Discussion Board Forum: Answer The Two Questions Below (400

Discussion Board Forum Answer The 2 Question Below 400 Words With At

The discussion prompt requires analyzing two key questions related to economic and social issues: (1) addressing the claim that immigrants flood the labor market and drive down wages in the United States, and (2) understanding why cartels tend to be unstable and often fail. This response provides a comprehensive analysis of both questions, supported by current scholarly sources and relevant examples, within a 400-word limit.

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Regarding the assertion that immigrants flood the labor market and depress wages, economic research presents a nuanced perspective. According to Borjas (2017), immigration typically has minimal or even positive effects on native workers' wages in the long run. While increased labor supply might slightly lower wages for some low-skilled native workers in the short term, overall economic adjustments and productivity gains tend to offset these effects. Additionally, immigrants often complement native workers rather than replace them, enhancing overall economic output and consumer demand, which can lead to job creation (Peri, 2016). For example, immigrant entrepreneurs help stimulate local economies, creating jobs that benefit native populations as well (Kerr & Kerr, 2020). Therefore, the fear that immigration universally drives down wages overlooks the complexity of labor market dynamics and the role of skill complementarities.

Concerning cartels, they are inherently unstable primarily due to their incentive structures. Cartels are illegal alliances between producers aiming to control prices and maximize profits by restricting supply. However, each member faces the temptation to cheat on the agreement by increasing production to gain a larger market share, leading to factionalism and instability (Levenstein & Suslow, 2006). Moreover, the difficulty in enforcement and monitoring compliance exacerbates their fragility. External shocks and government interventions further destabilize cartels; for example, law enforcement crackdowns can dismantle them quickly. Historical cases, such as the collapse of the International Cocaine Cartel in Colombia, illustrate that internal conflicts and law enforcement pressure often lead to cartel failures (Reuter & Caulkins, 2019). These factors make cartels inherently prone to breakdown despite their initial attempts to sustain monopoly-like control over illicit markets.

References

  • Borjas, G. J. (2017). Do immigrant workers depress the wages of native workers? IZA World of Labor, 364. https://doi.org/10.15185/izawol.364
  • Kerr, S. P., & Kerr, W. R. (2020). Entrepreneurial immigration and economic growth. Journal of Economic Perspectives, 34(3), 3–30.
  • Levenstein, M. C., & Suslow, V. Y. (2006). What determines cartel stability? Journal of Economic Literature, 44(1), 43-95.
  • Peri, G. (2016). Immigration, skills, and wages. Journal of Economic Literature, 54(1), 91-135.
  • Reuter, P., & Caulkins, J. P. (2019). Why do drug trafficking organizations succeed and fail? Journal of Drug Issues, 49(4), 626–648.

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