GIVE ME YOUR TIRED, YOUR POOR/YOUR HUDDLED MASSES YEARNING

TO BREATHE FREE. The New Colossus by Emma Lazarus 1883

The Economic Case for Immigration Reform in the United States

CHRISTIAN TERAN
LORAS COLLEGE
INTERNATIONAL STUDIES
SENIOR CAPSTONE
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ABSTRACT:

In this research paper, the contents that one will find are that of the following. An

analysis of the impacts that both documented and undocumented immigrants have on the United

States. As well as an analysis of how immigrants can resolve the current economic issues that the

United States has stumbled upon due to a low unemployment rate occurring at the same time of

having a low Real Potential Gross Domestic Product. This essay will conclude with discussing

how Start-Up Visas will be a pathway that can help both immigrants trying to come into the

country while at the same time assisting the United States in expanding their economy.

INTRODUCTION

First and foremost, why did I make the decision in researching the topics of Immigration

and Policy, specifically in that of the United States of America? For starters, immigration is a

matter that truly hits close to home for me. Growing up in Tucson, Arizona, with a father who

was and still is an owner of a small local Mexican and Seafood restaurant that goes by the name

of El Gorrion, I was constantly surrounded by individuals who were coming into this country

in search of better opportunities. Not only were these hardworking individuals seeking better

prospects in life for themselves but for their families as well, which on too many occasions they

had to leave behind in their native land. I truly feel that I would be doing a great disservice to

these individuals that helped form the way in which I now view the world, if I do not do my part

in making an effort to inform as many individuals as I can on the realities of immigration and

what it means to be an immigrant in the United States in the 21st Century.

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Aside from my personal feelings towards the issue of immigration, many individuals as

well as myself, have noticed over the last few presidential election cycles in the United States

that immigration has been somewhat of a hot button issue that is heavily debated in political

discourse. In actuality, it would be an understatement to say that immigration is a hot button

issue, rather it is a human phenomenon that should concern everyone due to the effects that

immigration has on every single one of us. Though, despite immigration being a controversial

issue today, what is even more concerning to me is the great lack of clarity that there is when

discussing the matter of immigration and how to go about solving our predicaments with the

issue. Immigration is a much more complex and multifaceted issue that cannot by any means be

solved by simply putting up a physical wall between us and our neighbors to the South as some

suggest, nor is it feasible to simply let everyone into the United States no questions asked.

Looking at immigration as a two dimensional issue is foolish and will only lead us on a path

towards more difficulties in the future.

Finally, my ultimate objective in conducting this research is to locate vital information on

the implications of immigration and present them to you, the reader, so that we both can look as

to how immigration truly effect our nation. It is crucial to understand the implications of

immigration, both negative and positive. Because if we cannot understand the effects of

immigration in its entirety, it will not be possible to introduce progressive and positive policies

that will benefit both the immigrants coming into the United States and those who already reside

within its borders.

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The essential questions which I seek to find the answers to are the following:

1. What are the most prominent migration patterns of the 21st Century?

2. What impacts do these certain migration trends have on the United States?

3. How would easier pathways towards legal status for immigrants benefit the

U.S. Economy?

Many might ask why the answers to these questions are important, well they are

important for many different reasons but the three most important explanations as to why this

matters is, first off, immigration is everlasting. From the very beginning of human history,

migration has been present and dismissing this human occurrence that has been going on since

the beginning of mankind will only hurt our countrys future. Along with the previous point,

knowing that human migration is something that is always occurring whether it pleases us or not,

currently in the United States, our current immigration policies are hurting the United States

prospects for potentially huge economic gains. And ultimately as I have mentioned before, if we

are to truly introduce progressive and positive immigration reform that will benefit both the

immigrants coming into this country as well as those native citizens of the U.S., it is our

responsibility to adequately inform ourselves to the best of our ability in order to truly

understand immigrations many diverse aspects.

