Impact of Immigrants in Recession

Impact of Immigrants in Recession

Introduction

The article under study reveals massive insights in the context of the huge immigrant population specifically covering the period of recession. The US labour market has been struggling to cope with the after effects of recession due to a variety of reasons. With an analysis of the current economic situation, this article has looked to assess the impact of immigrants on the labour market within USA. It had been observed in the past that the impact of immigration on the average income of USA was minimal but positive (Peri, 2010). Immigration had significantly enhanced the US productivity in the long run by successfully enhancing the economic efficiency in production which is highly vital as well as encouraging the implementation of adjustments in the distinct way the economy of USA functions. In the case of the economic environment of USA, the firms have been known to reorganize their production for successfully taking advantage of the immigrant labour and native workers alignment with the occupations that suit their level of specialization, expertise and skills (Fix, Papademetriou, Batalova, Terrazas, Lin, & Mittelstadt, 2009).

Discussion

However, the point to be observed here is that such adjustments require time and cannot show results overnight. In the case of the current economic scenario, the situation in terms of long run seems quite distant and thus does not pose a concern. On the other hand, the concerns pertaining to short run have increased at a rapid pace and thus shape the findings of this article (Peri, 2010).

This article provides a lengthy analysis of the long and short run impacts of immigration in comparison with the business cycle (Papademetriou, Sumption, Terrazas, Burkert, Loyal, & Ferrero-Turrión, 2010). The findings of the article clearly state that in the case of the long run, immigrants have not been known to reduce the domestic employment rates, however they have significantly increased the productivity and resultantly the level of average income. On the other hand, in the case of the short run, immigration has been known to have a slight effect in decreasing the native employment rate as well as the average income. This is due to the fact that the effects from the adjustments are not immediate and thus take some time. The results from the long run become prominent after a period of seven to ten years. Furthermore, the short run impact of immigration depends a huge deal on the specific state of the economy.

When the economy is growing at a rapid pace, the aspect of new immigration creates a plethora of jobs thereby leaving the native employment unaffected. However, during the financial crisis and other downturns, the economy has not been known to respond in an efficient manner. The new immigrants are known to have a minimal negative impact on native employment (Fix, Papademetriou, Batalova, Terrazas, Lin, & Mittelstadt, 2009).

Supply and Demand

The concepts of supply and demand have a huge significance in the context of economics as they shape ...