How Does Illegal Immigration Affect The Economy
Kevin Racine
Jamaica Ritcher
English 102
30 November 2011
Illegal Immigration: A Positive Effect on the Economy Imagine being in line at a convenient store and a Hispanic man is in line in front of you at the counter purchasing food and gas. Chances are that you might not even know it, but he just happens to be an illegal immigrant. Through purchasing that food and gas, he just contributed to the economy as a consumer by paying sales tax. This is just one small example of the several ways illegal immigrants contribute to and positively affect the economy of the United States. For countless years there has been a controversial debate over whether illegal immigration has a positive or detrimental effect on the economy. It has especially …show more content…
been voiced recently through the public due to the economic recession we find ourselves in, along with the growing number of illegal immigrants entering the country every day. The argument that illegal immigrants do not contribute to the economy and free load off American citizens’ tax payments is false. Undocumented immigrants have an overall positive effect and contribution to the economy as workers and consumers by paying sales, property, federal, and state taxes, as well as decreasing consumer costs through cheap labor; the need for the wider acceptance of matricula cards as a form of identification is vital to the economy.
According to a study conducted by Steven A. Camarota, Director of Research at the Center for Immigration Studies, 70 percent of American citizens view illegal immigration as harmful to the U.S. economy. However, undocumented immigrants actually contribute more to the economy than people tend to think. In 2008 there was a reported 12 million undocumented immigrants (Nadadur 3). The American Immigration Lawyers’ Association reported that illegal immigrants may add up to $10 billion to the economy every year (Preston 2). An example of this is illustrated in a 2009 study conducted in the state of Indiana, examining the contributions undocumented immigrants have to the economy. According to the study, Indiana has an estimated 45,000 to 100,000 illegal immigrants that fluctuates seasonally with the agriculture industry. These workers were estimated to have added over $3.5 billion to the state’s economy in 2008 (“Economics of Illegal Immigration” 1). The $3.5 billion contributed by these illegal immigrants is solely in the state of Indiana, a state with one of the lowest numbers of illegal immigrants. I have come up with a system to roughly illustrate how much undocumented immigrants can hypothetically add to the economy in states such as California, where the number of illegal immigrants is estimated at approximately 2,600,000. Take the number of illegal immigrants in Indiana and times it by 26 to get the population of illegal immigrants in California, and then multiply the $3.5 billion contributed by illegal immigrants in Indiana by 26, and that is $91 billion. Even though this is a hypothetical formula and not a precise method for determining the contributions made by illegal immigrants, it provides a thought provoking idea of how much money these immigrants may be contributing. Illegal immigrants feed into the economy because they are forced to pay sales and property taxes, whether they want to or not.
It is impossible for anyone living in the country, whether legal or illegal to avoid paying either of these two forms of taxes. When illegal immigrants enter the country, they have to find a home for themselves and their family. Whether they rent a house or buy a house, they are paying property taxes. When these immigrants rent a house, they are typically paying a monthly renters’ fee to a landlord who is in turn using that money to pay the government in property taxes. Currently, workers in the construction, contracting, and architecture businesses are struggling with finding projects due to the fact that there are few people currently investing in the housing and building market during this time of economic instability. Illegal immigrants that enter the country and invest into the housing market are helping these workers maintain their job security by giving them work. A 2010 study conducted by the Immigration Policy Center reports that illegal immigrants contributed $1.6 billion in state and local property taxes in the 2010 fiscal year (“Unauthorized immigrants pay…1”). This disproves the assumption that illegal immigrants are flying under the radar when it comes to paying taxes. This money paid from property taxes feeds straight into the economy and is used the same as tax money paid by legal citizens. All illegal immigrants pay sales tax on anything they buy domestically, with this money going straight into the economy as
well.
