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Immigration occurs when people from other countries enter another country to seek employment and live there permanently. The United States opened its doors to immigrants but only to a certain limit that is determined annually. Immigration has been an issue that the government is trying to address as the growing population of immigrants has affected the people and economy of the country. Immigration has both benefits and negative effects. Isaac Hourwich, a labor economist argues against the restrictions of immigration in America.

With regard to the exacerbating conflict in immigration, the international market has contributed much to it. The severe damage and breakdown of economies around the world including the social and political structures have made the lives of people more difficult. The destruction of the environment is also a problem since resources are slowly drying up in other ares. People can no longer survive in their own countries. The deficits in the national budget and the rising debt have led to the financial crises in most nations.

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Programs for structural adjustment have been prioritized instead of social programs because this is a requirement for countries in making international loans. This neglect in the social conditions of the countries have led people to migrate to more stable economies. Improvements and advancements in transportation and communication have provided more opportunities for people to migrate especially if they are living under such poor conditions. The reports of the Dillingham Commission, a commission created by Senator Dillingham, on industries did not take into consideration the reaction of the American workers.

Immigration hurt the workers in so many ways and this was reflected in racial terms. The book of Isaac Hourwich, “Immigration and Labor”, answered the report of the Dillingham Commission. Hourwich argued that the massive unemployment in 1912 was due to the inconsistencies in the demand distribution because of the effects of the business life cycles and the presence of seasonal industries (1912). Immigration was capable of supplying a great but unnecessary unskilled workers that can cause the stimulation of the industries.

Hourwich also argued that restrictions on immigration will not help in the improvement of American workers. Changes in technology and prices were the factors that greatly affect the wages of American workers. Restrictions will only affect the labor or union movement and capital will be taken outside of the country. Hourwich also further declared that the assumptions of America regarding the labor market and immigration were not correct. One assumption is that because of immigration, too many people are going after a small number of jobs – the result of which causes wages to fall.

Critics of the immigration policy wanted to restrict if not ban it in the country. Hourwich argues that immigration restriction is not the answer. The rate of economic expansion is far greater that the rate of immigration. He went on to support his statements with economic data he gathered from state and federal governments. Immigration occurs in free and open capitalist economies such as the United States. Immigration responds to the demands of labor. When the demand for labor increases, the occurrence of immigration will also increase.

The rise and fall of the demand for labor is an effect of broader economic activities. According to Hourwich, the immigrant labor supply is dependent on free competition in the market. The immigrant labor supply can be likened to any other commodity. There are times when the supply will exceed demand and some instances may show that demand exceeds supply. However, in the long run, the labor supply will be able to self-adjust with demand. Immigration does not displace American workers (Hourwich 1912). Hourwich reminded critics of immigration that capital is broad and international.

The rate of production has developed in the United States because of capital brought in a sufficient labor supply. If however, a shortage of labor will be created because of immigration restrictions, this would result in the increase of wages and profits will decrease below the average of other nations. The scenario can only stimulate more American capital to make an investment elsewhere in foreign markets. The American industries will slow down. Capital will take advantage of the industrial development of other countries who provide cheap but skilled labor.

American commodities produced by better paid American workers cannot compete in the global market because of the presence of products made by Siberian or Mexican laborers financed by American capital. The competition will result in the displacement of some American workers. The normal ratio between the active labor and reserve labor will be restored which is significant to the development of the industrial system in the United States (Hourwich 1912). If locals or native Americans will compete with immigrants in terms of labor, locals would have to reduce their expectations for a higher salary.

Employers might want to hire immigrants more because they would only pay for low wages. Immigration increases the supply of labor. More and more people are competing for jobs. It is more difficult for natives or locals to start a small business because competition is high in the job market and they are forced to settle for low wages in order to have a job. Immigrants are also determined and motivated to succeed in the United States because they left their home country for a better life and even support family members back home.

This drive makes them save more and spend less for the future. For them, getting lower wages will only lead to something great in the long run. Setting up a small business is not that hard to do once a person has the capital or the funds to support it. Immigrant business owners may not be afraid to take risks because operating a business of their own is a dream. They would have to take risks to see if they will succeed. As more new businesses open, this increases the competition in the market.

Locals will have more to worry about as the products and services that are offered by the immigrants may be better and unique than their own. Hourwich and his arguments provided valuable insights on the negative effects of immigration restriction to the American economy in general. The restriction of immigration does not reduce employment and raise wages in the long run as previously explained in the discussion. Immigration is necessary to America’s industrial economy. Reference Hourwich, I. (1912) ‘Immigration and labor: The economic aspects of European immigration to the United States’, University of California

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American Social History Essay. (2016, Jul 13). Retrieved from

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