Differences Between High Skilled And Low Immigrant Workers
High Skilled and Low Skilled differences There are big differences in production activities among high and low educated workers. They have different sets of skills, which they apply, in different types of jobs. Technically, if there is a large supply of low skilled, low educated immigrant workers, they decrease the wages of less educated natives5. However, because of such combinations between the two in the schooling distribution, they seem to have the same distribution as US natives. Because of this, their entrance into the states does not really change the supply of either group and it is not seen to change their wages. On the aggregate level, immigration does not explain the increases in wages for workers with college of high school degrees.
…show more content…
Technology & Specialization Also within these two groups there are different productive characteristics between natives and immigration. There is more of a trend for less educated immigrants to work more in manual labor jobs. They may work as farm laborers, in house services, childcare, or as construction workers5. On the other side, natives with the same education level work in fields that require more communication skills such as farm coordinators, clerks, and cooks. Since immigrants do not have the best English language skills, they have an advantage in Manuel jobs. They then specialize in these fields and within places that hire immigrants, and this in turn creates a demand for native staff that has stronger language interaction skills. The specialization allows US natives to upgrade their jobs, avoiding the changes in wages from the competition. With immigrants taking the typically Manuel labor jobs that US natives tend to leave, they force changes in production lines that can boost labor efficiency. It’s has been found that when there is an influx of low skilled immigrants, businesses use certain strategies that work with the Manuel type workers so that they can work without any kind of loss in wages or productive labor. Studies have found that from the time period of 1990-2006, immigration changed the wages of low skilled and low educated US born workers by -1.0 and 1.5 percent5. This same study also had results showing that when specialization was accounted for, there was a 0.6% gain for US workers’ wages because of immigration5.
Cutting costs and creating new jobs
Another aspect to consider is the different opportunities that come about in the labor force for native workers from immigration.
It is commonly known that natives with the same education and skill set are paid more than their immigrant counterparts, and this has to do with the immigrants having less bargaining power and much fewer options. For this reason, businesses tend to pay them a salary less than their marginal productivity, which in the end makes the business more profitable5. Doing this to save money allows them to increase their productivity by enabling them to hire more workers to do tasks often done best by natives. Having immigrants pushes these businesses to use the cheaper cost of employing them, and some of these jobs go to the natives as well. Also, because immigrants tend to hold jobs different from natives we cannot call the pay below marginal productivity “discrimination” 5.
Immigration will alter the economy in several different ways. It will increase firm’s investments; increase specialization among US natives, new technologies from firms and more jobs created. For these reasons immigration has shown few effects on less educated natives on the local and national
scales5.
Lets Look at Other Countries
Much to many people’s surprise, the US has not had the highest immigration rates in the last decade. The increases in immigrants in regards to the whole population have been in Spain, Ireland and Italy. They had immigration rates of 11.1%, 9.8% and 5.0% from 1995 till 20085. The United States had net immigration of 3.8% of the whole population. With these rates causing a stir in Europe they have also done their own sets of studies in regards to the costs and benefits of immigration. What they have found about the effect of wages and employment was that of those done in the United States. However, there is a couple of differences between US and European immigration. Both of them show that the United States has a competitive advantage. In Europe, they attract less highly educated immigrants mostly because the wages for highly educated processionals is less there and because taxes are much more progressive. Many immigrants dare not as willing try to move their careers there for that reason. The biggest competitors for the United States for these highly educated professionals is the UK, Canada, and Australia as continental Europe is losing the competition and potential for growth, technological progress and innovation in the long run.
Also, Europe has a big influx of young and uneducated immigrants who perform Manuel jobs that are not supplied. Though it has upgraded jobs for natives, the fact that there is protection of insiders, and high costs for job transitions, it has decreased the effectiveness of this. The protection of native workers has actually hurt the less educated natives more but decreasing the mobility that protected them from that wage competition discussed earlier. It is the countries in Europe that have less employment protection that more fully reap the benefits from immigrants, and see more natives upgrading their jobs without the competition in wages.
