Do you think illegal immigrants pay for themselves?

[Infohawk]

It seems like a lot of the debate about whether illegal immigrants are good or bad for America comes down to whether people think they are a net benefit to the economy or not.

I can't think of any scenario in which citizens are net befitting from illegals on the whole.

We can look at back of the envelope calculations:
Here is an article that is excited that illegals paid 11 billion in taxes. http://articles.nydailynews.com/2011-04-20/local/29470037_1_sales-taxes-tax-revenue-property-taxes Unsurprisingly, most of this comes from state sales taxes 2011 studies suggest there are 11 million illegals in the country. On average, they're paying $1,000 in taxes. That's negligible. It costs states about $8,000 per year to send a kid to public school. This is not even getting into other public services available to illegals like hospitals, roads, regulatory systems and law and order that you don't really find in central America...

People frequently talk about the past to argue that waves of immigrants make the economy boom. Of course, in the 19th and early 20th century there were barely any public services like what we have now. Immigrants truly did make their own way with little or no handouts from the rest of society. They suffered for it but eventually made their own way.

So, if you think illegals are a net economic benefit, please explain (even if its only in back of the envelope calculations) how this can be so.

(And please don't bring legal immigration or race into this thanks.)

 

[sm625]

They help push down prices. They help continue a long tradition of an underground economy. When the disgusting blob of soviet madness we call Washington DC comes crashing down on itself, we are going to need a functioning black market to take its place. The market formed around illegals, as well as drugs and guns is what we will rely on to keep some sense of civility.

 

[woolfe9999]

I don't know the answer to this question, and I think if people are being honest, no one else here does either. The issue is very complex. My gut tells me the answer is probably no, but I'm nowhere near 100% certain of that.

I think there is a problem with relying only on taxes paid. That is only part of the equation. Illegals will also do work like home services more cheaply than citizens. In some cases this costs the citizen a job. In others, it only creates economic value because the person doing the hiring would not have paid the vastly higher price and would never have had the work done to begin with, or would have done it themselves. In those cases, the payment to the illegal is money that gets circulated rather than saved, and that is good for the economy.

This is a non-trivial issue. Living in California, I personally know many people who hire illegals to do things: yardwork, cleaning, handyman stuff, hauling, etc. that they either wouldn't be having done or would be doing themselves but for the really low price of hiring the illegal. However, my anecdotal observations are not scientific because I can't quantify how much work is of this type versus the type that actually costs citizens jobs.

- wolf

 

[MovingTarget]

No. They depress wages in any given field, and they utilize the same services as you and I while getting paid under the table (i.e. without paying non-sales taxes). They are a drain on the average citizen and legal immigrant alike.

 

[her209]

No.

/thread

 

[First]

Not that hard to find lots of evidence, actually. Here are two studies that show illegals break about even or have a net economic benefit:

http://www.cbo.gov/ftpdocs/87xx/doc8711/12-6-Immigration.pdf (CBO, small negative economic impact, but did not consider consumption impact on businesses)
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=881584 (Chapman University, positive economic impact)

According to the CBO study:

"In most of the estimates that CBO examined, however, spending for unauthorized immigrants accounted for less than 5 percent of total state and local spending for those services. Spending for unauthorized immigrants in certain jurisdictions in California was higher but still represented less than 10 percent of total spending for those services."

According to the Chapman study:

"Americans believe that undocumented immigrants are exploiting the United States' economy. The widespread belief is that illegal aliens cost more in government services than they contribute to the economy. This belief is undeniably false. [E]very empirical study of illegals' economic impact demonstrates the opposite . . .: undocumenteds actually contribute more to public coffers in taxes than they cost in social services. Moreover, undocumented immigrants 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. Eighty-five percent of eminent economists surveyed have concluded that undocumented immigrants have had a positive (seventy-four percent) or neutral (eleven percent) impact on the U.S. economy."

The point about illegal immigrant impact on subsequent job creation as a result of their consumption, even IF they take in more in public services than they dole out in local/state/federal taxes, is clearly a very strong case and is difficult to measure in hard numbers but undeniably cannot be ignored nor should it be meddled with via baseless wingnut studies masquerading as honest analysis.

By and large, the fear of illegals is almost exclusively based on ignorance, xenophobia or some combination thereof and has little to do with their economic impact, which is worst case scenario slightly negative economically and best case scenario significantly positive economically.

 

[woolfe9999]

No. They depress wages in any given field, and they utilize the same services as you and I while getting paid under the table (i.e. without paying non-sales taxes). They are a drain on the average citizen and legal immigrant alike.

Not in every case.

