Illegal Immigration and the Economy

Migratory worker, FSA ... camp, Robstown, Tex. 1942 Jan.  Rothstein, Arthur,, 1915-1985,, photographer. (Library of Congress, Prints and Photographs Division, Washington, D.C. 20540 USA)
Migratory worker, FSA ... camp, Robstown, Tex. 1942 Jan. Rothstein, Arthur,, 1915-1985,, photographer. (Library of Congress, Prints and Photographs Division, Washington, D.C. 20540 USA)

A major national debate rages over U. S. government control of immigration and the impact foreign workers exert on the country's economy. Sometimes the rhetoric reflects on the benefits but more often it focuses on the burdens being forced on society. While conversations range from bland indifference to outright hostility, the loudest and most incendiary opinions drown out the more moderate voices and dominate the tone and tenor of the dialog.

Americans are uncertain about how immigration is affecting the US economy and this is apparent in the conversation. Most analysts, after considering all aspects, agree both legal and illegal immigrants produce a slight, yet positive, net gain of about one tenth of 1 percent in the gross domestic product. The most significant benefits come from lower labor costs and this translates into reduced prices for every commodity they handle. Consumers save on hundreds of purchases from produce and food products to new homes. The nation's GDP gets a boost when visiting workers replace the growing number of retired seniors. And, the contributions from today's expanded work force make it easier for Social Security to pay benefits to future retirees.

So, are immigrants really bad for the economy?

Economists say immigrants are not a drag on the economy. So, the question is not whether they are detrimental to the country. The bigger mystery is why many people do not see all of the positive economic benefits and choose to blame immigrants for so many of the country's woes. Why did 74% of the respondents in a New York Times/CBS News poll mistakenly think illegal immigrants weaken the economy?1 Why, in discussions about the pros and cons, is there a huge gap between the public's perception and the established reality.

Why is the picture distorted?

Politics, resentment, ignorance, demographics and the economy all converge to create an atmosphere of animosity directed at immigrants. Under the yoke of the Great Recession, people feel threatened by the sudden explosion of foreigners.They hold immigrants responsible for the strain on public services and community resources like schools and hospitals. And, in these uncertain economic times, Americans reject diversity and target foreigners to calm the nation's collective insecurity. There is no doubt all of these issues have some merit but hardly enough to explain the negative attitudes expressed by a growing segment of society.

Business and Consumers are big winners.

To explain current sentiments, it is necessary to explore how the benefits and costs are unfairly distributed to different and separated levels of society. Companies and shareholders enjoy cost reductions from lower wages, pass some to unaware consumers whom, in turn, pocket their share of the profits gained from the sweat of resident foreign laborers. This lack of consumer awareness adds to an immense perceptual disconnect between the benefits and costs of immigration especially when the laborers and the consumers are in different parts of the country.

Families of migratory workers in front of their row shelters, FSA ... labor camp, Robstown, Tex.1942 Jan.  Rothstein, Arthur,, 1915-1985,, photographer. (Library of Congress, Prints and Photographs Division, Washington, D.C. 20540 USA)
Families of migratory workers in front of their row shelters, FSA ... labor camp, Robstown, Tex.1942 Jan. Rothstein, Arthur,, 1915-1985,, photographer. (Library of Congress, Prints and Photographs Division, Washington, D.C. 20540 USA)

Unskilled workers respond to competition.

Reduced labor costs have a downside for America's least-skilled workers and this leads to opposition to immigration. In the two decades prior to 2000, wages of high school dropouts fell 9% due to competition from immigrant laborers. There is evidence this increases anti-immigration sentiment. A study in 2005 discovered a link between low-skilled workers and opposition to immigration due to competition in the work place. Surveys reveal the most intense opposition to immigration comes from Americans who did not finish high school.2

More skillful workers run hot and cold.

Taxpayer animosity toward immigrants also depends on factors like immigrant density and the availability of public assistance. Attitudes based on resentment of competition blend with those based on resentment of an added tax burden. Among better-educated, more skilled workers, the greatest opposition flourishes in areas with large immigrant populations and lots of available social services. But, studies indicate measurable declines in this sentiment after various welfare reforms in the 1990s reduced access to some public assistance programs.3

Washington wins and states lose.

