Unemployment Issues

Abstract

Unemployment is one of the major issues of the united states while at the same time the country is a destination for migrants as well. The issue of immigration has been in debate of policy makers, researchers and public with two perspectives i.e. employment opportunities and market outcomes. To discuss all causes of unemployment in the United States is very vast subject to be covered in this paper. Even the impacts of the immigration on the local economy is also a very broader topic to be covered here in details, therefore the research focus has been narrow down to the impact of immigration on the employment opportunities on the local citizens. This aspect of the problem was selected for three reasons. First of all, to explore the truth about the growing concerns of the locals about the fast decreasing share in the employment. Secondly, to explore the effects of unemployment on the workforce and lastly in light of the research present a policy brief, which is important in the present scenario of surge in immigration in the recent years.

 

 

 

 

 

 

 

 

 

 

 

Identifying the issue

The Center for Immigration Studies (CIS) is a non-profit research organization that advocates immigration reduction in the United States and striving for supporting policies for the employment of local people. According to CIS mission statement the organization provides reliable information and policy advice to the policymakers, the academics, media, and concerned citizens with about the social, economic, environmental, security, and fiscal consequences of legal and illegal immigration on the United States. The Center has published several research reports, articles and maintains a blog for the cause. According to monthly the Center for Immigration Studies the population of the immigrant (legal and illegal) has reached to 42.1 million in the second quarter of this year counted for 13.3% of the total population of the country. The immigration rose by 44% (1.7 million) from the last year which is record high level in last 105 years.

Unemployment has been one of the major issue of the economy and common citizen. One of the most important causes of the unemployment in the United States is considered the inflow of the legal and illegal immigrants from all over the world. The issue of immigration has been in debate of policy makers, researchers and public with two perspectives i.e. employment opportunities and market outcomes. To discuss all causes of unemployment in the United States is very vast subject to be covered in this paper. Even the impacts of the immigration on the local economy is also a very broader topic to be covered here in details, therefore the research focus has been narrow down to the impact of immigration on the employment opportunities on the local citizens. This aspect of the problem was selected for three reasons. First of all, to explore the truth about the growing concerns of the locals about the fast decreasing share in the employment. Secondly, to explore the effects of unemployment on the workforce and lastly in light of the research present a policy brief, which is important in the present scenario of surge in immigration in the recent years.

The term immigration wherever mentioned in this paper means legal and illegal immigrations but excludes asylum on humanitarian grounds. Moreover, utmost attempt has been made to refrain from any bias due to the sensitivity of the topic.

Research question: The research examines the issue of unemployment and market outcome with perspective of immigration growth to give policy recommendation to the law makers.

 

Background information

According to Federal Reserve Database-FRED unemployment rate in the United States in July 2015 was 5.3% (8.3 million persons) broader to include the part-time underemployed it reaches to 10.5% (16.5 million persons). The unemployment rate is percentage of the labor force and is restricted to and 16 years of age and older. According to the U.S. Bureau of Labor Statistics report (May 2015) The unemployment rate of native-born persons down to 6.3 % in in 2014 from 7.5 % in 2013. The jobless rate for immigrants was 5.6 % fell from 6.9 % the prior year. This illegal immigrant are not included in the aforementioned statistics as accurate related cannot be collected. The joblessness and growing legal and illegal immigration has been concerns of the common citizens. The unrest increased in past few years due to higher unemployment in the current and increased influx of the immigrants. According to a Gallup Poll (2014), 66% of Americans perceive illegal immigrants “cost the taxpayers too much by using government services like public education and medical services”. While 74% believe that illegal immigrants mostly take low-paying jobs.

The unemployment has negative impacts on the employability of the workforce. It is argued by Coles and Masters (2000) that during unemployment skills rapidly go outdate or wither. This makes mismatch of employee skills and employer requirements which may result in employer not wanting to hire him/her. Thus, result in further unemployment and or weak bargaining position of employee. The employers usually use the so-called concept of employability by recruiting the low paid workers on contractual basis and do not offer any job security, which although give employer more flexibility in the fluctuating labor market but also result in acute shortage of skilled employees at times.

The intermittent unemployment result in skill depreciation and lack of training and turnover related to job insecurity which makes the workforce short of skilled. On the basis of Coles and Masters (2000) model, it is argued that in order to prevent skill shortage, this must be the aim to priorities human resource policies in such way stop long term unemployment.

“The longer the workers have been unemployed, the smaller their chances of finding a job. Their skill level runs the risk of deteriorating, and employers are increasingly hesitant to employ them.” (ILO,1998)

Pissarides (1992) cited by Edin and Gustavansson (2008) states that unemployment by arresting skills formation result in further unemployment. Edin and Gustavansson (2008) carried out their longitudinal research (1994-1998) on direct human capital depreciation due to job interruption on the data from International Adult Literary Survey (IALS) test scores.

Using longitudinal data set they found that time out of work lead to skill depreciation. Further they give strong statistical evidence that there is a negative relationship between work interruption and skills.

The academia and the policy analysts are divided on the impact of the immigration on economy particularly on the employment market. Some argue that immigrant’s jobs from locals while others negate the claim and says that the immigrants are not taking jobs of local rather takes those jobs which the locals are not doing.

Arguments for

There are various academic researches carried out which suggest that there are negative effects of immigration on the jobs of local people. According to Dennis Jacobe, Ph.D., Gallup’s chief economist the most evident beneficiaries of illegal immigrants are the companies which hire the immigrants as it promotes higher profits and returns to them. The use of illegal workers have unofficially changed U.S. labor laws has resulted in lower wages and poor work conditions.