In a 2005 study, it was estimated that 90 percent of the wages earned from undocumented immigrants are spent within the confines of the U.S. border (Nadadur 10). Through the results of the study, it was determined that illegal immigrants have the total capacity to consume $450 billion of goods. If they are spending approximately ninety percent of their earnings in the U.S., that means they are contributing $405 billion to the economy. As mentioned previously, it is fair to articulate that it is nearly impossible to survive in the country without paying taxes for everyday necessities. Illegal immigrants are starting to get more opportunities to contribute to the economy due to a fairly recent concept of select American companies accepting matricula cards as valid identification for certain goods and services in areas where there is a high concentration of illegal immigrants (Nadadur 10). They were first introduced in March 2002 in select metropolitan areas (Dinerstein 1). Matricula cards are photo I.D. cards distributed by the Mexican consulate to Mexican nationals and used as a strategy to encourage congressional action regarding immigration policy in America. These cards were put into effect because of the fact that it is nearly impossible for an illegal immigrant to get a valid American identification card. The Mexican government reports that most matricula card holders do not have documented legal status. The article “ID’s for Illegals”, by Marti Dinerstein from the Center for Immigration Studies, discusses the positive aspects of this type of identification system. He states how the United States has reported that matricula cards are somewhat useful in keeping tabs on the number of illegal immigrants in the country by recording the number of cards used in the United States. While this seems like an odd and risky idea, companies such as Sprint, Costco, and Wells Fargo have begun accepting these cards as a valid form of I.D.(Nadadur 10). These businesses are not hiring immigrants that possess only a matricula card, but rather accepting the cards as a form of I.D. when making purchases or setting up accounts. Dinerstein reports that the matricula card is currently accepted by over 800 law enforcement agencies and 74 banks nationwide. Thirteen states have even even begun to accept these cards as identification for receiving a drivers’ license (Dinerstein 1). Wells Fargo has reported that it has opened 525,000 matricula accounts, which accounts for six percent of the bank’s total accounts. This new concept has also been adopted by certain medical care providers. The Blue Cross of California has begun to sell health insurance to matricula card-holders (Nadadur 10).
It is likely that Hispanics will soon be the largest minority group in the nation. These companies have realized that the massive population of illegal immigrants as potential consumers is too large to ignore. Previously, illegal immigrants weren’t able to contribute to these companies because they had no acceptable form of identification, but through the adoption of the matricula system by certain companies it is allowing illegal immigrants to further contribute to the economy by accepting the matricula card for certain goods and services which they were previously unable to do. Another positive aspect of this system is that it saves time and money for law enforcement agencies. Anytime a person commits even the most minor of infraction of the law, it is standard police protocol to require identification. If the person can’t provide identification, they are immediately sent to jail where the police fingerprint and book them until they can provide proper identification. This can sometimes be a very lengthy process. By illegal immigrants possessing a matricula card as valid identification it is saving law enforcement time, money, and jail space.
Opponents to the concept of the matricula program argue that there is no way to verify the authenticity of the documents, therefore condoning counterfeiting by accepting them. However, there have been new telephone lines recently established between Mexico and the United States that leads directly to the Mexican consulate office. When there is a question regarding the authenticity of the card, U.S. officials can then call the consulate office in Mexico and have them verify its validity through their databases (Dinerstein 2). The Mexican government has made other efforts in reducing the risk of counterfeiting such as adding features to the cards such as: features on the card only visible under infrared or ultraviolet lighting, a high tech decoder, and a seal that changes color in natural light (Dinerstein 2). The Mexican consulate office also takes a current photograph of any matricula card applicant and requires a birth certificate and proof of their place of residence in Mexico that is then filed into a database (Dinerstein 3). It is vital for this system to be more widely adopted so that illegal immigrants have a way to feed into the economy as consumers through investing in the goods and services the United States has to offer. Illegal immigrants are costing big businesses less than native workers, because they are taking low end jobs and getting paid less for them (“Economics of Illegal Immigration 1”). Undocumented immigrants cost big businesses less because they are getting paid lower wages, while performing the same duties as legal citizens are doing and forfeiting the same percentage of their paycheck to income taxes. Many illegal workers pay their taxes through utilizing false tax ID numbers. Businesses are not discriminating between legal and illegal workers by taking the same percentage of income taxes from their employees’ paychecks, regardless of citizenship status. Classical economics says that immigration benefits the host country because the country that the immigrant came from bears the costs of raising the worker until he or she is ready to enter the job market (Nadadur 5). This essentially results in the immigrant’s home country paying for the labor productivity of the country where the individual resides and works (Nadadur 6). Professor Giovanni Peri of the University of California-Davis presented research on how immigration affects the wages of legal citizens in different skill groups (Ender 3). According to Peri, native workers and foreign-born workers complement each other because they differ in their skills. He argues that these different skills increase productivity, which in turn averages out wages (Ender 4). Chief Executive Thomas Donahue of the U.S. Chamber of Commerce presented a speech to Congress in 2005 stating, “Studies have shown that less-skilled workers experience very little downward pressure on their wages from competition with illegal immigrants” (Preston 2). At the same time, immigrants are enhancing economic productivity whether legal or illegal. Illegal immigrants have a positive effect on the U.S. economy by decreasing consumer costs. As a result of illegal immigrants filling the secondary labor market, products and services become cheaper to citizens because these workers are willing to work for below average wages. This saves businesses money and provides a kind of subsidy for them. For example, a substantial number of U.S. farm workers are undocumented, illegal aliens that provide labor for lower wages than U.S. citizens. According to research conducted by the Agriculture Department’s Economic Research Branch, consumers pay less for food than any other developed country because illegal immigration allows businesses to minimize their production costs (Nadadur 9-10). This has a positive effect on all American citizens because it decreases their consumer costs in many different aspects.
