By G.L.C., on August 13th, 2008
Immigrants, both legal and illegal, play an important role in U.S. economy. The topic of immigrants invokes a lot of emotion. Due to their large numbers, which are increasing every day, they are having more of an impact on the economy than ever before. Most people tend to blame crime and loss of jobs on immigrants. The overwhelming argument against immigrants is that they will take work away from native workers at a much lower wage.
An article, “Immigration: Issues and Perspectives for Businesses,” by Sarena Davila insists that immigration can be beneficial for the U.S. economy. Immigrants are a source of labor at relatively low cost. The high cost of labor has forced many U.S. companies to move their operations to countries like China and India where the cost of labor is much lower. If labor is available at lower costs, most American companies would continue to operate from here rather than move their operations abroad. If a worker is skilled and meets the requirements of the company at a lower cost, any company will hire that worker. In this era of globalization, American workers must get competitive or they stand to loose. The real concern here should be if the immigrants are paid sub-standard wages on account of their immigrant status. It is important to continue to encourage those who want to come to the U.S. to do so legally and continue to contribute to the economy.
Immigrants often fill undesirable jobs – the jobs American workers do not want to do – or jobs of American workers who drift into higher paying occupations. This implies there is no loss in jobs as immigrants do not take jobs away from currently employed citizens.
American businesses who hire illegal workers are actually breaking the law because employers who hire illegal workers also violate immigration laws when misled by false documents.
To tackle this problem, a mere legal mechanism to check immigration is not sufficient. Most immigrants come to the United States looking for jobs and end up in less skilled jobs. There is a real shortage of less skilled workers in the United States. Add to that the minimum wage laws. These two factors act as an incentive for U.S. businesses to hire immigrant workers – both legal and illegal. Immigrant workers who want to come and work in the United States will do anything it takes to get here. They want to get here because they know they will get work no matter what their immigration status is – legal or illegal. It’s simple economics. There is demand for such workers. So long as there is a demand, these workers will continue to come to the United States looking for work. Instead of just concentrating on legislation to tackle this issue, the government should address the root of the problem – the demand for such workers. If there is no demand, these workers would look at other countries. But then again the government cannot just put a complete stop to the hiring of immigrant workers. These workers are needed if the U.S. economy is to maintain its competitiveness.
By G.L.C., on July 26th, 2008
In December 2007 a federal judge in Oklahoma threw out a lawsuit against a statewide law that forbids hiring illegal immigrants. According to the Greater Oklahoma City Chamber of Commerce, the local businesses now have to deal with the fallout on the economy. It estimates that 20% of the city’s construction labor force – about 2,000 workers – left the city in the four months since December 2007. More than 70 businesses closed in the first two months of 2008 because many of their employees left the state.
When the government gets cracking on illegal immigrants, the main opponents of the government action are the human right activists and other immigrant rights associations. Local law enforcement authorities generally crack down on illegal immigrants in their jurisdiction and the businesses that employ them. Business caught hiring undocumented workers generally have their licenses revoked. Now businesses have started resisting the government attempts to crack down on illegal immigrants.
Businesses and the government have benefited handsomely from the present flow of illegal immigrants into the U.S., but they refuse to reimburse local and state authorities and taxpayers for the related costs. Undocumented workers illegally hired by U.S. businesses contribute more than $8 billion to Social Security and $2 billion to Medicare. All Social Security Administration projections and budgets include, and rely heavily on, the billions in annual contributions from undocumented immigrant workers. Social Security would have a significant solvency problem without this revenue.
There is now fierce political pressure from business lobbies, immigrant rights groups, and members of Congress. This has resulted in a steady retreat by the government from workplace enforcement in the 20 years since it became illegal to hire undocumented workers in this country.
Arizona has some of the nation’s most rabidly anti-immigrant politicians and enacted some stringent employer punishments last year. But a business group has succeeded in gathering signatures for a ballot initiative that could soften some of the stringent punishments.
Riverside, New Jersey, is a perfect example of how the crackdown on illegal immigrants has adversely affected local businesses. In July 2006, the Riverside Township Committee unanimously passed the Illegal Immigration Relief Act, which made hiring or renting property to an illegal immigrant punishable by a $2,000 fine and jail time. Since then, town officials estimate, as many as 2,500 immigrants, or nearly one-third of Riverside’s population, have fled. Downtown merchants and restaurateurs report declines in revenue of as much as 70%. The ordinance was never actually enforced. It was almost immediately tied up in court after 62 Riverside business and property owners filed a lawsuit claiming that the Illegal Immigration Relief Act was unconstitutional and improperly superseded federal authority.
Without the cheap labor of the illegal immigrants, the local economy in many towns and cities would virtually collapse. The irony is that while the nation requires the immigrant’s cheap labor, the nation does not want the immigrant.
