Illegal immigrants do bring benefits as well as costs to the U.S. economy. The economic benefits of illegal immigration are two-fold: taxes and spending.
Taxes
The Social Security Administration believes that about half of unauthorized immigrants pay Social Security Taxes. A 2005 New York Times piece reported that over 9 million W-2 wage forms with incorrect or false Social Security Numbers were turned into the government in 2002, a reasonable benchmark for the number of undocumented workers. These represented some $56 billion dollars in earnings, $6 billion in Social Security taxes and $1.5 billion for Medicare.
Naturally, the exact tax numbers for illegal immigrants are hard to establish, but at least it is clear they are paying into the system.
Consumption
Something else that many opponents of illegal immigration forget or choose to ignore is the consumer power of this group. UCLA's Raul Hinojosa is quoted in BusinessWeek estimating that "the total goods and services they consume ... plus all they produce for their employers, is close to about $800 billion."
Some argue that much of what illegal immigrants make doesn't benefit the U.S. economy because it is sent back to their families in Mexico and other countries in the form of remittances. Even considering the $42 billion that the World Bank says left the United States (in 2006) as remittances, that is only about 10% of illegal immigrants' wages, says Hinojosa. That leaves about $400-450 billion of that is consumptive capacity staying in the U.S.
Impact on Labor Force
Andrew Sum, an economist at Northeastern University in Boston, adds another dimension to this issue. Though he does acknowledge that the large supply of (illegal) immigrants in the U.S. has likely displaced low-skilled native workers, that the relative youth and higher birth rate of immigrants has been key to dynamism and growth in the labor force. "Without the immigrants," Sum told CNNMoney.com, "we would have a decline in labor force of 3 to 4 percent. We couldn't have grown nearly as much as we did in the '90s."
This idea is part of a broader demographic shift that is taking place in America. According to the U.S. Census Bureau, Hispanics - by far the largest group of immigrants - will represent 45 percent of population growth between now and 2030 and 60% of growth from 2030 to 2050. Whites, in comparison, will contribute about 14% of overall population growth between now and 2030 and are slated to begin declining in absolute numbers after that.
Economists often warn against making too direct or causal a link between population growth and economic growth. Consider that a younger population requires more jobs, hard to provide in times of economic crisis. But a larger population does mean larger markets for products and housing, potential engines of growth.
Net Effect
A previous article laid out the ambiguities plaguing the debate over illegal immigration, as each side fields numbers that bolster their side and not the other. This article shows that there are indeed benefits from illegal immigration, but the question of whether they outweigh the costs remains.
Reference:
U.S. Census Bureau - "Population Profile of the United States"
 |