Lastly, immigration in Europe has been a strong reason for their growth in the last ten years5. However, the population is aging and the younger crowd is getting smaller and smaller. This is creating a dependency ratio of retirees to workers, and it is decreasing the supply of up and coming workers5. Immigration can help them by lessening the negative side effects from this. When there is a better balance of old and young workers and the more workers to retirees is really where increased immigration can help the labor market in Europe5. Going along with this, in a study done by American Enterprise Institute and Partnership for a New American Economy the first they found was that immigrants that had advanced degrees increased employment for American workers2. This effect is seen more prominently with those with advanced degrees from US universities in the fields of engineering, mathematics, science and technology. In their data they compared employment from all of the states, and it showed that having an additional hundred immigrant workers in STEM fields was associated with an extra 262 jobs for American workers2. Though this effect is largest for immigrants educated in US universities working in STEM, immigrants with any advanced degree in general was shown to increase employment from the years 2000-20072. Any 100 immigrants with advanced degrees in STEM concentrations from the United States or abroad brings approximately 86 jobs to American workers2. On top of that, regardless of what fields they got their degrees from, it was associated with an extra 44 jobs for American workers2. The Second finding was that both unskilled and skilled temporary immigrant workers boosts the employment in the United States. From their data they found that the states that had the most temporary workers in their H-1B and H-2B programs for skilled and unskilled workers, there was higher employment rates among the native born. What they found was that adding an additional 100 H1-B workers associated with an extra 183 jobs for Americans and adding 100 H-B2 workers was associated with an additional 464 jobs2. The third finding found that their analysis did not find any proof in aggregate to show that foreign-born workers were harming US employment2. Even with today’s immigration patters there is no statistical evidence that shows any negative effect on US workers. They do not show that that immigration leads to less job opportunities for Americans. The last main finding they had was that immigrants with advanced degrees payed much more taxes than they get in benefits from the government. They found that in 2009, on average an immigrant with an advanced degree paid $22,500 in taxes, while their families would usually only receive on-tenth of that amount via government programs2. Policy makers looking to increase economic growth and job creation should consider the positive effects of immigration. Immigration could better the economy and it wouldn’t involve increasing taxes or spending more money. It would require us to increase visas for temporary immigrants whom are highly educated, ad expand programs for workers in skilled and less skilled fields. With these results from many different studies, policy makers should look to policies that boost the US employment rates. They may require a new tax system or spending cuts. They could create jobs in the following ways:
1) Prioritize immigration by those in STEM occupations who have degrees from US institutions.
2) Shift our immigration policy to focus more on economic growth and increase the amount of green cards for workers in highly skilled occupations.
3) Increase the amount of programs for temporary workers in skilled and less skilled jobs. Increasing skilled temporary foreign workers though the H-1B program showed to be positively related to the employment rate for US natives.
Immigrants moving to rich countries create great opportunity for increases in income and productivity. A lot of these positive effects do go to the immigrants, but the countries are also receiving benefits from it. Yes there are some workers that will not reap the benefits; a lot of them actually gain from immigrant’s presence.
Looking at immigration from a labor market perspective, we have to differentiate between the highly educated and lower educated as they are different groups and policies should be made to separately handle them. Changing the focus of immigration from family reunification to and to economic growth could provide many advantages.
For the very educated immigrants, the H1-B program has been the main way to bring them into the United States since the 1990s. Given that this group of immigrant’s provides great benefits to the US in the long run, it makes sense to eliminate or increase the Cap off size. Anyone with a PhD in science or Engineering should be automatic permanent residence. Those who come to the US for graduate school ought to be given the chance to stay once they finish their studies.
Also, less educated immigrants will continue to come to the United States, so the government needs to find ways for them to enter legally or become legal at some point. Temporary visas could be given out to those in construction, home services, hospitality or agriculture under an employee sponsorship. The demand for immigrants in such occupations has been part of the reason why there is such a large portion of undocumented immigrants. There will be no solution to this problem unless the US finds a way to meet the demand needs and employment for the illegal immigrants.
Lastly, having immigrants continue to come to the United States will help create incentives for the natives to increase their skills and education. Natives who hold such Manuel jobs could be assisted in trying to transition into better jobs and to help equip them with skills and training. It has been happening in the last few decades, but more can be done. Ultimately, immigration can be used to increase the competitive advantage for US workers and the companies here. Acknowledging the facts when discussing new immigration policies would help push along the debate and decrease prejudice when talking about immigration policies. Immigration policies should be made from both economic and non-economic points of views. Such as thinking of those in poorer countries, the political benefits we get from the help, and as our value as a country of opportunity to people from all over the world.
