Illegal Immigration: a fact-based cost/benefit analysis

[Zeebadee]

Quote by: fushigi OK back to California. Let's just talk Mexico first. Mexicans send $15bn in wages to Mexico. How much of their wages are spent in California? Well, considering that Latin Americans immigrants in the US earn $500bn a year, and $45bn (9%) of that is sent home. Now, this figure of Latin American immigrants includes citizens, many of whom probably don't send ANY money overseas (as they've already brought their family to live with them in the US). So let's be generous and say illegals send a 5x greater portion of their wages--45%--home in comparison with all Latin Americans in the US. That would mean illegals in California are NOT sending $15bn/45% = $33bn home. That money's staying in the economy, and it's still more than 4x the total state losses from services provided for illegals. And that's just Mexicans.

Just because the money is staying in the economy doesn't mean it's all going back to the state. If one of them spends $50 for gas, it's not all going back to offset the social services they are receiving. And of the $45 billion they send home, NONE of that is going to the state or the economy.

[fushigi]

Quote by: Zeebadee And of the $45 billion they send home,

Actually, it's $15bn they're sending home. And I was being generous to your side saying they send 45% of their wages home. One could easily argue that it's much less, considering all Latin American immigrants together (legal and illegal) send only 9% of their wages home.

If it were 9% they're keeping $166bn in California every year.

[fushigi]

Quote by: Zeebadee I think you're incorrectly interpreting the study you quote. The cost to the state may be $102 per Hispanic resident, and the overall "benefit" of $9 billion are two entirely different things. The $9 billion isn't paid back to the state, it's the total product of the immigrants labor. That goes for their living costs, food, gas, etc. The $102 is the NET cost to the state after all the rest is figured in.

Not ALL the rest. ALL the rest would include those expenses, which it doesn't.

Quote by: Report Hispanics annually contribute about $756 million in taxes (direct and indirect) while costing the state budget about $817 million annually for K-12 education ($467 million), health care ($299 million) and corrections ($51 million) — for a net cost to the state of about $61 million, or $102 per Hispanic resident.

At the end of the day, they're costing taxpayers $61m and providing much more than that for the economy.

Furthermore, many would argue that the benefit of $9bn in the market is much better than $61m in the hands of the government. Finally, the $817m they use in services is not money simply "squandered"--that money's paying hospital workers, teachers, and prison guards; it's almost all redistributed within North Carolina.

Quote by: Zee if all the illegals were to disappear, other people would step in and perform those jobs,

Can you prove this? There's a labor shortage as it is in the industries dominated by illegal labor.

appletree » Blog Archive » Labor Shortage Forces Construction Companies to Hire Illegals
U.S. Farmers Facing Labor Shortages - washingtonpost.com

[bishop]

here's two good studies on the costs of illegal immigration.. the second has a line-by-line breakdown of the costs.

Center for Immigration Studies
Federation for American Immigration Reform: The Estimated Cost of Illegal Immigration


when you're talking about the cost/benefit of illegal immigration, it's important to clarify the context you're referring to.. for consumers, illegal immigration is a good thing and doesn't suppress local wages... when you look at how taxpayers in general fare, the facts show that they pay for these people in the $billions.


personally, i'd like to see the immigration quotas revised overall - and i'd also like to see the border secured by our national guard (if not our army).

[Zeebadee]

Quote by: bishop illegal immigration is a good thing and doesn't suppress local wages... when you look at how taxpayers in general fare, the facts show that they pay for these people in the $billions.

To say that illegal immigration doesn't suppress wages is ludicrous. Common sense alone would refute that claim. People willing to work for less money in direct competition with local workers are going to drive wages down.

" By increasing the supply of labor between 1980 and 2000, immigration reduced the average annual earnings of native-born men by an estimated $1,700 or roughly 4 percent.

Among natives without a high school education, who roughly correspond to the poorest tenth of the workforce, the estimated impact was even larger, reducing their wages by 7.4 percent.

The 10 million native-born workers without a high school degree face the most competition from immigrants, as do the eight million younger natives with only a high school education and 12 million younger college graduates.

The negative effect on native-born black and Hispanic workers is significantly larger than on whites because a much larger share of minorities are in direct competition with immigrants.

The reduction in earnings occurs regardless of whether the immigrants are legal or illegal, permanent, or temporary. It is the presence of additional workers that reduces wages, not their legal status."
Center for Immigration Studies

[bishop]

it isn't possible to get a truly credible analysis of the economic impact - because we don't have all the information.

not only that, but your link/study argues that all immigration is bad for u.s. workers, not just illegal. even college grads have fared worse apparently.. makes me question the validity of this piece.

i'd wager that the individual state's economic situation has MUCH more of an impact on wages than illegal immigration does.

just to toss another perspective into the fray:

The Wages Of Change - HartfordInfo.org

Two-thirds of unauthorized immigrants lack a high school diploma. Those who have higher education often find themselves shut out of the skilled labor force. So the 11 million to 12 million unauthorized immigrants in the U.S. compete directly with the 10.4 million American workers who never completed high school. What's unclear is how much all the job-for-job competition drives down wages. One national study found the hit on wages to be 7.4 percent for native-born high school dropouts, or $1,850 for a group that earned an average of $25,000 a year in 2000. But research that focused on cities with high concentrations of illegal immigration found a much smaller impact, closer to 1 percent. When groups of undocumented immigrants congregate in one area, it turns out, they largely compete against one another. The effect on wages also depends on the health of the economy. The late 1990s posted the largest influx of immigration on record, both legal and illegal, yet the wages of low-wage workers rose more than they had in 30 years. The reason is basic economics: Yes, the supply of labor had expanded, but demand from employers outpaced the supply. In the long run, economists say, reduced wages for low-skilled workers are offset by gains to employers, and the savings are passed down to the rest of the country in the form of lower prices for goods in industries such as construction and agriculture that have high concentrations of undocumented workers. Research from MIT economist Patricia Cortes shows that a 10 percent increase in the share of low-skilled immigrants in the labor force reduced the price of "immigrant-sensitive" services such as housekeeping and gardening by 1.3 percent. Overall, the numbers are not dramatic. The low-skilled immigration wave of the 1990s increased the buying power of high-skilled natives living in the 25 largest cities by 0.65 percent, Cortes' research shows, but squeezed the buying power of native high school dropouts by 2.66 percent. Add to those findings this wrinkle: The primary losers, those without a high school diploma, make up just 10 percent of the U.S. labor force. So even if their income is squeezed, the total affect on the economy is likely small. Another hidden bonus is that many illegal workers share illegitimately obtained Social Security numbers with dozens of workers across the country, each paying federal, state and local taxes on their wages. But because their papers are falsified, they can't collect Social Security payments after they retire, or obtain Medicare coverage. Many don't even claim their tax refunds, according to researchers. "They pay into the system," said Windham's Muirhead, "without reaping the benefits."

if it's our high school dropouts who are most affected by illegal immigration, i for one am not about to get all up in arms.

i should also repeat my views on illegal immigration, lest they become distorted.. my main point of criticism pertains to the allegations that illegal immigration is so bad for our economy.

Quote by: bishop personally, i'd like to see the immigration quotas revised overall - and i'd also like to see the border secured by our national guard (if not our army).

[rmnunez]

The remitances are about a third of the Mexican GNP, and exceeded $23 billion at last count, an amount as high or close to what the other two major "thirds" of the Mexican economy (oil and tourism) contributed. These funds, which are sent directly into Mexico's most improverished areas, only since the conservatives are in power have been endowed with an entitlement programme to triple their value with matching state and federal funds when invested in any sort of productive activity at home. You send $20 thousand to help your wife open a beauty parlor, the government will finance $60 thousand ("2 for 1") to finance the project which benefits the community and provides employment.

Gringan financial services, the small shops that cash their paychecks and long established big time operators like Western Union, charge exhorbitant rates and only recently has the government gotten into this trying to facilitate the process. The consulates try and help, corruption has been reduced, they want to fiscalize more, financing is with licensing and accounting conditions. Its a huge sector, underestimated, people estimate the Mexican community on both sides of the border moves an economy the size of California's.

[fushigi]

This is why banks are so keen to permit reforms to allow illegals to open bank accounts--the benefits from their savings accounts and money transfers would be enormous.

[rmnunez]

United statians complain about the costs and unfiscalized tax flows, but they are ignoring a huge market. In Los Angeles there are more people watching Univision than ABC, CBS, NBC, Fox and CNN combined, but it costs less per second on the Spanish broadcaster. In major cities like New York, Chicago, Miami, Denver and others, the same is true.

The undocumented stoop laborer, poor as he is, is demonstrably very responsible, devoted to his family, reliable. These are low credit risks, the sort of people who can be counted on to pay their bills and they live within their means. They can't suckle on any government teat or feed from that tax-funded trough since they are undocumented. Since there are 12 to 15 million of them, some undocumenteds must be the absent fathers to illegitimate welfare dependants in public schools and others will end up in the criminal underworld, but the immense majority pass surreptitiously trying to avoid any undue atttention and worried about their unlawful condition.

[rmnunez]

Mexico City's evolving skyline:

[fushigi]

Heh, if the Mexico City government's anything like the one here in Beijing, that photographer had to wait a looooong time to get a shot of some nice, blue sky.

I believe we share the title for worst air quality in any city.

[rmnunez]

Pollution is a major problem in Mexico City, they have air quality emergencies all the time, volcanic activity from the Popocatapetl, the bowl shaped valley with its huge urbanized area of 16 to 20 million people, plus the vast periferic suburban megalopolis, spew all sorts of contaminants. If you leave a window open a fine dist setles on everything by afternoon.