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FUNDAMENTALS OF MIGRATION

Migration in the 21st Century has without a doubt had its impact on structured societies in

the modern world. As of today, transnational migration has yet ceased to grow throughout the

entire globe. According to the US National Intelligence Council on Growing Migration, there is

around 140 million individuals worldwide whose permanent residence is outside of their birth

country; it is a well-known fact that immigrants consist of over 15 percent of the population in

over 50 different countries on earth.1 This goes to show that immigrants are as a whole, a fairly

large part of their hosts countrys overall population. It has been stated in this developmental

review that there is not a singular form of impact that migration has, rather migration has various

different impacts on both the sending and receiving countries. These different effects of

migration vary depending on the circumstances surrounding the how and why individuals go

about making the decision in leaving their home country in the first place. One of the more

emphasized concepts in this document is that of structuring transnational migration movements.

The world can be divided into four different regions in which migration trends and activity are

most prevalent and more easily traceable. These regions consists of the Americas,

Russia/Eurasia, Middle-East/ Sub-Saharan Africa, and the European Union. Each of these

regions represent the varying explanations as to why individuals migrate.

One of the most deliberated themes in national politics in the majority of the

industrialized nations is that of the theorized negative effects that migration has on the native

population. It is assumed by many citizens of host nations, that immigration will have

undesirable impact on their individual potential earnings and financial growth. Although there is

1
"The US National Intelligence Council on Growing Global Migration." Population and Development
Review 27, no. 4 (2001): 817-19. http://www.jstor.org/stable/2695203.
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truth to that statement, it has been studied and research finds that for every 10% increase in

overall migration there is a 1% reduction of the native populations overall wages.2 That being

said, it is also important to note that various economist agree that the value of human capital in

migrants is much more important in how migration effects the economic situations of the host

countries native individuals. There is without a doubt a tradeoff when looking at migrants

through the lens of quantity-versus-quality.3 This is an important concept that industrialized

nations have yet to discuss or consider when looking for ample solutions to mass migration. Rey

Koslowski whose expertise is in European Integration, International Migration, Information

Technology, and Home Land Security, has stressed the significance of looking at how

prosperous historic kingdoms dealt with migration, in order to understand the importance of

relationships between the success of ancient empires within its unique emigrational

circumstances4.

Shifting the focus to a more current and unique scenario in international migration, the

United States being one of the most influential countries worldwide has been faced with mass

waves of migration ever since the nations conception. Throughout the vast majority of United

States history, this country has been accepting migrants by the masses, and the success of the US

can be largely attributed to this very reason. Although ever since the tragedy of 911, the overall

feelings towards migration and migrants themselves by the American people have been nothing

2
Friedberg, Rachel M., and Jennifer Hunt. "The Impact of Immigrants on Host Country Wages,
Employment and Growth." The Journal of Economic Perspectives 9, no. 2 (1995): 23-44.
http://www.jstor.org/stable/2138165.
3
Chiswick, Carmel U. "The Impact of Immigration on the Human Capital of Natives." Journal of Labor
Economics 7, no. 4 (1989): 464-86. http://www.jstor.org/stable/2535138.
4
Koslowski, Rey. "Human Migration and the Conceptualization of Pre-Modern World
Politics." International Studies Quarterly 46, no. 3 (2002): 375-99. http://www.jstor.org/stable/3096094.
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less than hostile. Some important concepts have been brought to light by Mary M. Kritz who

wrote about the need of a national discussion on immigration, those ideas being; the effect that

the United States has on the development of underdeveloped nations when taking the best and

brightest from these certain countries, also she points out that national debates on politics should

incorporate a more diverse view rather than a polarized one on immigration and how it is

necessary to begin thinking on how immigration is more than just a matter of whether or not we

should or should not accept migrants.5

5
Kritz, Mary M. "Time for a National Discussion on Immigration." The International Migration
Review 36, no. 1 (2002): 33-36. http://www.jstor.org/stable/4149526.
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WHAT DO WE KNOW?

When starting my research, the first thing which I found to be most important in finding,

was looking into the various migration trends that are most prevalent in todays world. Initially

going into this project I had assumed many things, and one of those things that I had assumed

was that the unauthorized immigrant population in the United States was growing. Although

when looking more closely into migration trends, I stumbled upon a piece of information that

proved my initial hypothesis wrong. Below is a graph provided by the Pew Research Center on

Hispanic Trends, and what this graph is presenting us with is that since 2008 2009, when the

Great Recession hit the United States economy, unauthorized immigration into the United States

has decreased.6 Since the Great Recession, the total unauthorized immigration population has

been at roughly a steady 11.2 million individuals. This information surprised me due to the fact

that it is a widely accepted myth that immigration is on the rise in the United States.

