The Impact of Illegal Immigration of Economy in the U.S

Posted: September 10th, 2013

The Impact of Illegal Immigration of Economy in the U.S

Name:

Course:

Date:

The Impact of Illegal Immigration of Economy in the U.S

            The true extent and consequence of unlawful immigration to the American financial system has been cause for debate among scholars and politicians alike. It has been found that Illegal immigrants can be both beneficial and simultaneously costly to the American financial system. At the very least, illegal immigrants buy goods and services contributing to the labor and levy dollars while expecting services that include healthcare, law enforcement and education (Anderson 2010, p. 38). The existence of unlawful settlers in America also has other complex implications in the country’s economic system. For example, their involvement in the economy reduces the average salaries given to natives with limited proficiency. Many have argued that the participation of unlawful immigrants in the American financial system does more harm than good. Illegal immigration is the cause of several economic issues such as crime, rising costs and unemployment.

Evidence has shown that the cost on the US economy by illegal immigrants can either be equivalent to or outweigh the benefits of continuing to host them in the country. This problem has been seen to threaten the financial system of the nation and may even cripple it in the future. The truth of these claims remains debatable. However, it is important to understand who illegal immigrants are their history before looking at the problems or benefits that they may have on the US economy and how these problems can be solved. Attention must be put on solving the situation rather than removing immigrants from the country all together. Illegal immigration is menace but immigrants still form an important part of the economy, good or bad.

Illegal immigrants are all those individuals who have been born in foreign countries, are non-citizens and their presence in the country is illegal. A good number of the unlawful settlers entered the country without being inspected or stayed in the country long after they were supposed to leave. It is difficult to give accurate estimates as to the quantity of settlers in the nation, but it is believed that about 33% of the individuals born outside the nation are in the country illegally. In the year 2009, the Center for Immigration Studies affirmed that 63 percent of the unlawful settlers entered the country before 2000 (Hartman 2006, p. 103). Sixty-two percent of this population came from Mexico. Seventy-five percent of the unauthorized immigrants in the country are Latino. Most immigrants come from Mexico. However, other unauthorized immigrants who enter the US include those from Asia, South America, the Caribbean and the Mid East. Illegal Immigrants constitute approximately 4% of the country’s population (Newton 2008, p. 57). Majority of this population have been residing in the nation for more than ten years.

Four percent is a significant number in the American population for it to have an influence on the American economy. The negative implications of illegal immigrants have been thought of to be equal to or even outweighing the benefits. It will be interesting to look at the benefits and the shortfalls that the American economy has suffered in relation to the participation of unlawful settlers in the nation. It would also be interesting to balance between the implications on the economy of deporting all the immigrants out of the nation and the implications of having them stay. Another important factor would be to examine the reasons for the large number of illegal immigrants in the country and the rationale behind deporting them despite the reasons they have given. Some have claimed that having unlawful settlers in the nation is good, since it may cost the economy more that it would for having them stay in the country. So, what are the impacts of having unlawful settlers in America with regard to the economy?

The impacts can be either positive or negative. One benefit is that they provide cheap labor (Nadadur 2009, 1041). Labor is a vital economic factor of production in any country in the world. The mobility of aspects of production that include labor is a prerequisite to the success of the international trade. Illegal immigrants in this sense offer cheaper services to employers in the across the nation. Land is very expensive and farmers need to grow crops and expect high returns on their investments. Growing crops is very labor intensive. In San Diego for example, Immigrant labor is important (Pham & Van 2010, p 495). Without them, the farms there run the risk of disappearing. Tourism is also a benefactor of immigrants. Those doing housekeeping chores in the hotels in San Diego are Immigrants (Pham & Van 2010, p 497). No matter how one looks at it, cheap labor ensures employers are making profits and that customers enjoy cheaper services. However, while employers may be looking at this from the cheap labor point of view, low-skilled Americans are struggling to compete with a group willing to take lower wages than they are. In this case, the role of immigration of the economy is the cause of unemployment in the country.

