Question

Research and find specific examples of immigrants working as a) substitutes for U.S. workers and b) compliments to U.S. workers. Make sure you put the correct graph with each story. Use examples different from the ones on this website. Ten bonus points go to anyone who comes up with a real example (with links to source material) that I haven’t looked at before.

Answer 1

a)Immigrant workers can either be substitutes or compliments for native born workers.Immigrant workers compete for same job with native born workers when they are substitutes .In a demand and supply model when more immigrants are there ,supply of labor increases.This causes wages to fall for workers who have same skill.Many immigrants may be low skilled workers and so the wages of native born low skill workers will fall.Same type of substitution occurs for high skilled workers.

b)When workers are complimentary an increases in immigrants will lead to increase in wages as well as better job opportunities for native born workers. So low skilled immigrants tends to reduce the production cost and increase the output of those goods which in turn increases the demand for high skilled workers.Example increase in housing construction has increased the demand for high skilled workers like electrician , plumber etc.