6
Estimated unauthorized immigrant population in the U.S. rises, falls, then stabilizes. (2016). Pew
Research Center's Hispanic Trends Project. Retrieved from
http://www.pewhispanic.org/2016/09/20/overall-number-of-u-s-unauthorized-immigrants-holds-steady-
since-2009/ph_2016-09-20_unauthorized-02/
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Although, when I decided at looking into this specific migration trend into the United

States, I was taken aback at an even more surprising statistic that was also provided the Pew

Research Center on Hispanic Studies. What the following graph exemplifies, that despite a

general decline in unauthorized immigrant population in the United States, there has been an

increase of unauthorized immigrants into the United States from countries other than Mexico.7

Meaning, while unauthorized Mexican immigration into the United States has been decreasing,

the amount of unauthorized immigrants from other countries is on the rise. Which really struck

me, considering the fact that the vast majority of the negative rhetoric towards illegal

7
Among unauthorized immigrants, a decline from Mexico but rise from elsewhere since 2009. (2016).
Pew Research Center's Hispanic Trends Project. Retrieved from
http://www.pewhispanic.org/2016/09/20/overall-number-of-u-s-unauthorized-immigrants-holds-steady-
since-2009/ph_2016-09-20_unauthorized-01/
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immigration in the United States is more often than not strictly associated with that of

undocumented immigrants that derive from the country of Mexico.

As we can see from the information above, early on in my research I found vital

information about immigration that for the most part people seem to dismiss or not believe.

Much of this has to do with the unfortunate reality the major news outlets seem to feed their

viewers false information or on many occasions they simply withhold crucial information that is

needed in order to understand immigration. The following information on immigration can be

fairly easily found by doing basic inquiries on the internet.

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There is much research on the economics of immigration such as the following, The

Labor Supply of Undocumented Immigrants which was conducted by a very well renowned

economist named George J. Borjas in March of 2016.8 What he essentially concluded was that

the labor supply of undocumented workers is not as responsive to wage changes as the labor

supply of the other groups in the population. In fact, the data clearly suggest that the labor supply

of undocumented men is almost perfectly inelastic. (Borjas, 27). For those who do not

understand the economic lingo, what his research concludes is that the supply for undocumented

workers is always present and constant despite of the wages in which they earn. For instance, it

does not matter whether a certain job an undocumented immigrant hold pays five dollars or 20

dollars, the fact of the matter is that no matter what is that these people are being paid, they will

still work; and if for whatever reason one undocumented worker does not want a certain job

because of the wages being earned, there will almost always be another undocumented

immigrant willing to do the job. This just goes to show that the vast majority of undocumented

immigrants are here to work and not fool around as many people believe.

Another study done on the impacts that immigration has on the United States economy is

Immigrants in Arizona Fiscal and Economic Impacts which was done by Judith Gans in June of

2008.9 In her research she conclude that Immigrants make significant contributions to Arizonas

economy. While just 14 percent of the workforce in the aggregate, they are a much larger share

of the workforce in specific sectors and a much larger share of specific categories of workersi.e.

low-skilled as well as specific types of high-skilled workers. (Gans, 62). Essentially this

8
Borjas, George J. The Labor Supply of Undocumented Immigrants Harvard University (March 2016):
1- 42
9
Gans, Judith. Immigrants in Arizona: Fiscal and economic impacts. Udall Center for Studies in Public
Policy, University of Arizona (2007)
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research is concerned with the direct impacts that immigrants have on the local state economy of

Arizona, and that despite immigrants only holding 14 percent of all jobs in Arizona, they hold

very important jobs that are related to infrastructure such as construction, landscaping, and

agricultural; all things that are crucial to a healthy society.

Although as I have said before, there are negatives to immigration as well, The Impact of

Latino-Owned Business on Local Economic Performance is a study done by Craig Wesley

Carpenter on July of 2016 and he was looking at how Latino Owned Businesses effect local

economies.10 He states that when this paper divides the LOB employment share by industry, we

find both positive and negative impacts on economic performance measures. (Carpenter, 24).