Many illegal immigrants work in the agricultural industry where mass production is the key. Without assistance from these migrant workers, there would not be the same level of productivity present. Many of the jobs that involve mass production and low wages are the ones that illegal immigrants fill that many citizens refuse to do. The economy would be sure to take a devastating hit if the number of migrant workers was decreased. Many Americans do not take these jobs because they are typically short term or seasonal, with high employee turnover, and often poor or dirty working conditions. A study was done that showed that while only 4.3 percent of workers in the labor force are undocumented, 20 percent of farming jobs, 17 percent of cleaning jobs, 12 percent of construction jobs, and 11 percent of food preparation occupations are performed by undocumented immigrants (Nadadur 10). If this population of productive workers was to be eliminated, the economy would not be the same. For example, lettuce farms in Arizona need approximately 40,000 people to hand-pick their products (Mauriello 1). There are simply not enough local workers to accomplish that large of a task without the help of seasonal migrant workers. The contributions that undocumented immigrants offer go further than the state and local levels. Illegal immigrants also pay federal taxes and contribute to the national economy. Many illegal immigrants pay taxes such as Social Security by using false documents. The IRS recently collected nearly $305 million of taxes paid using an Individual Tax Identification Number. Social Security taxes are deducted from the pay of illegal immigrants and integrated into the prices of goods such as fuel (“Economics of Illegal Immigration 2”). The use of ITIN numbers is a common method for paying taxes for those who do not have social security numbers but are required to pay taxes by their employers (Mauriello 1). A 2005 study conducted by the Mexican Migration Project shows that 66 percent of illegal immigrants reported their employers deducting Social Security tax from their pay. According to the article, “Tax-Paying Illegal Workers Contribute to the Economy”, illegal immigrants pay approximately $7 billion in Social Security taxes every year. These immigrants are continually paying federal taxes that are used for such programs as Medicare, even though they cannot benefit from these programs. Despite the fact that many illegal immigrants are eligible for many of these programs due to their low wages, they cannot claim income tax returns or claim Social Security benefits because they fear being captured and deported, and because of their lack of proof of citizenship. So in comparison to native workers, immigrant laborers are putting in the same percentage of these taxes, but receiving nothing in return for them. According to the Washington-based Latino civil rights organization, La Raza, many undocumented immigrants are often willing to pay taxes when they have the means to do so (Preston 2). La Raza spokeswoman Luisa Chope claims that, “Many contribute these taxes because they know that their money goes to improving schools that many of their children attend.” Therefore, these undocumented workers are paying more in taxes than they can benefit from government services because of their ineligibility for the majority of offered services. There are people that believe illegal immigrants are taking the jobs from Americans and are the cause of the increasing numbers of unemployment in the United States. There was a study conducted in 2005 that showed that 32 percent of illegal aliens had not completed ninth grade compared to two percent of U.S. citizens that had not completed that grade level (Nadadur 7). The minimal educational background of many illegal immigrants holds them back from receiving the opportunity to explore a broad spectrum of job opportunities, which in turn makes them less competitive in job markets being pursued by American citizens (Nadadur 8). Americans should not blame illegal immigrants for the current high unemployment rates. This study shows that most American citizens have higher qualifications for jobs than undocumented immigrants and shouldn’t view these immigrants as competition, because the majority of employers value higher education in the hiring process.
