefore, more job opportunities?

These are some of the questions, which the current study seeks to answer.   

Impact of Immigration on Wages, Unemployment, and the US Economy

According to the US Chamber of Commerce (2016), there is widespread misinformation regarding immigration despite the numerous studies and reports on its impact on the economy.

Contrary to the reports that immigration has negative economic impacts, the Chamber of Commerce (CoC) reports significant benefits of immigration to the U.S economy, notably, the creation of new jobs that complement and benefit the country’s labor force. According to the report, this leads to an overall improvement in wage rates. The issues raised on immigration in the U.S are discussed in the report as follows:

Impact of Immigrants on Job Opportunities

While this argument seems convincing, the CoC notes that employment cannot be looked at as a ‘zero-sum’ affair (p.2). Ideally, the economy cannot be assumed to contain a fixed number of job opportunities for which natives and immigrants compete.

A literal example given by the CoC is that, while there are about 8.1 million illegal immigrants in the U.S, removing them from the country would not free up an equivalent number of job opportunities for unemployed native Americans to fill. This is because such an occurrence would equally eliminate the 8.1 million opportunities presented by these immigrants in terms of investment, tax remittance, and net consumption.

In that case, the economy would suffer major setbacks that would render such an effort futile. To a larger extent, such an effort would lead to the loss of jobs instead of freeing up opportunities for natives. In light of that argument, it is important to consider the contribution of immigrant workers to the U.S economy. 

Contribution of Immigrants to the U.S Economy

According to Fairlie (2015), the 2014 Kauffman Index of Entrepreneurial Activity showed that the likelihood of immigrants becoming entrepreneurs is twice that of Native Americans. In 2013, for instance, 28.5% of the new entrepreneurship ventures in the U.S were owned by immigrants.

This entrepreneurial tendency by immigrants led to the generation of “more than $775 billion in revenue, $125 billion in payroll, and $100 billion in income, employing one out of every ten workers along the way” (Fairlie 2012, p3). Therefore, the significance of immigrants to the U.S economy in terms of growth cannot be ignored.

Contrary to the thought that immigrants take up jobs that would otherwise be done by the natives, they play an important role in job creation and are of benefit to the natives too. In 2007, the Fiscal Policy Institute revealed that about 4.7 million people in the U.S work in the small businesses owned by immigrants. In fact, at 18%, the number of businesses owned by foreign-born individuals surpass the number of immigrants living in the U.S (13% of the population).

Foreign-born individuals are a significant contribution to the small business sector as they own 28% of the country’s Main Street businesses. Moreover, 18% of the U.S’ Fortune 500 companies are owned by immigrants, who inject an annual revenue of about $1.7 trillion into the country’s economy in addition to employing a significant number of Native Americans.

Worth noting is that notable U.S companies like Google, Yahoo, Verizon, Procter & Gamble, United States Steel, Intel, and AT&T among others are either owned or founded by immigrants (PNAE 2011; Anderson 2013). One can only imagine the extent to which the U.S economy would suffer if these companies left the country. In essence, immigrants do not deny American workers job opportunities, but come to fill existing vacancies or create jobs (Rob Paral & Associates 2009).

Migrants Taxation and Revenue, Security, and Welfare

There exist notions that undocumented migrants do not pay taxes, therefore, do not contribute to economic growth, that immigration contributes to insecurity, and that immigrants put a strain on the national budget due to increased welfare demands.

On the issue of taxation, the CoC notes that both documented and undocumented migrants pay taxes through sales, medical, rent, and social security taxes just as other American citizens. For instance,  In 2013, the Institute for Taxation and Economic Policy (ITEP) estimated that immigrants paid $11.6 billion in taxes, with those living in California contributing the largest share (ITEP 2016).

However, it goes further to state that undocumented immigrants who do not subscribe to social welfare programs are not eligible for federal and state welfare benefits such as health insurance, supplemental security income, and food stamps among others. Therefore, this provides a subsidizing effect on the social security program because despite not paying taxes, they do not enjoy its benefits. 

Moreover, the CoC refuted claims that immigrants did not integrate into society fully and were more likely to engage in crime. Currently, popular political rhetoric proposes the construction of a wall on the US-Mexico border as a way of boosting the U.S’s national security. However, it has been noted that nearly half of the country’s undocumented immigrants got into the country legally.

Additionally, immigrants, including those from countries such as Mexico and Guatemala, who are considered a threat to the country are less likely to engage in crime. This is backed by research findings indicating that despite an increase in immigrant populations from 3.5 million to 11.2 million between 1990 and 2016, the FBI recorded a 48% decline in violent crime as well as a 41% decline in property crime over the same period (Passel & Cohn 2014; FBI, 2014).

