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Effects of Immigration on the Economy

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Illegal immigration is an issue that has been highly debated in the United States for decades, and the effects of these immigrants will be for many to come, especially with the country in a recession and many people in economic trouble. December 1, 2008 the National Bureau of Economic Research officially declared The U.

S. in a recession. Before 2007, U. S. economy has grown in 23 of the last 25 years. During this period, the U. S. attracted record numbers of new immigrants. The U. S. oreign-born population had quadrupled from 9. 6 million in 1970 to 38. 1 million in 2007. In the past decade, more than one million immigrants have entered this country legally each year and about another 500,000 entered illegally. Immigrants from Latin America (including Mexico) account for 54% of all immigrants, compared to 18% in 1970. Asians account for 27% compared to 9% in 1970. Europe and Canada decreased from 68% in 1970 to 15% today. (Terrazas 2009) According to a 2007 Gallop poll 46% of Americans, believe that immigrants are making the economic situation worse.

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On the other hand, yearly we gain between one billion and 10 billion of the gross domestic product because of immigration.

Likewise, the increase in immigration presents many problems today many believe that immigrants are imperative for the U. S. economy to grow, and without them, the losses would be significantly greater than the gains. The Federal Reserve Bank of Dallas(2003) identified three ways immigrants contribute to job growth in the U. S. by stating that “they fill an increasing share of jobs overall, they take jobs in labor-scarce regions, and fill the types of jobs native workers shun”(Federal Reserve Bank of Dallas,pg. ). Many economists feel that without immigrants in our workforce production levels would decrease, demand and prices would increase, this could force us to spend more money on goods less available than they are today. According to the Bureau of Labor Statistics, 2. 4 million immigrants, nearly 30% of those are working in residential construction (Isadore 2006). Many are not only building the houses but also buying them, so if the immigrants were taken away not only would it create a problem in production of goods and the work force, it would also put the housing market at a higher risk.

Simmons identified many problems that immigrants present to our economy, instead of contributing tax dollars to education, health care, and prison systems residents of California have to pay nearly $1,000. 00 per household to aid in the regulation of the population of illegal immigrants (Simmons 2006). Illegal immigration has both negative and positive impacts on different parts of the economy. Wages for low-skilled workers go down, therefore that means the benefits by Americans of paying lower prices for things like meals at restaurants, produce, and construction.

Another negative impact is on expenditures by the government. This is because illegal immigrants do not pay taxes but their children go to public schools and they use other services. So many people perceive them as a strain on government spending. If you averaged all the negative and positive effects over the whole economy, the effect is a small positive, according to George Borjas a Harvard professor, the average American’s wealth will increase by less than 1% because of illegal immigration.

In February 2011, article the “Federation for American Immigration Reform” states that “Illegal immigration costs U. S. taxpayers about $113 billion a year at the federal, state, and local levels. The annual outlay that illegal aliens cost taxpayers is an average amount per native-headed household of $117. 00. Education for the children of illegal aliens constitutes the single largest cost for taxpayers, at an annual price tag of nearly $52 billion”. (Simmons 2006). At the state and local levels, the taxes recouped through taxes collected from illegal immigrants’ average less than 5% of the public costs associated with illegal immigrants.

Some staggering statistics, California facing a budget deficit in 2010-2011 of $14. 4 billion is facing the expenses of $21. 8 billion to take care of illegal immigrants; likewise, in New York $6. 8 billion deficit is smaller than the $9. 5 billion in yearly costs for illegal immigrants. A number of illegal immigrants have children once they are here in the U. S. making their children U. S. citizens and so, they cannot be counted as part of the total number of undocumented children in the U. S. even though an illegal immigrant heads their household.

Immigration has accounted for a large majority of the increase in enrollment in public schools. Seven percent of the school age children are from illegal immigrant families. Many of these children require additional assistance, which is an added cost to the school system. April 2006, a Standard and Poor’s annalists wrote, “Local school districts are estimated to educate 1. 8 million undocumented children. At an annual cost of $7500 per student, the cost of providing education to these children is about $11. 2 billion”.

In 2009, the estimated cost to educate children of undocumented and U. S. born children is $30 billion. Another added expense of illegal immigrants includes border enforcement. The U. S. spending on enforcing the borders is very high; the Center of Immigration Studies reported that in 2007-2008 enforcement resources such as border and interior enforcement costs far more than the tax savings that would be generated from reduced illegal presence. The U. S. Today reported that” illegal immigrants could get emergency care through Medicaid, the federal-state program for the poor and people with disabilities.

They cannot get non-emergency care unless they pay. They are eligible for most public health benefits”. Illegal immigrants and legal immigrants who are here less than 5 years are ineligible for Medicaid unless they fall into the categories such as children, elderly, or disabled. The Pew Hispanic Center estimated in 2005 that 59% of the nations illegal immigrants are uninsured compared to 25% of legal immigrants and 14% of U. S. citizens, they make up about 15% of the nation’s 47 million uninsured people.

The Center for Immigration Studies, an organization that advocates immigration reduction reported in 2004,”Households headed by illegal aliens imposed more than $26. 3 billion in costs on the federal government in 2002 and paid only $16 billion in taxes, creating a net fiscal deficit of almost $10. 4 billion, or $2700. 00 per illegal household”. (www. cis. org) If the United States gave amnesty to illegal immigrants and they began to pay taxes and use services like households headed by legal immigrants with the same education levels, the estimated annual net fiscal deficit would increase from $2700. 0 per household to nearly $7700. 00, for a total cost of $29 billion. Although legalization would increase average tax payments by 77%, average costs would rise by 118%.

The vast majority of illegal immigrants hold jobs; likewise, the fiscal deficit they create for the government is not from an unwillingness to work. There are benefits, drawbacks, and arguments on both sides of the debate, but you have to look at the overall picture and ask the question, Can the benefits illegal immigrants provide worth the costs? That question will be part of a debate for a long time in the future.


  1. Terrazas, Arron. (January 2009). Illegals and Current Economic Crisis. www. migrationpolicy. org/pubs/lmi_recessionJan09. www. lsu. edu/faculty/jwither/Essays/Immigration_trade/Sisk_essay.
  2. Isadore, C. (2006, May1). Illegal Workers: good for the U. S. economy. (www. money. cnn. com/2006/05/01/news/economy/immigration_economy(index).
  3. Simmons, G. (2006, March 30). Immigration’s Effect on Economy is Murky. (www. foxnews. com/story/0,2933,18972,00. ) Survey by Gallup; June4-June24, 2007. www. ropercenter. uconn. edu/ipoll. )
  4. U. S. Immigration and Economic Growth: Putting Policy on Hold (2003, December). (www. Dallasfed. org/research/Swe/2003/Swc0306a. ) www. immigration. procon. org/view. answers. php? question ID=00788. www. fairus. org/Feb/2011.
  5. “Backgrounder: Immigrants in the United States, 2007”, Center for Immigrant Studies, November 2007. Wolf, Richard (2008, January 22).
  6. “Rising health care costs put focus on illegal immigrants”. USA Today. www. cis. org/illegal. www. pewhispanic. org/files/Reports/126/94.

Cite this Effects of Immigration on the Economy

Effects of Immigration on the Economy. (2016, Dec 23). Retrieved from https://graduateway.com/effects-of-immigration-on-the-economy/

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