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Introduction
Two basic factors motivate Immigration in the world; the first one is the reason to move from country of origin and second, the reason to move to a host country. According to Esipova and Ray (2009), socio-economic factors have influenced the world’s immigration pattern with statistics indicating that United States of America (USA) and Canada are still destinations of choice for most people in the world especially from the developing nations. “In 2006, the immigrant population in Canada was nineteen percent of the total population” (Statistics Canada, 2006). “In 2003, the population of immigrants in the USA was eleven percent of the total population” (U.S. Census Bureau, 2003). United States of America and Canada have adapted stringent immigration policies aimed at either drastically reducing the influx of immigrants or selecting suitable immigrants to the two countries. However, immigrants have greatly influenced the socio-economic landscape of the two North American countries.
Economic Impact of the Immigrant Population
Report by the White House Council of Economic Advisors(2007) indicate that “immigrant population in the U.S.A adds $ 37 billion every year to the economy”. Similarly, according to Grubel and Grady (2011), in 2006, the immigrant population remitted more than fifty percent of the total taxes.
Immigrant Labour force
Immigrants in the U.S.A and Canada contribute to the labor force of the two economies. The goods and services they produce are also beneficial to the natives. Batalova and Fix (2008), point out that the ratio of native to foreign born doctors in the USA is three to one and in every three computer engineers one is an immigrant and over forty percent of medical experts are immigrants. “In Canada, thirty eight percent of male in the labor force are immigrants with post graduate degree” (Jay, 2007).
Furthermore, “ forty nine percent of doctorate degree holders and forty percent of masters holders in Canada are immigrants” (Fitzpatrick, 2008). The availability of employment and the minimum wage factor have significantly boosted immigration to The U.S.A and Canada. Many have argued that immigrants take jobs with minimum wages that the natives do not consider (Dukakis & Mitchell, 2006).
In addition, other scholars argue that the minimum wage creates illegal job market that pay lower than the minimum wage especially for the illegal and undocumented immigrants in the United States, who mainly cross the southern border (Penney, 2010). In comparison, Canada’s geographic position makes it less vulnerable to undocumented immigrants crossing the borders.
However, just like the United States, immigrants are still at the bottom of the labour market. Newer immigrants to Canada have a high unemployment rate, it takes them ten years before they can attain the same employment rate as of the natives (Lochhead, 2003).
In 2006, “new immigrants had an unemployment rate of eleven percent compared to five percent of the Canadian natives and seven percent of immigrants who had stayed in Canada for more than five years” (Statistics canada, 2006). USA has a high number of illegal and undocumented immigrants linked to the economic performance.
According to Pew Hispanic Center (2008), population of undocumented workers increased by one million between 1990 and 2006 then dropped significantly during the economic downturn, it is estimated that the number of illegal immigrant is lower than of legal permanent resident immigrants. The report further reveals that “five percent of the labour force in the United States is composed of illegal and undocumented immigrants” (Pew Hispanic Center, 2008).
Evidence suggest that immigrants to the united States and Canada are concentrated at both income ends of the respective countries labour markets, which are largely determined by their immigration status and educational levels.
Immigrant Consumers
Immigrants to both the United States and Canada contribute greatly to their host country’s economies as consumers. The immigrant population aid in creation of new jobs as they increase demand for consumer products and services. They provide credible foundation and emergence of new market groups. Mehta, Nik, Mora, and Wade (2002), reveal that illegal immigrants in the chicago metropolitan area are responsible for creation of 31, 908 additional jobs,which is a significant boost to the local economy.
In Canada, “ twenty percent of total intake of immigrants are Chinese making their language the third most spoken in Canada.” (Wang & Lo, 2003) The paper further details the establishment of a Chinese news paper published in Toronto marketing professional services and other goods.
In addition, with a decreasing birth rate and early retirement, Canada will depend on new immigrants to sustain the growth of consumer market. Tory and Deans (2011) concur that Ontario’s economy is unsustainable without attracting skilled immigrants.