Furthermore, the US States having the highest recent increases in the number of immigrant populations recorded the lowest rates of crime. Contrary to popular thought, the findings also show that there are less immigrant convicts in the country than there are native convicts. 

The U.S Economy, at a Time of Slow Growth, does not Need Migrant Workers

Some Americans are of the view that immigrants are putting a strain on America’s resources, more so, at this time when the economy is struggling to shake off the effects of the economic recession. Such are of the view that immigration should be stemmed to boost the country’s economy and its global competitiveness.

However, it is important to note that some regions of the U.S. have acknowledged the positive contribution of immigrants to their economies. For example, the cities of Dayton, Ohio, and Miami, Florida have welcomed immigrants, noting that they are an important asset in terms of revitalizing their economies and transforming the cities’ neighborhoods (Blazar 2013).

Perhaps, this is due to the realization that the country’s economy is facing a demographic challenge as native baby boomers grow old. It is projected that, in the near future, immigrants will be of great significance to the U.S economy since a greater number of U.S taxpayers are approaching retirement age at a high rate.

According to the Bureau of Labor Statistics (BLS), the population of the U.S citizens aged 55 years and above will rise from 18.2 million in 2014 to 102.9 million in 2024 (38.2% of the population) against an economic growth rate that is likely to create about 9.8 million jobs within the same period (Lockard & Wolf 2015). Therefore, the economy may suffer labor deficits going forward, placing immigrants in an important position regarding replenishing the declining labor force. 

Immigrants spur economic growth through job creation, increased government revenue through taxation, increased local and foreign direct investment, as well as increased gross domestic production. Without immigrants, the U.S may face not only labor deficits, but also reduced production and an even worse economic performance.

Immigrants lower wage rates at the expense of Native American Workers

It has been argued that immigrants contribute to lower wage rates since they are more willing to take lower wage rates relative to Native Americans. However, the CoC disputes this notion, arguing that it is a myth. On the contrary, immigrants contribute to wage increases.

To start with, natives and immigrants do not possess similar skill sets, meaning that the jobs done by natives and migrants are interdependent, a factor that leads to the increased productivity of natives (US Chamber of Commerce, 2016, p. 3).

Secondly, immigrants increase the size of the labor force and subsequently stimulate investment. Consequently, this increases the labor demand and a rise in wages (Peri, 2006). In fact, a report by the Economic Policy Institute revealed that immigration contributed to a 0.4% increase in wages between 1994 and 2007 (p.6). As a result, college and high school graduates experienced a 0.4% and 0.7% increase in wages, respectively, while those without high school diplomas benefited from a 0.3% increase.

On average, native workers realized a 0.6% increase in their wages over the same period.  The average increases in wages occur despite competition for jobs between natives and immigrants. A study on the impact of immigration on the average wages in Dawson, Nebraska and Miami, Florida, where high immigration rates have been recorded revealed that the average wages in those areas increased amid competition for jobs.

Similarly, it has been noted that natives living in the U.S cities that have high immigrant populations receive higher wages than in cities where such populations are low (Card 2007). 

What Causes Hostility Attitudes Towards US migrants?

Dustmann and Preston (2004) note that concerns on the labor market and the welfare system are important triggers of hostility towards migrants, more so,  in cases where they are viewed as competitors by the natives. In some cases, such hostility may also be caused by racial prejudices.

These factors play out clearly in the case of the U.S’s hostility towards immigrants. At a time when the country is faced with numerous challenges amid increased immigration, the natives feel threatened, fearing that the prevailing resource scarcity may worsen.

Naturally, when put under pressure, human beings tend to find scapegoats for their problems. In the case of the U.S., immigrants have had to take the blame for poor economic performance.  Dustmann and Preston note that hostility based on the perceived threat of competition for resources is often misinformed. This is similarly stressed by Borjas (1999b) and Gaston and Nelson (2000).

According to these publications, there is little empirical evidence to suggest the adverse effects of immigration in relation to employment and economic growth. Dustmann and Preston note that provided that immigration does not elicit a change in the type of goods produced by an economy, its eventual impact is only felt in terms of the quantity of produce as opposed to wages and employment.

These statements are in line with the argument posed in this study.  Conclusion The study highlights the several gains the U.S economy acquires from immigration. Among them is the creation of more job opportunities by immigrants, an outcome that is contrary to the perceived competition for jobs.

Therefore, it concludes that as opposed to the popular rhetoric that immigrants are a threat to the economic performance and competitiveness of the U.S economy, immigration has been of huge benefit to the country’s economy.

Therefore, it recommends an open-minded approach to the analysis of the advantages and disadvantages of immigration. Such a stance would help citizens and policy makers to take a much more informed stance on the immigration issue. Otherwise, taking a reactionary approach due to economic pressure could lead to negative outcomes for the economy going forward.     

