Economic impact of illegal immigrants in the United States


Economic impact of illegal immigrants in the United States

The overall economic impact of Illegal Immigrants to the United States is a contested issue.

Historic views

According to a 1998 article in "The National Academies Press", "many [previous studies] represented not science but advocacy from both sides of the immigration debate...often offered an incomplete accounting of either the full list of taxpayer costs and benefits by ignoring some programs and taxes while including others", and that "the conceptual foundation of this research was rarely explicitly stated, offering opportunities to tilt the research toward the desired result." [James P. Smith and Barry Edmonston, Eds., "The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration (1998)", p. 2, The National Academies Press (1998) [http://books.nap.edu/openbook.php?record_id=5985&page=2 The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration (1998).] Retrieved: February 19, 2008.] One survey conducted in the 1980s (before the current wave of illegal immigration) found that 76 percent of economists felt recent illegal immigration had had [Survey results reported in Simon, Julian L. (1989) The Economic Consequences of Immigration Boston: Basil Blackwell are discussed widely and available as of September 12, 2007 at a Cato group policy paper by Simon [http://www.cato.org/pubs/policy_report/pr-imopi.html here] .] a positive effect on the economy.

upply and demand for labor

Labor is a mobile economic factor of production and Peter Andreas asserts that illegal immigration is spurred on by periods of high demand for labor. [Andreas, Peter, "The Making of Amerexico (Mis)Handling Illegal Immigration," World Policy Journal Vol. 11.2 (1994): pp.55. "The sad irony is that the most important constraint on the flow of illegal aliens may be continued economic stagnation in states such as California. In periods of recession, labor markets tighten, reducing em- ployment opportunities--both legal and illegal. Economic recovery, on the other hand--propelled in no small part by the hard work of illegal laborers already here-- would expand opportunities in the labor market, encouraging continued illegal immigration."]

"Supporters of a crackdown argue that the U.S. economy would benefit if illegal immigrants were to leave, because U.S. employers would be forced to raise wages to attract American workers. Critics of this approach say the loss of illegal immigrants would stall the U.S. economy, saying undocumented workers do many jobs few native-born Americans will do." [ [http://www.npr.org/templates/story/story.php?storyId=5312900 Q&A: Illegal Immigrants and the U.S. Economy : NPR ] ]

According to the executive vice president of Banco Popular, the bank has found no higher rate of default in home loans to illegal immigrants than any other market the company serves. [Shaheen Pasha. [http://money.cnn.com/2005/08/08/news/economy/illegal_immigrants/index.htm Banking on illegal immigrants] . CNN/Money, August 8, 2005.] This was before the Subprime mortgage crisis.

A free migration argument consistent with free market economy would require us to first have a free market and no welfare system. [ [http://www.mises.org/story/2135 The War on Immigration Will Fail - Wade A. Mitchell - Mises Institute ] ]

Taxes and social services

The IRS estimates that about 6 million unauthorized immigrants file individual income tax returns each year. Research reviewed by the nonpartisan Congressional Budget Office indicates that between 50 percent and 75 percent of unauthorized immigrants pay federal, state, and local taxes. Undocumented workers are estimated to pay in about $7 billion per year into Social Security. [cite news | url=http://www.nytimes.com/2005/04/05/business/05immigration.html?ex=1270353600&en=78c87ac4641dc383&ei=5090 | title=Illegal Immigrants Are Bolstering Social Security With Billions | publisher=New York Times | author=Eduardo Porter | date=April 5, 2005]

Professor of Law Francine Lipman [ [http://www.chapman.edu/law/faculty/lipman.asp Francine Lipman] ] writes that the belief that undocumented migrants are exploiting the US economy and that they cost more in services than they contribute to the economy is "undeniably false". Lipman asserts that "undocumented immigrants actually contribute more to public coffers in taxes than they cost in social services" and "contribute to the U.S. economy through their investments and consumption of goods and services; filling of millions of essential worker positions resulting in subsidiary job creation, increased productivity and lower costs of goods and services; and unrequited contributions to Social Security, Medicare and unemployment insurance programs." [cite journal | author=J. Lipman, Francine, J. | title=Taxing Undocumented Immigrants: Separate, Unequal and Without Representation | url=http://papers.ssrn.com/sol3/papers.cfm?abstract_id=881584 | publisher= [http://www.abanet.org/tax/pubs/ttl/ The Tax Lawyer] | date=Spring 2006. Also published in Harvard Latino Law Review Spring 2006 [http://www.law.harvard.edu/students/orgs/llr/vol9/lipman.pdf] .]

