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Benefits of Illegal Immigration Offset Costs on the U.S. Economy
By Bruce Vang
Although illegal immigration is essential to the dynamics of the U.S. economy and for sustaining its pace in the creation of jobs, many American citizens believe that illegal immigrants can become a black hole on social services and public charges upon the major areas in the United States that receives these vastnesses of immigrants. Because there is a shortage of unskilled labor in many segments of the U.S. economy, numerous low-skilled positions are being filled by illegal immigrant workers. Without these workers, the productivity and economic growth of the economy would be slower and there would be fewer jobs for skilled labor. Also, by filling these unskilled labor openings, illegal immigration contributes to keeping the U.S. economy prosperous and affluent. The U.S. economy indeed benefits from illegal immigrants in who supply foreign workforce that complements rather than competes with the local workforce in the United States.
At issue is whether illegal immigrants in the country fuel the economy and the labor market or whether they cost American tax-payers their money. Since the local government is the first to provide public services such as health care and education to the community, many local government officials have expressed their concerns that illegal immigrants are a burden on their budgets and do not contribute tax revenues in what they cost in public services and those includes incarceration and medical care. One legislative director even went as far as saying, "it costs us millions per year" (Preston). While these public services are important to the American public, it is also very important to illegal immigrants as they establish a permanent living space in the U.S. where they can call home.
It can be hard to imagine that illegal immigrants participate in a positive effect on the U.S. economy, but in fact they do. Immigrants after all, are not just workers, but consumers and demand for products and services which expand employment. Many illegal immigrants are willing to pay their taxes because they want to make a contribution to the place in which they live in. Since living in this country, they know their money goes to improving local schools for their children and provide for a healthier community. Even if it is true that some unauthorized immigrants are motivated to migrate to the U.S. to tap into public resources, many have proven to benefit the U.S. economy. However, it is generally recognized that most enter to build a better life for themselves and their family by securing a higher paying job.
According to the National Council of La Raza, a Washington-based Latino Civil Rights and Advocacy Organization, reported that "the majority of undocumented immigrants pay income taxes using individual taxpayer identification numbers or false social security numbers" (Meredith). In comparison, a corporate law firm called the Washington-based American Immigration Lawyers Association, states that "immigrant households paid an estimated $133 billion in taxes to federal, state, and local governments in 1997" (Preston). This shows that a large portion of the money made by most illegal immigrants goes back to their local government to help improve local schools and the economy as a whole.
Illegal immigration is persistent because it has a strong economic foundation. In addition to immigrant households contributing $133 billion dollars to the government, the American Immigration Lawyers Association also reports that immigrants "may add as much as $10 billion dollars to the economy each year" (Preston). This is a vast amount of wealth that may hurt the U.S. economy if illegal immigrants did not contribute this much money. Clearly, illegal immigrants contribute to the U.S. economy as much as their income allows them to because they want to help make this country thriving.
Some who favor immigration reform argues that illegal workers will work for lower wages and that in-turn will hurt the job market for American workers by taking away jobs and lowering wages. While this holds some truth, in the long term, there will be little to no pressure on wages and American workers will eventually be moving onto higher paying jobs. Thomas Donohue, president and chief executive office of the U.S. Chamber of Commerce, reports in a study showing that "less-skilled workers experience very little downward pressure on their wages from competition with illegal immigrants" (Meredith). He moves on to say that "American workers are moving into higher paying jobs, and immigrants have filled the gap by taking manual labor jobs that American workers are unwilling to take" (Meredith). Noticeably, considering that many illegal immigrants cannot speak English and have a relatively low skill-set, they will be able to only take the low skill jobs that have been disregarded by Native American workers who are constantly improving themselves in higher education.