Technology & Specialization Also within these two groups there are different productive characteristics between natives and immigration. There is more of a trend for less educated immigrants to work more in manual labor jobs. They may work as farm laborers, in house services, childcare, or as construction workers5. On the other side, natives with the same education level work in fields that require more communication skills such as farm coordinators, clerks, and cooks. Since immigrants do not have the best English language skills, they have an advantage in Manuel jobs. They then specialize in these fields and within places that hire immigrants, and this in turn creates a demand for native staff that has stronger language interaction skills. The specialization allows US natives to upgrade their jobs, avoiding the changes in wages from the competition. With immigrants taking the typically Manuel labor jobs that US natives tend to leave, they force changes in production lines that can boost labor efficiency. It’s has been found that when there is an influx of low skilled immigrants, businesses use certain strategies that work with the Manuel type workers so that they can work without any kind of loss in wages or productive labor. Studies have found that from the time period of 1990-2006, immigration changed the wages of low skilled and low educated US born workers by -1.0 and 1.5 percent5. This same study also had results showing that when specialization was accounted for, there was a 0.6% gain for US workers’ wages because of immigration5.
Cutting costs and creating new jobs
Another aspect to consider is the different opportunities that come about in the labor force for native workers from immigration.
It is commonly known that natives with the same education and skill set are paid more than their immigrant counterparts, and this has to do with the immigrants having less bargaining power and much fewer options. For this reason, businesses tend to pay them a salary less than their marginal productivity, which in the end makes the business more profitable5. Doing this to save money allows them to increase their productivity by enabling them to hire more workers to do tasks often done best by natives. Having immigrants pushes these businesses to use the cheaper cost of employing them, and some of these jobs go to the natives as well. Also, because immigrants tend to hold jobs different from natives we cannot call the pay below marginal productivity “discrimination” 5.
Immigration will alter the economy in several different ways. It will increase firm’s investments; increase specialization among US natives, new technologies from firms and more jobs created. For these reasons immigration has shown few effects on less educated natives on the local and national
scales5.
Lets Look at Other Countries
Much to many people’s surprise, the US has not had the highest immigration rates in the last decade. The increases in immigrants in regards to the whole population have been in Spain, Ireland and Italy. They had immigration rates of 11.1%, 9.8% and 5.0% from 1995 till 20085. The United States had net immigration of 3.8% of the whole population. With these rates causing a stir in Europe they have also done their own sets of studies in regards to the costs and benefits of immigration. What they have found about the effect of wages and employment was that of those done in the United States. However, there is a couple of differences between US and European immigration. Both of them show that the United States has a competitive advantage. In Europe, they attract less highly educated immigrants mostly because the wages for highly educated processionals is less there and because taxes are much more progressive. Many immigrants dare not as willing try to move their careers there for that reason. The biggest competitors for the United States for these highly educated professionals is the UK, Canada, and Australia as continental Europe is losing the competition and potential for growth, technological progress and innovation in the long run.
Also, Europe has a big influx of young and uneducated immigrants who perform Manuel jobs that are not supplied. Though it has upgraded jobs for natives, the fact that there is protection of insiders, and high costs for job transitions, it has decreased the effectiveness of this. The protection of native workers has actually hurt the less educated natives more but decreasing the mobility that protected them from that wage competition discussed earlier. It is the countries in Europe that have less employment protection that more fully reap the benefits from immigrants, and see more natives upgrading their jobs without the competition in wages.
