The reduction and aging of the population in developed countries inevitably leads to a need in foreign labor, which, in turn, causes heated debates around the issue of immigration. Prevalent A view, according to which immigration is considered the cause of rising unemployment, falling of wages among the indigenous population, increasing social spending, and the growing threat of terrorism and other problems are widely spread. However, many researchers consider immigration as a way of filling in a missing workforce that contributes to the economic development of the host countries. There is a labor shortage, because of the decrease in the birth rate among the indigenous population, as well as the reduction of its population and aging in the developed countries.
The societies and the states help pensioners to prolong and improve their lives, as they create the necessary conditions for them. However, it means that the tax burden on workers, whose number is steadily declining in developed countries, becomes excessive. The problem would be many times sharper without foreign labor. According to the UN, “numbers of immigrants worldwide have reached 191 million, 60% live in developed countries, nearly half the count are women and 20% of all immigrants live in the US” (“The US tops UN study on global immigration”, 2006). Many scientists state that the positive impact of immigration on the economy is determined by its direct connection with the four factors that lead to economic growth – more people, more capital equipment, technological change that raises the productivity of labor and capital, and the rule of law.
Immigration and the Factors of Economic Growth
· More people. The downsizing and aging of a population, as well as the changing of the proportions between its able-bodied and disabled parts in favor of the second, are the arguments in favor of attracting labor from the number of immigrants. Furthermore, often migrant workers due to their low level of professionalism take place at the lowest rung of the ladder of employment. Locals can hold prestigious jobs in accordance with their education. Immigration increases the flexibility of the labor market and positively affects it even at a high initial level of unemployment. Filling empty niches, immigrants contribute to more effective use, as well as the growth of skilled local personnel, thus increasing labor productivity.
· More capital equipment and technological change. Immigration has a positive impact on the development of any production. It supports the investment industry. In addition, many employers are showing interest primarily in high-skilled immigrants. The latter fact promotes various industries and science, contributing to the improvement of the material and technical bases and equipment upgrades. As noted by Kenny (2012), “High-tech industries probably have the most to gain from the action on immigration”. For example, immigrants participated in the creation of such giant companies like Google and Yahoo (Lofgren, 2011).
· The rule of law. The influx of a large number of immigrants requires the development of the legislative framework in the host country, as immigrants working for a particular country have all the right to a fair distribution of benefits and resources. States are required to improve the legal system, allowing immigrants and the indigenous population to harmoniously coexist on equal terms within the state.
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My personal experience also confirms the favorable impact of immigrants on the economy. For example, one of my friends is a native of India. This young man has been studying IT technologies for more than five years. Today he works in an IT company quite successfully. He has all the chances of a serious increase in the corporate ladder. Initially, he worked in the company as a junior programmer, but his professionalism and skills allow him to rely on a speedy promotion. He is a very talented programmer who invented a rather interesting software application that can be of great help for office workers in their work. Thus, my friend is an example of how immigrants can contribute to technological development in a particular industry.
It does not make sense to deny the fact that immigration is positive for the economy of various countries. The positive impact of immigrants is observed at different levels and in different sectors of the economy. It must be said that entrepreneurial activity is more common among foreigners than among the local population. Ethnic businesses have the greatest development in the service and trade, especially in cleaning the streets and premises, as well as in restaurants, hotel and tourism kinds of business. Overall, immigration has a positive impact on the development of any production. The natural rate of unemployment among unskilled workers is higher than among skilled ones. Foreigners may retain and create more jobs than they may take. The impact of immigration on the budget is estimated as small. Moreover, the total impact of immigration on the budget is rather positive. Immigration favors more efficient use of resources, not only labor but also financial. Hence, it contributes to the overall efficiency of the economy.
The main problem lies in a large number of illegal immigrants. States are required to perform two main tasks. The first is to control the number of immigrants who arrive in accordance with the capabilities of the country. An excessively large number of immigrants may have the opposite (negative) impact on the economy. The second tack is connected with the need to provide illegal immigrants with a legitimate reason for their life and work in the country. The state should create the necessary conditions for the harmonious coexistence of immigrants with the indigenous population.