This minimal educational background prevents many immigrants from catching up to the salaries of native workers, which provides them fewer job opportunities. In a study conducted by Professor David Card of the University of California-Berkeley, winner of the John Bates Clark medal for his contributions to economics, he found that the inflow of illegal, undocumented workers has little to no effect on job market opportunities for native workers (Ender 2). Card claims that opportunities for low-skilled workers are sustained by the broad use of low-skilled illegal workers as this type of labor becomes more abundant. Some people argue that if there were no illegal immigrants available for work in the United States, many businesses that have a need for a large labor force would move their production overseas in search of more workers (Mauriello 1). This would cause a drastic decrease in job opportunities for American workers. The jobs that the illegal immigrants are taking is freeing up the local labor pool for higher salary jobs. This shows that it is a naïve assumption to say that illegal immigrants are taking away jobs from U.S. citizens. Opponents to illegal immigration often argue that illegal immigrants hurt the economy by using public services such as health care and public schools out of the pockets of American citizens. Under federal law, emergency medical services are required to provide care to pregnant women and babies, which is a large expense that the country picks up the tab for (Nadadur 13). However, babies born in the United States are by law legal citizens at birth, so fifty percent of the money spent on providing care to a pregnant mother is also going to a legal United States citizen. Also, fifty six percent of illegal immigrants are male. Proponents of illegal immigration have argued that males use less public services than females and children (Nadadur 13). Additional research has been conducted that demonstrates trends showing that illegal immigrants are far less likely and often deterred to use public services because of the fear of being discovered by immigration authorities and deported out of the country (Nadadur 13).
Furthermore, a 2000 Health Affairs study found that illegal immigrants are far less likely to use available health-care services compared to the legal population (Nadadur 13). There is also no sufficient data regarding the health costs of undocumented immigrants, and until the data is presented, it is unfair to conclude that illegal immigrants have a negative effect on the funds of medical services. Public education was guaranteed to illegal immigrant children in 1982 as a result of Supreme Court case Plyer vs. Doe (Nadadur 14). Therefore based on this case, it is a legal right of illegal immigrants to have the opportunity of attending public schools, and a legal obligation of American citizens to provide it. In conclusion, illegal immigration benefits the United States economy and is far more beneficial than detrimental. Illegal immigrants generally pay the same property, income, and sales taxes as American citizens do. They contribute towards funds such as Social Security, Medicaid, and Medicare while for the most part not receiving any of the programs’ benefits in return. Undocumented workers help keep consumer costs down for American citizens by contributing in increasing productivity, which aids supply for many of the goods available in our market. Illegal immigrants are a necessity and fuel the economy by spending the majority of their earned wages in the United States. They are an asset to many of America’s industries such as agriculture, construction, cleaning, and food preparation. Without their work, many of the country’s industries would not be the same. Illegal immigrants provide a subsidy for businesses by providing cheaper labor. Overall, illegal immigrants are contributing more to the economy as producers than they are consuming. It is vital for future immigration policy to recognize that illegal immigration has positive and significant impacts on the economy, and more strategies such as the Matricula card program need to be adopted by more companies and industries to provide illegal immigrants with an easier path to further contribute to the economy.
Works Cited
Camarota, Steven A. “Elite vs. Public Opinion: An Examination of Divergent Views on Immigration.” Center for Immigration Studies (2002). http://www.cis.org/articles/2002/back1402.html. Web. 23 November 2011.
Dinerstein, Marti. “ID’s for Illegals.” Center for Immigration Studies.” http://www.cis.org/MatriculaConsular-IDCards. Web. 3 December 2011.
Ender, Joanna. "Immigration In The U.S.: Economic Effects On The Nation And Its Cities." Business Review (Federal Reserve Bank Of Philadelphia) (2005): 44. MasterFILE Premier. Web. 8 Nov. 2011.
Ewing, Walter. "Are Illegal Immigrants Good For The Economy?." Junior Scholastic 113.8/9 (2011): 9. MasterFILE Premier. Web. 8 November 2011.
Hicks, Michael. "Economics Of Illegal Immigration." Indiana Business Magazine 52.3 (2008): 6. MasterFILE Premier. Web. 8 Nov. 2011.
Los Angeles Almanac. “Illegal Immigrants in California and Los Angeles County.” http://www.laalmanac.com/immigration/im04a.htm.Web. 9 Nov. 2011.
Mauriello, Bruce. “Tax-Paying Illegal Workers Contribute to the Economy.” Illegal Immigration Statistics. http://www.illegalimmigrationstatistics.org/illegal-immigration-pros-tax-paying-illegal-workers-contribute-to-the-economy/. Web. 8 Nov. 2011
Nadadur, Ramanujan. "Illegal Immigration: A Positive Economic Contribution To The United States." Journal Of Ethnic & Migration Studies 35.6 (2009): 1037-1052. Academic Search Premier. Web. 8 Nov. 2011.
Preston, Meredith. "Economy Factors Into Immigration Debate." American City & County 121.6 (2006): 8. MasterFILE Premier. Web. 8 Nov. 2011.
“Unauthorized Immigrants Pay Taxes, Too.” Immigration Policy Center (2010). Academic Search Premier. Web. 8 Nov. 2011.