Just take house cleaning as an example, because a huge percentage of female illegals are employed doing that, some for the wealthy, but most for the middle class. Having someone else clean your house is not necessary for basically anyone except maybe the disabled. It's something some people do because they don't want to do it themselves. Accordingly, they're only going to hire someone to do it if they can afford it. If the illegal isn't available at $10 per hour and they have to pay a citizen $20 per hour, they may just do the house cleaning themselves. In that case, the availability of the illegal has created a new price point and hence new demand to go along with it. If the citizen has to lower their price to $10 per hour to compete, they are competing for work they wouldn't have gotten anyway, with or without competition from the illegal, because the buyer can't afford the higher price.

In many cases, it costs jobs or lowers prices, yes. But not in all cases. In some cases, it is a net economic benefit.

- wolf

 

[Infohawk]

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=881584 (Chapman University, positive economic impact)

The Harvard Latino Law Review article merely has conclusions. It has no actual analysis to explain why it would be a benefit to the economy. The most convincing facts it has is listing all the federal benefits illegals don't get but most of us already know they don't get those. The state education, infrastructure and hospital systems are where the money is lost. The article seems to ignore those.

I'm open-minded. If you have articles that delve deeper into the issues (preferably from economists), I'm willing to look at them.

 

[gevorg]

They don't add to the economy, they're leaching from the economy.

 

[woolfe9999]

An addition to my observation about illegals in home services. While it is true they don't pay taxes, it is also true that many citizens in that line of work don't either. They are payed often in cash. Anyone who thinks this is reported more often than not is naive. Illegals often compete against citizens in areas where the citizens don't pay taxes either. Furthermore, most people in that line of work don't make enough to pay income taxes anyway, even if they do report it.

 

[Infohawk]

I don't know the answer to this question, and I think if people are being honest, no one else here does either. The issue is very complex. My gut tells me the answer is probably no, but I'm nowhere near 100% certain of that.

I don't disagree completely, which is why I am posting this. If someone has interesting facts or analysis I want to here them.

At the same time we shouldn't overstate the uncertainty. One of the strengths of our relatively free market economy is that it has accurate pricing system. People's economic contributions are signaled by their salaries which are measured clearly in dollars. Illegals simply don't make that much. We can measure their salaries (and taxes generated) and we can measure the government services they consume. Do they match up? Or don't they? It seems like they don't and considering their illegal status I see no reason to excuse the shortfall like I do with our poor or otherwise disadvantaged citizens. I think I would mind illegal immigration less if they were truly in the black market as someone suggested earlier. In that case, they would be truly paying their own way.

 

[pcgeek11]

Is this really a question? The answer is an obvious No.

 

[woolfe9999]

I don't disagree completely, which is why I am posting this. If someone has interesting facts or analysis I want to here them.

At the same time we shouldn't overstate the uncertainty. One of the strengths of our relatively free market economy is that it has accurate pricing system. People's economic contributions are signaled by their salaries which are measured clearly in dollars. Illegals simply don't make that much. We can measure their salaries (and taxes generated) and we can measure the government services they consume. Do they match up? Or don't they? It seems like they don't and considering their illegal status I see no reason to excuse the shortfall like I do with our poor or otherwise disadvantaged citizens. I think I would mind illegal immigration less if they were truly in the black market as someone suggested earlier. In that case, they would be truly paying their own way.

Yes, we can measure that portion of their economic impact reasonably well- taxes paid versus services consumed. (I'd like to see the services consumed number but I'll assume your point is correct for now.) However, that is only the portion measureable by dollars transferred through the public sector. Where there is much greater uncertainty is their impact within the private sector, e.g. the examples and illustrations I have given suggest that there are many situations where the illegal being in the market helps the economy but others where it harms the economy and we don't know how much of each there is.

The oft cited maxim that illegals steal jobs is not always true. In some cases those jobs would not exist without the illegal and there is benefit to that money being circulated as well as the enhancement in the quality of life for those who can hire illegals for services but cannot afford to pay more.

- wolf

 

[Slew Foot]

but but butbutbutbutbbtbut... you can save 5 cents on lettuce!!

 

[Carmen813]

The total economic impact (GDP) of undocumented workers is estimated at around $500 billion a year. It far exceeds the amount of money that they utilize in government services. Many of them also pay into Social Security and Medicare, programs from which they will never receive benefits.

*Edit*
However, it's worth noting that there is no real way to measure any of this.

 

[Fern]

In a previous thread about this not too long ago, I posted a link to a study done by a economics professor. The answer is "NO".

If low wages, low taxes and absorbing more in government services was a really net benefit for the economy Greece would be in great shape; but it's not.

Edit: Look up a 1997 study by Dr. Donald Huddle, Professor Emeritus of Economics at Rice University. The net burden is in the ten's of billions.

Then there's this: http://www.themoralliberal.com/2011/04/05/most-illegal-immigrant-families-collect-welfare/

Fern

 

[tweaker2]

IMO the biggest impact the illegals make is not so much in the domestic occupations but in agribusiness and other large businesses that employ them in large numbers.

