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Ashish's Niti

Niti in Sanskrit means policy/strategy/vision. This blog hosts my political views, along with news and commentary. This blog has moved here.

Friday, August 06, 2004

Immigration and Jobs

PrestoPundit also links to this report citing that:

The number of new immigrants who joined the labor force [represented] 60 to 62 percent of labor force growth. Between 2000 and April 2004, the total number of new foreign-born workers who were employed was 2.1 million. During that same period, employment of native-born workers and established foreign immigrants declined by 1.3 million, due to higher unemployment and reduced labor force participation.

ParaPundit asks:

What advantage could possibly be gained for the nation as a whole by letting in a large number of low-skilled workers to drive down the wages and drive out of the labor market our existing native-born low-skilled workers?

There are plenty of advantages. Low prices for consumers (including unemployed native-born low-skilled workers), and higher profits for businesses. Also, when you connect the dots make a note of following things:
If immigrations had not come and taken those jobs driving down the wages and consumer prices and increasing the profits,
a) Capital investment would have been lower otherwise, thus reducing further available jobs. Thus, jobs taken up by immigrations (2.1 million) cannot be directly made available for native-born workers without disturbing the economic balance. Maybe, if new immigrations were not allowed, those 2.1 million jobs would have been created at all (or atleast less number of jobs would have been created).
b) Second, existing capital invested in US might have been fled outside US (outsourcing) because of higher wages if immigration would have been allowed to come and take up the jobs. This could have reduced the employment of existing established immigrants and native-born workers by more than the current 1.3 figure.

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