The nonpartisan Congressional Budget Office reviewed 29 reports published over 15 years on the impact of unauthorized immigrants on the budgets of state and local governments. While cautioning that the reports are not a suitable basis for developing an aggregate national effect across all states, they concluded that:cite web | url=http://www.cbo.gov/ftpdocs/87xx/doc8711/12-6-Immigration.pdf | title=The Impact of Unauthorized Immigrants on the Budgets of State and Local Governments | publisher=The Congress of the United States - Congressional Budget Office | date=12-2007 ]
*State and local governments incur costs for providing services to unauthorized immigrants and have limited options for avoiding or minimizing those costs
*The amount that state and local governments spend on services for unauthorized immigrants represents a small percentage of the total amount spent by those governments to provide such services to residents in their jurisdictions
*The tax revenues that unauthorized immigrants generate for state and local governments do not offset the total cost of services provided to those immigrants, although the impact is most likely modest.
*Federal aid programs offer resources to state and local governments that provide services to unauthorized immigrants, but those funds do not fully cover the costs incurred by those governments.

Aviva Chomsky, a professor at Salem State College, states that "Early studies in California and in the Southwest and in the Southeast...have come to the same conclusions. Immigrants, documented and undocumented, are more likely to pay taxes than they are to use public services. Illegal immigrants aren't eligible for most public services and live in fear of revealing themselves to government authorities. Households headed by undocumented immigrants use less than half the amount of federal services that households headed by documented immigrants or citizens make use of." [ (Chomsky: 2007, 40)]

Editorialist Robert Samuelson points out that poor immigrants strains public services such as local schools and health care. He points out that "from 2000 to 2006, 41 percent of the increase in people without health insurance occurred among Hispanics"Samuelson, Robert (2007) "Importing poverty" Washington Post [http://www.washingtonpost.com/wp-dyn/content/article/2007/09/04/AR2007090401623.html September 5, 2007] )] , although he makes clear that these facts are true of legal as well as illegal immigrants. According to the Center for Immigration Studies, 25.8% of Mexican immigrants lived in poverty — more than double the rate for natives in 1999.Center for Immigration Studies [http://www.cis.org/articles/2001/mexico/poverty.html Not Dated] ] In another report, The Heritage Foundation notes that from 1990 to 2006, the number of poor Hispanics increased 3.2 million, from 6 million to 9.2 million.Importing Poverty: Immigration and Poverty in the United States: A Book of Charts [http://www.heritage.org/Research/Immigration/SR9.cfm October 25, 2006] ]

Michael D. Antonovich, a board member of the Los Angeles County Board of Supervisors, has said that welfare costs for illegal immigrants in LA County were over $37 million in September 2007 and that they had increased $2 million over the previous two months. He also said that 25% of all welfare and food stamp benefits go directly to children of illegal aliens and that the projected annual cost in welfare and food stamps for illegal aliens would be $444 million - including public safety and healthcare, the total cost for illegal immigrants to the County exceeded $1 billion a year - not including the millions of dollars for education. [http://antonovich.co.la.ca.us/newsroom/releases/jan2008/RELEASE%20%20illegals%20WELFARE.pdf]

Ernesto Zedillo, former President of Mexico and current Director of the Yale Center for the Study of Globalization, asserts that illegal immigrants are only a drain on government services when they are incapable of paying taxes; and that this incapacity is the result of restrictive federal policies that require proof of citizenship. He further argues that the US economy has "crucial" need for migrant workers, and that the current debate must acknowledge this rather than just focus on enforcement. [Citation
last =Zedillo
first =Ernesto
author-link =
last2 =
first2 =
author2-link =
title =Migranomics Instead of Walls
newspaper =Forbes
pages =25-25
year =2007
date=1/8/2007
url =
]

The Internal Revenue Service issues an Individual Taxpayer Identification Number (ITIN) regardless of immigration status because both resident and nonresident aliens may have Federal tax return and payment responsibilities under the Internal Revenue Code. Federal tax law prohibits the IRS from sharing data with other government agencies including the INS. In 2006 1.4 million people used ITIN when filing taxes, of which more than half were illegal immigrants. [ [http://www.npr.org/templates/story/story.php?storyId=7718604 U.S. Tax Program for Illegal Immigrants Under Fire] NPR, March 5, 2007.]

ocial security

The Social Security Administration has stated that it believes unauthorized work by non-citizens is a major cause of wage items being posted as erroneous wage reports instead of on an individual's earnings record. [http://www.ssa.gov/oig/communications/testimony_speeches/03142006testimony.htm Administrative Challenges Facing the Social Security Administration] . Congressional Testimony - March 14, 2006] When Social Security numbers are already in use; names do not match the numbers or the numbers are fake, or the person of record is too old, young, dead etc., the earnings reported to the Social Security Agency are put in an Earnings Suspense file [ESF] . The Social Security spends about $100 million a year and corrects all but about 2% of these. From Tax Years (TY) 1937 through 2003 the ESF had accumulated about 255 million mismatched wage reports, representing $520 billion in wages and about $75 billion in employment taxes paid into the over $1.5 trillion in the Social Security Trust funds. As of October 2005, approximately 8.8 million wage reports, representing $57.8 billion in wages remained unresolved in the suspense file for TY 2003.