Rector, R. E., (n.d) unskilled immigrants have a negative effect on the overall economy, particularly if it results in lower wages overall.

Arguments against

Peri, G. (n.d) states that there is no evidence that suggest that immigrants crowded out employment. Contrary to the claim, immigration has positive association with productivity and negative relation with the high skill bias of production technologies therefore immigrants improved specialization, also promoted unskilled efficient technologies.

Michael Greenstone and Adam Looney “the influx of immigrant workers from 1990 to 2006 reduced the wages of low-skilled workers by 4.7 percent and college graduates by 1.7 percent.”

Contradictions

There are many contradicting statements on both sides. Firstly, they disagree on the impact of the legal and illegal immigration on the employment of the local citizens. The Center for Immigration Studies (CIS) claims very high number, they also have many stories and proofs to their claim.

Secondly there is also a difference of opinion on the impact of the immigrants on the employment and local economy.

According to Center for Immigration Studies (CIS) low-skill migrants being this relatively vulnerable group pose a moral question from the advocates of the immigration about economic harm to their interests. They argue that If a worker is not employed in time his skill level will fall and weakening his bargaining position and if the delay is prolonged the level of skill fall too low which may render him unemployable

After presenting both perspectives and the differences on the subject. It is interesting that both sides agree on the negative impacts of the unemployment on the skills of local workforce. There is no strong disagreement on the subject that intermittent and long term unemployment adversely affect skills of the unemployed workforce thus reducing the chances of employability and bargain power for better opportunities.

Personal opinion

I principally agree with the (CIS) view on the ground of the vulnerability of the locals in employability and for the moral reasons that the relatively venerable have more rights on the employments than the immigrants. Though some companies and other stakeholders will benefit from the low paid immigrant workforce but is not justifiable on the cost of the other citizens. Moreover, it carries more weight that interruption in jobs and unemployment further weaken the skills of the jobless persons which further weakening the chances of their employments thus perpetuating the unemployment for some people.

The workforce while unemployed for long time their talent is corroded. Losing of these skills from fleets result in manpower shortage as well as increase in investment level. Learning by doing suggests that it is difficult for unemployed workers to keep pace with the technological advances. The unemployed workers find it difficult to gain the new skills without hand on experience. Long term of unemployment result in skill decay and diminishes competencies.

The contribution and positive impact of the immigration can also be not ruled out. However, this is a dilemma that on one side some stakeholders and companies benefit from the immigration in general on other side the workforce and low skilled workers appear to be negatively affected.  In my view the Center for Immigration Studies (CIS) work is worthy to advocate for the relatively vulnerable unemployed citizens and low skilled workforce by presenting facts and policy recommendations to the lawmakers or highlighting the issues in the media for influencing the power centers to bring on board those who are losing as result of increased immigration. Moreover, nothing has been observed which question the non-partisan claim of the organization. In addition, the organization has not shown any concerns on the asylums granted by the government on humanitarian grounds.

More research is needed to exclusively determine the impact of the illegal immigration on the employment and economy of the country.

Policy recommendation

The law makers should take into consideration of the concerns of relatively vulnerable low skilled unemployed work force. The United States immigration need to review the immigration policy to safeguard the interests of the unemployed and low skilled workforce of the country. The immigration policy needs to be carefully reviewed and reformed to regulate the immigration closely. Moreover, the policy should be regularly reviewed owning to the employment market situation in the country. To encounter the recent wave of the increased immigration two types of measures can be taken to minimize the negative impact of the immigration on the local workforce. First to control the influx of legal and illegal immigrants by further strict rules and regulations on the immigration by revising criterion.  Illegal immigration could be minimized through improving securing arrangement on porous borders. Secondly by devising laws to ensure preference of the locals over the immigrants.

References 

Gottfries, N., & Eriksson, S. (n.d.). Ranking of Job Applicants, On-the-Job Search and Persistent Unemployment. SSRN Electronic Journal SSRN Journal.

Gottfries, N., & Eriksson, S. (n.d.). “To a situation with two different types of unemployed workers: one group that is identical to employed workers and one group that is less attractive to hire”,

Falkinger, J., & Grossmann, V. (n.d.). Skill supply, supervision requirements and unemployment of low‐skilled labor. Int J of Manpower International Journal of Manpower, 69-83.

The Real Impact of Illegal Immigration. (n.d.). Retrieved April 04, 2017, from http://www.gallup.com/businessjournal/24448/real-impact-illegal-immigration.aspx

Klein, L. (n.d.). Racial Patterns On Income And Employment, U.S.A. Social Policy & Admin Social Policy & Administration, 32-42.

What Immigration Means For U.S. Employment and Wages. (2012, May 4). Retrieved April 04, 2017, from http://www.brookings.edu/blogs/jobs/posts/2012/05/04-jobs-greenstone-looney

Rector, R. E., C. Kim, and S. Watkins. 2007. The Fiscal Cost of Low-Skill Households to the U.S. Taxpayer. Heritage Foundation Special Report No. 12. Washington.

Card, D. 2009. How Immigration Effects U.S. Cities. In, R. P. Inman (ed.), Making Cities Work: Prospects and Policies for Urban America. Princeton, NJ: Princeton, University Press, pp. 158-200.

Peri, G. (n.d.). The Effect of Immigration on Productivity: Evidence from US States.

Klein, L. (n.d.). Racial Patterns On Income And Employment, U.s.a. Social Policy & Admin Social Policy & Administration, 32-42.

Rector, R. E., C. Kim, and S. Watkins. 2007. The Fiscal Cost of Low-Skill Households to the U.S. Taxpayer. Heritage Foundation Special Report No. 12. Washington,