There is a charge that immigrants flood the labor market and

There is a charge that immigrants flood the labor market and drive down wages in the United States.

(a) Make two arguments for the above statement (1) Explain why you agree with the statement and (2) Explain why you disagree with the statement.

(b) Which argument would you choose?

Be sure to provide a total of two arguments. There should be an explanation supporting the statement and one that disagrees with the state. Be sure to thoroughly explain your reasoning. Provide examples to support your answer.

Solution

For :

Immigrants increase labor supply in a country . This surplus of labor in the economy helps producers to get labor at cheaper rates . So they drive down wages .

Also immigrants are ready to work at lower wage rates . Since they migrate to find work and settle down , initially they agree to work at whatever wage they are offered . So this drives down the wage rate of the whole economy .

Against :

It depends on the skill requirements and skill levels of immigrants to affect the equilibrium wage . If the skills required to work in US does not match the skill level of immigrants then they are not hired which does not affect the wage rate . Also producers after refrain from hiring immigrants because of either lack of legal identity documents or their nature of shifting from one place to another .