Running head: Impact of Immigration on the US Workforce

Impact of Immigration on the US Workforce

Saint Leo University
Human Resource in Management MBA 533 MB01
April 02, 2016

Impact of Immigration on the US Workforce

The current state of immigration has been the subject of many news articles, and political
campaigns that seek to reform or improve the current immigration system in the US. This paper

Impact of Immigration on the US Workforce

provides an overview of the current issues with immigration concerning its impact to the US
workforce. Although the paper will not provide a complete background on immigration policy, it
will use as starting point the Immigration Reform and Control Act of 1996 to explain the current
situation of the legislation. Moreover, this paper will also cover the impact that immigration has
on native wages when comparing skills and education of national workers and immigrants.
Furthermore, this piece will also elaborate on the importance of workforce diversity and how
human resources professionals need to understand the impact of immigration on the workforce
and its impact on the organizational culture.
Immigration policies are sole responsibilities of the federal government and therefore will
be as their discretion as an instrument of policymaking (Briggs Jr., 1999). Current government
regulations limit any foreign born person to enter, work, or seek refuge in the country without
explicit permission of the federal government (Briggs Jr., 1999). Likewise, the federal
government also protects foreign workers against discrimination practices from employers
(Ivancevich & Konopaske, 2012).
The Immigration Reform and Control Act of 1996 put employers in charge of controlling
and limiting the influx of illegal immigrants from seeking employment opportunities in the US.
By transferring this responsibility to employers, the government allows organizations to be the
enforcer of the law screen all applicants eligibility for lawful employment (Ivancevich &
Konopaske, 2012). Because of the constant change of immigration laws and because of the
implications that temporary work permits or temporary workers have, the employer is required to
maintain records that demonstrate employment authorization (Ivancevich & Konopaske,
2012). Recently, there have been many immigration initiatives, which include a change in the EVerify system. From 2011, the system now allows employees to voluntarily check their

Impact of Immigration on the US Workforce

employment eligibly. In the same year, the Legal Arizona Workers Act was passed as a way to
stop the influx of immigrant workers in the state and penalized organization that employed
illegal immigrant by revoking their business licenses. Likewise, in 2014 President Obama using
an executive order put in place two programs that will grant legal status to almost 5 million
immigrants in the US, however, this executive order is currently on hold and awaiting a Supreme
Court of the United States review.
As observed by this student, immigration is a current issue and disregarding the outcome
of the Supreme Court, it is an undeniable fact that this decision will have a huge impact on the
US workforce. According to Briggs Jr., (1999), immigrants will account for 67% of the
population growth by 2050. Therefore, immigrant will have a dominant influence in human
resource development (Briggs Jr., 1999). Although the data available is inconclusive, Briggs Jr.,
(1999), believes that the foreign-born workforce is mostly composed of men and is younger than
the native-born population. If further research of this data proves to be right, then the impact of
immigration on the US workforce would be greater than what is reveled by statistics.
Briggs Jr., (1999), mentions that one of the principal characteristics of this new labor
workforce is that is composed by low skilled workers that have little human capital. Although
there have been recent changes in how an important number of immigrants now posses high
level of education and skills, the statement holds true it holds true based on the population
percentages.
For the native workforce, the low-skilled population segment has the greatest difficulty finding
employment, thus adding an important number of immigrant workers to compete for
opportunities in the low-skilled ladder will have a massive impact on the workforce composition
and could have significant effects on society by widening income disparities.

Impact of Immigration on the US Workforce

Empirical research shows that there is a link between manufacturing jobs and
immigration (Borjas, The Analytics of the Wage effect of Immigration, 2009). As manufacturing
opportunities diminish in the country, so are employment opportunities for blue-collar
employees. As the demand for labor of a certain type of workers has changed over time, the
characteristic of the workforce has not, which contributes to the need of a comprehensive
immigration reform that addresses the issues and reverses the current upside cost-benefit
equation.
As the current legal framework and situation of immigration shows, the impact of foreign
workers is wide and has an important effect on wages. The next section of this paper will cover
the impact that immigration has on native wages when comparing skills and education of
national workers and immigrants.
Barcellos (2010), states that there has been a great increase of immigrants in the US since
2007 and, therefore, the relation of native workers wages have changed because of the new
immigration. Likewise, Wagner (2010) contents that the most controversial issue of the
immigration is needs to measure up to what degree immigrant workers displace native workers
and affects their wages. Moreover, Barcellos (2010) argues that immigration does not affect
wages but contrary are wages that have an impact on immigration. Furthermore, and because of
immigration there is a temporary native worker migration to other locales until wages reach a
normal level. Borjas, Freeman, and Katz (1996) maintain that immigration could be study as a
good, and therefore laws of supply and demand apply. Moreover, they argue that immigration is
an elastic good, because of changing in demand affect prices, or in this case wages. Furthermore,
Wagner (2010) states that as a good with plenty of substitutes that immigration will affect
demand for other goods in other industries. As manufacturing jobs increase, there is a direct

