Economic Impact Of Immigration In America

[edit] 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."[2]

A survey conducted in the 1980s found that economists themselves overwhelmingly viewed immigration, including illegal immigration, as positive for the economy.[3] They found that 76 percent felt that recent illegal immigration has a positive affect on the economy.

In an article that appeared in the World Policy Journal (1994), Peter Andreas asserts that constraining the flow of illegal immigration in states such as California, may result in economic stagnation.[4]

[edit] Participation in the free market

One of the largest drivers of immigration both legal and illegal is economic supply and demand for labor and the natural human desire of people to participate in the economy and in so doing better their economic situation. Labor is a mobile economic factor of production, efforts to limit its mobility are attempts at limiting the free market (for labor). However, a free migration argument consistent with free market economy would require us to first have a free market and no welfare system.[5][6]

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.[7]

[edit] Impact on Social Services

The nonpartisan Congressional Budget Office.[8] reviewed 29 reports published over 15 years to evaluate the impact of unauthorized immigrants on the budgets of state and local governments. It found the following

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

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.

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"[9], 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 вЂ" more than double the rate for natives in 1999.[10] 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.[11]

Professor of Law [12] 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."[13]

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 aliens.[14]

[edit] Social security

Since 1986, when the Immigration Reform and Control Act set penalties for employers who knowingly hire illegal immigrants, most illegal immigrant workers have been using fake or stolen ID's and social security numbers to get a job.[15] Many employers who hire illegals withhold social security and income taxes and send the required numbers and tax payments on to the IRS and Social Security administration (SSA).

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 $1500 billion 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.[16] This money represents income reporting mistakes, honest and otherwise of U.S. citizens and income paid by illegal immigrant workers and underground U.S. workers using counterfeit or stolen cards. The largest single source of this mismatched income is illegal immigrant workers. To put this in persepective it should be noted that in 2005 SSA brought in $1045.2 billion dollars total of taxes and interest.[17]

[edit] Impact on Poverty

"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."[18]

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