Lastly, immigration in Europe has been a strong reason for their growth in the last ten years5. However, the population is aging and the younger crowd is getting smaller and smaller. This is creating a dependency ratio of retirees to workers, and it is decreasing the supply of up and coming workers5. Immigration can help them by lessening the negative side effects from this. When there is a better balance of old and young workers and the more workers to retirees is really where increased immigration can help the labor market in Europe5. Going along with this, in a study done by American Enterprise Institute and Partnership for a New American Economy the first they found was that immigrants that had advanced degrees increased employment for American workers2. This effect is seen more prominently with those with advanced degrees from US universities in the fields of engineering, mathematics, science and technology. In their data they compared employment from all of the states, and it showed that having an additional hundred immigrant workers in STEM fields was associated with an extra 262 jobs for American workers2. Though this effect is largest for immigrants educated in US universities working in STEM, immigrants with any advanced degree in general was shown to increase employment from the years 2000-20072. Any 100 immigrants with advanced degrees in STEM concentrations from the United States or abroad brings approximately 86 jobs to American workers2. On top of that, regardless of what fields they got their degrees from, it was associated with an extra 44 jobs for American workers2. The Second finding was that both unskilled and skilled temporary immigrant workers boosts the employment in the United States. From their data they found that the states that had the most temporary workers in their H-1B and H-2B programs for skilled and unskilled workers, there was higher employment rates among the native born. What they found was that adding an additional 100 H1-B workers associated with an extra 183 jobs for Americans and adding 100 H-B2 workers was associated with an additional 464 jobs2. The third finding found that their analysis did not find any proof in aggregate to show that foreign-born workers were harming US employment2. Even with today’s immigration patters there is no statistical evidence that shows any negative effect on US workers. They do not show that that immigration leads to less job opportunities for Americans. The last main finding they had was that immigrants with advanced degrees payed much more taxes than they get in benefits from the government. They found that in 2009, on average an immigrant with an advanced degree paid $22,500 in taxes, while their families would usually only receive on-tenth of that amount via government programs2. Policy makers looking to increase economic growth and job creation should consider the positive effects of immigration. Immigration could better the economy and it wouldn’t involve increasing taxes or spending more money. It would require us to increase visas for temporary immigrants whom are highly educated, ad expand programs for workers in skilled and less skilled fields. With these results from many different studies, policy makers should look to policies that boost the US employment rates. They may require a new tax system or spending cuts. They could create jobs in the following ways:
1) Prioritize immigration by those in STEM occupations who have degrees from US institutions.
2) Shift our immigration policy to focus more on economic growth and increase the amount of green cards for workers in highly skilled occupations.
3) Increase the amount of programs for temporary workers in skilled and less skilled jobs. Increasing skilled temporary foreign workers though the H-1B program showed to be positively related to the employment rate for US natives.
Immigrants moving to rich countries create great opportunity for increases in income and productivity. A lot of these positive effects do go to the immigrants, but the countries are also receiving benefits from it. Yes there are some workers that will not reap the benefits; a lot of them actually gain from immigrant’s presence.
Looking at immigration from a labor market perspective, we have to differentiate between the highly educated and lower educated as they are different groups and policies should be made to separately handle them. Changing the focus of immigration from family reunification to and to economic growth could provide many advantages.
For the very educated immigrants, the H1-B program has been the main way to bring them into the United States since the 1990s. Given that this group of immigrant’s provides great benefits to the US in the long run, it makes sense to eliminate or increase the Cap off size. Anyone with a PhD in science or Engineering should be automatic permanent residence. Those who come to the US for graduate school ought to be given the chance to stay once they finish their studies.
Also, less educated immigrants will continue to come to the United States, so the government needs to find ways for them to enter legally or become legal at some point. Temporary visas could be given out to those in construction, home services, hospitality or agriculture under an employee sponsorship. The demand for immigrants in such occupations has been part of the reason why there is such a large portion of undocumented immigrants. There will be no solution to this problem unless the US finds a way to meet the demand needs and employment for the illegal immigrants.
Lastly, having immigrants continue to come to the United States will help create incentives for the natives to increase their skills and education. Natives who hold such Manuel jobs could be assisted in trying to transition into better jobs and to help equip them with skills and training. It has been happening in the last few decades, but more can be done. Ultimately, immigration can be used to increase the competitive advantage for US workers and the companies here. Acknowledging the facts when discussing new immigration policies would help push along the debate and decrease prejudice when talking about immigration policies. Immigration policies should be made from both economic and non-economic points of views. Such as thinking of those in poorer countries, the political benefits we get from the help, and as our value as a country of opportunity to people from all over the world.