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In the United States, wage differentials are heavily influenced by immigration. Many Americans have concerns on how immigrants affect the U.S. economy. These concerns vary, whether it is about immigrants obtaining jobs from natives or causing an increase in the unemployment rate. The majority of immigrants that come to the U.S. are generally poor. Thus generating a lower income and depending on the American welfare systems such as the Medicaid, Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF). The Women Infants and Children food program (WIC), free or subsidized school lunch, the Supplemental Nutrition Assistance Program (SNAP) which is commonly known as food stamps, and public housing or rent subsidies (Amadeo 2020). However, some immigrants are highly skilled and tend to have sponsorships from employers through the H1-1B program generally.

The purpose of this paper will focus on comparing the effects on the labor market between American natives and immigrants based on earnings, occupation, education, certifications, and their overall status in society. We will also look into how COVID-19, also referred to as the coronavirus, has impacted our economic stance and society.

Why immigrate to the US?

The purpose of why individuals move to the United States is that there is an opportunity for new chances to succeed, where they can change their conditions. Moreover, they have the choice to better their social, money related accomplishment simultaneously, which encourages many people to move to the United States every year. “People move with the information or desire that progressively open entryways will be available to them in their particular field than at home” (Nunez 2014). Some individuals move to the United States after work has been offered to them, which can be easy to settle their lives if they have a high paying job after they arrived in the United States. There are different places where it is undependable to communicate a negating point of view, honestly. Where the immigrants can get detained, or that there would be various outcomes to talk uninhibitedly. “Different things are merged with the constitution and bill of rights that are associating with the individuals who do not have those tantamount affirmations openings inside their nation” (Nunez 2014). Particularly families moved to the United States to have better lives for their children as well as better education. Precisely when they moved to the United States, the essential, parents needed was to send their children to school to be better individuals by having the opportunities that they never had. Areas, where immigrants come from, have inadequate educational systems. The ability international families have is to send their children to the United States for better education. When having the privilege of coming to America, their dream becomes a reality. Many have been waiting for a long time in refugee camps and other unsafe places to get a chance to provide a lifestyle for their children where they were unable to provide in their home country.

Sources:“Lawful Permanent Residents.” Department of Homeland Security, 24 Feb. 2020,

www.dhs.gov/immigration-statistics/lawful-permanent-residents.

Generally, when individuals immigrate to the United States they tend to settle in metropolitan areas. “Immigrants from a particular origin tend to live in areas where others from the same origin live, rather than distributing themselves across the regions of the destination in the same proportion as the native-born population. The result of this tendency to settle among others from their country of origin is the formation of ethnic concentrations or ethnic enclaves” (Chiswick & Miller 2004). When these immigrants migrate to these urban areas, they tend to enter into the workforce that is heavily rooted in services, such as manual labor. The Department of Commerce conducted a study that found 474 occupations that were majority employed legal or illegal immigrants (Camarota, Richwine, & Zeigler 2018). The majority of immigrants tend to be employed in industries such as agriculture, construction, hospitality, and other services.

O-Ring

The O-ring theory focuses on the economic development of firms’ productivity to ensure proficiency. The model goes into detail with high-skilled or high-educational leveled individuals that are willing to work together to maintain a higher production rate, which increases economic growth. We know that a worker’s wage is based on his or her productivity, meaning the worker with more productivity will receive a higher wage.  In the O-ring model, the production of high-skilled or high-educated labor groups, plus the production of low-skilled worker groups, is higher than the production of high-skilled workers work with low-skilled workers. Since the United States is a well-developed country, many high-skilled workers immigrate and work to increase the local economic growth. Meanwhile, their wage will increase. Therefore, wage inequality happened (Todaro 2015).

Immigrants Skill

When discussing the individuals that received a higher education outside the U.S., they are usually unable to pursue their profession. For instance, some Cuban doctors move to the United States who can not work in the medical field because they do not have the right medical documents. “Many end up holding occupations for which they are overqualified subject to their paper certifications” (Enchautegui 2016). It is sad to say that in today’s society nationwide, xenophobia still exists within many social groups; immigrants happen to fall into this category. With that being said, there are numerous claims of insightful workers on the subject of harassment by individuals. Particularly after the presidential election of 2016, journalists have been harassed by many officials since the journalists were from different countries, which was a shocking thing to see in the United States. This sort of condition forced numerous immigrants compelled to take low skills occupations to stay away from the generalization of numerous Americans. “By a moderate any way fundamental edge, legitimate immigrants with at any rate an advanced education are more likely than natives to take hard labor jobs. Even more fundamentally, the seriousness of the mishandle changes by and large across sending locales” (Enchautegui 2016).