Jamaica Ritcher
English 102
30 November 2011
Illegal Immigration: A Positive Effect on the Economy Imagine being in line at a convenient store and a Hispanic man is in line in front of you at the counter purchasing food and gas. Chances are that you might not even know it, but he just happens to be an illegal immigrant. Through purchasing that food and gas, he just contributed to the economy as a consumer by paying sales tax. This is just one small example of the several ways illegal immigrants contribute to and positively affect the economy of the United States. For countless years there has been a controversial debate over whether illegal immigration has a positive or detrimental effect on the economy. It has especially …show more content…
been voiced recently through the public due to the economic recession we find ourselves in, along with the growing number of illegal immigrants entering the country every day. The argument that illegal immigrants do not contribute to the economy and free load off American citizens’ tax payments is false. Undocumented immigrants have an overall positive effect and contribution to the economy as workers and consumers by paying sales, property, federal, and state taxes, as well as decreasing consumer costs through cheap labor; the need for the wider acceptance of matricula cards as a form of identification is vital to the economy.
According to a study conducted by Steven A. Camarota, Director of Research at the Center for Immigration Studies, 70 percent of American citizens view illegal immigration as harmful to the U.S. economy. However, undocumented immigrants actually contribute more to the economy than people tend to think. In 2008 there was a reported 12 million undocumented immigrants (Nadadur 3). The American Immigration Lawyers’ Association reported that illegal immigrants may add up to $10 billion to the economy every year (Preston 2). An example of this is illustrated in a 2009 study conducted in the state of Indiana, examining the contributions undocumented immigrants have to the economy. According to the study, Indiana has an estimated 45,000 to 100,000 illegal immigrants that fluctuates seasonally with the agriculture industry. These workers were estimated to have added over $3.5 billion to the state’s economy in 2008 (“Economics of Illegal Immigration” 1). The $3.5 billion contributed by these illegal immigrants is solely in the state of Indiana, a state with one of the lowest numbers of illegal immigrants. I have come up with a system to roughly illustrate how much undocumented immigrants can hypothetically add to the economy in states such as California, where the number of illegal immigrants is estimated at approximately 2,600,000. Take the number of illegal immigrants in Indiana and times it by 26 to get the population of illegal immigrants in California, and then multiply the $3.5 billion contributed by illegal immigrants in Indiana by 26, and that is $91 billion. Even though this is a hypothetical formula and not a precise method for determining the contributions made by illegal immigrants, it provides a thought provoking idea of how much money these immigrants may be contributing. Illegal immigrants feed into the economy because they are forced to pay sales and property taxes, whether they want to or not.
It is impossible for anyone living in the country, whether legal or illegal to avoid paying either of these two forms of taxes. When illegal immigrants enter the country, they have to find a home for themselves and their family. Whether they rent a house or buy a house, they are paying property taxes. When these immigrants rent a house, they are typically paying a monthly renters’ fee to a landlord who is in turn using that money to pay the government in property taxes. Currently, workers in the construction, contracting, and architecture businesses are struggling with finding projects due to the fact that there are few people currently investing in the housing and building market during this time of economic instability. Illegal immigrants that enter the country and invest into the housing market are helping these workers maintain their job security by giving them work. A 2010 study conducted by the Immigration Policy Center reports that illegal immigrants contributed $1.6 billion in state and local property taxes in the 2010 fiscal year (“Unauthorized immigrants pay…1”). This disproves the assumption that illegal immigrants are flying under the radar when it comes to paying taxes. This money paid from property taxes feeds straight into the economy and is used the same as tax money paid by legal citizens. All illegal immigrants pay sales tax on anything they buy domestically, with this money going straight into the economy as
well.
