Illegal Immigrants are a Net Gain to our Economy

by Chuck McGlawn 7/13/2015

Let’s do a mind experiment if the “Ground Dwellers” had been successful in preventing the “Tree Dwellers” from climbing down from those trees and illegally immigrating to the ground, we would not be having this discussion. If the lions, tigers, elephants, snakes, lizards, scorpions, spiders etc could have banded together, created a government with the power to prevent the tree-dwellers from descending to the ground, those tree-dwellers would still, be in the trees and not on the evolutionary pathway, that would lead to fire, the wheel, the lever, the windmill, the steam locomotive, the 747 jet, or the internet. And we would not have Lou Dobbs, Rush Limbaugh, Sean Hannity, Ann Coulter et al (The lions, tigers, elephants, snakes, lizards, scorpions, spiders, etc of our day) to remind us of the horrors of illegal immigration

Dobbs, Rush, Hannity, Coulter, et al and most people that are opposed to migrants coming into the US raise the most indefensible objections. Their opposition almost always focuses on economics. They claim, incorrectly, that illegals are an economic drain on our economy. By definition, that means that illegals consume more in social services than they pay in taxes.

Even when economist use that very flawed formula for calculating the benefits to the US economy from this migration, illegal immigration it still reveals a net gain to the US economy.  However, the benefits that accrue to the US economy go way beyond just the difference between the more taxes the illegal immigrants pay, than the social services they consume.

Because the Dobbs, Hannity, Limbaugh, and Conservatives of every stripe control the thinking on this subject so thoroughly that real studies are rarely undertaken, or the more complete studies are dismissed by being labeled as “Liberal” or the conclusions are marginalized in a cloud of ambiguity, distortions and outright lies.

However, when and if you ever read the studies, used by the conservatives you will find equivocation on a grand scale, but read closely you will also find, as we did, that most economists agree that illegal immigration is a net gain to our economy.

The most conservative estimate has illegals paying $36 billion more in taxes than they consume in services. More realistic estimates, place it closer to $200 Billion. And it would be much much more if the ancillary effects of the contribution to the well being of our economy were measured. [See example below] And it would be even more if we had a functional Guest Worker Program, where migrants would not have to be looking over their shoulder while they are, at the same time, looking for work, and we didn’t spend Billions trying to keep them out.

Here are just a few of the statements from major studies.

The Economics and Policy of Illegal Immigration in the United States

By Gordon H. Hanson

University of California-San Diego

and National Bureau of Economic Research report:

• illegal immigration has been hugely beneficial to the many US employers

• Unauthorized immigrants provide a ready source of manpower in agriculture, construction, food processing, building cleaning and maintenance, and other low-end jobs, at a time when the share of low-skilled native-born individuals in the US labor force has fallen dramatically.

• Illegal inflows broadly track economic performance, rising during periods of expansion and stalling during downturns (including the present one).

• By contrast, legal flows for low-skilled workers are both very small and relatively unresponsive to economic conditions. [In other words, the legal immigration established by Government quotas is responsible for low-skilled labor shortages and low-skilled labor surpluses. This is par for the coarse when the government tries to improve on the workings of the free market. CM]

• Unauthorized entry is the primary means through which the US economy gains access to low-skilled foreign labor.

• inflows of unauthorized labor responded to the demands of US business, helping raise US productivity in the process.

The Pew Hispanic Center estimates that in 2008, [illegals] represented 25 percent of farmworkers, 19 percent of building and maintenance staff, 17 percent of construction labor, 12 percent of employees in food preparation and serving, 10 percent of production labor, and 5 percent of the total civilian labor force. The US economy could no doubt survive the departure of these workers, but it would cause disruptions in labor-intensive industries and the regions in which they are concentrated.

The Economic Logic of Illegal Immigration by Gordon H Hanson

• In the United States, scarce workers include low-skilled workers in construction, food preparation, and cleaning services, for which the supply of U.S. native labor has been falling.

• Temporary legal workers cannot easily move between jobs, limiting their benefit to the U.S. economy.

• Lower prices for goods and services raise the real incomes of U.S. households, with most of these gains going to those in regions with large immigrant populations.

• The total impact of immigration on U.S. residents—the sum of the immigration surplus (the pretax income gain) and the net fiscal transfer from immigrants—would be unambiguously positive. They generate a positive immigration surplus (by raising U.S. productivity) and make a positive net tax contribution (by adding to U.S. Government coffers)

In this Council Special Report, Professor Gordon H. Hanson approaches immigration through the lens of economics. The results are surprising. By focusing on the economic costs and benefits of legal and illegal immigration, Professor Hanson concludes that stemming illegal immigration would likely lead to a net drain on the U.S. economy—a finding that calls into question many of the proposals to increase funding for border protection.

Mark Zandi, the chief economist at Moody's Economy.com, says, "If illegal immigration came to a standstill, it would disrupt the economy, it would lead to higher prices for many goods and services, and some things literally would not get done. It would be a major adjustment for our economy, for sure."

From Why Did Lou Dobbs Quit? by Mark Thornton

§ The only national problem with immigration is the government. Because immigrants are relatively poor they tend to pay less in taxes than their use of so-called government services like health care and education, and thus they increase the burden of taxation. We can, therefore, solve the immigration problem by simply eliminating government programs that provide free services. Note: we would simultaneously solve the problems of education and health care by placing these industries back into the private sector.

• Immigrants, particularly illegal Mexican immigrants have found good jobs in industries associated with the [government created] housing bubble. Large numbers of immigrants work at jobs in the construction, landscaping, and road construction industries. Employment in the construction industry alone is currently nearly two million jobs above trend (7.7 vs. 5.9 million).

• Thornton concludes, “Migration is naturally balancing as long as the government provides no incentives like free education and healthcare.”

It is doubtful that anyone would disagree with the fact that illegal immigrants, by virtue of their working for low wages, boost corporate profits (this is the only reason why corporations employ illegal immigrants) and reduce commodity prices for Americans overall. … not just to direct savings in purchases for individual consumers, it also contributes partly to keep the lid on inflation…And don’t forget the higher taxes paid by the corporations because of increased profits.

The other most common criticism against illegal immigrants are their alleged "sucking-up" of taxpayer dollars (for education/welfare). There have been many studies cited to support these charges and in a topic as controversial as this is, it is very difficult for me, as a reader who is trying to be objective, to find any facts that are trustworthy.