They claim that Ontario is facing stiff competition from other provinces as it receives fewer immigrants. In the USA, “immigration has led to the establishment of Hispanic, African-American, Asian-American consumer markets, when all combined they were worth $ 1.46 trillion in purchasing power.” (Passel & D’Vera, 2009)
The number of African immigrants is increasing in the U.S.A. This group has strong family and cultural ties in their native countries, which include music, food and lifestyle. A study by New American Dimensions (2009) detail the following:
African immigrants prove to be sensible shoppers, shopping around for the right price and the right product. Younger shoppers are more prone to shopping for products recommended by family and friends. Supermarkets lead the list of stores patronized by African immigrants. Discount stores and low-end department stores are the top shopping venues for clothes and accessories.
(p 199)
Experts widely anticipate that the immigrant population will help in reviving the underperforming housing market in the United States. Joint Center for Housing Studies of Harvard University ( 2009) indicates that immigrants in the United States directly contributed to formation of more than forty percent of households in the early part of the year 2000.
In Canada, a study by Genworth Financial Inc (2007), indicated that fifty two percent of immigrants buy homes within their third year of arrival. The study also indicates that ninety one percent of new immigrants in 2007 had a desire to own homes.
Immigrant Entrepreneurs
Immigrants to Canada and the United States of America contribute to the economies of their respective host countries as entrepreneurs. The immigrants are likely to invest in smaller segment of the economy characterized by low entry levels limited technical and skill requirements.
Rapid Immigration (2011), assert that immigrants are more likely to go into business than the natives and they also have contributed to cutting edge businesses. A good example is the silicon valley in the USA that has witnessed a overwelming immigrant participation. The Hart-Celler Act of 1965 is the genesis of Asian immigration to the West Coast of the United States. It allowed immigration based on ones’ skills and family ties to an American citizen or a permanent resident.
This act created opportunities for highly educated professional immigrants whose skills were on demand. Skilled immigrants have an increasing presence in Silicon Valley, they comprise a third of the entreprenurial engineers. A study conducted by AnnaLee Saxenian (2000), reveal that Yahoo, Hotmail and Ebay as some of the immigrant founded companies in the Silicon Valley.
In South Florida, immigrants from Latin American countries have turned the area into a leading attraction of business from their native countries and specifically in banking (Sassen & Portes, 1993). In canada, a report by RBC Economic Research (2011), show that immigrant enterprises doubled in number between 2004 and 2007.
The report also found out that new immigrant business people are younger than their native counterparts. “Some of the companies conceived and initiated by Canadian immigrants include, Mitel, Newbridge, Corel, ATI, Redknee, Dalsa, Platform, Futurecom, Intelligent Mechatronics (IMS), Aastra, Hummingbird, Matrox, Sigma Systems, JDS and Consultronics” (Hebert, 2011).
Thomas Bata was a notable investor from Czechoslovakia, with his Toronto based Bata Shoes Company. “Others include, Robert Shad of Husky Injection Molding, Frank Stronach of Magna, Leslie Dan of Novopharm, Peter Munk of Barrick, the Reichman family” (Hebert, 2011).
Immigrant business in the United States have greatly depended on their social structures and ethnic based institution that support their activities. These include non-market mechanisms such as collective labor, rotating credit association that act as resource mobilizes for entreprenurial opportunities. “These groups or organizations exhibit elements of immigrant cultures as well as good business practices ” (AnnaLeeSaxenian, 2000, p.31).
A notable example is in Silicon Valley, where the Chinese and Indian immigrant groups actively exist. They join mainstream associations such as the American Electronic Association. They join such association just to be sure, but appear less active in them as compared to their ethnic associations. Some Chinese associations have different ethnic outlook from others, for instance The Monte Jade Science and Technology Association use their dialect, Mandarinand, in all their functions.
“This excludes immigrants from other parts of China who do not speak Mandarin” ( AnnaLee Saxenian , 2000 p.31). These associations provide first generation immigrants with sources of professional network and contacts. They also provide source of labor information,market and hiring avenues for members.
In addition, they sponsor regular conferences and forums for members to share ideas. Some of the immigrants associations include, The Chinese Software Professionals Association founded by a small group former students of National Taiwan University in 1988. This is a volunteer run association and is actively involved in networking.
The association holds monthly meetings in English, it posts job opportunities for members and the membership is open. “They hold their annual conferrence at Stanford University,which is their premier event” ( AnnaLee Saxenian , 2000 p.41). Other notable immigrant associations are, The Silicon Valley Indian Professionals Association founded in 1987 by a young Indian engineer, The Indus Entrepreneur started in 1991 among many others.