This individual concluded that depending on what industry a Latino owned business is in, they

have either negative or positive effects on the local economic performances.

Overall, despite the last piece of information, the notion that the economic impact of

immigration is overwhelmingly positive for the United States Economic growth, is widely

undisputed by economist everywhere.

Carpenter, Craig W. The Impact of Latino-Owned Business on Local Economic Performance

10

Department of Agricultural Economics Texas A&M University (July 2016): 1-65

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NOW WHAT?

Now that we know all of this information, the question still stands: How do we go about

reforming our current immigration policies in the United States? As I began my research on this

aspect of this study, very early on I came across a wonderful organization called the Partnership

for a New American Economy.11 This is an organization that focuses precisely on reforming

immigration policy disregarding any form of political affiliation. What they place their efforts in

is in providing the general public with a vast amount of information and resources on economic

findings in regards to immigration. They do this in order to make the case for reforming our

current immigration policies because of the fact that their findings are overpoweringly positive.

In my opinion the most useful tool that they provide their readers with is their blog which

provides any findings on the economic impact that immigrants have on the United States

currently. What makes this organization unique is that it is a nonpartisan one and it is made up of

a diverse group of individuals who range from Democrats, Republicans, Independent Mayors,

and different business leaders that come from all over the country. A few of those involved in

this partnership are Bob Iger who is the president and CEO of Disney, Michael Bloomberg who

is the former Independent Mayor of New York City, and Rupert Murdoch who is the CEO of

FOX News and Chairman of 21st Century Fox. Knowing this, it is quite obvious that this

organization is focused purely on the economic well-being of the United States; something that is

far to commonly overlooked in the political sphere. Moving forward, as I was looking at the

different sources which they provided I ended up at the website for the United States Bureau of

Labor Statistics with the following graph in front of me.

11
New American Economy. Partnership for a New American Economy. Retrieved from
http://www.renewoureconomy.org/front/
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What the above graph shows is that as of November of the year 2016, the unemployment

rate in the United States was at a 4.6% unemployment rate.12 Which in most cases is a very good

thing. Although I as I was looking through other pieces of information that the Partnership for a

New American Economy provides us with, I fell upon another very resourceful organization

called the Foundation for Economic Education. The ultimate goal of this organization is too

inform their readers on how Economics works in our country. They have the intention of

providing us with a fundamental understanding of how economics works. The cause of this

organization is a very important one, because as I said before, when making decisions for our

country, most of the time the realities of economics are overlooked and are replaced with

emotional decision making on part of our political leaders. Moving forward, when I was going

over their website, I came across the graph below. What this graph that was provided by the U.S.

12
United States Unemployment Rate | 1948-2016 | Data | Chart | Calendar. (2016).
Tradingeconomics.com. Retrieved from http://www.tradingeconomics.com/united-states/unemployment-
rate
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Congressional Budget Office indicates, is that currently our Real Potential Gross Domestic

Product in the United States is really low.13 Meaning that the level of economic output that the

United States can provide currently is not far reaching.

When you put a low Unemployment Rate together with at low Real Potential Gross

Domestic Product, you end up with a country that has very little room for economic growth. This

is never a good position for any country to be in.

13
US. Congressional Budget Office, Real Potential Gross Domestic Product [GDPPOT], retrieved from
FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/GDPPOT, December 18,
2016.
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ECONOMIC EXPANSION

Now why exactly is economic expansion important? Well there are many reasons as to

why though the three most important are the following. When economic expansion occurs, there

is an increase in the average salaries that individuals attain. When this happens, people tend to

spend more on commodities, and this leads to my second point. When there is an increase spending

on part of the citizens, there is an increase in the tax revenue that the government makes, leading

the government to borrow less money. And finally when the government has to borrow less from

its citizens due to an increase in tax revenue that the government makes, it allows for the

opportunity to spend money on public services such as healthcare, infrastructure, education and so

forth. With that said, economic expansion is crucial in increasing the quality of life of a countries

citizens.