There are many Latin American immigrants working in laborious work occupations with advanced education. The compensation they got is not sufficient to help their families here in the United States as well in their home country. They do not have any choice but to work in low paying jobs until they find high paying jobs. “Legal immigrants from specific areas of the world fight extensively more than others to utilize their school or advanced degrees. As an outcome, policy-makers should be cautious when designing an immigration system that selects for education” (Richwine 2018). There are various immigrants with progressively high skill that can be logically valuable in the United States. For any professional work required license, and this is not encouraging for many immigrants workers to procure enough pay to help their families. For instance, where we came from, we do not need a barbershop license to start the business, yet here in the United States, we have to have a license to open the business, which can cost us more money to have the license.

Occupations between Immigrants & Natives

Even though there are many jobs which immigrants do in the United States, these top occupations which immigrants do are servants, housekeepers, cooks, and random rural specialists. Interestingly the kind of employment that the natives do with a high school and GED diploma are agents, truck drivers, janitors, and building cleaners. “The best three occupations wherein less-encouraged immigrants are most over-addressed are different individual appearance workers, for instance, manicurists, workers who assess, sort, and request regular sustenance and other natural nourishment and sewing-machine administrators” (Enchautegui 2015).

Most of the immigrants work at service provider industries as soon as they arrive in the United States because they can not find jobs proportionate to the positions they have held in their home country, which can help them to support their families. The most obvious opportunity is for their children. The majority of immigrant children have the chance to have professional related occupations. In many cases, immigrant children have a high chance of holding a better paying job than their parents.

Earning between Immigrants & NativesIn this section, the difference between the wages of the native-born labor force and the immigrant labor force, the potential impact of immigration on the local wage will be illustrated. According to Nowrasteh, in 1970, the wage for male immigrants was 3.7% higher than native males; however, after 42 years, the wage was reversed. Native male workers wage was 10% to 11% higher than male immigrant workers in 2012 in the United States (Nowrasteh 2018). The trend of the wage difference between native workers and immigrant workers is, when the immigrant workers working in the US longer, the wage difference between them will be smaller.

As the native workers and the immigrant workers have different growth environments, they have differences in advantages and disadvantages in entering the US labor market. Those differences will also affect their wage. Liao finds out that Chinese immigrant workers have language limitations, and it becomes a significant disadvantage for earning. However, according to the empirical experiment, Chinese immigrants are more likely to have higher education levels. The data shows that 20.3% of Chinese college-graduate immigrants have PhDs, and only 3.7% of college-graduate natives have PhDs. For masters degrees, 36.9% of Chinese immigrants have master’s degrees, and 25.8% of the natives have a master’s degree (Liao 2015). Those concepts can explain the immigrant workers are entering the labor market with vast wage differences in the first place, but the growth rate for them is faster than native workers.

In this section, the wage differences between immigrants and local workers through Nowrasteh’s study will be demonstrated.  It is majorly based on the experimental method proposed by George Borjas. However, Nowrasteh made many adjustments to Borjas ‘experiment. Firstly, Borjas’ experiment included both males and females samples, while Nowrasteh limited the samples to males. Secondly, additional controls on race, gender, educational level, occupation, and year of work were added to his experiment design (Borjas 2015). Compared with the Borjas experiment that only controls the age and the inbound population, Nowrasreh’s experiment is more comprehensive and credible. Based on the mode, data on age, weekly salary, education level, years of immigration, and other factors that come from ASC’s annual social and economic supplementary information summary from 1994 to 2017 were present in the following chart (Sarah 2017).

The study compares and contrasts the wages of immigrants to their American counterparts in the age group from 25 to 64-year-old. Age, place of birth, gender, and ethnicity are four factors listed in the experiment that are potentially significant to the experimental data. The experimental results are divided into four parts, the wage difference between all immigration samples and all local samples, the wage difference between legal immigrants and all locals, the wage difference between illegal immigrants and locals, and the wage difference between illegal immigrants and legal immigrants.

