Research Article: Immigration & the U.S. Economy

The United States has grown and developed through a rich history of immigration and foreign influence. Long before European colonies were established, original North American settlers paved the way from Asia and developed foundational communities. “The first immigrants arrived in North America and the land that would later become the United States. They were Native American ancestors who crossed a narrow spit of land connecting Asia to North America” (History.com, 2018). U.S. founding fathers such as James Madison, Thomas Jefferson, Benjamin Franklin and even Alexander Hamilton collectively noted the value of immigrants:


“James Madison argued…’freedom arises from that multiplicity of sects which pervades America. Where there is such a variety of sects, there cannot be a majority of any one sect to oppress and persecute the rest’…Franklin, by far the most vociferous critic of immigrants among the Founders, ultimately concluded that ‘they contribute greatly to the improvement of a Country’…Thomas Jefferson, reflecting the general sentiment, said, ‘The present desire of America is to produce rapid population by as great importations of foreigners as possible.’ On this point, Jefferson’s archrival, Alexander Hamilton, agreed. ‘Immigrants exhibit a large proportion of ingenious and valuable workmen…who by expatriating from Europe improved their own condition, and added to the industry and wealth of the United States’”(Bier, 2012).


Immigration & the U.S. Economy

“A 2017 Report from the National Academies of Sciences, Engineering, and Medicine found immigration ‘has an overall positive impact on the long-run economic growth in the U.S’” (Frazee, 2018). Additional research shows that immigrants: 1.) help boost tax revenues; 2.) take on jobs that support various pockets of the economy; 3.) help mitigate declining U.S. birth rates; 4.) and contribute to economic startups and innovation. Since immigrants generally cannot collect government benefits, they typically contribute more in tax revenues than consume in benefits. Although first-generation immigrants may cost the government slightly more than U.S. born citizens, second and third generation immigrants have shown to be major tax contributors. “Second generation immigrants are ‘among the strongest fiscal and economic contributors in the U.S.,’ the [NASEM] report found. They contribute about $1,700 per person per year. All other native-born Americans, including third generation immigrants, contribute $1,300 per year on average” (Frazee, 2018).


Job Factors

Despite criticisms that immigrants take jobs from U.S. born citizens, Giovanni Peri, an economics professor at the University of California provides counter information against the claim. He explains how immigrants don’t necessarily “compete with Americans for work, immigrants tend to complement American workers…most economists agree that in spite of being a very big part of the labor force, immigrants have not come at the cost either of American jobs, nor of American wages” (Frazee, 2018). Research conducted by The Brookings Institution, a nonprofit public policy organization, found “the impact of immigrant labor on the wages of native-born workers is low…undocumented workers often work the unpleasant, back-breaking jobs that native-born workers are not willing to do” (Brookings, 2017).


U.S. Birth Rates

Not only are immigrants willing to take unpopular jobs, they also help offset the declining U.S. birth rate. The Baby Boom generation has comprised the main workforce over the past few decades. However, the workforce is predicted to shrink with Baby Boomer retirement, and immigrants are integral in filling in the population gaps. “Immigrants play a large role in future U.S. population growth. Assuming current trends continue, future immigrants and their U.S.-born children will account for 88% of the nation’s population growth between 2015 and 2065, according to Pew Research Center projections” (Passel & Cohn, 2017). Immigrants supplementing workforce gaps and boosting the population also contribute directly to U.S. retirement programs. “Lower immigration portends big problems because the basic American retirement system — Social Security and Medicare — relies on workers to pay for retirees, and the entire expansion of the work force over the next 15 years will come from immigration. Lower immigration rates will mean serious funding shortfalls for older Americans” (Goolsbee, 2019).


Innovation

Immigration factors have also been directly linked to U.S. economic innovation and advancements. Immigrants are responsible for creating at least half of the startups in the United States, and that includes many Fortune 500 companies. “A [2018] study from the National Foundation for American Policy finds that 55%, or 50 of 91, of the country’s $1 billion startup companies had at least one immigrant founder” (Anderson, 2018). Furthermore, a 2019 study revealed how former U.S. immigration restrictions hindered the work of domestic scientists and inventors. Petra Moser and Shmuel San, both New York University economists, studied the effects of immigration laws in the 1920’s. “That was the last time the United States engaged in mass immigration restrictions based on ethnicity” (Goolsbee, 2019). Their findings showed that when immigrants were blocked from entering the United States, “to preserve the ethnic ‘character’” (Goolsbee, 2019), immigrant numbers inevitably fell. “The essence of knowledge work is building on others’ ideas, and having fewer creative people from different backgrounds in the United States undermined the entire enterprise” (Goolsbee, 2019). The study showed that tight immigration policies lead to a reduced number of immigrants, which resulted in less scientific innovation and job field interest.


“Quotas seriously curtailed immigration of scientists and inventors of specific ethnicities…The quotas didn’t protect domestic scientists and inventors. It hurt them, and it decimated their work. Patents for American scientists who worked in fields with many East European scientists fell almost 60 percent compared with those in other fields. And, over time, fewer American-born people became scientists and inventors at all. The net effect was a substantial reduction in invention in the United States” (Goolsbee, 2019).


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Citation Index


Anderson, Stuart. “55% Of America's Billion-Dollar Startups Have An Immigrant Founder.” Forbes. Forbes Magazine, February 4, 2019. https://www.forbes.com/sites/stuartanderson/2018/10/25/55-of-americas-billion-dollar-startups-have-immigrant-founder/#67388a9448ee.


Bier, David. “America's Founders Supported Immigration.” HuffPost. HuffPost, November 20, 2012. https://www.huffpost.com/entry/founding-fathers-on-immigration_b_1898163?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALlxJGv1R7w6F4qIy4_qCEx3ZohgX5ZyQQjl8iSiD_BMUedMQ8mHIhhlGOSDFziUrqL6IqN_59zBE-4LtBx4k2qPNfjAJf-poFmUPIuqTLZiYvgn-Y2p7Gl6Gk_mSNa5is9JsSyXjJQGZPSa2eDk9QCmjvgqI5kx8Jcx1V1FGs0Y.


Frazee, Gretchen. “4 Myths about How Immigrants Affect the U.S. Economy.” PBS. Public Broadcasting Service, November 2, 2018. https://www.pbs.org/newshour/economy/making-sense/4-myths-about-how-immigrants-affect-the-u-s-economy.


Goolsbee, Austan. “Sharp Cuts in Immigration Threaten U.S. Economy and Innovation.” The New York Times. The New York Times, October 11, 2019. https://www.nytimes.com/2019/10/11/business/immigration-cuts-economy.html.


History.com Editors. “U.S. Immigration Timeline.” History.com. A&E Television Networks, December 21, 2018. https://www.history.com/topics/immigration/immigration-united-states-timeline.


Hoban, Brennan. “Do Immigrants ‘Steal’ Jobs from American Workers?” Brookings. Brookings, July 19, 2018. https://www.brookings.edu/blog/brookings-now/2017/08/24/do-immigrants-steal-jobs-from-american-workers/.


Passel, Jeffrey S., and D’Vera Cohn. “Immigration Projected to Drive Potential U.S. Labor Force Growth through 2035.” Pew Research Center. Pew Research Center, March 8, 2017. https://www.pewresearch.org/fact-tank/2017/03/08/immigration-projected-to-drive-growth-in-u-s-working-age-population-through-at-least-2035/.

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