There are few issues that are more divisive in the United States than illegal immigration. Some Americans want undocumented workers arrested and deported back to their country of origin. Others, point to the benefits these workers give to the United States and want to enact an amnesty plan for illegal immigrants now living in the country. Many also want these immigrants to have access to a wide range of social, medical and educational opportunities. Others, want them precluded from such programs.
Often, these arguments are based on emotional or political stands. From a more analytical perspective, the more fundamental question arises: Do foreign-born workers, illegal or legal, benefit or hurt the United States economically?
President’s Council of Economic Advisors Argue for Immigrants
On the pro side, here are some findings from a study done by the President’s Council of Economic Advisors in 2007 entitled Immigration’s Economic Impact. On average, U.S. residents benefit from immigration, the study concludes. Immigrants tend to raise natives’ productivity and income.
Immigration is likely to have a modest, positive influence when looking at long-run, fiscal perspectives.
The presence of skilled immigrants is likely to be especially beneficial to natives.
Immigrants are a critical part of the U.S. workforce and contribute to productivity, growth and technological advancement. They make up 15 percent of all workers and even larger shares of certain occupations such as construction, food services and health care. About 40 percent of scientists with Ph.D.s working in the United States were born abroad.
Many immigrants are entrepreneurs. The Kauffman Foundation’s index of entrepreneurial activity is nearly 40 percent higher for immigrants than for natives.
Immigrants and their children assimilate into U.S. culture. For example, although 72 percent of first-generation Latino immigrants use Spanish as their predominant language, only 7 percent of the second generations are Spanish-dominant.
Immigrants have lower crime rates than natives. Among men aged 18 to 40, immigrants are much less likely to be incarcerated than natives.
Immigrants slightly improve the solvency of pay-as-you-go entitlement programs such as Social Security and Medicare. An additional 100,000 net immigrants per year would increase the long-range actuarial balance by about 0.07% of taxable payroll.
The long-run impact of immigration on public budgets is likely to be positive. Projections of future taxes and government spending are uncertain, but a study published by the National Research Council estimated that immigrants and their descendants would contribute about $80,000 more in taxes (in 1996 dollars) than they would receive in public services.
These points lead to the conclusion that immigrants show a strong work ethic, and the children of immigrants tend to assimilate into the society relatively quickly in terms of language acquisition and educational attainment. They benefit the economy and the wider society.
Opponents Weigh In
But opponents disagree. Writing in the conservative publication City Journal, Steven Malanga admits that a 1997 National Academy of Sciences study estimated that immigration’s net benefit to the American economy raises the average income of the native-born by about $10 billion a year—which works out to about $120 per household.
But he quickly adds that whatever economic benefits come from unskilled immigrants, they have to weighed against the added cost from immigrants to social programs and immigrant-advocacy programs.
For example, a 1998 National Academy of Sciences study found that more than 30 percent of California’s foreign-born were on Medicaid compared with 14 percent of native-born households.
The foreign-born were more than twice as likely as the native-born to be on welfare, and their children were nearly five times as likely to be in means-tested government lunch programs, he says.
One study estimated that only 56 percent of illegals in California have taxes deducted from their earnings.
Immigrant families cost each native-born household in California an additional $1,200 a year in taxes.
Immigrants lower the wages of native-born workers. Harvard economists, George Borjas and Lawrence Katz, estimate that low-wage immigration cuts the wages for the average native-born high school dropout by some 8 percent, or more than $1,200 a year.
He projects that immigrants’ participation in social welfare programs will increase over time, because so many are destined to struggle in the U.S. workforce.
Unskilled immigrants also take jobs away from natives of the United States who also work in unskilled fields. He argues that there is no labor shortage for the immigrants to fill. Unemployment among unskilled workers was about 30 percent, as of 2006.
The potential drawbacks to a proposed guest-worker program far outweigh any economic benefit, given the history of temporary-worker programs in developed countries.
He concludes that the United States should only allow workers that the country needs and exclude those who are likely to cost more than they contribute.
There is no question that foreign-born workers benefit the U.S. economy in certain ways. But it remains open to debate whether the benefits are outweighed by costs. The debate will likely to continue well into this century.
