Immigrants and the American Work Force

 

Opinions and Evidence - On the whole, the U.S. has benefited economically from the high levels of immigration we have experienced throughout our history.

Outline

1. Historically, U.S. economy has been characterized by labor scarcity and natural resource abundance
   1. Relative labor scarcity meant that U.S. wages and living standards were high compared to most of the rest of the world
      1. High wages provided impetus for high birth rates
      2. High wages attracted immigrants to American labor force
         1. After 1650, immigrants are 15% of total U.S. population

   2. Growing labor force fueled economic expansion 1800-1970
      1. Real output per capital grew 12 fold
      2. Population multiplied by 85
         1. Half from natural increase
         2. Half from immigration

2. Contributions of immigrants to the growth of the American economy were overwhelmingly positive
   1. High ratio of natural resources to labor made labor very productive

   2. Immigration was a selective process
      1. People came in their prime working years, so that U.S. got benefit of training they received in their home countries - huge cost savings to U.S.
      2. Immigrants tend to be those most endowed with sense of adventure, adaptability, and willingness to take risks - all qualities necessary for economic growth

   3. Immigrants were an important source of industrial and mine labor necessary for the development of the U.S. as an industrial giant
      1. High demand for agricultural labor until 1910 meant that growth of industrial sector had to come from new workers, not from those shifting out of agriculture

3. The history of the immigrant contribution to the American economy has periodically been obscured by waves of nativist sentiment that have found expression in the political arena
   1. Trade union movement has historically supported immigration restrictions

   2. Reality of the immigration effect on wages is more complex than union argument suggests

Connections to Economics

Rules of the Game - How did the facts of labor scarcity and natural resource abundance impact American attitudes toward immigrants? How have non-economic considerations affected American perceptions of immigrants? How did American attitudes toward immigrants change as the national origins of immigrants changed?

Trade-offs - Would the American economy have developed differently if the immigrants had not come? What was the impact of emigration on the European countries? What is the historical relationship of immigration levels to periods of contraction and/or expansion of the U.S. economy? What has been the impact of immigrant labor on wage rates?

Incentives - What role did the abundance of natural resources, persistent labor shortages, and the resultant high wages play in determining levels of immigration to the U.S.? What were the costs and benefits to immigrants of coming to the United States? What incentives "pulled" immigrants from their home countries? What "pushed" them to leave home? Why were American industrialists willing to use immigrant labor?

The Economic Way of Thinking - The high productivity of labor and resultant high wages attracted immigrants to the United States, and continues to do so. The growth and expansion of the American economy, especially the period of rapid industrial development after the Civil War, would not have been possible without a dynamic labor force in which high rates of natural increase were supplemented by immigration.

Economic Concepts that support the historical analysis:

• relative scarcity
• labor markets
• productivity
• wage determination