Impact of Immigration on the US Workforce

adverse impact on job opportunities in the services sector because of immigration (Wagner,
2010). Conversely, the demand of native workers will be affected depending on the capacity of
substitution that the labor force has for a specific position. If the supply of the workforce whether
they are immigrant or native workers, surpasses the demand for job opportunities, then
organizations could potentially lower wages, to the point where native workers are better off
moving to another area. Wagner (2010) states, that this behavior is clearly observed between the
manufacturing and the service industries in manufacturing, we can expect high elasticity of
demand because of trading, while in the service industry output is constrained by local
demand, and therefore a low elasticity of demand (Wagner, 2010).
The subject of the effect on immigration on wages is still a subject that needs more
investigation because the effects vary according to the industry and the types of native labor
available. Wagner (2010) explains that there seems to be confusion on whether immigration has
an effect on wages or the subject is being treated as an inequality issue instead of a supply and
demand issue. On the other hand, Barcellos (2010) claims that concerns regarding and wages are
immigration and unfounded because there is no clear evidence that a great influx of immigrants
to a certain region will have a different effect that an influx of native workers.
As explained by Barcellos (2010) and Wagner (2010) the direct effect of immigration on
wages needs more research to prove that a relationship between both exists. However, in the next
section of the paper this student will examine the subject of diversity in the workforce where
immigration plays an important role for the organization human resources and in the
organizational culture.
According to Ivancevich and Konopaske (2012), diversity could be defined as the
mixture of differences and similarities that exists in the workplace. Moreover, Prewitt (2002),

Impact of Immigration on the US Workforce

states that there is a misconception regarding diversity and that only applies to demographics.
However, as he explains, diversity includes more than demographics and the subject addresses
how people differ, but also understand their similarities. Furthermore, Ivancevich and
Konopaske (2012) described diversity as the people that make up todays workforce.
For businesses as well as for human resource managers are important to pay close
attention to workforce diversity because the effects that it has on the organization. The current
trend is that in the near future organizations will have an increase in workforce diversity,
therefore the need of creating an environment that values differences and similarities among
employees (Ivancevich & Konopaske, 2012). From the information explained in the previous
two sections is clear for the student that workforce diversity will increase because of the
immigration, and its effect on the workforce composition. Changes in society force organizations
to make changes to accommodate for a more diverse workforce, however, is not a common
practice for organization to changes their structures and policies because of the practical
consequences of diversity initiatives to help organizations to incorporate employees with
different backgrounds. (van Ewijk,, 2011). It is clear that organizations involve differences and
similarities, however, organizations can work in diversity in two ways. First, as a way to help
individuals, and ensuring that equal opportunities exist, and the second one as groups, which will
support the idea that these groups of individuals are valuable on the organization (van Ewijk,,
2011). These two possibilities are important for the organizations because they will help the
organization to create policies that are directed to neutralize differences as individuals or to
simple recognize them as valid groups within the organization. Furthermore, the individual
approach tends to address the concept of equal opportunities, therefore van Ewijk (2011)

Impact of Immigration on the US Workforce

explains that by addressing and recognizing differences employees will feel motivated and this
will result in a in a richer, more creative and more productive work environment.
A negative aspect of diversity in the workplace is the explored by Wilson (2014). He
explains that while diversity and equal opportunities are well received, there is a glass ceiling for
non-native workers within organizations. There is evidence that shows that diversity, which
include immigration is lacking at the top levels of organizations in the US (Wilson, 2014). As
stated in the first section of this paper, as a general statement, immigrant workers are usually low
skilled, therefore the expectation of immigrants in top position in corporate America are slim.
Nonetheless, organizations cannot discourage employees to better themselves and reach full
potential; not only this will help with motivation and productivity, but also will help the
organization to have a well-prepared workforce. Regarding this subject, Roldan and Stem (2006)
states that is no longer sufficient for minorities to have a fleeting dream of success, it is
essential to create a personal success plan. On the other hand, diversity has a positive impact in
organization because when employees bring different background and cultures, their analytics
framework allows organization to explore problems from a variety of perspectives (Martin,
2014). Furthermore, as globalization keeps moving forward, the probabilities of working in a
diverse environment increases, therefore and as explained by Martin (2014), the opportunity of
working within a diverse group helps all tem members to overcome cultural differences through
shared experiences.
On the employees level, workers entering a new workplace culture or organizations with
global agendas will expose their employees to experience some degree of culture shock.
Workforce diversity helps personnel to overcome it as business expands in other countries or
becomes international (Martin, 2014). This benefit is linked directly to immigration and diversity

