With the Rise of the Far Right in the West, Are Immigrants Really 'Stealing' Jobs from Citizens?

Today, the world is experiencing an inflation crisis that could turn into a recession, especially with the US Federal Reserve's strict policies of reducing the money supply and raising interest rates.

In light of this crisis, some social segments are increasingly convinced that the entry of migrants and refugees harms economic interests.

But the issue is not so simple, and today there are those in America who propose to solve the problem of inflation by increasing the number of legal immigrants.

 

Tackling US Economy

Last year, economist David Card of the University of California, Berkeley, won the Nobel Prize in Economics for his contributions to more than one economic field and for presenting different perceptions of controversial issues in several countries, such as the harm of raising the minimum wage on the economy, which some analysts think that this means companies cutting employment.

In another more relevant question, Card examined the impact of the influx of migrants on economies, and whether it is true that this migration means that the people of the country compete for jobs. This means that citizens lose their jobs, especially since immigrants are usually more flexible than citizens and less demanding, and thus become a less expensive option for companies, putting them ahead of citizens.

Card examined the latest of the waves of Cuban immigration to the city of Miami in America at his time in 1980, which was preceded by other waves of Cubans taking refuge in the city.

Interestingly, he found that there is no relationship between the flow of these to the labor market at the time, and any change in the wages of workers already in Miami, and assuming there are effects that are very simple and can be neglected, but the city's economy was able to absorb new immigrants and enter them into the labor force without negative effects, which rose Miami's workforce is 7% in one year.

There are three factors that led to this result in Miami; first, the potential in the city's economy, which enables it to receive a large proportion of unskilled labor in a short period.

Consequently, some economic sectors in the city have developed as a result of the arrival of these immigrants (most of whom are uneducated) to allow the exploitation of their labor force and its surplus.

The second factor is the ease of their integration into the city due to the concentration of Spanish speakers in it, and finally that the city's residents gradually adapted to the recent wave, with many of them leaving the city and looking for other opportunities outside it.

 

Not a Surprise

Card's results are consistent with what can be understood from different economic growth models.

These models focus on the role of three factors in growth: the accumulated capital in the economy and the extent of its investment in it, in addition to the level of technology used, as well as the amount of work done by society using capital and technology, and in the long run economic growth cannot be continued without continuous growth in all three factors.

Even in the short term, it sometimes appears that an economy is not exploiting its full economic potential. Specifically, it does not have enough labor to operate all its capital and technology resources.

This would mean that this economy needs more manpower to exploit its resources of capital and technology, and if society is not able to find what the economy needs, the best practice is for society to try to import this power from abroad.

Last month, the US economy reached its lowest unemployment rate in its history, the same rate as the previous October, knowing that the number of unemployed in October reached nearly 6 million people.

But the US economy itself produced 10 million new jobs in the same month, which means that the US economy generates more jobs than the number of the US labor force.

The opening of sectors of the economy as the recovery began enabled people to return to their normal lives and purchasing power, while supply chains lagged behind in recovery at the same speed, increasing demand on the one hand and supply remaining at lower levels on the other.

But the supply side also has other problems regarding the size of new jobs compared to the number of unemployed; many sectors in the economy are trying to employ many and do not find those who want these jobs.

This may result from problems in the distribution of those wishing to work and new jobs; some of the unemployed may be located in states where there are no new jobs, while other states suffer from a shortage of labor with many jobs.

The problem is also related to the great changes caused by the Covid-19 pandemic in the American labor market. For example, alternatives to face-to-face work constituted a great incentive for a large segment of workers not to return to the working conditions prior to the Covid-19 pandemic.

American society and developed societies, in general, have started to change their workers in terms of their acceptance of different working conditions.

 

Why Immigrants?

World Bank data show that the US labor force was growing steadily from 1990 to 2008, and then its growth slowed for several years before returning to the growth that reached its peak in 2019 to approximately 166 million workers.

But the number today does not exceed 164 million, meaning that instead of growing and exceeding the old figures, the United States may need another year to reach by the end of 2023 what it was in 2019, and this means that the potential of the American economy is heavily underutilized.

If America wants to solve the problem in natural ways, it must rely on a set of different factors, all of which are not in favor of the time race in front of inflation, recession, and other problems facing the economy.

This is because the rate of American population growth is weak, and it was close to zero in 2021, and measures aimed at motivating American citizens to work may not work much or may take a long time.

Moreover, many of the jobs that the economy needs today need unskilled labor, and the advanced American economy is not in the interest of its citizens to work in such sectors.

In addition to being an immediate addition to the labor force, which the economy cannot provide, immigrants are more flexible than local labor. For example, current and future migrants can solve the problem of varying job, and labor needs to meet geographically.

David Card showed that some of the city's workers adapted to the wave of immigration by leaving the city, most of these were Cubans who had immigrated to the city previously, but they do not have very many ties to Miami.

And because they came to Miami a short time ago, they can go out to other cities with better opportunities, and this was better for Miami so that there was no surplus labor, and better for the other city that needed more labor and had surplus opportunities.

In the past decade, the United States has begun to halve the number of immigrants legally allowed to immigrate to the United States compared to the previous decade.

Some conservatives and others blame immigrants for the country's economic woes, helping to reduce the number of immigrants, who throughout American history have been a source of labor and whom the economy today may need more than ever.

The entry of immigrants does not only mean the exploitation of untapped resources, but it means increasing productive capacity and solving supply-demand problems that will contribute to solving the problem of inflation.

This will increase the number of those able to buy and demand in the US economy, which means that they will also benefit from demand, but less than their American counterparts due to them being more flexible in accepting jobs with lower salaries and their ability to save their living costs at lower values.