The economic imbalance between benefits and burdens is amplified by payroll deductions. Thousands of undocumented aliens contribute to Social Security and pay income taxes through regular payroll deductions and the federal government reports most get very little in return. Billions deposited into the Social Security Trust Fund go unclaimed. While undocumented workers contribute to FICA and accumulate credits for retirement, they must be "legal" to claim benefits. On the local and state level, however, immigrants also contribute through property and sales taxes but, contrary to the federal windfall, they tend to absorb far more in services, benefits, and assistance. In the final accounting, the U.S. Treasury and Social Security both enjoy a huge surplus and leave state and local governments on their own to fund the overwhelmed regional services.

Demographics also play a role.

Beyond the economic issues, there is a geographical component to the debate as well. The last two decades have witnessed the spread of immigrants from New York, Texas and California to most of the states in the interior. Between 1990 and 2008, California's share of undocumented immigrants fell from 42% to 22% while 28 other states, North Carolina and Georgia among them, saw their share double.4 The debate once confined to rural areas in a few coastal states has made its way into towns and villages across the nation's heartland.

Politics and the news media.

An old joke that says a lot goes like this, "Of course I read the New York Times. How else would I know what to think?" Politics and the news media mold attitudes and both, through the years, have played major roles in shaping the U.S. immigration debate. There have been subtle and audible warnings of a "Latino threat" for the past 70 years. President Ronald Reagan introduced immigration as a matter of "national security" in the 80s. A racist image of immigrants-as-freeloaders began to circulate in the 90s. And even Lou Dobbs, in his pursuit of ratings and wages, added to the inflammatory rhetoric of the last decade with rants about an "invasion of illegal aliens" waging "war on the middle class." 5

And the debate continues.

All of these factors are woven into the tapestry of the national immigration debate. It continues to rage without any constructive dialog about redistribution of the benefits to reduce the disproportionate burden carried by some localities. The debate needs to acknowledge this as the major issue. Foreign workers did not create the system nor are they responsible for the inequities within it. Immigrants pay taxes, consume products, and yearn for a better life. It is hard to find praise for the visiting workers who perform real tasks for pay they deem to be fair but Americans consider, to a large degree, an unacceptable wage. The Federal government and our senior citizens reap huge benefits from a sizable work force known to typically claim far less than what is deducted from their pay. Consumers are generally unaware of the impact immigrant laborers have on lowering prices or how they supplement the ranks of American workers as they age and retire.

A pro-immigration shirt made by American Apparel.
A pro-immigration shirt made by American Apparel.

There is a glaring need to elevate the quality of the national debate. Within the dialog, innuendo needs to be replaced by reality. Hard facts need to be substituted for anecdotes. Blame for taking jobs away from Americans needs to yield to the prevailing conditions. The legions of unemployed workers are not filled with farm workers, food processors, landscapers, or low skilled workers but actually with factory workers, autoworkers, secretaries, and salesmen. Responsibility for America's mortgage foreclosures should not be shifted to foreign workers by those unwilling to explore the real causes. Widespread hostility should give way to the truth. Immigrant workers, whether they are documented or not, produce a slight, yet positive, increase for the economy and a fair measure of benefits to retail and service consumers. The conversation needs to include a hint of gratitude.



2 Kenneth Scheve and Matthew Slaughter, Globalization and Perceptions of American Workers (Peterson Institute, 2001)
5 Douglas S. Massey and Magaly Sanchez R., Brokered Boundaries, (Russell Sage Foundation, June 2010).

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Comments 24 comments

vrbmft profile image

vrbmft 5 years ago from Yucaipa, California

I applaud your intelligent discussion of a pertinent issue. Pertinent not because it is pertinent, but because we are all so afraid of our own shadow and feel so powerless to have any input into what goes on in our country, so powerless that we have to find some place or some group to dump on.

Why not be up and arms with the real estate industry who for years now has had the power to assign artificial value and devalue to our personal property? Or to the investment industry who can express a singular fear which makes your IRA, which you have paid into for years, devalue at the ring of a bell? I know, it is all the price of capitalism, but so are immigrant workers, legal and illegal.

I never get it that, when it comes to the economy, we are airheads, and seem to jump on bandwagons rather than have the fearsomeness to look at the awful truths of economics. Everything is the way it is because people more influential than we are, are making money from the way things are. Hello! Doesn't require rocket or economic science. Pretty basic.



HSchneider 5 years ago from Parsippany, New Jersey

This was an excellent and thorough analysis of the immigration situation. Thank you Quillographer for clawing past the talking points and showing the entire picture. People try to demonize others for their own political ends or to soothe their fears.