In a 2005 study, it was estimated that 90 percent of the wages earned from undocumented immigrants are spent within the confines of the U.S. border (Nadadur 10). Through the results of the study, it was determined that illegal immigrants have the total capacity to consume $450 billion of goods. If they are spending approximately ninety percent of their earnings in the U.S., that means they are contributing $405 billion to the economy. As mentioned previously, it is fair to articulate that it is nearly impossible to survive in the country without paying taxes for everyday necessities. Illegal immigrants are starting to get more opportunities to contribute to the economy due to a fairly recent concept of select American companies accepting matricula cards as valid identification for certain goods and services in areas where there is a high concentration of illegal immigrants (Nadadur 10). They were first introduced in March 2002 in select metropolitan areas (Dinerstein 1). Matricula cards are photo I.D. cards distributed by the Mexican consulate to Mexican nationals and used as a strategy to encourage congressional action regarding immigration policy in America. These cards were put into effect because of the fact that it is nearly impossible for an illegal immigrant to get a valid American identification card. The Mexican government reports that most matricula card holders do not have documented legal status. The article “ID’s for Illegals”, by Marti Dinerstein from the Center for Immigration Studies, discusses the positive aspects of this type of identification system. He states how the United States has reported that matricula cards are somewhat useful in keeping tabs on the number of illegal immigrants in the country by recording the number of cards used in the United States. While this seems like an odd and risky idea, companies such as Sprint, Costco, and Wells Fargo have begun accepting these cards as a valid form of I.D.(Nadadur 10). These businesses are not hiring immigrants that possess only a matricula card, but rather accepting the cards as a form of I.D. when making purchases or setting up accounts. Dinerstein reports that the matricula card is currently accepted by over 800 law enforcement agencies and 74 banks nationwide. Thirteen states have even even begun to accept these cards as identification for receiving a drivers’ license (Dinerstein 1). Wells Fargo has reported that it has opened 525,000 matricula accounts, which accounts for six percent of the bank’s total accounts. This new concept has also been adopted by certain medical care providers. The Blue Cross of California has begun to sell health insurance to matricula card-holders (Nadadur 10).
It is likely that Hispanics will soon be the largest minority group in the nation. These companies have realized that the massive population of illegal immigrants as potential consumers is too large to ignore. Previously, illegal immigrants weren’t able to contribute to these companies because they had no acceptable form of identification, but through the adoption of the matricula system by certain companies it is allowing illegal immigrants to further contribute to the economy by accepting the matricula card for certain goods and services which they were previously unable to do. Another positive aspect of this system is that it saves time and money for law enforcement agencies. Anytime a person commits even the most minor of infraction of the law, it is standard police protocol to require identification. If the person can’t provide identification, they are immediately sent to jail where the police fingerprint and book them until they can provide proper identification. This can sometimes be a very lengthy process. By illegal immigrants possessing a matricula card as valid identification it is saving law enforcement time, money, and jail space.
Opponents to the concept of the matricula program argue that there is no way to verify the authenticity of the documents, therefore condoning counterfeiting by accepting them. However, there have been new telephone lines recently established between Mexico and the United States that leads directly to the Mexican consulate office. When there is a question regarding the authenticity of the card, U.S. officials can then call the consulate office in Mexico and have them verify its validity through their databases (Dinerstein 2). The Mexican government has made other efforts in reducing the risk of counterfeiting such as adding features to the cards such as: features on the card only visible under infrared or ultraviolet lighting, a high tech decoder, and a seal that changes color in natural light (Dinerstein 2). The Mexican consulate office also takes a current photograph of any matricula card applicant and requires a birth certificate and proof of their place of residence in Mexico that is then filed into a database (Dinerstein 3). It is vital for this system to be more widely adopted so that illegal immigrants have a way to feed into the economy as consumers through investing in the goods and services the United States has to offer. Illegal immigrants are costing big businesses less than native workers, because they are taking low end jobs and getting paid less for them (“Economics of Illegal Immigration 1”). Undocumented immigrants cost big businesses less because they are getting paid lower wages, while performing the same duties as legal citizens are doing and forfeiting the same percentage of their paycheck to income taxes. Many illegal workers pay their taxes through utilizing false tax ID numbers. Businesses are not discriminating between legal and illegal workers by taking the same percentage of income taxes from their employees’ paychecks, regardless of citizenship status. Classical economics says that immigration benefits the host country because the country that the immigrant came from bears the costs of raising the worker until he or she is ready to enter the job market (Nadadur 5). This essentially results in the immigrant’s home country paying for the labor productivity of the country where the individual resides and works (Nadadur 6). Professor Giovanni Peri of the University of California-Davis presented research on how immigration affects the wages of legal citizens in different skill groups (Ender 3). According to Peri, native workers and foreign-born workers complement each other because they differ in their skills. He argues that these different skills increase productivity, which in turn averages out wages (Ender 4). Chief Executive Thomas Donahue of the U.S. Chamber of Commerce presented a speech to Congress in 2005 stating, “Studies have shown that less-skilled workers experience very little downward pressure on their wages from competition with illegal immigrants” (Preston 2). At the same time, immigrants are enhancing economic productivity whether legal or illegal. Illegal immigrants have a positive effect on the U.S. economy by decreasing consumer costs. As a result of illegal immigrants filling the secondary labor market, products and services become cheaper to citizens because these workers are willing to work for below average wages. This saves businesses money and provides a kind of subsidy for them. For example, a substantial number of U.S. farm workers are undocumented, illegal aliens that provide labor for lower wages than U.S. citizens. According to research conducted by the Agriculture Department’s Economic Research Branch, consumers pay less for food than any other developed country because illegal immigration allows businesses to minimize their production costs (Nadadur 9-10). This has a positive effect on all American citizens because it decreases their consumer costs in many different aspects.