To distinguish between illegal immigration and legal immigration in ASEC, George Borjas’s residual estimation technique employed was used in the experiment. This technique narrows the ASEC samples by analyzing backgrounds of samples to eliminate those immigrant individuals whose identities, either illegal or legal, are considered ambiguous (Borjas 2017). This identification technology excludes the following group. Foreign-born people who arrived before 1980, citizens, recipients of government subsidies, veterans or active-duty soldiers, government workers, people born in Cuba or Puerto Rico, who require government permission certified professional and legal immigrants or citizens (Nowrasteh 2018).

In this analysis, all immigration workers are classified based on the time of staying and working in the United States. The table separates the period that the immigrants enter the United States horizontally (see the headers in the first row) and classifies the length of time spent working or living in the United States vertically (see the header in the first column). For example, when comparing the wages of all migrant workers and all native workers of the same period, the wage gap between migrant workers who immigrated in between 1995 to 1999 and lived in the United States for 0 to 5 years and natives is -13.5%, indicating this category of immigrant workers earn 13.5% less than natives (Table 1). According to the data, for those immigrant workers, who come to the United States in the same period, with the length of time living and working in the United States, the difference in wages between them and local workers decreases. Whereas, for those workers who move to the United States recently, such as workers who immigrated to the United States after 2015, their initial wage differences between locals are narrower when compared to their new immigrant counterparts (workers who immigrated to the US during 1995 to 1999).

Table 1: The Wage Difference between All Immigration Samples and All Natives

Table 2: The wage difference between legal immigrants and all Natives

Table 3: The Wage Difference between Illegal Immigrants and All Natives

Table 4: The Wage Difference between Illegal Immigrants and Legal Immigrants

According to the wage difference between legal immigrants and all natives, there is a relatively large wage gap between legal immigrants and natives (Table 2). However, for those illegal immigrants, the wage gap between them with all natives was relatively small (Table 3). For those illegal workers who stay longer than 11 to 15 years, their wages even have a positive wage gap, and in other words, their average wage is higher than native workers. Surprisingly, according to the data in table 4, the average wage for illegal immigrants is lower than legal immigrants. After 11 to 23 years in the United States, the wage became closer.

Income Inequality Comparison

The debate continues whether immigrants have a positive or negative impact on the United States economy. Generally, immigrants have a higher benefiting factor to the economy as opposed to the contrary of how society perceives it. The immigrants employed in the US have raised GDP per capita by increasing productivity in labor and assisting social security. They are found to be more likely to develop specific skills or advance more than natives. There is higher skilled employment of foreigners, while unskilled immigrants generate larger surplus to U.S. firms than natives do. The only economic disadvantage is undocumented workers that decrease wages in labor of agriculture and construction. However, some argue the contrary; for instance, the earnings of low-income immigrants heavily rely on the American welfare system, as opposed to the native consumption of welfare being much lower.

CATO Institute conducted a study stating immigrants are generally less likely to consume the welfare benefits and if they do, it’s a lower dollar value than the natives (Nowrasteh 2018). The main welfare assistant programs are Medicaid, Children’s Health Insurance Program (CHIP), the Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), and the Women Infants and Children food program (WIC). To be eligible for welfare in America, there are requirements to be met based on the immigration status, individuals income, the value of assets owned, employment status, and some states require their policies to be met. The temporary migrants are ineligible for the welfare benefits. Regardless of immigration status, the National School Lunch Program, WIC, and Head Start benefits are available (Nowrasteh 2018).