Immigrant Tax Payers
Immigrants in the United States contribute more in taxes than what they receive as public benefit. The difference between tax and cost in benefits for an individual immigrant is $ 1,800 and the net tax he or she remits together with the descendants is between $80,0000 and $105,000 at federal level and $ 25,000 at the state level (Smith & Edmonston, 1997). “ In 1997, immigrant enterprises and households remitted $162 billion in taxes.
In addition, only after Ten to fifteen years is when immigrants becomes net economic contributors (Moore, 1998). It is believed that more than half of undocumented immigrants pay federal, state and medicare taxes. Nonetheless, all immigrants remit sales taxes and property taxes when they rent houses or buy goods and services (The White House, 2005). According to Strayhorn (2006), $1.58 billion in revenues was produced by undocumented immigrants in Texas, this was way more than the $1.16 billion they received.
Immigrants are major contributors to the Social Security system.
Undocumented immigrants contribute billions to the Social Security system under false names that do not match the numbers. These immigrants can not benefit from the system. In the year 2005, records from the Earnings Suspense File indicated a total of $ 520 billion (O’Carroll, 2006).
It is estimated that over the next five decades immigrants to the USA will provide a net benefit of over four hundred billion dollars to the social Security system (Anderson, 2005).
One most significant way in which immigrants to Canada and the United States of America contribute to the economies of their respective host countries is by remitting their taxes. According to Kelley (2008), Most studies are inconsistent by their mention of the cost of immigration to the economy.
Most of these studies cover one year of the immigrant population and fail to consider the gradual increase of their tax contribution over extended period. Most Immigrants do not have access to federal and state public benefit programs and cannot burden the economy’s budget. There are public benefits such as Temporary Assistance, Medicaid, Food Stamps, Supplemental Security income that immigrants do not qualify to receive.
Permanent residents need to pay into Social Security for more than ten years for them to benefit from it, before they can benefit from it if they retire. Illegal immigrants who form one third of the immigrant population, also do not qualify to receive any public benefits. (Wasem, 2007). In 2005, “ the percentage of immigrant children receiving Medicare dropped to thirty from thirtysix in 1995 while native children receiving medicare increased to fortyseven percent in 2005 from fortyfive percent in 1995” (Center on Budget and Policy Priorities, 2007).
Immigrants in the United States, do not feature significantly in statistics on growth of poverty. According to Center on Budget and Policy Priorities (2007), natives of the United States accounted for sixteen percent of the growth of poverty line. The same analysis reveal the growth of the poverty line by 3.9 million between 2000 and 2006. Immigrants contributed to ten percent of that growth which included undocumented immigrants.
The healthcare system is not strained by immigrants. Data from an interview survey conducted in California, indicated that undocumented immigrants from Mexico and Latin America did not use health care and reported bad experiences unlike their U.S counterparts (Ortega, et al., 2007). In 1998, expense per person on healthcare was at fiftyfive percent lower for immigrants than for natives, on the average, U.S
Natives received $2,546 as compared to $ 1,139 for the immigrants (Oregon Center for Public Policy, 2007).
Immigrant population in the United States is a net benefit to the economy. Immigrants complement the country’s labor force, which triggers capital investments. This leads to the increase of the Gross Domestic Product yearly. According to Smith and Edmonston (1997),
“The average fiscal impact of immigrants is positive in part because they tend to arrive at young working ages. This because their descendants are expected to have higher skills and incomes, in part because they pay taxes for some items, such as national defense and interest on the federal debt, for which they do not impose costs, and in part because they will help to pay the public costs of the aging baby-boom generations.” (p. 353)
Evidence suggests that immigrants have access to the upward mobility. Successive generations of the Hispanic men have closed the education gap with their native white counterpart, which has translated to increased income over years.
The percentage of Hispanic immigrants earning minimum wage in 1995 decreased to thirty-six percent from forty-two percent in 2005 (Pew Hispanic Center, 2008). Poverty rate declined to twelve percent in 1990 from seventeen percent in 1980 and twenty-four percent in 1970 among the Latino immigrants who came to California between 1960 and 1970 (Myers, 2007).
