Sample Essay on Cuban Refugees are good for Economic Growth in Florida

Cuban Refugees are good for Economic Growth in Florida

Problem Statement

The highest numbers of Cubans refugees who have settled in the United States are in Florida, a state that is only 90 Miles from Cuba’s coast. Their movement to the United States was highly influenced by the periods of political repressions in their country. About 1.24 Million Cuban were living in the United States by the year 2008, where most of them lived in South Florida. The high number of Cuban refugees in Florida has enabled them to maintain their traditions customs and culture. This number also contributes greatly to the economic growth of Florida; they bring in additional revenues through international trade and improve productivity in by increasing the workforce in all sectors of the economy. Cuban Americans are part of the group of Florida’s foreign-born entrepreneurs and innovators. For instance, Quich Foods Company that was originally founded by a Cuban refugee, exports refrigerated and frozen foods. This Company is one of the ten biggest businesses owned by Latinos and founded by refugees that play a key role in increasing U.S exports. Moreover, Cuban refugees have provided a wide range of skills and enhanced the labor force increasing productivity and innovations in Florida, which has translated to a better economy (Saad, 2011).

Theory

Impact on International Trade

Refugees play a key role in increasing International trade. They enhance the flow of bilateral trade through various channels including the formation of Diaspora networks that pass on information. The networks help in decreasing barriers to information and costs of searching for information. Other channels through which refugees help in enhancing international trade are boosting the flow of foreign direct investments back to their home countries, increasing the level of incomes in the destination countries that changes the size of government in an economy, and the implementation of trade policies that support bilateral trade. All these channels are effective in increasing the amount of trade that happens between countries (Ghosh, & Enami, 2015).

Impact on productivity

The influx of refugees increases the pool of workers, which directly leads to a rise in productivity in an economy. The presence of a skilled workforce in companies leads to innovations; this affects the level of productivity with long-term effects in an economy. A pool of workers with various skills encourages them to specialize in jobs that they are more suited for and unique to them. Job specialization contributes to an increase in productivity allowing expansion of businesses. An increase in population leads to an increase in the overall productivity by increases the nation’s tax base providing the government more money to invest in innovative projects and spend on public goods such as roads that increase productivity. Furthermore, refugees increase the demand for locally produced goods and services; this increases the level of productivity to meet the increasing demand (Guest, 2011).

Empirical Evidence

International Trade

Huge amounts of literature evidence suggest that a complex relationship between immigration and international trade presently exists. Studies show that there is a direct relationship between refugees with the international trade because the costs of communicating and moving goods and services are reduced. In addition, refugees have a positive economic effect that enhances the growth of international trade. Studies across various disciplines indicate that refugees can generate a network of business connections and the sharing of languages, cultures, and tastes lead to an increase in trade between countries. Other studies suggest that refugees stimulate investments internationally which, influences international trade. This is confirmed by the high correlation between the flows of trade and the financial flow between countries (Steingress, 2015). These studies have been confirmed by various statistical studies. The highest percentage of the world purchasing power is outside the U.S at 70% while the about 95 percent of the world population is also outside the U.S. In addition, research indicates that about ninety-five percent of small to medium-sized businesses form the group that produces two-thirds of the total value of exports from Florida. Statistics indicates that business ventures that expand their operations to international markets increase their profitability by 12% and grow at a faster average rate of 15% (Ghosh, & Enami, 2015).

Impact on Productivity and Innovation           

Studies by the National Institute of Economics and Social Research (NIESR) indicate that increasing the share of refugees by one percent in a UK workforce results in an increase in labor productivity of about 0.06% to 0.07%.  The empirical analysis conducted by NIESR for companies in the UK on the relationship between an increase in their labor force and productivity from 2007 to 2009 confirmed the findings of earlier researches. These studies confirm that the presence of refugees increases the workforce in most sectors. Moreover, there are refugees who are more educated than natives in certain sectors are, and refugees tend to work more hours than the natives do. Productivity depends on certain drivers that increase the quality of production and quality of labor. Division of labor or specializations ensures that individuals apply their best skills in performing jobs. Studies show that the level of skills determines the time spent in accomplishing a task and the quality of the work performed. Studies also indicate that there is a relationship between the amount of labor available with the level and amount of skills (Piero, & Patrizia, 2013). This implies that the more the number of workers, the broader the types of skills that can be found within that pool of workers. The productivity of labor is measured in terms of gross domestic product per capita of the people employed in a country. Thus, productivity has a big correlation with the amount of the labor force. Refugees increase the quantity of labor and offer a variety of skills. For instance, innovations from skilled refugees lead to the inception of new businesses; the foreign-born population has started about thirty-seven percent of the new businesses in Florida. This makes Florida the third in the whole country as in terms of having businesses owned by immigrants. The annual incomes obtained from businesses started by refugees’ in Florida are at $ 13.3 annually (Manyika, Remes, & Woetzel, 2014).

Conclusion

The presence of a high number of Cuban refugees in Florida has led to economic growth. The increase in foreign trade and productivity due to the presence of refugees are some of the factors that have contributed to this growth.  Refugees through certain channels promote international trade; this is especially in bilateral trade between their native countries and the destination countries. The channels assist in passing on information through networks and enhance financial growth and more transactions that increase trade. The increase in the labor force through the presence of a high number of refugees improves the levels of productivity in a nation. The quantity of labor, the level of skills and division of labor are the key elements that determine the effect of labor on productivity. Therefore, refugees in Florida play a key role in influencing international trade and improving productivity, which translates to economic growth.

References

Ghosh, S., & Enami, A. (2015). Do refugee-immigrants affect international trade? Evidence from the world’s largest refugee case. Journal of Policy Modeling37(2), 291-307.

Guest, R. (2011). Population ageing, capital intensity and labour productivity.Pacific Economic Review16(3), 371-388.

Manyika, J., Remes, J., & Woetzel, J. (2014). A productivity perspective on the future of growth. McKinsey Quarterly.

Piero, M., & Patrizia, G. (2013). The Drivers Of Productivity. Комунальне господарство міст, (109), 292-303.

Saad, P. M. (2011). Demographic trends in Latin America and the Caribbean.Population Aging. Is Latin America Ready.

Steingress, W. (2015). The Causal Impact of Migration on US Trade: Evidence from a Natural Experiment (No. 9058). Institute for the Study of Labor (IZA).