Impact on poverty

"In North Carolina, where the immigrant share of workers with a high school degree or less doubled in the past five years, surging immigration has depressed wages for low-skilled native workers and cost some their jobs, says John Kasarda, a professor at the University of North Carolina's business school." [ [http://www.usatoday.com/money/economy/2006-04-10-immigrants-economic-impact_x.htm USATODAY.com - Immigrants claim pivotal role in economy ] ]

Research by [http://www.borjas.com George Borjas] , Robert W. Scrivner Professor of Economics and Social Policy at Harvard University, shows that illegal immigrants had a long-term reduction of wages among American poor citizens during the 1980s and 1990s by 4.8% while increasing the average American's wealth by less than 1%. The effect on wages for middle class individuals was an overall wealth increase. [The Evolution of the Mexican-Born Workforce in the United States [http://ksghome.harvard.edu/%7EGBorjas/Papers/w11281.pdf April 2005] ] .

Paul Samuelson, Nobel prize-winning economist from MIT, posits that wealthier Americans tend to benefit from the illegal influx, while poorer Americans tend to suffer. [Citation
last =Elstrom
first =Peter
author-link =
last2 =
first2 =
author2-link =
title =Fresh Ideas for the Immigration Debate
newspaper =BusinessWeekOnline
pages =6-6
year =2007
date=2/27/2007
url =
] [Rising black-Latino clash on jobs [http://www.csmonitor.com/2006/0525/p01s03-ussc.html May 25, 2006] ]

High school drop outs would expect to see an average of 25 dollar a week raise if illegal immigrants disappeared. [http://www.npr.org/templates/story/story.php?storyId=5312900] .

Impact on African Americans

Research by George Borjas (Robert W. Scrivner Professor of Economics and Social Policy at Harvard University), Jeffrey Grogger (the Irving Harris Professor in Urban Policy in the Harris School at the University of Chicago), and Gordon H. Hanson (the Director of the Center on Pacific Economies and Professor of Economics at UCSD) found that a 10-percent immigrant-induced increase in the supply of a particular skill group reduced the black wage by 4.0 percent, lowered the employment rate of black men by 3.5 percentage points, and increased the incarceration rate of blacks by almost one percent. [Immigration and African-American Employment Opportunities: The Response of Wages, Employment, and Incarceration to Labor Supply Shocks [http://www.nber.org/papers/w12518 September 2006] ]

“We're being overrun,” says Ted Hayes of Choose Black America, which has led anti-illegal immigration marches in south-central Los Angeles, California. “The compañeros have taken all the housing. If you don't speak Spanish they turn you down for jobs. Our children are jumped upon in the schools. They are trying to drive us out.” [Wikipedia Race relations] He also touts illegal immigration as the biggest threat to blacks in America since slavery.Black activists join Minutemen Project against illegal immigration [http://www.topix.com/forum/afam/TTMKJRF5CBOI64OJ5 Sep 3, 2007] ] Hayesâ Crispus Attucks Brigade and the American Black Citizens Opposed to Illegal Immigration Invasion have organized protests against illegal immigration.

Education

Using the U.S. INS statistics on how many illegal immigrants are residing in each state and the U.S. Dept of Education's current expenditure per pupil by state, the Federation for American Immigration Reform has estimated cost of educating illegal alien students and U.S.-Born Children of Illegal Aliens in 2004 for the top five states was as follows [ [http://www.fairus.org/site/PageServer?pagename=research_researchf6ad FAIR: Breaking the Piggy Bank: How Illegal Immigration is Sending Schools Into the Red Full Text ] ]

Spending for public education of undocumented children and U.S.-born children of undocumented parents in K-12 public education in Minnesota for 2003-2004 was a total of $118.14 million to $157.53 million [ [http://www.state.mn.us/mn/externalDocs/Administration/Report_The_Impact_of_Illegal_Immigration_on_Minnesota_120805035315_Illegal%20Immigration%20Brief%2026.pdf Illegal Immigrants ] ]

For the same time period, total spending in New Mexico at the state and local levels for illegal immigrant schoolchildren was about $67 million [(New Mexico Fiscal Policy Project, Undocumented Immigrants in New Mexico.)]

According to the newsbrief, "the enormous impact of large-scale illegal immigration cannot be ignored." [ [http://www.fairus.org/site/PageServer?pagename=research_researchf6ad Breaking the Piggy Bank: How Illegal Immigration is Sending Schools Into the Red] , by Jack Martin, Director of Special Projects, Federation for American Immigration Reform (FAIR), June 2005.]