Nowrasteh’s study demonstrated a comparison between the average per-capita welfare cost by program and nativity. The study results of “the average value of welfare benefits per immigrant were about $3,718 in 2016, about 39 percent less than the $6,081 average value of welfare benefits per native. The average immigrant consumed $6 more in cash assistance, $7 more in SNAP benefits, and $98 more in Medicaid than the average native did. However, the average immigrant consumed $56 less in SSI, $610 less in Medicare, and $1,808 less in Social Security retirement benefits than the average native in 2016 — more than compensating for their overconsumption of cash assistance, SNAP, and Medicaid” (Nowrasteh 2018). Immigrant adults are more likely to use SNAP and Medicaid than native‐​born adults and equally as likely to use cash assistance. Naturalized immigrants are more than three times more likely than noncitizen immigrants to use Medicare and Social Security but less likely to use cash assistance, SNAP, and Medicaid. Naturalized immigrants are more likely to use entitlements than noncitizens. Relative to natives, naturalized immigrants are less likely to consume Social Security and slightly more likely to consume Medicare (Nowrasteh 2018). As Nowrasteh’s study focuses on individuals rather than households, it allows identifying particular subgroups, as opposed to a granular analysis. Overall his study showed natives are 61 percent more likely to consume welfare benefits and immigrants are 27 percent unlikely to consume benefits  relative to natives with similar incomes.

The US is one of the countries that have a relatively high minimum wage, which can be a factor that explains why many people immigrate to the United States. Many immigrants think they have the same level of skill and earn more in the US. According to Nowrasteh, immigrants have a higher wage growth rate in the US. After being employed for more than five years, they tend to receive a higher income. In this section, the wage differences between immigrants and local workers through Nowrasteh’s experiment will be demonstrated. Nowrasteh’s experiment is majorly based on the experimental method proposed by George Borjas. However, Nowrasteh made many adjustments to Borjas ‘experiment. Firstly, Borjas’ experiment included both males and females samples, while Nowrasteh limited the samples to males. Secondly, additional controls on race, gender, educational level, occupation, and year of work added to his experiment design (Borjas 2015). Compared with the Borjas experiment that only controls the age and the inbound population, Nowrasreh’s experiment is more comprehensive and credible. Based on the mode, data on age, weekly salary, education level, years of immigration, and other factors that come from ASC’s annual social and economic supplementary information summary from 1994 to 2017 were present in the following chart (Sarah 2017). The experiment compares and contrasts the wages of immigrants to their American counterparts in the age group from 25 to 64-year-old. Age, place of birth, gender, and ethnicity are four factors listed in the experiment that are potentially significant to the experimental data. The experimental results are divided into four parts, the wage difference between all immigration samples and all local samples, the wage difference between legal immigrants and all locals, the wage difference between illegal immigrants and locals, and the wage difference between illegal immigrants and legal immigrants.

To distinguish between illegal immigration and legal immigration in ASEC, George Borjas’s residual estimation technique employed was used in the experiment. This technique narrows the ASEC samples by analyzing backgrounds of samples to eliminate those immigrant individuals whose identities, either illegal or legal, are considered ambiguous (Borjas 2017). This identification technology excludes the following groups. Foreign-born people who arrived before 1980, citizens, recipients of government subsidies, veterans or active-duty soldiers, government workers, people born in Cuba or Puerto Rico, who require government permission certified professional and legal immigrants or citizens (Nowrasteh 2018).

Previous Certifications

For most occupations, the wage in America is relatively higher when compared to wages in other countries. The wage variations in the field of IT, consulting, journalism, and medical specialists are more visible, which means the wage for these occupations is much higher, could reach 100% to 200% when compared with other countries such as India, Mexico, and China (Noack 2015). Therefore, many immigrants, especially in these fields, would think that they can get more income and better quality of life if they immigrate to the United States.

Educational Backgrounds

The educational system in the United States for immigrants has improved by a high rate as of recent years, most of the immigrants are continuing their education and making change. For that result, the economy is growing since individuals with various foundations are in the field. To assist the country with being profitable and head of most of the innovation in the world. “The around 44 million immigrants in the United States are preferably instructed, due to a limited extent to rising degrees of tutoring in a considerable lot of the nations they originated from and inundation of high-talented laborers to the U.S. as of late, particularly from Asia” (Radford 2019). Even though there are numerous battles, there are workers who get their declarations and different achievements throughout the years. These achievements will assist the migrants in finding better occupations and applying for government sectors. “In 2016, 17.2% of workers ages 25 and more seasoned had a four-year certification, and another 12.8% had accomplished a postgraduate qualification, investigation of the U.S. Statistics Bureau information” (Radford 2019).  From individual encounters, more immigrants are exceptionally skilled in math and science; however, they cannot proceed with their education as a result of the absence of a language barrier. According to the New York State board of education, more immigrant students in high school have excelled in all the regent exams with 100s and 90s scores; however, they cannot pass the  English regents exam. Therefore, they cannot go to college, which was very sad to see students who resemble cannot ready to go to school as a result of one regent exam.

