Economics is really hard?
So imagine this - Dude from Romania or Bulgaria or Mexico or whatever decides he needs to go make more money in the states, and what i cannot understand if he sends almost all the money he makes from America does his country benefit the most ? Or is it more benefical for him to work in his own country, to make produce and sell it in his own land.I hope you can understand my question. THANK YOU.
- BrianLv 54 years agoFavorite Answer
It benefits him and his family the most, after that the country.
Prices are higher in the US than in his own home country. As such even working at a McDonalds flipping burgers makes him in a day as much as working as a doctor makes at home. If he saves enough for a few years and then goes back home he will have saved enough to go buy a house or his own company. The average income in Bulgaria for example is around $600 per month. If he can make $2000 a month in the US then he earns more than 3 times as much per month then back in his home country.
His family benefits because if he doesn't want to go back home but keeps sending them $500 a month then he pretty much sent them an additional person's income.
His home country also benefits, as his family or himself once he is back has more money and will buy more things, this gets the economy rolling faster as people in his home country will profit of the money he is spending. When he spends it it is taxable again via sales tax and the home country gets tax revenue from all of it.
The US also benefits from it. He still has to pay normal taxes however he gets minimum benefits from those taxes. The US also gets cheap labor that isn't asking for much income.
The only people screwed in this whole equation is the Local workforce that has to compete at a lower cost with immigrants which drives down their bargaining power and as such their wages.
- 4 years ago
Economics minor here.
People work (and get paid) as a means to provide for themselves and their family/group. People don't work out of some benevolent idea (that's charity). This started back when you'd barter, and it still stands today.
The concept of what you're talking about is fairly ingrained in society- people that attend religious services do it weekly (it's called tithing). It has history in Western culture as well...if you look at most organised crime syndicates, it works the same way (and currently most drug dealing operations have a similar structure). Even developing countries will pool resources to go in on a new business (and then take profits to re-pay investors) since in many developing countries the idea of borrowing large sums of money from a bank is still considered undesirable.
When I worked briefly in the US (I'm Canadian and am back to being based here) I'd kick some money to my father to help him out even though I was barely getting by (he'd usually use the money to pay for services he wasn't able to do i.e. snow removal, lawn care, fall leaf cleanup) since I didn't want him doing this stuff. The Latinos who will cook that restaurant meal you eat tonight are no different. Same for the Irish/British bartender who you might patronise or your coworker who's a first/second generation immigrant.
If you don't have the opportunity in your own country, you seek opportunities elsewhere (and for all of its numerous problems, the entrepreneurial spirit in America is still perceived as being very real in most of the world). You also sell the product where people will buy it (the Internet has, in some ways, flattened this out but it's still desirable to have a physical presence in that market you do business in). So if you make the latest consumer product, you'd want to be where people are most likely to buy it.