However, in industries where illegal workers are highest, the effect on unemployment is not very significant, as people would like to think. The existence of unlawful settlers in the nation is a chance for legal workers to benefit from this. For example, when Chicago is experiencing an elevated quantity of unlawful settlers, the wages for lawyers increase. In time, more lawyers would want to move to the city and the wages will return to normal creating a balance in terms of wages among lawyers (Newton 2008, p. 64). The fact that immigrants are around to offer cheap labor, employers are not at the mercy of individuals with low skills asking for more than they deserve. The undocumented workers in this sense can be seen as being of assistance to the financial system.

Another important factor to consider is that illegal immigrants take the least wanted jobs in the nation. These jobs include construction, restaurant jobs, and agriculture among other menial jobs. If undocumented workers were not there to take these jobs, then it would be difficult for employers to get reliable workers. They would result to employers considering automation of their activities and then destroy the chances of ever having jobs in these sectors. Their cheap labor also translates lower prices of products where they work. Therefore, Americans get to enjoy cheaper prices of goods as opposed to the high prices that would have resulted form higher wages of low-skilled laborers. Still, illegal immigrants are considered a nuisance to the economic status of the country.

Unemployment is a big issue in the country and the illegal immigrants have been accused of taking the jobs meant for documented immigrants and American citizens. It is true that their involvement lower the salaries of individuals with limited proficiency in the country, but the rest of America is profiting by paying reduced charges for items such as meals in restaurants, agricultural produce and even construction. Another important thing is that immigration levels are higher in Los Angeles, Chicago and New York (Newton 2008, p. 77). Therefore, unemployment rates in the United States cannot be attributed to the immigrant population. Their impact on unemployment is therefore lower than it has been portrayed in the country’s media. In fact, it can be asserted that the illegal immigrants have an important part to play in the wellness of the economy.

There have been those who have argued that the illegal immigrants have a vital position in the maintenance of the American economy. Therefore, America has to focus more on this fact rather than focus on law enforcement to handle issues regarding undocumented immigrants. The claim is that illegal immigration is brought about by the high demand for labor. A higher demand for cheap labor increases the likelihood for illegal immigration. The quantity of unlawful settlers in 2006 was at levels well beyond 11 million undocumented individuals (Gilchrist & Corsi 2006, p. 128). During the recession that began in 2008, this number began to drop because there were fewer jobs. This is the first time that the numbers dropped (Preston 2008). The population of immigrants was always growing from 1990 to the time the recession hit America. This is testament to the actuality that the immigrant population has a crucial function in the economic wellbeing of the country.

Historically, foreigners or immigrants have been an important part in the growth of the American populace and the economy. America is considered the land of opportunity and this draws many people to the country. Notably, the only time the emigration rate from the United States was higher than that of immigration was during the 1930 Great Depression. Illegal immigrants have been considered to form at least 4.9 percent of the inhabitant workforce in the country (Porter 2012). Illegal immigrants are the ones filling the gaps in jobs that are undesired by American workers because of what they consider low pay. The new regulation in Georgia in 2010 that stopped farmers from hiring illegal immigrants and requirement to report illegal immigrants was a blow to the farmers association. In turn, the Georgia farmers had lost about 50 percent of its work force. Their crop also suffered since there were not enough laborers to work in the fields. This also meant that the prices of fresh produce were higher. Consequently, there was the likelihood that more jobs suffered especially venders who deal with fresh produce.

The Economic activity brought about by illegal immigrant spending ensures that about five percent of the entire American workforce is employed. Undocumented immigrants are believed to be occupants of over 3 million housing units. This is about four percent of all the homes in America. An investigation carried out by the University of California LA (UCLA) shows that immigrants’ involvement in the economy produces about 150 billion dollars of the country’s economic activity (Hartman 2006, p. 38). Illegal immigrant labor favors employers more since desperate workers are willing to take lower wages to work. The benefits to the employer by hiring an illegal provide them with the opportunity to offer cheaper services. The employer is also not inclined to make welfare contributions or even make any wage related costs. The advantages of unlawful settlers also extend to real estate business.

