Immigration Affect the Economy, Research Paper Example

Problem statement

One of the major issues United States faces is that of immigration. Immigrants have moved legally and illegally into most cities in the United States. The recent trends in immigration in the city of Boston have generated immense concern. The effects of immigration on the median household income in the metropolitan areas in the United States particularly Boston, are the motivation behind writing this paper. The paper aims at identifying the median household trends in the United States especially in areas coupled with immense immigration.

A metropolitan is an area characterized by agglomerations of urban zones with centers bound by employment and incomes. Most urban areas in today’s economy have turned to metropolitan areas especially in the developed nations. The increase in metropolitan cities results from high urban population due to migration; both immigration and emigration.

In the United States, an immigrant is defined as a foreign-born person living within its boundaries. This context encompasses documented persons, refugees and asylum seekers. Some definitions, particularly those from the United States Immigration and Naturalization Service, consider immigration a menace.

The major concerns in this paper are the repercussions of immigration on the economic conditions of the metropolitan area of Boston in the United States. It is very evident that immigration patterns have changed since the 1960’s, and so the effects have revolved. Other cities we can look at classified as metropolitan area include Chicago, Houston, New York, Boston and Los Angeles. These areas are characterized by high population density, which according to the 20012 census have tremendously increased.

The aim of this paper is to discuss how immigrants contribute to the upsurge of the median household income in metropolitan cities where they settle. This topic is controversial since some claim that immigrant’s decrease the median household income. This paper intends to address the increased household income in the metropolitan city of Boston where immigrants concentrate as compared to other cities. The inadequacy of data on immigration has hindered the activities of the government in ensuring that the issue is fully addressed. Immigrants are associated with the poor implementation of fiscal policies in the United States by creating deficits in the fiscal federal government’s levels since they are not included in the budget.

Hypothesis 1:

This paper addresses the question of the influence of immigrants on median household income for metropolitan areas in the United States. It hypothesizes that metropolitan areas with higher concentrations of immigrants will have higher median household income. This variable is taken from the 2000 census but it identifies household income in 1999. A scatter plot will be analyzed to identify the relationship of these two variables.

Research conducted in Boston confirms that immigrants have not only played a role in bridging the job opportunities for U.S natives, but also have strengthened a number of sectors in big-city economies, comprising small business enterprises, construction finance, manufacturing and international trade. Overall, fiscal influences of immigration on States and local governments have been negative, but there is still some evidence that fiscal impacts have been positive in cities suffering the cost of native-born inhabitants. The fringe cost of services to the immigrants is less in places with excess capacity in infrastructure and social service systems (McNichol, 2003).

The economic contribution of immigrants on the median household income in the United States can be viewed from different angles including the labor market, city population, economies, fiscal health and neighborhoods. The following points are attributed to the increased median income in metropolitan area of the Boston and its likes.

Hypothesis 2:

Network social capital works differently in the labor market for men and women In Los Angeles. For example, immigrants and especially women seem disadvantaged by social networks, which lead to low wage rate and hence low wages and a consequent depressed economy. Research from the city shows that social capital has been accumulated in the neighborhood by the immigrants and in this case the male immigrants. Women seem disadvantaged by the reciprocal social network exchange. Traditionally, it has been known that men tend to benefit more from the social network to provide a higher wage. Immigrant women have many family ties in their social network than the men and this result to a higher wage premium since they are able to secure jobs more quickly than men are.

Women are able to create social ties, which are bound, important in creating informal support structures to manage household economy and subsequently median household income. In Los Angeles, most of the immigrants storming in come to assist family members manage their businesses (Camarota, 2001). Women are more prone to this and hence blamed for the low wages in the informal sector. Network social capital accumulated through reciprocal exchange trap immigrants and especially women into social networks that provide redundant information regarding the labor market. In Los Angeles, migrants who have lower SES have social network members with similar economic characteristics, who cannot help them, fare better in the labor market. This negative characteristic of network social capital could be more pronounced for women. It is also evident that the use of personal contacts in a job search and finds that social capital provides a wage penalty for Latina women even when they use weak ties to find employment. Thus, the network social capital that unauthorized women in Los Angeles developed through social network reciprocity and by attending meetings of civic organizations is not expected to provide access to information and resources that leads to jobs that offer higher wages.