Hxprof 5 years ago from Clearwater, Florida

Though I agree with those who contend that illegal immigrants don't belong here and need to be encouraged or forced to leave, I enjoyed reading your assessment of this debate.

Glenn Stok profile image

Glenn Stok 5 years ago from Long Island, NY

This was a very interesting read. It explains why the government isn't doing much to stifle illegal aliens.

I bet it's an unspoken agreement in Washington to leave it alone since, as you stated in your hub, there's a slight net gain in the gross domestic product and reduced prices to consumers due to the work done by illegal aliens.

I feel your hub is important to read and to consider as another way to look at things. Voted up.

Quilligrapher profile image

Quilligrapher 5 years ago from New York Author


“Sometimes it is better to light one little candle then to curse the darkness.”

Thanks for sharing your views with us.


Quilligrapher profile image

Quilligrapher 5 years ago from New York Author

You are welcome Hschneider. I appreciate your making time to read and to comment. I believe it is essential that we know how yesterday has shaped today's debate if we hope to understand how today's debate will impact tomorrow.


Quilligrapher profile image

Quilligrapher 5 years ago from New York Author

Hi Hxprof.

Thank you for the read and comment. I truly appreciate your visit.


Quilligrapher profile image

Quilligrapher 5 years ago from New York Author

Thanks Glenn for your read and interesting comment. My bet is your bet may be a winner. I appreciate the ^ vote.


stephaniedas profile image

stephaniedas 5 years ago from Miami, US

Hey there,

I'm glad you said something reasonable about this. I get why people believe that immigrants harm the economy, but you finally present an argument that is based in fact and not a common misconception. The truth is that illegal immigration is necessary for our economy to keep running as it does. Maybe this isn't as true since 2008, but it certainly was in the years before that.

Aside from the economic argument, I don't think that sending people who have been here for years back to their countries and separating families is the most humane way to deal with things. I think that separating parents and children does more harm for our society than good for our economy. Anyway, we also need to take into account the economic resources used to send illegals back to their countries.

As far as animosity towards immigrants goes, the animosity about the economy needs to be redirected. Poor people trying to make a better life for themselves really aren't to blame, as most people in their situations would try to do the same.

Now I'll conclude my little rant. Thanks for the great hub, voted up and awesome.


Quilligrapher profile image

Quilligrapher 5 years ago from New York Author

Hi back attcha, Steph. You have a balanced and reasonable viewpoint. I can't say that about many rants in the national debate. Still, I thank you for visiting and leaving a kind comment.


Charles James profile image

Charles James 5 years ago from Yorkshire, UK

I spent over 20 years as an immigration lawyer in the UK.

(1) my perception is that the immigrants want to work and will take the low paid unsocial hours hard working jobs that our local population just do not want to do. Until the recession there was little competition for these jobs.

(2) If you figure the costs of growing even an unskilled worker, and your rich country is getting a free gift of an adult worker from a poor country, it is the rich country's gain.

(3) Skilled workers like doctors, nurses, engineers and IT graduates are really needed in their home countries but the home countries cannot compete with the wages paid in the rich countries.

Quilligrapher profile image

Quilligrapher 5 years ago from New York Author

Thank you, Charles James, for a comment based upon your related and valuable experience. Your observations are accurate and useful for bringing the real economic picture into focus. Your contribution is appreciated. Q.

Old Poolman profile image

Old Poolman 2 years ago from Rural Arizona

Nice presentation and extremely well written. You make some excellent points in this hub.

I have a friend who owns some huge pear orchards. He is forced to hire illegals to get his crop picked and hauled to market before they rot on the trees. He puts help wanted ads in all the local papers and notifies the local unemployment office he needs workers. He has never had a single applicant from his attempts to hire help. Many will say that is because this job only pays slave wages, but that is not true. His workers get paid by the box and the harder they work the more they make. He actually has had some of the same workers return year after year for over 10 years.

Most everyone is aware that illegals often buy fake ID cards and several hundred illegals have the exact same Social Security number. Do we honestly believe that when the Social Security administration receives hundreds of SS withholding payments from employers all on the same SS Number it doesn't sound an alarm or ring a bell? Do they really believe this one individual has over 100 jobs?

Of course they don't but as you point out they like the extra revenue they most likely will never have to pay out.

The first guy who reaches retirement age and uses this SS number should get a really good check every month from the government.

