I'm a novice at macroeconomics, and trying to understand the effect of immigration (from developing nations) on the economy of a developed nation. Specifically, I am considering the effect when the nation itself does not have full employment.
So, from what I have read, immigration is a positive thing for the economy in general. The increase in workforce capacity means that production can increase, therefore exports increase, and therefore the economy grows.
However, what if the nation does not have full employment? In this case, there is already a section of society (let's say 5%) which is available to work. This would suggest that there are actually not enough jobs around, and so any immigrants arriving will also not have any jobs. If there had been any jobs for the immigrants to take, then employment wouldn't be at the 5% level. Despite this however, all developed nations have at least some level of unemployment, yet immigration is still beneficial. Why is this?
My suggestions are the following:
Immigrants from developing nations tend to be happier to take on unattractive jobs, which citizens of the developed country may refuse to do. Therefore, whilst the citizens remain unemployed and live off benefits, the immigrants will take on "newly created" jobs which would otherwise not have existed, boosting the economy.
The 5% unemployment rate is actually due to people who are sick / disabled / otherwise unable to work. Therefore, assuming the immigrants are able to work, again there will be new jobs created which would otherwise not have existed.
Higher immigration creates more competition for jobs, causing wages to decrease and allowing companies to pay their employees less. Therefore, the nation's companies make more money, and this causes the economy to grow.
Are any of these correct, or reasonable suggestions? Or are there any other thoughts? Thanks!
Alternatively, is my hypothesis that immigration typically boosts the economy not, in fact, correct?!