In this article, Cowen (2010) argues that there is a need for Americans to put more emphasis on the macroeconomic perspective of immigration opposed to adoption of a strong negative sentiment against immigrants. The article provides the contemporary view on immigration process in the United States and how this view has been constructed culturally by conservative Americans preferring to maintain a pure society free of immigrants. Generally speaking, Cowen (2010) highlights the benefits that immigration has brought to the United States of America and exactly how native Americans have profited from outsourcing. Thus, as much as immigration remains one of the most critical aspects affecting Americans, especially in the terms of the recent recession, there are positive gains that have been received from it, which deserve to be declared.
Firstly, there is an interesting issue that the active competition for employment is between immigrants and off-shored workers in contrast to the American laborers. This view is heavily expressed by two professors of Economics, Gianmarco and Giovanni, who assert that immigration reduces the need for companies to hire workers or professionals from off-shore locations (Cowen, 2010). According to this point, when American companies move their production to off-shore locations, this leads actually to the transferring of low wages for both unskilled and highly qualified employees in these locations. In this matter, the immigration processes adequately turn this phenomenon towards to retaining the unskilled workersr in the United States. This point of view supports essentially the fact that immigration is actually salutary for America because it ensures that skilled labors, which create the majority of America’s labor-market, is fully utilized in the result of addressing the menace of unemployment.
Indeed, Cowen’s point of view can be attributed to changes in macroeconomics because of the logical exchange that is evident from an economic perspective. However, Cowen’s argument also provides the view on the majority of American people who vigorously subscribe to belief that immigration is making worse the problem of unemployment. For instance, 77 percent of Americans believe in off-shoring to degrade employment, while 13 percent suppose that it brings positive gains. And 55 percent consider that immigration has decreased opportunities, while 28 percent believe that it has been beneficial (Olney, 2011). These statistics could also be supported by the pressure caused by the recent recession, which drove the majority of workers to lose their job. In this regard, Cowen’s position could be justified by the fact that American citizens have to cope with the new competitive nature provided by immigrants. Nevertheless, it is important to acknowledge that the measuring productivity from immigration and off-shoring is not a straight sequential task because it requires adequate condition for an accurate economic benefits that have been accrued from the ventures.
The expectation is that immigration and off-shoring should provide Americans with benefits in terms of increasing amount of Americans who get economical gains from the interaction between these two approaches. Hence, taking into consideration Cowen’s example of India, it is difficult to assess the direct benefits under such circumstances. Moreover, the effect of productivity from immigration is hard to evaluate. The wages for broken countries are essentially earned by the immigrants as opposed to the domestic firms (Olney, 2011). Additionally, the concept of immigration and off-shoring can be used to determine the extent to which the economy is able to accommodate a new labor force whether on formal or informal basis.
The long-term influence of immigration and off-shoring opportunities will be an improved economic activity in the country. This improvement will encourage local Americans to become actively engaged into the nation building processes. Olney (2011) asserts that immigration and off-shoring provide a unique opportunity to establish the productivity effect of the local economy. In fact, the influx of immigrants into the USA should be used to indicate significant economic gain, which will further attract more foreigners to come to look for opportunities, especially when the outcomes are favorable. This will transform eventually the United States into a regional economic center by benefiting from the diverse skills in its labor-market. Thus, when the competition reaches such levels, the positive growth will be witnessed in the relevant sectors of the economy. With the lapse of time, this will become reliable economic index of the growth levels dimension in the U.S.
Secondly, it is also clear that there is a favorable aspect regarding the translocation of production processes to a non-US location. When this happens, there is a value effect that the same products will eventually be resold back to the the United States. The author gives an example of Indian-based franchise of Dell setting up a new production unit in the U.S. prompted by the establishment of a call-center in India for the sales purpose of marketing the products to consumers of the United States (Cowen, 2010). This rationale is an interesting one given the fact that while establishing industries in non-American locations, part of the skilled labors is required to support the core functions that will also provide losses in the non-US location. Thus, while off-shoring there is a retaliatory effect that will be felt in the source countries. The aim is to recreate the existing balance of trade.
In my opinion, if this concept was to be applied in the local context it would be easy to associate the economic benefits with the actual local consumption of the products. According to the Holstein (2010) observations, some of American largest corporations have set up major off-shore establishments and, at the present get benefits from international sales account for 60%, 70%, and 80% of sales respectively. However, in as much as off-shoring could be having a complimentary effect at the local level through future trade exchange, the accrued monetary benefits can not be directly correlated to the products to be sold because of the actual earnings go to the human resource of the country where the off-shore company is located. Furthermore, this point of view fails knowledge of the challenges that may be faced while setting up an off-shore entity.
The long standing impact of the view that off-shore establishments have a positive economic impact on the local level is the enhancement of off-shore trading approaches which neglect the local market. This implies that innocent American citizens will be subjected to increasing unemployment. The point of view will make also weaken the fact that in America, there are unskilled persons as well who need to be absorbed into the informal sector. In addition, this point may eventually lead to the development of reliance among individuals not living in off-shore locations while undermining the internal trade capacity. Holstein (2011) further adds that there is a need for companies to rethink their expansion strategies. The aim of pursuing alternative mechanisms is to maximize the available human resources at the local level.
Thirdly, the notion of competition between locals and foreigners has been reviewed with regard to the aggression and rejection pointed at the foreigners on the basis of belief that they are decreasing the platform for healthy competition. Cowen (2010) effectively brands this strategy as being protectant in which even the governmental authorities are involved in safeguarding the citizens from possible exploitation. This can be viewed as more of an escapee approach in which the affected natives make immigrants scapegoats for their socio-economical problems. Virtually, what needs to be done is to face the reality that competition is salutary for the formal growth of economy of the country.
There is an ironic twist in the protectionist approach pursued by the United States citizens against foreigners. Given the fact the United States own some of the largest and the most successful enterprises, the foreign investment strategies have been used historically to expand their operations in other parts of the world. As such, the United States is not justified in its utilization of this protective approach towards to the other nations. Holstein (2010) observed that for a period of more than 30 years, China invited countries such as U.S. to set up industrial establishments in their countries, and recently the governmental authorities started demanding for the recognition of China’s intellectual property among the other factors. In this regard, Cowen’s assertion that there is a protectionist approach does not seem to be well-balanced because it fails to take into account adequately all sides of the story. I believe that Americans can not be so unwelcomed to foreigners when they have one of the most comprehensive foreign policy, which do not prioritize aggressive mechanisms.
Finally, the long-standing impact of maintaining this point of view will be the increasing destruction in foreign relations with its international community. Generally speaking, what is required is to change the strategy of the most American citizens and to accept the fact that competitive framework in skilled and unskilled labor-market will continue reflecting preference for foreign labor taking no regard to the used approaches. As a leading economy in the world, there are exact challenges for the United States to continue to cope with this struggle to maintain a suitable equilibrium.