It seems to me the value that they provide in this regard is in the increased profits that these businesses gain from employing them. This boosts income more for the rich than any other class. Most of the revenues gained from paying illegals so cheaply don't get passed on, or down in this case. Most of those "savings" don't get trickled down to those of us who buy the products the illegals produce. The profits get taken up before the products reach the store shelves.

The supposed positive flow of cash ala "savings" into the middle class and poor of the nation is further restricted from the amount of earnings the illegals make that get sent outside our borders. A large portion of the income the illegals earn does not stay in-country and recirculate at the lower income levels.

So I don't see how hiring illegals helps the middle class and the poor much at all. The rich sucks off the cream at the top, a lot of what's left gets sent out of country and the middle class and the poor citizens gets to compete for depressed wages caused by the illegals willing to work for slave wages.

edit - Of course, if I'm shown compelling evidence that refutes my opinion, I would be more than happy to hear it and modify my opinion accordingly.

 

[MovingTarget]

but but butbutbutbutbbtbut... you can save 5 cents on lettuce!!

And Tyson Chicken! :thumbsdown:

There are exceptions though, as wolf stated, but we are talking about illegal immigrants as a whole here. I am a supporter of comprehensive immigration reform so that those willing to contribute to the success of this nation are able to do so in a legal way.

 

[werepossum]

I don't know the answer to this question, and I think if people are being honest, no one else here does either. The issue is very complex. My gut tells me the answer is probably no, but I'm nowhere near 100% certain of that.

I think there is a problem with relying only on taxes paid. That is only part of the equation. Illegals will also do work like home services more cheaply than citizens. In some cases this costs the citizen a job. In others, it only creates economic value because the person doing the hiring would not have paid the vastly higher price and would never have had the work done to begin with, or would have done it themselves. In those cases, the payment to the illegal is money that gets circulated rather than saved, and that is good for the economy.

This is a non-trivial issue. Living in California, I personally know many people who hire illegals to do things: yardwork, cleaning, handyman stuff, hauling, etc. that they either wouldn't be having done or would be doing themselves but for the really low price of hiring the illegal. However, my anecdotal observations are not scientific because I can't quantify how much work is of this type versus the type that actually costs citizens jobs.

- wolf

This. Illegals depress wages, leading to wealth stratification and indirectly, to more socialism. They also export money from the country, and use relatively very high levels of social services. They are however often more productive, the threat of starvation and the opportunity to be rewarded for hard work proving to be stronger boosts to productivity than the offsetting drain due to lack of education. And being cheaper, they may well make some manufacturing companies competitive enough to survive against foreign competition.

I voted "No", but you are absolutely right that none of us really knows. Even an honest, unbiased scientific study (which will never happen) would require valuation of indirect and intangible benefits and drawbacks for which no universal agreement of valuation could ever be made.

A much more clear case would be legal immigrants, which I believe are a net boost although, like anything, too much may be toxic. I would therefore feel safe in saying that children of illegals who do assimilate are a net benefit - but even that is a wild ass guess.

 

[Infohawk]

The total economic impact (GDP) of undocumented workers is estimated at around $500 billion a year. It far exceeds the amount of money that they utilize in government services. Many of them also pay into Social Security and Medicare, programs from which they will never receive benefits.

Myeahh we already went over the SS and medicare. GDP is not the same as tax revenues.

 

[Infohawk]

but but butbutbutbutbbtbut... you can save 5 cents on lettuce!!

LOL. Unfortunately he'll want you to use those savings to buy air conditioning for migrant farm workers. You don't end up saving in the end.

 

[DaveSimmons]

No, but like the budget most voters want to have their cake, eat it too, then pass the bill on to someone else in the future.

People want cheap landscaping and apples. Perhaps we could bus welfare recipients out to the farms to pick fruit and solve two problems at once.

 

[First]

The Harvard Latino Law Review article merely has conclusions. It has no actual analysis to explain why it would be a benefit to the economy. The most convincing facts it has is listing all the federal benefits illegals don't get but most of us already know they don't get those. The state education, infrastructure and hospital systems are where the money is lost. The article seems to ignore those.

I'm open-minded. If you have articles that delve deeper into the issues (preferably from economists), I'm willing to look at them.

The CBO weighed in quite adequately and despite admittedly leaving out their direct consumption impact on small businesses, they were only able to find a small net negative economic impact. Any reasonable measure of their impact on consumption, which powers 70% of GDP and therefore payroll for small businesses that only survive based on said consumption, is VERY likely to be more than the several billion they take away in social services. There's really very little question any negative impact they have is quite small, and that it's far more likely they have some sort of positive net economic impact. Anything else is pure bluster.

 

[zinfamous]

I would think...slightly, yes.

 

[Fern]

-snip-
There's really very little question any negative impact they have is quite small, and that it's far more likely they have some sort of positive net economic impact. Anything else is pure bluster.

Tell it to Dr. Donald Huddle, Professor Emeritus of Economics at Rice University. He says otherwise.

Fern