The Refugee Executive Order (Part 7)

This is the last post in our series on the executive order.

Image result for refugee getting jobs

Two women sit a table reading papers in a folder as they undergo employment readiness training.

How will refugees affect the economy?

Here is what Noah Smith, a writer for Bloomberg, wrote :

Immigrants of all stripes obviously increase a country’s total gross domestic product. More people equals more production overall, which also means a larger tax base. Its effect on per capita GDP is more ambiguous, since that depends on whether the immigrants have higher or lower skill levels than the native populations that they join. If you import a bunch of engineers, local average income probably will go up, simply because engineers tend to make more money. If you import a bunch of farmworkers, the opposite will happen.

There is some legitimate economic concern here. Low wage workers can have an adverse impact on the economy. We must keep in mind that the negative impact is not universal.

Miami, FL

Image result for 1990s 125,000 Cubans came to the U.S

In the 1990s 125,000 Cubans came to the U.S. during the Mariel Boatlift crisis which increased Miami’s labor force by 7 percent. These immigrants were “relatively unskilled.” Economist David Card studied the impact of this influx and found that the influx “had virtually no effect on the wages or unemployment rates of less-skilled workers, even among Cubans who had immigrated earlier.”

Card’s findings are not unique. Studies performed in Denmark, Uganda, and even Cleveland show that refugees have neural and sometimes positive effects on a community’s economy and wages.

Cleveland, OH

Let’s look at the study done in the Cleveland area. The city took in 4,518 refugees from 2000-2012. Refugees started 38 businesses with a total of 141 employees.  The same refugees also contributed $1.8 million in tax revenue for the state of Ohio in 2012.

The study says,

Research provides evidence that refugees are highly motivated and wish to give back to their host country. Refugees are more likely to be entrepreneurial and enjoy higher rates of successful business ventures compared to natives. The literature also supports the argument that immigrants in general do not take jobs away from natives and that the diversity of skilled immigration can positively impact the income and productivity of welcoming nations. At the local level, refugees provide increased demand for goods and services through their new purchasing power and can be particularly revitalizing in communities that otherwise have a declining population.

Refugees can positively impact the economy. The key is to locate refugees in areas that are similar to their previous environment and place them in jobs they are trained to perform.

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