Answer :
Final answer:
In the short run, unrestrained migration to the United States with capital in fixed supply is likely to hurt workers due to a decrease in wage rates. Capital owners may benefit from lower labor costs. So, the correct answer is option A workers.
Explanation:
Regarding immigration's impact on the United States, if the country has more capital per worker compared to Central America and capital is in fixed supply, the influx of labor from unrestrained migration is likely to affect wages due to the short-term increase in labor supply. According to economic theories, in the short run, the increase in labor supply when capital is fixed results in a decrease in the wage rate, impacting native workers negatively as their wages would fall. Capital owners, on the other hand, could see an increase in their consumer surplus due to the lower wage rates paid to workers. Therefore, in such a scenario, the group that is hurt by the immigration in the United States would likely be the workers.
In the long term, adjustments in the labor and capital markets, along with technological advancements, can result in economic growth and consequently increase benefits for both workers and capital owners. However, during the transition phase, which involves the short-term impact of increased labor supply, it is primarily the workers who experience the negative effects of lower wages. Employers may benefit from this change as they can hire labor at reduced costs, increasing their profits.