Quilligrapher profile image

Quilligrapher 2 years ago from New York Author

Hello there, Poolman. Nice of you to visit my hub. Thank you.

While your story may not necessarily represent the norm, in this case it is consistent with data indicating many US born high school drop outs shy away from short term agricultural jobs. There is an urgent need for seasonal, hard working, low skilled, low cost labor in the US. Traditionally, migrant foreign workers fill this need and they are important in our economy. Although I am not in favor of illegal border crossings, I recognize the contributions of foreign workers when they are here. To punish them is to punish ourselves.

Thanks again for your visit. I appreciate your contribution to this topic. Q.

jackclee lm profile image

jackclee lm 4 months ago from Yorktown NY

Yes, that is exactly what I am saying. The Mexican government is complicit in this immigration crisis. They have a failed economy that is corrupt and controlled by drug lords. They can't produce jobs for their poor. They ship them here to work in migrant camps and send money back to support their country. I don't want any part of Mexico becoming part of the US. I prefer to improve our legal immigration process so that we welcome people who truly wants to be here and assimilate to our form of government. Let's keep our border secure and keep out the drugs and the illegal immigrants. I feel bad for them but we have a country that must come first.

Quilligrapher profile image

Quilligrapher 4 months ago from New York Author

I appreciate your visit, Mr. Lee, and I thank you for airing your opinions. To the best of my knowledge, migrants are not shipped to worker camps in the U. S. by the Mexican government. Guest workers come here under their own volition. However, if you have hard evidence that proves otherwise, I am interested in seeing it. It is also odd to read: “I don't want any part of Mexico becoming part of the US,” considering most of our South-West was Mexico’s before our government annex it. Are you saying we should give it back?

Once more, thanks for sharing.


jackclee lm profile image

jackclee lm 4 months ago from Yorktown NY

No, I want to keep the current borders. I don't think your idea is a good solution to our current problem. The Mexican government help promote illegal crossings because it helps their balance sheets. Migrants sent money back home to help their families. This is a well known fact.

There is no incentive for them to stop the crossings. We need a solution that will secure our borders and have some legalized guest worker programs simliar to some European nations.

jackclee lm profile image

jackclee lm 4 months ago from Yorktown NY

Here is article in New York Times -Mexico Government publish pamphlet-

Old Poolman profile image

Old Poolman 4 months ago from Rural Arizona

At one time we had a very workable guest worker program called the "Bracero" program. As I recall, it was a joint effort between Mexico and the USA. Farmers in the US requested a certain number of workers for a specified date and time frame. Workers in Mexico registered for the program and were matched with a farmer needing help. At the end of the season the workers returned to Mexico and the farmers had their crops picked or harvested.

The problem with the program is that it worked so of course it was discontinued.

jackclee lm profile image

jackclee lm 4 months ago from Yorktown NY

I do support a guest worker program in such a case as migrant farmers. It needs to be regulated and IDs issued so they are not living underground. I also think sanctuary cities are mis guided. We all want immigrants to be treated fairly whether legal or illegal. To allow criminals to run free is just insane.

Old Poolman profile image

Old Poolman 4 months ago from Rural Arizona

It is insane but could easily be solved if Washington would get off their ass and fix it.

Farmers need their crops harvested and nobody on welfare will even apply for these jobs. People in Mexico need to work but can't get here unless they come illegally.

Even an idiot could see that this problem could easily be solved.

jackclee lm profile image

jackclee lm 4 months ago from Yorktown NY

Farmers could pay a higher wage for the workers competitive to welfare payments and perhaps that could entice some citizens who wants to work but won't right now... There is more than one way to solve our problem...

I can't accept the conventional wisdom that Mexicans are doing work Americans won't... Given the proper incentives, people will prefer work over welfare.

Hxprof 4 months ago from Clearwater, Florida

In some cases, farmers could invest in machines to do the work of picking. No longer having access to illegals to do that work would force their hand, and they would, in the long run, be better off for the investment.

Old Poolman profile image

Old Poolman 4 months ago from Rural Arizona

Not everything can be picked by machine. Some fruits have to be selectively picked depending on ripeness.

The other thing we could do would be to cut off some of the welfare when there is work available. If we could get our own people to work we wouldn't need illegals either.

Many seem to think that illegals work for peanuts, and perhaps some do. Most of them however work piece work and get paid for how much they produce.

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