Today, immigration is often regarded as an economic threat because jobs are believed to be stolen by immigrants. However, a recent study published by the National Bureau of Economic Research contradicts this popular bias. The results of the study indicate that immigration encourages business activity and produces more jobs for a country’s economy. You may be asking yourself: “How can immigrants competing with domestic labor for jobs, actually create more jobs?” There are several reasons which help answer this question.
Domestic job creation is being limited as major corporations are moving production to foreign countries. When companies move production offshore, they pull away not only low-wage jobs but also related high-skilled jobs such as managers and information technologists. Immigration can serve as a remedy to this concern. The easier it is for a business to find cheap immigrant labor at home, the less likely the business will relocate production offshore. Therefore, the potential loss of jobs is diminished because of immigration. The study confirms this idea as it found when immigration was on the rise, company offshoring was decreasing, and vice versa. Economic sectors with more exposure to immigration displayed a greater employment growth. In general terms, immigrants may be competing more with outsourced workers than with domestic labor.
Immigration has many overlooked job-creating benefits. Remember, immigrants also consume products sold in a country which then increases the demand. Therefore, production is amplified to meet these higher demands and more jobs are created. Additionally, low-skilled immigrants fill the gaps in labor markets and actually improve business prospects rather than destroy jobs. This is the case because immigrants serve as “complementary” workers who add value to the work of others and the countries where they are employed. As immigrants succeed in a country, they help this country develop strong business networks with the rest of the world. Conducting business with the native countries of immigrants becomes easier with the now enhanced international business relation. Overall, employing immigrant workers can allow businesses to create relationships with other countries that are valuable for international business.
Maybe it is time to go against the trend and look at immigration as a creative force useful for economic improvement. After all, immigration would not only create jobs but also increase tax revenue, bring new home buyers, and perhaps most importantly improve the international business environment.
What do you think? Can employment rates and economic growth be improved by immigration?