Many social scientists regard America as a multi cultural society. 31 million people were recorded as born in a foreign land in the 2000 Census. This corresponds to 12% of the population. Up to date, America remains the major destination for immigrants from the developing countries (Kim, 2007). The total scale of migratory flows into America, the phase over which substantial migratory inflows have taken place and the variety of immigrants in terms original countries, marks US as an exclusive host nation to study in terms of the economic effects of migration on the natives in the host country, migrants themselves, and home country economies (Friedberg & Hunt, 1995).

Mass migration started after the industrial revolution. Most of the people were travelling to the urban areas in search of jobs. People from the underdeveloped countries travelled to the developed countries also in search of work. In the industrial revolution period, many factories were built. This increased the demand for labor but labor was readily available. Most of the people had shifted to the urban areas in search of employment. The urban areas flocked with unemployed people (Kim, 2007). This made labor to be cheap. Employers could set wages as low as 10 cents an hour.  In addition, most of these people were unskilled and thus lacked a bargaining ground. Women would receive a third of what men received and children even received less.

Working for long hour with little pay can be attributed to low productivity. The workers had no motivation lowering their productivity. In addition, most of the workers were unskilled. With the revolution, the economy also revolutionized. Starting and running factories become expensive in terms of capital. With high capital and high unskilled and underpaid labor, the yield was low productivity. Low productivity translated to low profits. Instead of solving the labor problem, the factories increased the working hours. This from a utilities argument will lower the productivity.

With industrialization and immigration, cities grew at a high rate. This led to the rise of new social problems and the need for reforms. New immigrants settled in ethnic neighborhoods and used networking skills within their cultural backgrounds to find employment and survive. Most of the cities became divided between different classes and only connected by mass transit. The political elites used their political machines to bribe immigrants for their votes.

In the labor market, the immigrants and the natives were substitutes. The immigrants accepted lower wages thus lowering the wage rates in the market. However, with time, the immigrants wage rates grew but at a slow rate as compared to natives wage rates. Studies show that the immigrants were occupationally, geographically and financially mobile.

During the era of mass immigration, America turned from rural to urban nation. It is interesting to note that urban growth reduced considerably after the mass immigration ended. In 1820, 93% of the population lived in rural areas but by 1920, 51% of the population resided in cities. In the succeeding decades, the rate of urban dwellers rose moderately to 57% in 1940 and then to 64% in 1960 (Friedberg & Hunt, 1995). The immigrants concentrated in cities to take advantage of the ethnic externalities. The immigrants were searching for employment thus settled in cities. When other immigrated, it was easy to settle in cities where there were people from their ethnic backgrounds. The networks between the immigrants facilitated the flow of information about the labor market and the skills required.

Kim (2007) suggests that the rise 9of the division of labor was the cause of the concentration of workers and firms in urban areas as the firms attempted to reduce the labor matching cost. Though most of the immigrants came from rural areas, they became city dwellers in America.

Friedberg & Hunt (1995) concluded that the effects of immigration on the labor market are small. They argue that an experimental analysis of America reveals that a 10% increase in the number of immigrants in the population reduces native wages by only 1% (Kim, 2007). Theoretical literature on economic growth and immigration reveals that the effect on the income of the natives depends on the human capital levels.

After the industrial revolution, most of the people both natives and foreigners migrated to the urban areas in search of work in the industries and factories. However, with the oversupply of labor, the wages were very low. In addition, the immigration of foreigners to the U.S. often led to a reduction of wages for the natives (Kim, 2007). This can be understood as an effect of labor oversupply. The immigrants were willing to work for low wages and the industries were looking to minimize costs.  The immigrants considered the wages better than back home.

References

Friedberg, R. M., & Hunt, J. (1995). The impact of immigrants on host country wages, employment and growth. The Journal of Economic Perspectives, 9(2), 23-44.

Kim, S. (2007). Immigration, industrial revolution and urban growth in the United States, 1820-1920: Factor endowments, technology and geography (No. w12900). National Bureau of Economic Research.

 
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