Immigration is a major topic of concern in today’seconomy. What are the possible

Question

Immigration is a major topic of concern in today’seconomy. What are the possible problems and solutions for theseconcerns? What could happen to the U.S. labor markets ifimmigration is not controlled? One thing you want to keep inmind on this question is that the United States grants immigrationsrights to approximately 1 million people a year. This is not aquestion dealing only with ‘illegal’ immigration! Besure to keep your commentary dealing with economics and notpolitical science or social concerns. How do immigrants affect thesupply and wages in labor markets? How do immigrants affect thedemand for goods and services? These are the types of issues youwill want to address.

Explanation / Answer

As the immigrant move into the America, most probably will affectthe number of labor force. There are increase in supply curve oflabor. This move the supply curve to the right and reduce the realwages. If the country is facing expansion, this might not beproblem. Increase in labor force, decrease in wage, decrease incost, firm profit increase. Overall wealth might still be increase.However, if the economic facing downturns, the unemployment ratewill increased rapidly due to decrease in labor force. As more people immigrates into nation, the amount spend onconsume will increase. The demand for the goods increase. ForAmerica, this might also means net export decrease because most ofthe daily goods needed is import from other country, such asChina.

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