Question

Write an essay explaining what economic evidence suggests about the various effects lowskilled immigration on US wages. How might it be possible for US wages to increase as a result of such immigration?

Answer 1

Today the United States is witnessing the biggest ongoing wave of immigration in its history, with 1.2 million legal and illegal immigrants arriving annually. The influx triggered a near doubling of the foreign-born population share from 4.8 percent in 1970 to 9.3 percent by 1996. This large-scale migration has significant consequences for US social, political, and economic environments. Since immigration raises labor supply, it is also argued that it would lower incomes or make jobs more difficult for natives.

At the bottom of the labor market, work competition between immigrants and natives is thought to be especially intense, since so many immigrants are working in the low-skilled / low-wage sectors of the economy.

Immigrants are 60 per cent more likely than native-born workers to be working in lowskilled occupations. Thus, a higher percentage of immigrant workers, including native-born minorities, are adversely affected by competition with their fellow immigrants.
Understanding that migration makes natives and immigrants working in low-skilled jobs poorer doesn't tell us what we can do about it, if anything. The degree to which we take steps to counter immigration's wage impact depends on how worried we are about lowskilled workers 'incomes.

Any effort to implement such a program would without doubt lead to demands for substantial reductions in low-skilled immigration rates. Thus, if we are worried about the effects of immigration on jobs in lowskilled professions, then the most successful and politically feasible approach seems to be to the the degree of low-skilled immigration. Besides raising the influx of low-skilled legal immigrants, there should be more money dedicated to regulating illegal immigration. It is without doubt the lowest-skilled immigrant influx, with an estimated 75 percent lacking even a high school degree. It is generally accepted that a program allowing employers to check reliably and efficiently that all new hires are legally eligible to work in the United States provides the best chance of reducing illegal immigration

Companies respond by increasing their company to increase the supply of labour. Increased labor supply as a result of immigration is thus easily absorbed into the labor market as a result of increased labor demand, without reducing the salaries of native-born workers.

By ensuring more manufacturing jobs remain in the U.S., not only do native-born manufacturing employees benefit, but the demand for services on which the manufacturing sector relies such as transportation of manufactured products throughout the U.S also remains large. And as a result of globalization, the "upstream" jobs held by native-born workers in manufacturing-related industries are also better off.