Hypothesis 3:

Participation in civic organizations as form of network social capital provides access to information and resources that augment Mexican migrants’ wages in New York, while reciprocal social network exchange does not. Attending meetings of civic organizations provides an economic benefit as immigrants get access to information and resources that could help them find employment with better wages. However, low-income individuals as other groups in the United States have been attending fewer Social networks frequently consisting of homogenous individuals and may not provide access to a range of information necessary for a successful job search for a low-income migrant population. In contrast, attending meetings of civic organizations is thought to provide an opportunity to gain exposure to information and resources that otherwise might not be available in the migrants’ immediate social networks. Organizational membership is not necessarily selective because many organizations desire to expand their membership base. Individuals, therefore, possibly meet a variety of people that they might not be exposed to in their regular social network interactions. These resident individuals are more likely to possess non-redundant information because of their different access to information in their various network connections. For example, even though religious organizations are frequently segregated by race, they have a more diverse membership in regards to income. This membership diversity might assist lower income migrants in finding jobs with higher wages.

A research conducted on the economic benefit of stocks of social capital in explaining economic growth in Houston suggests that social capital plays an important role in a number of economic indicators including wage growth social capital is positively associated with the earnings of authorized Mexican men residing in Ney York (McNichol, 2003). They measure social network participation by a person’s interaction. This includes participating in sports organizations or belonging to social organizations, and this measure of social capital is positively associated with undocumented Mexican men’s wages. They also measure social capital by family and friendship tie and find that far family ties and friendship ties are positively associated with unauthorized men’s wages. Thus, network social capital that unauthorized Mexican men develop by attending meetings during the last quarter of the twentieth century is the average number of meetings attended for the poorest third of the population declined. Civic organizations are expected to provide access to information and resources that leads to jobs that offer higher wages (McNichol, 2003).

Variables related to immigration

Effects of Immigrants on median household income

The median household income is a key concept related to immigration. Median household tends to be more in areas where economic activity is high. High median household income was reported in cities like Chicago, Boston and Los Angeles. According to the census conducted in 2000, these cities reported a high increase in the number of immigrants with the highest immigrants being Asians and the blacks. These groups engaged in aggressive economic activities based on the economic agglomerations in the specific areas. Due to their status in society, immigrants worked hard to attain economic status in the States. In Chicago, the high number of immigrants results to a high cost of cheap labor for businesspersons. This in turn results to increased median household income in the area.

There is a mass migration of skilled persons as compared to the past wave of immigration. Since education has become the key measure of economic success across the globe, immigrants in United States come to acquire education and remain there for advancement of careers. Due to the high skilled labor, the immigrants establish businesses, which increase the household incomes in the areas where they are concentrated.

The impact of immigration on metropolitan labor markets

The economic theory offers astoundingly categorical insight into the effects of immigration on employment and earnings patterns of U.S. natives. Even high levels of immigration are consistent with full employment in the United States. The U.S provides shifts in the prices of labor i.e. in wages, salaries, and fringe benefits, which brings the labor market to equilibrium. The most important measures of immigration on the labor market of natives are the effects on levels and distributions of earnings. There is a growing unanimity among economists that substantial levels of immigration may have only unassertively impact on the earnings of native workers. Research conducted by Borjas indicates that a ten percent increase in the United States work force today would lead to a decline in the labor market earnings by slightly three percent or less.

Due to the impact of disparities in education levels among foreign-born people, there is a noteworthy concentration of immigrants multifaceted in occupations requiring both comparatively high and low levels of education. Among such occupations that require high academic knowledge are teaching; a field in which immigrants work for more than one-fifth of the total hours in several subject areas, especially foreign languages. They also form part of the healthcare professions, including research and patient care. Immigrants account for higher proportions of workers in many fields requiring minimal formal education, working for about one-half of the work hours in such occupations as tailoring, dressmaking, housekeeping, and taxi drivers.