Many illegal immigrants work in the agricultural industry where mass production is the key. Without assistance from these migrant workers, there would not be the same level of productivity present. Many of the jobs that involve mass production and low wages are the ones that illegal immigrants fill that many citizens refuse to do. The economy would be sure to take a devastating hit if the number of migrant workers was decreased. Many Americans do not take these jobs because they are typically short term or seasonal, with high employee turnover, and often poor or dirty working conditions. A study was done that showed that while only 4.3 percent of workers in the labor force are undocumented, 20 percent of farming jobs, 17 percent of cleaning jobs, 12 percent of construction jobs, and 11 percent of food preparation occupations are performed by undocumented immigrants (Nadadur 10). If this population of productive workers was to be eliminated, the economy would not be the same. For example, lettuce farms in Arizona need approximately 40,000 people to hand-pick their products (Mauriello 1). There are simply not enough local workers to accomplish that large of a task without the help of seasonal migrant workers. The contributions that undocumented immigrants offer go further than the state and local levels. Illegal immigrants also pay federal taxes and contribute to the national economy. Many illegal immigrants pay taxes such as Social Security by using false documents. The IRS recently collected nearly $305 million of taxes paid using an Individual Tax Identification Number. Social Security taxes are deducted from the pay of illegal immigrants and integrated into the prices of goods such as fuel (“Economics of Illegal Immigration 2”). The use of ITIN numbers is a common method for paying taxes for those who do not have social security numbers but are required to pay taxes by their employers (Mauriello 1). A 2005 study conducted by the Mexican Migration Project shows that 66 percent of illegal immigrants reported their employers deducting Social Security tax from their pay. According to the article, “Tax-Paying Illegal Workers Contribute to the Economy”, illegal immigrants pay approximately $7 billion in Social Security taxes every year. These immigrants are continually paying federal taxes that are used for such programs as Medicare, even though they cannot benefit from these programs. Despite the fact that many illegal immigrants are eligible for many of these programs due to their low wages, they cannot claim income tax returns or claim Social Security benefits because they fear being captured and deported, and because of their lack of proof of citizenship. So in comparison to native workers, immigrant laborers are putting in the same percentage of these taxes, but receiving nothing in return for them. According to the Washington-based Latino civil rights organization, La Raza, many undocumented immigrants are often willing to pay taxes when they have the means to do so (Preston 2). La Raza spokeswoman Luisa Chope claims that, “Many contribute these taxes because they know that their money goes to improving schools that many of their children attend.” Therefore, these undocumented workers are paying more in taxes than they can benefit from government services because of their ineligibility for the majority of offered services. There are people that believe illegal immigrants are taking the jobs from Americans and are the cause of the increasing numbers of unemployment in the United States. There was a study conducted in 2005 that showed that 32 percent of illegal aliens had not completed ninth grade compared to two percent of U.S. citizens that had not completed that grade level (Nadadur 7). The minimal educational background of many illegal immigrants holds them back from receiving the opportunity to explore a broad spectrum of job opportunities, which in turn makes them less competitive in job markets being pursued by American citizens (Nadadur 8). Americans should not blame illegal immigrants for the current high unemployment rates. This study shows that most American citizens have higher qualifications for jobs than undocumented immigrants and shouldn’t view these immigrants as competition, because the majority of employers value higher education in the hiring process.