Then again, they are many adult immigrants who moved to the United States to help their families back home. Besides, they are aged 17-35 years old. The first decision is to go to high school and universities; however, they do not get the opportunity like other individuals who can go to school with no issues. Those children who moved into the U.S. with their families have the chance to proceed with their advanced education. Such as completing their Ph.D. Following a couple of years, they can earn enough pay and move their families into a more secure neighborhood and better institution district so that their siblings can have a better opportunity in life.

Immigrants and native workers

The immigrant workforce remains the foundation of the United States economy; there is continuously a stereotype about immigrants. They are the motivation behind why the U.S. economy is declining. The most well-known one is the natives blaming immigrants for taking their jobs, yet if we look at the stats, immigrants never took employment where the natives work. The main occupations immigrants do are the place where the natives would not like to work, such as manufacturing plants, farms, and others who had labor employment. The hard time for most immigrants in the United States was after the election of 2016; numerous immigrants were sent back to their country, although they were dedicated individuals. Those individuals are extremely dedicated; however, every one of these challenges made their lives truly hopeless and the detachment of their kids and spouses. “Indeed, even among those without a secondary school diploma, immigrants and native workers can be very extraordinary, and these distinctions may influence their entrance to occupations”(Enchautegui 2016). For example, many immigrants can not communicate well in English. This challenge makes their lives hard even though they are very skilled workers,  which restrict their entrance to specific jobs. “Bilingual immigrants might be more qualified for specific occupations than natives who communicate in English” (Enchautegui 2016). Overall, immigration in the United States will not stop because there are more opportunities here in the United States compared to developing countries, particularly work and educational systems for their children. The immigrants pass the native labor force in 2019 with 2.5% more. The COVID-19 may slow down migration into the United States for a few years; however, individuals will not stop coming into the U.S. for many reasons, more importantly, to have better lives for their children.

COVID-19 Impact on Immigrants

A new infectious respiratory disease emerged in Wuhan, China, and was named COVID-19, also referred to as coronavirus disease by the World Health Organization. The outbreak of this pandemic has turned into a global health calamity of the century and significantly slowed down the economy, not only in the United States but worldwide. While almost all nations are working to reduce the spread of the disease with testing and treating patients, quarantining is suspected through contact tracing, restricting large gatherings, and maintaining complete or partial lockdown (Chakraborty, Prasenjit 2020). These are severely affecting the human population as a whole, the stability of the overall economy. However, some are more heavily impacted than others when it comes to looking at the socio-demographics of low-income households or recent migrants.

On March 27, 2020, President Donald J. Trump signed a $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act aimed to help American workers, small businesses, and industries coping with financial hardship. “A centerpiece of the stimulus package is that it will provide direct financial assistance to Americans in the form of checks with the amount received based on income. The CARES Act also provides one-time cash payments of $1,200 to individuals earning less than $75,000 who filed taxes for either 2018 or 2019 using a Social Security Number (SSN)” (Foran, Raju, Byrd, & Barrett 2020). However, this stimulus package is restricted, with many guidelines to be met in order to be qualified. Moreover, many immigrants have been excluded. “The Migration Policy Institute (MPI) has estimated that immigrants make up outsize shares both of essential workers in the fight against the pandemic and those in the industries hardest hit by its economic impact”(Chishti, Chishti, & Bolter 2020). Immigrants in the U.S. tend to live in conditions that make them more vulnerable than the native-born residents and are facing more difficulties accessing health care facilities. “A forthcoming MPI analysis shows that 7.7 million noncitizens lacked health insurance in 2018, making up 27 percent of the total U.S. uninsured population” (Chishti, Chishti, & Bolter 2020). The cause of many noncitizens unable to obtain insurance is from the lack of coverage employers within the informal sector provide and, ineligibility from their immigration status. The “unemployment among the foreign-born (including some naturalized citizens) grew 31 percent between February and March—compared with a 16 percent increase among the native-born. With a U.S. unemployment rate of 17.5 percent as of mid-April, the number of uninsured would rise to an estimated 9.3 million noncitizens” (Chishti, Chishti, & Bolter 2020). MPI has estimated that 15.6 million individuals will be excluded from the stimulus payments: 10 million unauthorized immigrants, along with 3.8 million children and 1.8 million spouses who are either U.S. citizens or green-card holders due to the restriction in the CARES Act (Chishti, Chishti, & Bolter 2020). As the United States continues to address the delicate issues in society, the immigration policy deserves serious attention.

