The population of immigrants in the United States rose from 20 million in 1990 to 39 million in 2006 (Urban Institute, 2014). This increase in the population of immigrants has certainly impacted the United States’ economy. Overall there has been a net growth to U.S. GDP due to immigration (Camarota, 2013).
Additionally, the type of immigrant coming to the United States has different impacts on the American economy. Many low-skilled immigrants can serve as labor replacement with more corporations relying on such workers in jobs from California, Arkansas, to New York (Urban Institute, 2014). These lower-skilled workers may not yield increase in the per-capita GDP of the United States (Camarota, 2013). However more educated higher-skilled workers certainly do and again the overall impact is positive to GDP and per-capita GDP.
Legal and illegal immigration makes the U.S. economy 11% or $1.6 trillion larger each year than it otherwise would be without (Borjas, 2013). 97.8% of that increase goes to immigrants in the form of wages and benefits, while 2.2% goes to other individuals and corporations in the United States (Borjas, 2013). Immigration improves skill diversity and also encourages natives to specialize in more complex jobs due to competition from new immigrant workers (Lewis & Peri, 2014). This complements immigrants’ skills, which also contributes to productivity gains.
The United States may consider changing immigration policy in many different ways. Many people suggest increasing more high-skilled immigrants as their improvements to economic productivity, net tax contribution minus government service expenses is usually more beneficial to the American economy than lower-skilled immigrants.
The Border Security, Economic Opportunity, and Immigration Modernization Act (S. 744) of 2013 was proposed to make changes to current US federal immigration legislation and the enforcement of that legislation, and allow for an increase in the number of immigrants that could enter the US (CBO, 2013, p.1). These are projections and thus aren’t perfect, but the most informed projections available. The net effect of this increase of immigrants allowed into the US would be no significant effect on federal budget deficits through 2020 and a decrease in the federal budget deficit over the decade from 2020-2030 (CBO, 2013, p.2). It is also projected to increase GDP by 3.3% by 2023 and 5.4% by 2033 (CBO, 2013, p.3). Through 2031, per-capita GNP, a measure subtracting international capital outflows to foreign assets such as immigrants sending money back to their home country or home institutions from GDP, would decrease by less than 1% as population growth would outstrip earnings per worker growth and the money staying in the US (CBO, 2013, p.3). After 2031 though, earnings per capita would increase into the future.
Another way to overcome the short-term impact of immigration on United States employees and government is a program like the EB-5 program, which awards visas to immigrants that invest $500,000 to $1 million into a U.S. Business (Shyong, 2014). Annually 10,667 of these visas are issued. The money used to qualify for these visas has been invested all over the country including LA, New York, and beyond. This program is one component of why immigration is not net negative on U.S. productivity or employment.
References.
Borjas, G. (2013). Center for Immigration Studies. Immigration and the American Worker A Review of the Academic Literature. Retrieved from http://cis.org/immigration-and-the-american-worker-review-academic-literature on 9/11/2014
Camarota, S. (2013). Center for Immigration Studies. The Fiscal and Economic Impact of Immigration on the United States. Retrieved from http://cis.org/node/4573 on 9/11/2014
CBO. (2013). Congressional Budget Office. The Economic Impact of S. 744, the Border Security, Economic Opportunity, and Immigration Modernization Act. Retrieved from http://www.cbo.gov/sites/default/files/cbofiles/attachments/44346-Immigration.pdf on 9/11/2014
Elkind, P., & Jones, M. (2014). Fortune. The dark, disturbing world of the visa-for-sale program. Retrieved from http://fortune.com/2014/07/24/immigration-eb-5-visa-for-sale/ on 9/11/2014
Lewis, E. & Peri, G. (2014). Immigration and the Economy of Cities and Regions (No. w20428). National Bureau of Economic Research. Retrieved from http://knrajlibrary.wordpress.com/2014/09/03/national-bureau-of-economic-research-latest-working-papers-during-the-week-of-september-01-2014/ on 9/14/2014
Mcgeehan, P., & Semple, K. (2011). The New York Times. Rules Stretched as Green Cards Go to Investors. Retrieved from http://www.nytimes.com/2011/12/19/nyregion/new-york-developers-take-advantage-of-financing-for-visas-program.html?_r=2& on 9/11/2014
Shyong, F. (2014). The LA Times. Visa Program for Wealthy Investors Maxed Out by Chinese Demand. Retrieved from http://www.latimes.com/local/la-me-0830-chinese-visas-20140830-story.html on 9/14/2014
Urban Institute. (2014). Research Area: Immigration. Retrieved from http://www.urban.org/toolkit/issues/immigration.cfm on 9/11/2014
USCIS. (2012). EB-5 Immigrant Investor. Retrieved from http://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor on 9/11/2014
Zhang and Associates. (2011). EB-5 Job Creation Requirement. Retrieved http://www.hooyou.com/eb-5/job.html on 9/11/2014
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