Economics Of Immigration From the origin of the United States, immigration has been crucial for the economic advancement and expansion of the nation. The US truly is a melting pot of many cultures and ideas, and it has benefited greatly from its diversity. However, with a much-reduced demand for unskilled or low-skilled workers, US policy must adapt so that it can better maximize the net economic benefits of immigration. While this probably does not include a universal drop in the number of legal immigrants, it would include the screening of applicants in such a way that preference is given to more economically beneficial candidates. It would also include making families totally responsible for their elderly relatives who migrate to the US, eliminating the refugee portion of immigrants, denying more, but not all, government services to illegal immigrants, controlling the southern border with more manpower and better technology, and establishing a national verification database. The optimal policy from an economic perspective should seek to provide U.S.
businesses with the labor they require without placing added burden on the taxpayers. Before specific policies can be addressed, it is crucial that immigrants be separated into four categories: legal, working-age immigrants; legal, elderly immigrants; refugees; and illegal immigrants. These groups are radically different, and they must be addressed differently. Universally cutting legal immigration levels would deprive businesses of labor resources that have allowed them to grow. It is important to note that legal immigrants increase the national income between seven and twenty-five billion dollars a year. Businesses benefit greatly in terms of increased labor availability.
Immigrants usually have a higher percentage of college degrees than people now living in this country, and thus they contribute greatly to the filling of higher-skilled jobs. Excluding refugees, thirty-three percent of legal immigrants have a college degree, compared to only 20% of the native population. Giving further preference to skilled would-be immigrants could be beneficial to the United States. Some people, such as Senator Alan Simpson, believe that allowing these highly-skilled workers into the US hurts the economy and the American worker. Looking at the facts, though, it would appear that this assumption is incorrect.
However, some of the United States? most successful companies are fervently fighting Senator Simpson?s immigration bill that would cut down on the number of highly skilled workers allowed to migrate. These companies include Microsoft, Intel, Hewlett-Packard, Texas Instruments, National Semiconductor, among others. Despite this, current immigration policy is slanted more towards groups that do poorly than it is towards those that are successful. In recent years, the United States is taking in more and more less skilled, legal immigrants, causing a reduction in some benefits immigrants bring with them, including tax revenues and capital externalities. This policy has reduced the number of qualified applicants for many firms, especially those in the technology area.
They have greatly benefited from the H-1B visa program, and further expansion of this program at the expense of less-skilled immigrants would be very beneficial. In 1994 almost 738,000 legal non-citizens received Supplemental Security Income, SSI, a welfare program, up from 128,000 in 1982; a 580% increase in just twelve years. Population increase can explain some of the growth, but not nearly all of it. The largest contributor to the jump is the elderly sub-group of immigrants. In the current United States immigration policy, many elderly immigrants are allowed into the country if they have family here that will sponsor them. The law requires the family to support their elderly relatives for a period of three to five years.
After that time, the elderly immigrants are entitled to US welfare programs. In contrast, it has already been shown that working age immigrants actually has a lower welfare participation rate than natives. The reason that immigrants as a whole seem to use welfare programs more can be explained by the tremendous percentage of elderly immigrants now on welfare. While 6.9% of the native population over the age of sixty-five receive assistance from United States? welfare programs, 11.1% of legal, non-refugee immigrants over sixty-five years of age who arrived before 1980 receive welfare, and 25.7% of legal, non-refugee immigrants over sixty five years old that arrived from 1980 to 1990 receive benefits from US welfare programs. The United States welfare program, which contains SSI, food stamps, and Medicaid, among other programs, has become some sort of a global retirement system.
The legal, working age immigrants may not have a negative effect on the state of welfare, but some of their older relatives do. If trends continue, 328 billion dollars will be spent from 1995 to 2004 to provide welfare for elderly non-citizens, and annual Supplemental Security Income and Medicaid cost for these immigrants will reach 67 billion in 2004. It appears that elderly immigrants drain from the welfare system, and since they are unlikely to have jobs (they are retired), they are not even close to being able to contribute enough in taxes to make up for what they take out of welfare programs, in particular SSI and Medicaid. Many households face rising costs in healthcare in terms of premiums and taxes to cover the costs of uninsured patients. Immigration as it is now is only adding to the problem. As much as 60% of the growth of uninsured people since 1993 is solely due to immigration.
It is often argued that immigration of high-skilled workers hurts American households. However, foreign-born scientists and engineers do not increase US unemployment nor do they undercut wages. Even the migration of less-skilled workers does not cost American jobs. In the 1980?s, more people migrated to the US since the boom between 1900 and 1910, and job growth increased while unemployment went down. The Refugee Dilemma People who are accepted as refugees are immediately eligible for welfare programs and given assistance that even surpasses those given to citizens.
From an economic perspective this segment of immigrants tends to be highly inefficient. Although it is regrettable that people have gone through and continue to go through terrible hardships, the best course of action in regards to US immigration policy towards refugees might include treating them the same as any other person applying for the permission to come to the United States. Present policy towards refugees is probably a failure. It not only places addition burden on U.S. households who have to pay the taxes, but it also fails to provide labor talent to businesses.
Refugees as a group have low incomes and high costs for welfare and other social services, as they are more likely to be on welfare than natives or other immigrants. The money they pay into the government, on all levels, is insignificant when compared to their use of social welfare programs due to the low quality of their jobs, when they have jobs. Between the years of 1981 and 1987, approximately 600 million dollars a year have been spent on refugees (in 1988 dollars). Broken down, 13.4% of refugees between the ages of fifteen and sixty-five are on welfare, and 49.6% of refugees over the age of sixty-five receive welfare benefits. These numbers are incredible realizing that only 3.7% of natives between the ages of fifteen and sixty-five are on welfare, and only 6.9% of elderly natives, sixty-five and older, come by welfare. The numbers are unbelievably lopsided. In general, refugees are a drain on the United States welfare system and on the economy as well.
Addressing the Illegal Situation Illegals are the group of immigrants that probably draw the most attention from the public. The …