In Canada, on the average immigrant household remitted $ 22,528 in taxes while the government spent $ 10,558 on each household in 1990 (Akbari, 1990).
Social impact of the Immigrant Population
The immigrant population in the United States and Canada has influenced culture in the two countries. “Initially, this was the basis of U.S. immigration: There existed an American identity, and people of all creeds and races could take on that identity. In other words, they could become Americanized” (Trumpet.com, 2005).
Immigration has resulted in erosion of the Americanization and introduced the melting pot phenomenon. California and New Mexico have adopted the use Spanish language while Lousiana has adopted French (Dicker, 2003). On the other hand, Chinese is widely spoken in some areas in Canada (Wang & Lo, 2003).
Immigrations has impacted the crime scene of both the US and Canada. The Department of Homeland Security(DHS) reveal that twenty percent of inmates in prison and jails are immigrants (Camarota & Vaughan, 2009). United States and Canada have both witnessed the increase in organized crime influenced by immigrants.
A good example is the Mafia crime saga that has continued to perplex many. Siderno Group a consortium of crime families including Coluccio, Commusso, Figliomeni is still operating in Canada (Humphreys, 2010). In the US, five crime families have been operating since the sixties, these are, Bonanno, Colombo, Gambino, Genovese and Lucchese (Hunt, 2011).
The United States and Canada have reaped much benefit from the immigrant community. The two governments need to adopt new policies that address immigrant issues.
Annotated Bibliography
Dukakis, M., & Mitchell, D. ( 2006). Raise Wages, Not Walls. The New York Times.
This Paper provides a political perspective on the role of the leaders on the immigration debate. It includes relevant evidence about the economic conditions of illegal immigrants in the United States. It addresses pertinent social justice issues that pertain to the plight of undocumented immigrants populations.
Fitzpatrick, M. (2008). Majority of recent immigrants to Canada have degree. Nationa Post.
This source describes the impact of immigration on the Canadian economy. It provides a comprehensive coverage of the Canadian immigration situation specifically the new immigrants and common immigration trends.
Hebert, R. (2011). The Contribution of Immigrants to Canada’s Tech Sector….and Why Politicians Must Pay Attention!
This source describes the development and evolution of immigrant owned enterprises in Canada. Special focus is on technology sector and the influence they have. It gives an outline of the contributions immigrant businesses have made to the Canadian economy. It gives a political twist to the inquiry of the key investors in Canada as well as listing the technology moguls.
Sassen, S., & Portes, A. (1993). Miami: A New Global City? Contemporary Sociology , 471-477.
This source outlines common concerns regarding illegal and undocumented immigrants in the united Sates. Highlights problems the immigrants face and advises on possible solutions. It is more of an advocacy website for the immigrants and gives a picture of public opinion on the issues the immigrants face.
Tory, J., & Deans, J. (2011). Ontario’s immigration debate isn’t getting the respect it deserves.
Describes the recent development of immigration in Canada, It adds a political perspective with special focus is on declining immigration in the country. It gives insight on the impact of immigration on the Canadian economy.
References
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Batalova, J., & Fix, M. (2008). College-Educated Immigrant Workers in the United States. Washington DC: Migration Policy Institute.
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Camarota, S. A., & Vaughan, J. (2009). Immigration and Crime: Assessing a Conflicted Issue. Web.
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Humphreys, A. (2010). A New Mafia: Crime families ruling Toronto, Italy. National Post.
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Myers, D. (2007). Immigrants and Boomers: Forging a New Social Contract for the Future of America. New York: Russell Sage Foundation.
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O’Carroll, P. P. (2006). Administrative Challenges Facing the Social Security Administration. (C. o. Finance, Interviewer).
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Ortega, A. N., Fang, H., Perez, V. H., Rizzo, J. A., Pokras, O. c., Wallace, S. P., et al. (2007). Health Care Access, Use of Services, and Experiences Among Undocumented Mexicans and Other Latinos. Archives of Internal Medicine , 167.
Passel, J. S., & D’Vera, C. (2009). A Portrait of Unauthorized Immigrants in the United States. Pew Hispanic Center.
Penney, R. (2010, July 8). Illegal Immigration: Symptoms vs Root Causes. Web.
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White House Council of Economic Advisors. (2007). Immigration’s Economic Impact. Washington DC: White House.
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