References

American Immigration Council. (2013). The Economic Blame Game: Immigration and Unemployment. American Immigration Council. Retrieved 23 September 2016, from https://www.americanimmigrationcouncil.org/research/economic-blame-game-immigration-and-unemployment

Anderson, Stuart. 2013. “American made 2.0: How immigrant entrepreneurs continue to  contribute to the US economy.” National Venture Capital Association, Arlington, VA.

Blazar, Bill 2013. “Senior Vice President of Public Affairs and Business Development,  Minnesota Chamber of Commerce.” in U.S economic competitiveness at risk: A Midwest call to action on immigration reform. The Chicago Council, Chicago, IL: The Chicago Council on Global Affairs.

Borjas, G 1999b. “The economic analysis of immigration.” Pp. 1697-1760 in Handbook of Labor  Economics, edited by O Ashenfelter and D Card. Amsterdam: Elsevier Science.

Card, David. 2007. “How immigration affects U.S. cities.” CReAM Discussion Paper No 11/07,  Center for Research and Analysis of Migration, London.

Clark, J. A., & Legge, J. S., Jr. (2009). Economics, racism, and attitudes toward immigration in  the new Germany. Political Research Quarterly, 50, 901–917.

Dustmann, Christian and Ian Preston. 2004. “Racial and economic factors in attitudes to  immigration.” Discussion Paper Series, Department of Economics, Centre for Research and Analysis of Migration (CREAM), University College London, London.

Facchini, Giovanni and Anna M. Myda. 2006. “Individual attitudes towards immigrants:  Welfare-state determinants across countries.” Discussion Paper No. 2127, Institute for the Study of Labor, Bonn, Germany.

Fairlie, Robert W. 2012. “Open for business: How immigrants are driving small business  creation in the United States.” Partnership for a New American Economy, New York.

Fairlie, Robert W. 2015. “The Kauffman Index: Startup activity, national trends.” Ewing Marion  Kauffman Foundation, Kansas, MO.

FBI. 2014. “Uniform Crime Reports, Data Online, Table-Building Tool, State and National  Estimates, 1990-2012.” FBI Uniform Crime Reports. Retrieved October 13, 2016 (http://www.ucrdatatool.gov/Search/Crime/Crime.cfm).

Gaston, N and D Nelson. 2000. “Immigration and the labour-market outcomes in the United  States: A political-economy puzzle.” Oxford Review of Economic Policy 16:104-114. ITEP. 2016. “Undocumented immigrants’ state and local tax contributions.” Institute on Taxation  and Economic Policy, Washington, DC.

Latif, E. (2015). The relationship between immigration and unemployment: Panel data evidence from Canada. Economic Modelling, 50, 162-167. http://dx.doi.org/10.1016/j.econmod.2015.06.013 Lockard,

Brett C. and Michael Wolf. 2015. “Occupational employment projections to 2024.”  Monthly Labor Review, December.

Passel, Jeffrey and D’Vera Cohn. 2014. “Unauthorized immigrant totals rise in 7 States, fall in  14.” Pew Research Center, Washington, DC.

Peri, Giovanni. 2006. “Rethinking the effects of immigration on wages: New data and analysis  from 1990-2004.” Immigration Policy Center, American Immigration Law Foundation, Washington, DC.

Pettigrew, T. F., Wagner, U., & Christ, O. (2007). Who opposes immigration? Comparing  German with North American findings.

Du Bois Review, 4, 19–39. PNAE. 2011. “The ‘New’ American Fortune 500.” Partnership for a New American Economy,  New York, NY.

Rob Paral & Associates. 2009. “The unemployment and immigration disconnect: Untying the  knot, Part I of III.” Immigration Policy Center, American Immigration Law Foundation, Washington, DC.

Scheve, K. F. and Slaughter, M. J. (2001) `Labor market competition and individual preferences  over immigration policy’, Review of Economics and Statistics vol. 83, pp. 133-145. Trading Economics. (2016).

United States Unemployment Rate | 1948-2016 | Data | Chart | Calendar. Tradingeconomics.com. Retrieved 23 September 2016, from http://www.tradingeconomics.com/united-states/unemployment-rate

US Chamber of Commerce. 2016. “Immigration myths and facts.” Department of Labor,  Immigration, and Employee Benefits, US Chamber of Commerce, Washington, DC. 

Zeigler, K. & Camarota, S. (2015). Immigrant Population Hits Record 42.1 Million in Second Quarter of 2015. Center for Immigration Studies. Retrieved 23 September 2016, from http://cis.org/Immigrant-Population-Hits-Record-Second-Quarter-2015

Zong, J. & Batalova, J. (2016). Frequently Requested Statistics on Immigrants and Immigration in the United States. migrationpolicy.org. Retrieved 23 September 2016, from http://www.migrationpolicy.org/article/frequently-requested-statistics-immigrants-and-immigration-united-states