The reduction of the undocumented immigrants in the country has left over 500,000 home permanently unoccupied. Because of the decreased demand in housing, many jobs have been lost leaving mortgage brokers, contractors and realtors unemployed. Again, the decreased expenditure by unlawful immigrants due to the economic decline was the direct result of the loss of one million jobs of individuals who offered services to this population. The migration of the Hispanic population back to Mexico was the cause of these problems. What policy makers failed to account for in deporting the many illegal immigrant was that they were great contributors to the economy. Every dollar that is earned by an illegal immigrant is spent almost immediately. Once this factor has been eliminated, the US economy is left with a hole that is unable to fill unless the immigrants are left to stay. The taxes that are got from their spending cannot be recovered.

The major arguments against immigrants in the country are the fact that they do not pay taxes. Therefore, illegal immigrants have thought of as being offered government services that they are not at liberty to enjoy. However, the IRS has estimated that close to 6 million illegal immigrants have been filing revenue tax proceeds annually. The Congressional Budget Office has also shown that 50 percent to 75 percent of illegal and undocumented immigrants have been paying local, state and federal taxes (Camarota 2004). It is also estimated that illegal immigrants have paid about $7 billion has been paid into the Social Security fund every year. In addition to all these, the illegal immigrant population spends millions of dollars each year supporting the United States and creating a number of jobs in return for many Americans. The participation of unlawful settlers in the nation is also very important because they are the reason why prices of certain goods and services are lower.

The effect of on the pricing on commodities is because of the existence of unlawful settlers within economic activities. While the salaries of lower-expertise laborers go under, the rest of America is able to enjoy cheaper pricing in for example restaurant meals, construction and even agricultural produce. The impact on the economy because of illegal immigrants is far smaller than what other trends shaping the economy have. For example, illegal immigrants have very little impact as compared to the developments in global trade and the increase in the automation of economic processes in the country (Newton 2008, p. 71). These two factors have major implications on prices, wages, and the wellness of the American financial system than illegal immigration will ever have. Economists however believe that when the whole economy is considered, illegal immigration offers little benefits.

Regardless, the potential dangers of removing all immigrants in the country will have far-reaching consequences that retaining them. The American manufacturers will have to suffer shortages in the labor force. Americans will be forced to join the work force in positions that are lower than what their education qualifications allow them. The result of this phenomenon will be the fact that wages may rise to very high levels and destroying the chance for American laborers to get employment in other countries because of their high wage demands (Anderson 2010, p. 16). The dependence for low skilled labor will be higher because the education qualification levels in the United States will have increased. Therefore, illegal immigrants have a big role to play in sustaining the stability in the economy. The illegal immigrants are is a problem that has been created by the inability of Americans to take up low skill jobs for lower pay.

Nonetheless, it is necessary to point out that the illegal immigrants will drain the government resources only if they are unable to pay taxes. The government should maximize on their presence and strive to ensure that more taxes can be collected on from this group. The impact on wages of the unlawful settlers is not significant. Most Americans will agree that the deportation of the immigrants back to their countries will have little impact on the amount of money they take home as wages. The simple reason is that most Americans do not compete for the same jobs as immigrants. However, those who stand to gain from such a move would be high school dropouts (Davidson 2006). This is because they are the ones mainly competing for the low paying jobs with the immigrants. The deportation of all undocumented immigrants would mean a pay rise for their services. The down side is that employers will have to raise prices for goods and services owing to the high wages that will e required to get the necessary help. Consequently, there is the chance that cost of living will rise. Nevertheless, if the immigrants are allowed to stay, they are able to create more jobs. This is because the buy goods and services. Therefore, their impact on unemployment would be positive rather than negative.

The positive consequence of immigration on the financial system depends on the educational level of the individual rather than the legal status of an immigrant (Nadadur 2009, p. 1043). A more educated immigrant is likely to contribute more to the economy than one who has lower education levels. Illegal immigrants are predominantly low skilled because of their poor levels of education. For this, they take very menial jobs and the result for this is that employers are able to enjoy the cheap labor. Their low education levels may be reason to think that they are costing more than, if they were legal. The fact that they are not at liberty to seek welfare and other governments benefits except emergency medical services, they are cheaper than legal immigrants are. However, it is apparent that unlawful immigrants have been filing tax returns on their personal incomes, contributing to Medicare, social security and other services that they will never enjoy. The immigrants have been though of as baggage to the American financial system. The truth is that their role in the economy has been downplayed and they have become the victims of an ill-informed American society.