Health care

Because of the U.S. Emergency Medical Treatment and Active Labor Act of 1986 (usc|42|1395dd), most hospitals may not refuse anyone treatment for an emergency medical condition regardless of citizenship, legal status, or ability to pay. Uncompensated care generates a significant financial burden on hospital emergency departments and cost-shifting to insured and paying patients. Fact|date=July 2008

The Immigration and Naturalization Service (INS) continues to bring injured and ill undocumented immigrants to hospital emergency rooms without taking financial responsibility for their medical care.EXECUTIVE SUMMARY, The USMBCC hired MGT of America, Inc. (MGT) in the fall of 2001 to conduct the analysis. [http://www.bordercounties.org/vertical/Sites/%7BB4A0F1FF-7823-4C95-8D7A-F5E400063C73%7D/uploads/%7B19324764-F50C-4C2D-ABDC-73317A65FC41%7D.DOC Fall 2001] ] Almost $190 million or about 25 percent of the uncompensated costs southwest border county hospitals incurred resulted from emergency medical treatment provided to undocumented immigrants

In 2006, the Oklahoma Health Care Authority estimated that it would spend about $9.7 million on emergency Medicaidservices for unauthorized immigrants and that 80 percent of those costs would be for services associated with childbirth. [statement of Nico Gomez, spokesman for Oklahoma Health Care Authority, before the Oklahoma Senate Task Force on Immigration, September 18, 2006. The Medicaid program is funded jointly by the states and the federal government. This report did not include the federal portion of funding for the program.]

Madeleine Cosman writes in the Journal of American Physicians and Surgeons that the burden of illegal immigrants on the health care system in the US has forced many hospitals to close due to unpaid bills and the unfunded mandate of Emergency Medical Treatment and Active Labor Act (EMTALA). Between 1993 and 2003, 60 hospitals in California alone were forced to close, and many others had to reduce staff or implement other procedures which reduced the level of service they could provide. The article attributes these closings mainly to illegal immigration. [http://www.jpands.org/vol10no1/cosman.pdf]

Data from personal interviews

At least two research studies have been done which attempt to discover the cost of health care for illegal immigrants by asking the illegal immigrants themselves.
*A phone survey in which Alexander Ortega and colleagues at the University of California asked illegal immigrants how often they receive medical care reported that illegal immigrants are no more likely to visit the emergency room than native born Americans, though their bills are usually either unpaid or passed on to the state [ Illegal Immigrants not US Health Care Burden [http://www.reuters.com/article/latestCrisis/idUSN26407393] ] .
*A RAND study concluded that the total federal cost of providing medical expenses for the 78% illegal immigrants without health insurance coverage was $1.1 billion, with immigrants paying $321 million of health care costs out-of-pocket. The study found that undocumented immigrants tend to visit physicians less frequently than U.S. citizens because they are younger and because people with chronic health problems are less likely to immigrate. [ [http://www.medicalnewstoday.com/medicalnews.php?newsid=56809 Health Care For Undocumented Immigrants Cost $1.1B In 2000, Study Finds ] ] . [ [http://rand.org/news/press.06/11.14.html RAND study shows relatively little public money spent providing health care to undocumented immigrants] ]

Contagions and epidemic

To reduce the risk of mortality from infection diseases in low-incidence areas, the main countermeasure has been the screening of immigrants on arrival. Prior to being awarded a green card, legal immigrants over the age of 15 must have a chest x-ray or skin test to check for tuberculosis. [The Patient Predator, Investigative Fund of Mother Jones [http://www.motherjones.com/news/feature/2003/03/ma_311_01.html March/April 2003 Issue] ] [I-693, Medical Examination of Aliens Seeking Adjustment of Status, Department of Homeland Security, U.S. Citizenship and Immigration Services [http://www.uscis.gov/files/form/I-693.pdf OMB No. 1615-0033; Expires 08/31/09] ] Illegal immigrants are not screened in this manner. However, according to the Center for Disease Control and Prevention (CDC)] , tuberculosis (TB) cases among foreign-born individuals remain disproportionately high, at nearly nine times the rate of U.S.-born persons. Immigration from areas of high incidence is thought to have fueled the resurgence of tuberculosis (TB), chagas, hepatitis, and leprosy in areas of low incidence. In 2003, nearly 26 percent of foreign-born TB patients in the United States were from Mexico. Another third of the foreign-born cases were among those from the Philippines, Vietnam, India and China, the CDC report said. [Is CDC covering up skyrocketing TB rate? [http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=43384 March 19, 2005] ] [CDC - Persistent High Incidence of Tuberculosis in Immigrants in a Low-Incidence Country [http://www.cdc.gov/ncidod/eid/vol8no7/01-0482.htm May 13, 2002] ] [Leprosy, Hepatitis and Tuberculosis Rising Fast in United States [http://www.newswithviews.com/Wooldridge/frosty9.htm December 2, 2004] ]

References

ee also

* Economic impact of immigration to Canada


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