This minimal educational background prevents many immigrants from catching up to the salaries of native workers, which provides them fewer job opportunities. In a study conducted by Professor David Card of the University of California-Berkeley, winner of the John Bates Clark medal for his contributions to economics, he found that the inflow of illegal, undocumented workers has little to no effect on job market opportunities for native workers (Ender 2). Card claims that opportunities for low-skilled workers are sustained by the broad use of low-skilled illegal workers as this type of labor becomes more abundant. Some people argue that if there were no illegal immigrants available for work in the United States, many businesses that have a need for a large labor force would move their production overseas in search of more workers (Mauriello 1). This would cause a drastic decrease in job opportunities for American workers. The jobs that the illegal immigrants are taking is freeing up the local labor pool for higher salary jobs. This shows that it is a naïve assumption to say that illegal immigrants are taking away jobs from U.S. citizens. Opponents to illegal immigration often argue that illegal immigrants hurt the economy by using public services such as health care and public schools out of the pockets of American citizens. Under federal law, emergency medical services are required to provide care to pregnant women and babies, which is a large expense that the country picks up the tab for (Nadadur 13). However, babies born in the United States are by law legal citizens at birth, so fifty percent of the money spent on providing care to a pregnant mother is also going to a legal United States citizen. Also, fifty six percent of illegal immigrants are male. Proponents of illegal immigration have argued that males use less public services than females and children (Nadadur 13). Additional research has been conducted that demonstrates trends showing that illegal immigrants are far less likely and often deterred to use public services because of the fear of being discovered by immigration authorities and deported out of the country (Nadadur 13).
Furthermore, a 2000 Health Affairs study found that illegal immigrants are far less likely to use available health-care services compared to the legal population (Nadadur 13). There is also no sufficient data regarding the health costs of undocumented immigrants, and until the data is presented, it is unfair to conclude that illegal immigrants have a negative effect on the funds of medical services. Public education was guaranteed to illegal immigrant children in 1982 as a result of Supreme Court case Plyer vs. Doe (Nadadur 14). Therefore based on this case, it is a legal right of illegal immigrants to have the opportunity of attending public schools, and a legal obligation of American citizens to provide it. In conclusion, illegal immigration benefits the United States economy and is far more beneficial than detrimental. Illegal immigrants generally pay the same property, income, and sales taxes as American citizens do. They contribute towards funds such as Social Security, Medicaid, and Medicare while for the most part not receiving any of the programs’ benefits in return. Undocumented workers help keep consumer costs down for American citizens by contributing in increasing productivity, which aids supply for many of the goods available in our market. Illegal immigrants are a necessity and fuel the economy by spending the majority of their earned wages in the United States. They are an asset to many of America’s industries such as agriculture, construction, cleaning, and food preparation. Without their work, many of the country’s industries would not be the same. Illegal immigrants provide a subsidy for businesses by providing cheaper labor. Overall, illegal immigrants are contributing more to the economy as producers than they are consuming. It is vital for future immigration policy to recognize that illegal immigration has positive and significant impacts on the economy, and more strategies such as the Matricula card program need to be adopted by more companies and industries to provide illegal immigrants with an easier path to further contribute to the economy.
Works Cited
Camarota, Steven A. “Elite vs. Public Opinion: An Examination of Divergent Views on Immigration.” Center for Immigration Studies (2002). http://www.cis.org/articles/2002/back1402.html. Web. 23 November 2011.
Dinerstein, Marti. “ID’s for Illegals.” Center for Immigration Studies.” http://www.cis.org/MatriculaConsular-IDCards. Web. 3 December 2011.
Ender, Joanna. "Immigration In The U.S.: Economic Effects On The Nation And Its Cities." Business Review (Federal Reserve Bank Of Philadelphia) (2005): 44. MasterFILE Premier. Web. 8 Nov. 2011.
Ewing, Walter. "Are Illegal Immigrants Good For The Economy?." Junior Scholastic 113.8/9 (2011): 9. MasterFILE Premier. Web. 8 November 2011.
Hicks, Michael. "Economics Of Illegal Immigration." Indiana Business Magazine 52.3 (2008): 6. MasterFILE Premier. Web. 8 Nov. 2011.
Los Angeles Almanac. “Illegal Immigrants in California and Los Angeles County.” http://www.laalmanac.com/immigration/im04a.htm.Web. 9 Nov. 2011.
Mauriello, Bruce. “Tax-Paying Illegal Workers Contribute to the Economy.” Illegal Immigration Statistics. http://www.illegalimmigrationstatistics.org/illegal-immigration-pros-tax-paying-illegal-workers-contribute-to-the-economy/. Web. 8 Nov. 2011
Nadadur, Ramanujan. "Illegal Immigration: A Positive Economic Contribution To The United States." Journal Of Ethnic & Migration Studies 35.6 (2009): 1037-1052. Academic Search Premier. Web. 8 Nov. 2011.
Preston, Meredith. "Economy Factors Into Immigration Debate." American City & County 121.6 (2006): 8. MasterFILE Premier. Web. 8 Nov. 2011.
“Unauthorized Immigrants Pay Taxes, Too.” Immigration Policy Center (2010). Academic Search Premier. Web. 8 Nov. 2011.