There is authentic apprehension that immigrants would probably increase the relative supplies of low skilled workers in Boston, reducing the earnings and opportunities of low-skilled and disadvantaged native workers. The tendency in the wage and unemployment rates of Boston workers between 1995 and 1997 was analogous to that experienced by employees in other metropolitan cities such as Los Angeles, Houston, and Atlanta, which did not experience the Mariel flow. Miami for instance was successful absorption of a sudden incursion may have been due to unique factors. However, data obtained on the impact of immigration on the labor markets in large metropolitan cities are consistent.

Effects of immigration on metropolitan urban economies

In addition to their unswerving influence on low-wage industries, such as attire manufacturing and brasseries, immigrant service workforces play substantial roles in maintaining business services and office industries in Boston (McNichol, 2003). They create job opportunities in the entrepreneurial and small business sectors of the State. A useful preliminary point is the comparison of the composition of employment in metropolitan cities with large and small immigrant populaces. As among any inhabitant groups, immigrants influence city economies by increasing the supply of innumerable types of personnel and increasing demand for a diverse of goods and services.

Nevertheless, when immigrants lift employment in a sector more than native-born workers do, concentration ratios should positively correlate with the percentage of cities immigrant’s population. Concentration ratios should inversely relate to the foreign-born population if natives spur employment in the sector more than immigrants do. Industries that positively correlate with deliberations of immigrant workers include business services, construction, manufacturing, and personal service industries. Construction industries offer many low-paying, formal positions, particularly in nonunionized sectors, such as home enhancement activities. The business service industry hires both very high and low skilled employees. Less skilled immigrants offer support services to more advanced service and corporate industries.

Several other industries inversely correlate with absorptions of more immigrants in the industry. These industries include healthcare, communications, education and agricultural sectors. Healthcare demonstrates the double-edged nature of an industry designed for immigrants. This field employs sundry low-skilled employees, to provide personal care to patients and execute kitchen chores, as well as janitorial services. However, healthcare is somewhat expensive and often not affordable, it thus requires health insurance services be made affordable.

Immigration and Entrepreneurship

Indigenous entrepreneurship is one of the most discernible economic contributions of immigrants to cities. Research by Rodgers indicates that entrepreneurial activities among immigrants reflect differences between immigrants and U.S. Boston populaces in economic opportunities and peculiar characteristics. Successful immigrant entrepreneurs, generally ascertain market niches in which they can operate profitably. One common identified niche is in retail outlets in minority communities (Camarota, 2001). In addition, immigrant-owned businesses also constellate in economic sectors. In New York, the high population density resulting from immigration of Asian Americans has contributed to the economic prosperity of the city. The Asian Americans have put up businesses in almost the entire city leading to an increase in household income.

Many immigrants are skilled and hence go into private venture to achieve status in community. Since racism was a menace in United States, the aliens work hard to achieve economic status for them to be identified by the Native American population. In Chicago, we find many immigrants in the entertainment industry since they want to achieve status in society. In New York, we find many immigrants enrolling in theatre schools around Hollywood so that they can achieve status and recognition.

Effects of immigration on international trade

Immigrants-owned businesses are far more than native based businesses, which have little impact on the economic base of the communities. Immigrants reinforce U.S. international finance and trade affiliations on the immigrant’s home countries or regions. There are nations with which the United States has little commerce with and in which cultural practices and business practices contrast. Overtime, immigrants gradually increase the amount of products exported to their home countries (Camarota, 2001). An upsurge in trade occurs almost immediately, however, since immigrants spur imports of goods they lack from home. Those arriving early have the prevalent impact; the effect weakens by the time late-arriving immigrants assimilate an already established large community.

From a study of the factors likely to influence the median household income in metropolitan areas, in this case Boston, we conclude that immigrants influence the household income positively since they are actively engaged in economic activities. A growth in the economy implies that the median household income is also high. Boston’s economic conditions are boosted by the immigrants in the metropolitan city.

In other metropolitan area like Chicago, immigrants play a major role in influencing international trade. This results from their aggressive activities in the industries. In almost all the metropolitan areas in the United States, a high median household is obtained due to the high level of income that immigrants have contributed towards the economy (Scott, 2005). Houston constitutes the major metropolitan are in the states with a high-income level of about 11% as at the census conducted on April 1 2000. The level of international trade reported to have increased in terms of increased exports and a reduction in imports.