IMMIGRANTS AND ECONOMIC GROWTH

Now that the above information is known, I decided to look into how immigrants

themselves can help solve one of the United States pressing issues. As I was conducting my

research I came across the Kauffman Foundation, this foundation has a focus on

entrepreneurship, specifically that of immigrant entrepreneurship. In one of their journals called

the Entrepreneurship Policy Digest they discussed the economic case as to why we should be

welcoming immigrant entrepreneurs. One of the more striking facts about this journal was that it

explained to the reader that immigrants were twice more likely to start businesses in 2014 than
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native citizens of the United States were.14 Along with this information, I also found in a

publication by the New American Economy called Reason for Reform: Entrepreneurship15,

which stated that new and young businesses create nearly all new jobs opportunities in the

United States every year. In this publication it was also noted that 28.5% of new entrepreneurs in

2014 were immigrants. Not only that, but over 5.9 million jobs were created by foreign born

entrepreneurs in 2007. Unfortunately less than one percent of these new businesses received

initial investments to help them start up there business. This only makes me wonder how many

more businesses could have opened but were never given the opportunity to establish themselves

in the United States.

SOLUTION

After analyzing all the information provided to us there are three things that stick out to

me. First off, we know that immigration is something that will always be around no matter

whether we want it to or not. It is something that will happen despite what anyone of us says or

does. We also know that currently the United States has a low Potential GDP, and we also know

that at the same time, immigrants are two times more likely to begin a business in the U.S. than

our native population. Now what does that leave us with? It leaves the United States to be in the

perfect position to take advantage of the opportunities for economic growth that Start-Up Visas

can provide.

14
Stangler, D. & Wiens, J. (2015). The Economic Case for Welcoming Immigrant Entrepreneurs.
Kauffman.org. Retrieved from http://www.kauffman.org/what-we-do/resources/entrepreneurship-policy-
digest/the-economic-case-for-welcoming-immigrant-entrepreneurs
15
Reason for Reform: Entrepreneurship. (2016). New American Economy. Retrieved from
http://www.renewoureconomy.org/wp-content/uploads/2016/10/NAE_Entrepreneurship.pdf
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If the United States wants to have a more progressive and positive immigration system,

Start-Up Visas are a great place to start. Essentially a Start-Up Visa allows Immigrant

Entrepreneurs to start a business in the United States. The individuals who would qualify for

such a Visa would be people who are looking to expand their business in the United States.

These business models have to show a certain amount of potential for financial success.

Ultimately what these Visas would do is create jobs for more people in the United States which

would in turn increase the Potential GDP, which would result in the increase of quality of life for

people residing within our borders. A Start-Up Visa would actually allow for more immigrants to

qualify for work visas, the reason behind this is that currently the only work visa program that

the United States operates is the H-1B Work Visa. The H-1B Work Visa is very difficult to attain

because of the strict requirements. A few of those requirements are that an applicant is required

to hold a college degree, or have a specialty in some technical skill, and they also need to have a

secured salary. Considering that the majority of immigrants coming into this country are low

skilled workers, our current immigration policies are catering to the wrong group of individuals.

If the United States were to commit themselves to working towards a Work-Visa program that

would allow low-skilled workers to have an easier pathway to eventually having the opportunity

to attain legal status or even citizenship, the country would be much better off, especially as far

as economics are concerned.

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CONCLUSION

At the end of the day, there are three things that my research proved to me. The first is

that immigration will never stop whether we like it or not, so we might as well try to use

immigration to our advantage. The second is that immigrants are fundamental for economic

growth, this is something that has been proven throughout history. The most successful countries

have always been those that embrace diversity. And finally, understanding immigration and all

its many characteristics, will eventually lead us to positive results for all. All the numbers point

to a successful outcome if the United States were to place an emphasis on positive immigration

reform, it is simply a matter of priorities. There is no reason as to why the United States should

not make the issue of immigration its top priority, because at the end of the day, positive

immigration reform will lead to an increase in quality of life for all of those residing within the

United States. With that said, I would like to leave you with this quote by Franklin D. Roosevelt.

Remember, remember always, that all of us, and you and I especially, are descended from

immigrants and revolutionists.