Lecture 13: Immigrants and the American Workforce


1.  A key to understanding people’s behavior is figuring out the incentives they face.

2.  Economic freedom, rule of law, and well-defined property rights promote growth and prosperity.

6.  Government is the arena of competition among interest groups.

7.  Worker mobility and competition among employers prevent exploitation of workers.

ECONOMIC CONCEPTS that support the historical analysis:

Opportunity Cost
Labor Markets
Supply and Demand
Expected Benefits v. Expected Costs
Business Cycles



History Standards (from National Standards for History by the National Center for History in the Schools)

Era 6 – 2:  The student understands massive immigration after 1870 and how new social patterns, conflicts, and ideas of national unity developed amid growing cultural diversity

Era 6 – 3:  The student understands the rise of the American labor movement & how political issues reflected social & economic changes

Era 7 – 1:  The student understands how Progressives and others addressed problems of industrial capitalism, urbanization, and political corruption

Era 10 – 2:  The student understands economic, social, and cultural developments in contemporary United States

Economics Standards (from Voluntary National Content Standards in Economics)

Standard 2:  Effective decision making requires comparing the additional costs of alternatives with the additional benefits. Most choices involve doing a little more or a little less of something; few choices are all-or-nothing decisions.

Standard 4:  People respond predictably to positive and negative incentives.

Standard 13:  Income for most people is determined by the market value of the productive resources they sell. What workers earn depends, primarily, on the market value of what they produce and how productive they are.


  • Immigration to the U.S. has enhanced global economic efficiency by moving people from economies with lower levels of resources per worker to an economy with high levels of resources per worker; from low productivity economies to a high productivity economy.
  • Potential immigrants weigh economic and non-economic benefits versus costs in deciding whether to move, where to move, when to move and what occupational sectors to enter.
  • Immigrants have had a complex impact on U.S. economy. Owners of land and capital almost always benefit from immigration, but the impact on native-born workers is more complex because immigrants are substitutes for some workers (dampening their wages), but complements for other workers (boosting their wages).
  • Accurately measuring the overall impacts of immigration is virtually impossible, making it the subject of intense, continuing debates.
  • American labor markets have been very open and flexible in integrating immigrants into the economy.
  • Although the U.S. has been unusually open to immigration, the four R’s (race, religion, radicalism, and recessions) have been instrumental in determining the types and timing of immigration restrictions and anti-immigrant sentiment.