More Immigrants! Should Native Worry?
In his news, “Immigrants Raise Wages for Some Native-born Californians,” Jessie Mangaliman reported “the influx of immigrants to California raised the wages of some native-born workers in the state, according to a report released Tuesday by the Public Policy Institute of California that refutes common public perception and previous studies on the subject.”
In detail, he said that “some better-educated workers -- with at least a high school diploma -- saw wage increases ranging from 3 to 7 percent between 1990 and 2004, a period when the state experienced record influx of immigrants.” In response to this phenomenon, He gave a reason that “rather than compete with native workers, immigrants ‘complement’ some work sectors -- agriculture and construction for example -- by helping native workers who have the language and local networking skills to ascend to better-paying supervisory and managerial jobs.” In Jessie’s view, more immigrants seem to be a good thing to Native-born Californians…
I cannot agree with his explanation. Based on what we learnt in class, Jessie Mangaliman’s
explanation does not sound reasonable. With more immigrants, labor supply would definitely increase. As a result, the labor supply curve in a competitive labor market model would shift to the right (S1 to S2) so that the wage would decrease (W1 to W2). However, because the employers cannot pay workers less than the minimum wage, the wage in completive labor market mode would not go down to W2 but somewhere between W1 and W2. Since the market cannot reach its equilibrium, a larger surplus would appear in the market which means that the unemployment rate should increase.
This theoretical analysis sounds good. However, neither of the predicted wage nor the predicted unemployment rage accounts with what happened in the real world. From these two diagrams I found from economagic, it is easy to see that the unemployment rate in California has been really bumpy and overall decreased; the average wage per job had a continuously increase since 1990.To adjust theoretical analysis, a larger effect of increasing labor demand (D1 to D2) is needed to cancel the effect of increasing labor supply. According to the real data, the RGDP of the United States has increased for 64.2% in last 17 years. During an economic booming, employers were encouraged and hired more workers to increase their profits. With a huge increase in labor demand, the negative effect of increasing labor supply was canceled and the labor market in California experienced an increase in wage and an overall decrease in unemployment rate.
Although the increase of labor demand canceled the effect of increasing labor supply and brought wages up in California, more immigrants would certainly cause an increasing labor supply which can do nothing but decrease wages. Just imagine what if our RGDP stays same since 1990…Should the native worry about more Immigrants? My answer is yes.
In detail, he said that “some better-educated workers -- with at least a high school diploma -- saw wage increases ranging from 3 to 7 percent between 1990 and 2004, a period when the state experienced record influx of immigrants.” In response to this phenomenon, He gave a reason that “rather than compete with native workers, immigrants ‘complement’ some work sectors -- agriculture and construction for example -- by helping native workers who have the language and local networking skills to ascend to better-paying supervisory and managerial jobs.” In Jessie’s view, more immigrants seem to be a good thing to Native-born Californians…
I cannot agree with his explanation. Based on what we learnt in class, Jessie Mangaliman’s
explanation does not sound reasonable. With more immigrants, labor supply would definitely increase. As a result, the labor supply curve in a competitive labor market model would shift to the right (S1 to S2) so that the wage would decrease (W1 to W2). However, because the employers cannot pay workers less than the minimum wage, the wage in completive labor market mode would not go down to W2 but somewhere between W1 and W2. Since the market cannot reach its equilibrium, a larger surplus would appear in the market which means that the unemployment rate should increase.This theoretical analysis sounds good. However, neither of the predicted wage nor the predicted unemployment rage accounts with what happened in the real world. From these two diagrams I found from economagic, it is easy to see that the unemployment rate in California has been really bumpy and overall decreased; the average wage per job had a continuously increase since 1990.To adjust theoretical analysis, a larger effect of increasing labor demand (D1 to D2) is needed to cancel the effect of increasing labor supply. According to the real data, the RGDP of the United States has increased for 64.2% in last 17 years. During an economic booming, employers were encouraged and hired more workers to increase their profits. With a huge increase in labor demand, the negative effect of increasing labor supply was canceled and the labor market in California experienced an increase in wage and an overall decrease in unemployment rate.
Although the increase of labor demand canceled the effect of increasing labor supply and brought wages up in California, more immigrants would certainly cause an increasing labor supply which can do nothing but decrease wages. Just imagine what if our RGDP stays same since 1990…Should the native worry about more Immigrants? My answer is yes.
3 comments:
Sure the native people will potentially have a sense of worries and soemtimes even hatred of immigrations.However, the economic as a whole, is actually not about individuals sometimes. More immigration means more labor force and most often more valuable labor force since the country is really being picky and choosy about immigration. Sure some of the native people will be elbowed out by these versatile "Aliens", but competitions lead to efficiency and this will sprint up the diathesises of native labor force. The economic will ultimately be better off and therefore the individulas will also be able to soak up in a better economic.
I agree with Hang Li in this case. More immigrants would cause the labor supply to increase and the wages to decrease. In areas such as construction this is especially hurtful to the natives. Immigrants are often able to charge a lot less for a job because they have lower costs of living do to shared housing. Natives are not able to charge such low prices so they are beat out for the jobs. The employers that are getting the job done at a lower price are benefitting but the employees that lose out on the job are not.
Of cause, native will very worry, also, the US government will more worry than US citizen. Becasue more immigtants will take more job opporunity from native.
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