In order to reduce the transmission of the coronavirus in communities, a lockdown has been enforced in the United States and various other countries. Due to lockdown, all domestic flights, railway service (except goods trains), bus, truck, and vehicle transports are suspended with special exemption to those associated with essential commodities. Most nonessential businesses have been forced to shut down, and those industries are unable to provide paid leave for their employees, leaving many laid off or claiming unemployment insurance. Americans continue to struggle with unemployment, one of the practical actions President Donald J. Trump has implemented to protect American workers by temporarily pausing immigration into the United States. In response to the coronavirus, Trump stated an executive order 13769 to suspend all immigration to the U.S. on April 23, 2020, for 60 days. In the president’s briefing statements, the only individuals that are exempt from the immigration ban are “medical and other essential workers to combat the outbreak, spouses and minor children of American citizens, and certain other aliens” (Trump 2020). This ban also exempts asylum seekers, refugees, and individuals applying for green cards through the EB-5 program or “investor visa,” requires an investment of at least $900,000 that is expected to create jobs. The Secretary of State or Secretary of Homeland Security will be determining “whose entry would be in the national interest” (Trump 2020).

Another issue that has surfaced from COVID-19 is the wave of xenophobic incidents from those of Asian descent, whether being an immigrant or native. STOP AAIP HATE, a reporting center formed by the Asian Pacific Policy and Planning Council (A3PCON), has received about 1,500 reports of coronavirus discrimination from March 19 – April 15, 2020. The types of discrimination consist of verbal harassment (being the most prevalent), shunning, physical assault, online, workplace discrimination, barred from the establishment, and transportation (Jeung & Nham 2020). These hate crime reports come from all across the U.S., and many Chinese/Asian people are racially under attack. Unfortunately, xenophobia and hate crimes will not fade overnight, but we can modify phrases and support those who have experienced discrimination.

The nationwide economic hardship continues with shutdowns, social distancing, while societies work to prevent the spread of COVID-19 practicing isolation. Although, during this pandemic, many individuals are worried about the results of the after effect. This pandemic will affect economic growth internationally. Within the U.S., The immigration ban will result in a deficiency in the growth of the U.S. economy and negatively impact livelihoods worldwide.

Summary and Conclusions

As the United States is strengthened with the contributions from immigrants, there is so much that is impacted by it from the economy to elections, the country’s development, and more. The overall view of immigration has in the United States has been seen to benefit the economy, and will forever remain a relevant topic in our country. The key attributes of our research were how immigrants’ skills, wages, and industry of employment impacts. The unprecedented challenge of COVID-19 has a significant impact on future immigration. According to the World Trade Organization (WTO) and Organization for Economic Cooperation and Development (OECD) have indicated COVID-19 pandemic as the largest threat to the global economy since the financial emergency of 2008–2009 (Chakraborty, Prasenjit 2020). “The effects of the coronavirus pandemic have exposed fundamental, systemic inequities and weaknesses of the U.S. economy and society at large. In the process, it has also revealed some fundamental inequities and long unaddressed issues in the U.S. immigration system that leave a sizable population of immigrants vulnerable at many levels, even though they contribute significantly to the country” (Chishti, Chishti, & Bolter 2020). For the interest in further research on immigration post-COVID-19, we are curious about what the future holds.

Our analysis concludes, as long as immigrants are working and living in the United States, the wage difference compared to natives demonstrates a lower wage rate. We have also discovered that as immigration increases, it will create greater competition with lower-income Americans. We hope our analysis will encourage additional research on immigrants. The framework demonstrated can have further insights and more precise quantitative calculations on the immigrant labor force impact. Along with exemplifying how immigration regulations will continue after the global pandemic. Due to the federal government suspending immigration into the U.S., we are interest in what the process be like afterwards in the continuing circumstances of the pandemic

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