Illegal Immigration – It’s Impact on the US Economy

Alien workers have played a very important part of the U.S. economy and throughout its history. The topic of illegal immigration often irritates a lot of emotion and has recently geared a lot of attention in the press. Immigrants are having more of an impact on the economy than ever before because of their large quantities in people. To many people, immigration issues revolve around economic arguments, such as the fact that immigrants will take work away from native workers at a much lower wage. With the foremost presence of illegal immigrant workers in the U.S., economists agree that there are many burdens and blessings that come with immigration, but they have all strained different conclusions in addressing the following questions with regards to illegal immigration:

1. How do illegal immigrants benefit the U.S. economy?

2. How do illegal immigrants damage the U.S. economy?

3. Can the U.S. address and solve these problems with illegal immigration?

4. Can illegal immigrants eventually become full citizens in the U.S.?

This review of the literature on illegal immigration and its impact on the U.S. economy focuses on these four questions.

How do Illegal Immigrants Benefit the U.S. Economy?

In a perspective article, Davila (2006) insists that immigration can indeed be good for businesses. The reason why it is good for businesses because immigration supplies labor at a relatively low
cost, though the real concern is how often that immigrants are paid substandard wages (Davila, 2006). Although immigration can be good for businesses, major businesses “are, of course, concerned with hiring illegals, especially given the senate proposals, which would place more emphasis on employers verifying that employees are legal immigrants” (Davila, 2006). However, many illegal immigrants bring hard work ethic to the U.S, which businesses are often taking into consideration to their open positions. Davila believes that immigration should be perceived as a way to improve our economy and use all possible resources at our will. This improvement of our economy brings the hard work ethic of illegal immigrants that should be highly rewarded (Davila, 2006). In retrospect, the conclusion of Davila is that it is important to continue to encourage those who want to come to the U.S. to do so legally and continue to contribute to our economy.

Although it may to true that many illegal immigrants are motivated to bring its hard work ethic to the U.S., it is however, uncertain that their authentic motivation is to tap into freely available resources. Enciro Marcelli believes that it is generally recognized that most illegal immigrants are more motivated to enter the U.S. to “build a better life for themselves and their families by securing a higher paying job” (Marcelli, 2005). There exist many common claims by the U.S. legislation on illegal immigration. Those includes: immigrations migrate to the U.S. to use its welfare program and public services and unauthorized immigrants take jobs away and depress the wages of, lower-skilled, minority workers.

In a study undertaken in the late 1980’s by a team of University of Texas researchers using 1980 U.S. Census data, they reported that although “legal immigrants had a small negative effect on the wages of U.S.-born white workers in the U.S. Southwest, undocumented Mexican immigrants actually had a small positive effect” (Marcelli, 2005). During the same time of the research done by the University of Texas scholars, another group of researchers from the University of Toledo in the early 1990s used the same data. However, they investigated the impact of undocumented immigrants on the unemployment of U.S.-born minority workers rather than the impact of undocumented immigrants on the employment of U.S.-born minority workers. They found an incredible inverse relationship. This is because illegal immigrants as they concluded enjoy clustering in states where unemployment rates were lower. The researchers interpreted this finding as “suggestive of labor market complimentarily rather than substitution” (Marcelli, 2005). In rebuke, the conclusion of Marcelli suggests that illegal immigrants fill undesirable jobs only after more collectively groups of workers drift into higher paying occupations (Marcelli, 2005). This means there is no loss in jobs as immigrants do not take jobs away from currently employed citizens.

In contrary to Marcelli with the issue related to the extent to which illegal workers utilize more public services than their tax contributions, Moretti and Perloff (2000) “found that the participation in welfare programs by illegal immigrant worker families was 8% in contrast to 27%, 30%, and 42% for citizen, amnesty, and green card worker families, respectively” (Moretti & Perloff, 2000). Although this research is sustainable to the validity of welfare programs, it did not take into consideration the tax contributions with service usage. Their analysis was not based on tax contributions because “since most pertinent tax payments are via payroll deductions or sales tax collections, the general belief is that tax contributions vary little by legal status” (Moretti & Perloff, 2000). There analysis therefore, included all public services as well as public education. With the conclusion of this analysis, it shows that illegal immigrants are actually contributing to public services as well as social security because not only are they employees but they are also consumers who gives back to the community as well.

How do illegal immigrants detriment the U.S. economy?

While there are some that supports immigration, there are also many firm believers that immigration poses problems to the U.S. economy. Zedillo believes that illegal immigration poses problems for the U.S. every year “the size of the population living illegally in this country grows by as much as half a million people” (Zedillo, 2007). He argues that company employers who hire these illegal workers are also violating immigration laws because employers who hire illegal workers also violate immigration laws when misled by false documents (Zedillo, 2007). The reason why illegal workers are often employed is because it makes it easier for the employer and employee to escape paying taxes. Without paying taxes, Zedillo argues, illegal immigrants can become “a drain on social services and a public charge upon those states receiving the bulk of the inflow” (Zedillo, 2007). With the free ride of not having to pay taxes, illegal immigrants are more prone to abuse and exploitation without the aid of the government programs. Zedillo concludes that while working in these harsh conditions, many illegal immigrants find it hard to economically and culturally live in the U.S. due to having the risk of become an underclass and face a social conflict with U.S. citizens (Zedillo, 2007). By having social conflicts with others, illegal immigrants will hurt government services by not actively participates in contributing taxes however they will benefit the overall economy in which “immigration is essential to the dynamism of the American economy and for sustaining its pace in job creation” (Zedillo, 2007).

Lewis, on the other hand, believes that not everyone benefits from immigration; there are both winners and losers (Lewis, 2007). Immigration’s benefits derive from reducing wages in the less-skilled jobs that immigrants take. Lewis concludes eb5 projects that average Americans will not be harmed by this; relatively few Americans work in low skilled jobs may be affected by this in which immigration may reduce the earnings of some low-skilled Americans (Lewis, 2007).
Can the U.S. address and solve these problems with illegal immigration?

To address the problems of illegal immigrants entering the U.S., there are two realistic options: do nothing, or establish a legal mechanism for migration. The U.S. government orders strict border patrol and various immigration enforcement actions every year. However economists believe that no matter what the total amount spent on immigration, without inclusive reforms, these problems will only grow worse. As Emerson reported in his article, “closing the border, and no significant guest worker program could result in increased wage rates under the assumption of immobile capital and no changes in production” (Emerson, 2007). However, there is considerable doubt raised in the effectiveness of efforts to reduce the flow of illegal workers across the border (Hanson, Robertson, & Spilimbergo, 2002). When illegal immigrants are willing to do anything and everything to get an opportunity to enter the U.S., it is questionable that the use of fencing and other approaches will achieve an end to this because the economic pressures of illegal immigrants to enter the U.S. from neighboring countries are just too great.

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