By Jennifer Bunn, on July 16th, 2008
There has been much debate over the past several years regarding the current nursing shortage. The statistics are grim: the current shortage is projected to double to around 12% by 2010 and to quadruple to 20% by 2015. By 2020, it is expected that the shortage will amount to 800,000 nurses.
One of the suggested solutions to the nursing shortage crisis has been to hire foreign nurses to fill the void. In theory, this makes perfect sense – they need the work and we need the nurses. Foreign nurses often receive a free education in their country of origin and are willing to work for less wages than domestically trained nurses. Why is this a problem?
The law of supply and demand is the basic underpinning of economic theory. When there is a shortage of labor in a market economy, wages increase as employers compete with one another to attract workers. If the shortage persists, wages and other compensations rise until enough workers are attracted by the higher wages and compensation; at this point, equilibrium is reached and supply and demand is balanced.
The practice of hiring foreign nurses to address the crisis may be beneficial in the short term but may worsen the situation in the long term. Foreign nurses willing to work for less pay and benefits falsely lower wages below what they would be in a fair market. Driving down nursing wages will result in nurses leaving the profession to work in other occupations.
In eight National Sample Surveys of the Registered Nurse Population (NSSRN) conducted between 1977 and 2004, a disturbing trend emerged: “According to the 2004 survey, there were an estimated 2,909,467 registered nurses in the United States as of March 2004. Of these, 16.8%, or 489,790, were not employed in nursing. Of those RN’s who were not employed in nursing, many were retired and others had left for family reasons. However, an estimated 209,140 to 241,563 left “for personal career reasons…or reasons connected to the workplace”*.
The NSSRN found that there were several reasons why these nurses chose to leave nursing. Some found that their current position was more rewarding. Others cited better wages, better hours, and concerns about their personal safety as reasons for leaving nursing.
Hiring foreign nurses to address the nursing shortage is not likely to fix the problem. Eventually, foreign nurses will leave nursing for the same reasons that many nurses now leave the profession: low wages, long working hours, and concerns about their personal safety as well as dissatisfaction with working conditions. In the meantime, hiring foreign nurses to fill the gap will only drive down wages and force more domestic nurses out of the profession.
The cure for the nursing shortage may be to address the issues that are leading to job dissatisfaction and to make nursing, as a profession, more attractive to those contemplating nursing as a career.
*Elgie, R. “Politics, Economics, and Nursing Shortages: A Critical Look at United States Government Policies.” Nurs Econ. 2007;25(5):285-292.
By G.L.C., on July 10th, 2008
The rise of the United States to economic prominence can be attributed to the presence of the highly skilled workforce. But in the last 30 years or so, the skill level of the American workforce has stagnated. The U.S. is no longer a skill abundant country.
To produce a more highly skilled workforce among Americans, new educational policies must be implemented. But this will take a long term before the effects can be seen. In the short to medium term, the U.S. will increasingly need foreign high-skilled workers and will therefore have to reform its high-skilled immigration policies and procedures not only to welcome the best and the brightest but also to make it easier for them to stay.
The H1B visa program was introduced to allow businesses to bring in skilled workforce from abroad to cope with the shortage of skilled workforce and for the U.S. to retain it economic prominence.
The major beneficiary of the H-1B visa program has been the IT industry. Major IT companies have over the years lobbied with lawmakers to increase the number of H-1B visas issued every year.
The large IT corporations need skilled workforce in order to remain competitive. But with the short supply of skilled workforce in the U.S., these companies have to bring in skilled workforce from abroad. The existing immigration rules made it difficult for these companies to bring in skilled workforce from abroad. However the introduction of the H-1B visa program changed all that.
Critics of the H-1B visa program point out that the H1B employees are a new type of indentured servant. In a new, unfamiliar country, they are docile and focus on working hard. The average salary of an employee on an H1B visa is lower than that of an American employee doing the same job. The H-1B sponsorship provisions make it very difficult for H-1B foreign workers to change jobs. The other major criticism of the H-1B visa program is that it takes away American jobs and gives them to foreign workers.
From a broader economic perspective, H-1B workforce has saved the U.S. economy millions of dollars in human resources and R&D costs, boosting the value of their employers’ stock.
It is just a myth that the use of foreign workforces by American companies using the H-1B program has cost Americans jobs. Instead of taking away jobs, the H-1B visa program has contributed positively to the economy by creating more jobs. The reasoning behind this is simple economics. The availability of skilled workforce enables American companies to retain their competitiveness and grow bigger. As the companies grow, they tend to help the economy grow. Then when the economy grows, it requires even more workers. A recent study found that for each H-1B visa issued by larger IT companies, five additional hires were made as well. With smaller companies, it was even more drastic, showing seven new hires.
Till the U.S. manages to overcome the shortage of skilled workforce in the long term, the H-1B visa program is the only way the United States can overcome the shortage in the short to medium term is to bring in skilled workforce from abroad. If the shortage is not overcome, the U.S. will loose its economic prominence.
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