Mexicans, who make up one third of recent immigrant arrivals in the U.S., tend to be less skilled compared to native-born-Americans. A recent study shows that "one half of all immigrants, and over two thirds of Mexicans, never completed high school, compared to only 16% of native-born Americans". (Lewis). This recent study done by Lewis provides evidence for reason why illegal immigrants fill relatively undesirable jobs, and that is because they have a low education. However, they fill these undesirable jobs only after more socially integrated groups of workers migrate into more desirable occupations. There is no question that native workers will be, on average, more educated each year and therefore less likely to accept these unskilled jobs.
Like many labor markets, illegal immigrants are inexplicably low-skilled; however, this allows Americans to benefit from illegal immigration. The reason for this is immigration makes inputs into production such as skilled labor and land. Skilled labor and land are two things that are reasonably scarce in the U.S. and will therefore raise their market value in real world markets. For example, if there are more low-skilled workers willing to work per acre of land, this allows farmers to be able to utilize their labor set and harvest more crops per acre in which ultimately makes their land more expensive. This analogy implies that U.S. consumers benefits from illegal immigrants to the extent in which immigrants drive down the cost of goods and services that uses a great deal of low-skilled labor. In a recent study, Cortes (2005) studied the impact of immigration on prices in twenty-five large U.S. metropolitan areas. She found that a "10% increase in immigration lowered the price of low-skilled intensive goods and services by 1%" (Lewis). Another study by the National Research Council reported that "in the mid-1990s, Americans gained between $1 and $10 billion per year from immigration's labor market impacts alone" (Lewis). Without a doubt, these two recent studies show that the U.S. economy is economically better off as a result of the contribution of illegal immigrants.
Those who oppose to immigration argue that not everyone benefits from immigration. Admittedly, besides immigration producing only positive effects on the U.S. economy, it also produces negative effects as well. However, those positive effects far outweigh the negative. Just as with international trade, the net benefit is encouraging, but there are both champions and rabbles. In this case, immigration initiates the reducing a small percentage of wages in the less-skilled jobs that immigrants take. The reason for this small force of reduction in wage is that immigrants and native-born workers, who are in the low-skill set groups, tend to work in different kinds of jobs.
Illegal immigration contributes to keeping the U.S. economy productive and prosperous by filling the unskilled labor gap in the U.S. economy. Filling such jobs, however, is central to the U.S. economy's functioning and growth. While it is true that those who oppose to immigration feel that immigrants fill jobs natives won't do, most Americans citizens benefit from immigration since labor markets are adequately elastic to take in immigrants without greatly depressing low-skilled Americans' earnings. Since there is a shortage of unskilled labor in many areas of the U.S. economy, those low-skilled gaps are being filled by illegal immigrant workers and will therefore lower the price of goods and services. This allows workers, consumers, and businesses to benefit from immigration. Overall, the foreign workforce complements rather than competes with the native workforce.
Works Cited
Meredith, P. "Economy factors into immigration debate." Issues and Trends June 2006: 8+. Academic Search Elite. Ebscohost. UW-Madison Library. 2 July 2007 .
Zedillo, Ernesto. "Migranomics Instead of Walls." Forbes 179.1 (2007): 25+ . Academic Search Elite. Ebscohost. UW-Madison Library. 3 July 2007 .
"Immigration: Issues and Perspectives for Businesses." Financial Executive 22.7 (2006): 67+ . Business Source Elite. Ebscohost. UW-Madison Library. 3 July 2007 .
Lewis, Ethan. "The Impact of Immigration on American Workers and Businesses." The Magazine of Food 2007: 49-55. Corporate ResourceNet. Ebscohost. UW-Madison Library. 1 July 2007 .
Marcelli, Enrico. "Immigrants and the U.S. Labor Market." NACLA Report on the Americas 38.5 (2007): 47+ . Academic Search Elite. Ebscohost. UW-Madison Library. 1 July 2007 .
Emerson, Robert D. "Agricultural Labor Markets and Immigration." The Magazine of Food 2007: 57-66. Corporate ResourceNet. Ebscohost. UW-Madison Library. 4 July 2007
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