For example, the argument that illegal immigrants are using up government services reserved for American citizens is not entirely true. All those born in America are supposed to be considered citizens in America. There are surveys that have been carried out on illegal immigrants classifying even those born in America as illegal. This may be because the parents are of illegal status. Nevertheless, the fact that they have been born in the country qualifies them to be considered Americans. Education is considered a prime aspect in the maintenance of the economy. An estimated seven percent of school-age populace consists of children considered illegal immigrants (Porter 2012). Many of these children need further assistance in sharpening their language skills. This in turn increases the costs of education in public schools, a cost that is incurred by the local governments. This is true except for the fact that there may be children considered as illegal yet they have been born in the country and therefore entitled to the services offered by the government including education and Healthcare.

When it comes to healthcare, illegal immigrants and even legal settlers who have been residing in the nation for less than five years are not eligible for the Medicaid programme. However, this service is offered to them in instances of emergency or if they meet certain requirements such as the young, the expectant, the elderly and disabled individuals among other criteria. However, what most people are unaware of is the fact that the charge for these emergency treatments take very little from Medicaid. While they are offered emergency treatments, they are required to pay in non-emergency circumstances (Wolf 2008). The illegal immigrants are also exempt from other benefits simply because they are not citizens. Still others counter this and believe that the illegal immigrants cost the American taxpayer a huge sum to sustain their continued existence in the country.

An advocacy group that favors tighter policies relating to immigration, Federation for American Immigration Reform, suggests that illegal aliens cost $100 billion and the American taxpayer foots the bill (Fahmy 2010). In Arizona, it is estimated that the state government spends between $1.3 billion and $2.5 billion every year on undocumented immigrants (Fahmy 2010). The state is also believed to incur a number of indirect costs that include education, medical and correctional costs. Crime continues to be a problem in the country especially crime that is caused by illegal immigrants. Crime means that more people have to be incarcerated making correctional facilities across the country overrun by illegal immigrants.

These immigrants have to be taken care of using the taxpayer’s money. This is a real and difficult situation for government agencies to handle. People believe that money spent on reforming immigrants could be used to serve other causes for example law enforcement, education, healthcare and infrastructure. However, correctional facilities do not only harbor illegal immigrants, but other criminals who are Americans. Instead of blaming illegal immigrants, the country should look for solutions to the costs incurred regarding illegal immigration.

The solutions to the financial charges of unlawful settlers are to ensure that these costs have been transferred to the immigrants themselves. It may be right to say that the cost of illegal immigrants is directly proportional to what they give back to the American economy. FAIR’s estimates that the taxpayer is subjected to spending over 100 billion dollars, yet, other estimates show that the existence of unlawful settlers in the nation contributes about 150 billion dollars every year. The problem of unlawful settlers in the nation is a problem that needs to be tackled with the utmost importance. The deportation of these illegal immigrants may not be the right decision with regard to the effects it may have on the economy.

State and Local governments have been incurring costs for providing essential services to illegal immigrants. The state and local administrations have no way of ensuring that these costs have been paid for. The amount of money spent on illegal immigrants is a small amount compared to what the total budget is for the rest of the population in local and state governments (Gilchrist & Corsi 2006, p. 24). It is also true that the amount of revenue that is collected from the illegal immigrant population is not enough to pay for the full charge of services rendered. The federal government programs continue to present supplies to their state and local counterparts but the problem remains that this aid is not enough to envelop the charges acquired by states. A permanent solution to the problem needs top be created to ensure that illegal immigrants pay for services offered by government. Since they are already in the country, law enforcement should focus its efforts on preventing further entry into the country. Government on the other hand should be keen on ensuring that revenue is collected from illegal immigrants by legalizing immigrants (Camarota 2004).

The role of unlawful settlers on the population has shown that it has positive impacts but at the same time, it has shown that it has negative impacts on the economy in America. The fact that the undocumented settlers are in the nation unlawfully makes it a difficult task to ensure that the services they enjoy are paid for. It would be much easier to legalize all of them, but there is no telling if the immigrant stream into the United States will ever end. The immigrants are a big problem in the country and the issue needs to be sorted out permanently. However, the solution is not by deporting all illegal immigrants to their country since the effect on the American financial system may be detrimental.

References