Impact of Immigration on the US Workforce

because allows employees from a diverse workforce to use the information and knowledge of
the individual workers to achieve objectives and overcome obstacles (Martin, 2014). Similarly,
a diverse workforce is useful for the organization because will keep employees and managers
informed about the culture of their respective countries. Moreover, since diversity programs add
cost for the organizations, having a culturally diverse workforce could not only cost, but also
support the integrations efforts from the organizations.
There are negatives and positive impacts that are related to immigration and how is
changing a homogeneous labor force into a more diverse workforce. As observed by this student
negative impacts affect productivity, and promote conflicts. On the other hand, the positive
aspects of a diverse workforce outweighs its negatives by providing organizations with
employees that help to reduce cultural shock, and that supports the organizations efforts to
establish a global business. Martin (2014) states that with proper strategic planning, top
management can enhance the positive effects and reduce the negative effects of cultural diversity
in the workplace. Although researchers and the media boast about the benefits of cultural
diversity in the workplace, there is very little proof or examples, other than theories that shows
the benefits of workplace diversity.
In conclusion, this student observed that immigration has an undoubted effect in
organizations. The US, honoring its traditions along with Australia is ranked among the most
receptive countries in the world regarding immigration (Briggs Jr., 1999). The current legal
framework, under certain circumstances allow immigrants to work in the US, however future
developments in this area might have an impact on immigration and the workforce. Moreover,
the composition of the non-native workforce is changing as more prepared, more educated, and
more skilled nonnative workforce enters the country and replacing workers with little human

Impact of Immigration on the US Workforce

capital. After a review of the available literature, this student concludes that there is no sufficient
evidence that sustain claims that immigration affects wages of native workers. Moreover,
researchers suggest that there is an inverse relationship between wages and immigration because
when wages rise; immigration rises as well, which potentially could push out native workers to
others areas. Borjas, Freeman, and Katz (1996) suggested that in order to understand the impact
of immigration on wages, immigrations needs to be treated as an elastic good, where changes in
demand will affect prices, or in this case will affect wages. Many researchers agree that there is a
need of further research in this area to prove the impact of immigration on native workers wages
because of the characteristics of immigration and its mobility there is no clear indication that
immigration has a positive or negative effect on wages. Lastly, this student concludes that there
is an effect from immigration on diversity. However, since diversification encompasses many
other aspects, demographics, and not only nationality, the impact direct impact of immigration on
diversification is hard to quantify. However all researcher agree that in theory, workforce
diversification seem to be beneficial for the organization, however, there is little evidence that
the statement holds true, and if so, research and data is needed on the subject.
Although the subject of immigration seems to be a straight forward subject to analyze
where considering only non-foreigners coming to the US, its ramifications are far and beyond
because immigration has an impact on many aspects of the organization as well as in many
aspects of life.

References
Barcellos, S. H. (2010). The Dynamics of Immigration and Wages. Rand Labor and Population.
Borjas, G. J. (2009). The Analytics of the Wage effect of Immigration. NBER.

Impact of Immigration on the US Workforce

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Borjas, G. J., Freeman, R. B., & Lawrence, K. F. (1996). Searching for the Effect of Immigration
on the Labor Market. American Economic Review, 246-251.
Briggs Jr., V. M. (1999). Immigration Policy and Human Resource Develpment. HR Spectrum, 14.
Ivancevich, J., & Konopaske, R. (2012). Human Resource Management (12 ed.). New York, NY:
McGraw-Hill Irwin.
Martin, G. C. (2014). The effects of cultural diversity in the workplace. Journal of Diversity
Management.
Prewitt, K. (2002). Demography, Diversity, and Democracy: The 2000 Census Story. The
Brookings Review, 6-9.
Roldan, K. A., & Stern, G. M. (2006). MInority rules: Turn your ethnicity into a competitive
edge.
van Ewijk,, A. R. (2011). Diversity and diversity policy: Diving into fundamental differences.
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Wagner, M. (2010). The Hetereogeneous Labor Market Effects of Immigration.
Wilson, E. M. (2014). Diversity, Culture, and the Glass Ceiling. Journal of Cultural Diversity,.