Data

The United States census conducted on 1 April 2000 was the states twenty- second census. A census usually involves the actual counting instead of using samples. The census was conducted in all cities and one of the variables obtained from the census was the level of median household income in United States .Data collected from a census is important since it succors by state officials in drafting legislations crucial in the overall economic development in the States. One of the vital information obtained from a census is that of immigrants. Immigration has become a menace not only in the United States but also across the globe.

The data collected revealed the economic characteristics of United States in terms of age, sex, housing, family and structure. These data were important in identifying the household income in United States, which helped estimate the economic conditions prevailing in the states at the time. It is through census data that the government can obtain full details of the immigrant’s trend in the United States. Immigrants have both positive and negative impacts relating to the economic conditions of a State. Data collected from the census was substantial in revealing the relationship of the concentration of immigrants and the median household income of the three hundred and eighty nine metropolitan states in the United States. From the results, twenty-five percent of the entire population comprised of non-American whites. This implies that a portion of this group comprised of immigrants. Actual data revealed that actual median household income upsurge gradually across the years. Form actual figures of the median household income approximated at $40,442 though the figure has gone up presently (McNichol, 2003). In 1999, the real median household in the States stood at its peak. However, the median household income tended to differ across regions. This was because there are different ethnic groups and their presence in metropolitan areas. This implied that different metropolitan cities had different median household figures. It evidenced that the median household figures in areas where immigrants were concentrated tended to be high since immigrants played a vital role in boosting the economic conditions of their respective areas.

In a subsequent analysis, the concentrations of Latino and Asian immigrants are analyzed separately to identify if any differences in immigrant origin exist among metropolitan economies. The Latinos since in memorial dominated the immigration field in the United States. Only recently have the Asians dominated the field. The influx migration of Asians in America reveals the legality of migration. American employers have changed their demand of employees to require high skilled workers with the majority coming from Asia. Latin migrants have been sliced due to the stress on academic knowledge (McNichol, 2003). The American economy transformed from a manufacturing economy to technology- based economy, which explains the decline in Latinos and an increase in Asian immigrants. In 1999, Latino migrants comprised the majority of immigrants in the United States. The concentration of both Latino- Americans and Asian-Americans differs in their places of settlement. Due to their influence in the economy, it becomes quite evident that before the 2000 census, the Latin-Americans were concentrated in metropolitan cities of the States. This also implied that the median household income was higher in such areas.

The shift in the Asian migration into the United States is a positive impact of the immigration policy drafted in 1990 that favored the flow of wealth into the country. Metropolitan economies differ especially in relation to the group dominating the region. From the data collected about these facts in the 2000 census, it is evident that metropolitan cities dominated by Asians reported a higher median household income as compared to those dominated by Latin immigrants. Though both groups positively contribute to the upsurge of the entire nation’s economy, regional figures tend to differ significantly. We can thereby conclude that the concentration of immigrants greatly affects the median household income in the metropolitan cities and in return increasing the entire income in the country. Other metropolitan areas in the United States have a concentration of immigrants that contributes immensely on the median household income of the region.

Conclusion

Median household income is high in metropolitan cities in the united State. This results from the high number of immigrants from other countries. For instance in Los Angeles, the high population results from the high number of Mexican immigrants in the city.

he high number of skilled immigrants results to the increase in the state’s economic well-being since they increase the gross domestic product of the state. The government should henceforth acquire more information about the immigrant’s trend and their contribution to the economic welfare in the United States. By overcoming the shortage of data on immigration trends, the government can plan for the immigrants since they play significant role in influencing economic conditions

References

Camarota, S. A. (2001, February 15). Migration. Retrieved May 7, 2013, from World Wide Web: http://www.cis.org/High-Cost-of-Cheap-Labor

McNichol, E. (2003, October 9). Statics.Inc. Retrieved May 8, 2013, from World Wide Web: http://encencusrepeot.orgList_of_metropolitan_areas_of_the_United_States

Scott, J. (2005, April 13). US Govt Corporation. Retrieved May 7, 2013, from World Wide Web: http://www.bls.gov/opub/mlr/2003/04/art2full