I remember the first time I heard about the science behind it. A headline in the paper read "Imecas on the rise", I thought these were like the "Aztecas" or "Toltecas", some indigenous community. The Imecas are the measure of particular matter in the air, when they rise too high there are traffic restrictions. The City has restrictions on automobiles which cannot be operated once a week if the Imecas are too high, this happens too often as the city has its own microclimate and a cover sits over the city hampered by high mountains around it on all sides which keeps the wind from blowing down and sweeping the pollution away. Fortunately its been rainy lately and the plants are growing. I've got about 8 yards of bean sprouts creeping up my veranda and both buganvillae in full bloom, he air quality has been better. Most of the high rises are going up in the perifery where greater altitude as you climb up the bowl's sides, gets better.

[Zeebadee]

Lots of nice new buildings, a great modern city, and a significant percentage of it's population relying on the U.S. for jobs, education, and medical care, with hundreds of thousands more leaving every year. They walk across the desert, wade rivers, and risk their lives to leave. Yeah, mexico sure is evolving. What a true paradise it must be!

How many of those nice new buildings would be being built if the corrupt mexican politicians had to pay for their own citizen's social services??

[rmnunez]

Almost one in two Mexicans has a family member working in the US, and a third of those were sent money in the past year, according to a survey published in Mexican daily El Universal Monday. The poll of 1,000 people showed 45% had at least one relative across the border and 61% rated the money they send as “very important,” illustrating Mexico's reliance on remittances. Some 11 million Mexicans in the US sent home a record $23 billion to their families last year –Mexico's second-biggest source of foreign currency after oil imports, even dwarfing the tourism industry.

.
Confirmed and corrected, I’d thought remittances were about as much as tourism or oil and have seen estimates of the Mexican expatriate community in the US closer to 15 million.

I also don't understand why united statians wave this at Mexico, look at the size and scale of those towering corporate headquarters, a third of its GNP is a lot of money, this is no puny third world economy GNP, this is the economy of an almost G-8 sumitteer. A third of it from the contributions of stoop laborers unlawfully crossing to fill a very evident need. This speaks to the volume, it takes a huge number of people sending very small amounts with frequency to add up those $23 billion. I'd like to know how many of those billions went to Western Union for the "wire"?

Monday's survey showed immigration to the United States, much of it illegal, peaked during the 1990s, after Mexico was battered by an economic crisis.

This is news, I knew of the economic crises and their impact, but didn't know of the peaking, as far as I can figure the rate of crossing is growing, some say accelerating. I need to study the survey to see what supports this conclusion.

Eight percent of those polled said they themselves had worked in the US at some time.

I get the impression the proportion is much higher, know many, even professional colleagues, who’ve previously worked in the US (lawfully or not).

As many as one in two people in Mexico live on less than $5 a day, and a lack of job opportunities prompts thousands to risk their lives crossing the border illegally each year.

This is artful manipulation! Whether per capita income and employment opportunities are related to unlawful border crossings is not established on mere assertions. People making such assertions ought to consider as well how much a difference 8 times or more the wages for the same work makes.

Border arrests were down by just under a third in the first few months of this year but more than 150 immigrants have already died trying to cross over, mainly of heat exhaustion.

More are getting shot by what seem like trigger-happy sometimes law enforcement types.

The United States is building a 700-mile fence along parts of its 2,000-mile border with Mexico and boosting security by adding trucks with infrared cameras, underground sensors that detect footsteps and surveillance drones. SignOnSanDiego.com > News > Mexico -- One in two Mexicans has family in U.S., poll finds

There are too many guns and fortifications on the border, immigration requires a more comprehensive approach than building walls and sending troops.

One must consider the impact the wage differential has, recognize the value of this huge labor force which the US cannot do without, and has to appreciate the impact of demographics as Hispanics in the US (almost 70% of them from Mexico) will be the majority there by 2010.

[rmnunez]

Pollution over Mexico City:





The "Imecas" on the rise here:

[Osborn F Enready]

sdbest said: Some sectors, for example agriculture, can no longer operate competitively without the reduced costs of using illegal immigrants who can be intimidated to work at less than the minimum wage. Therefore, illegal immigration must be a net benefit to the U.S. economy.

Based on current trade laws, and actions.

All of this could be changed if trade restrictions and subsidies were removed.

[rmnunez]

Sure, but those trade restrictions remain, today they are starting on a trial basis, to allow truckers from Mexico and the US to operate temporarily beyond the 20 mile border area in each other's countries. This was something NAFTA anticipated would happen seven years ago, but united statian paranoia envisioned reckless unlicensed Mexican operators maniacally hurtling down residential boulevards in drecepit trucks full of smuggled stowaways, so we're running 7 years behind.

[brien]

sdbest said: Some sectors, for example agriculture, can no longer operate competitively without the reduced costs of using illegal immigrants who can be intimidated to work at less than the minimum wage. Therefore, illegal immigration must be a net benefit to the U.S. economy

This may be true in terms of the economy but not in terms of US politics. So how does one address the exploitation of the illegal immigrant worker when they are paid a substandard wage? How does the current Congress that champions the minimum wage reconcile the exploitation of the illegal immigrant worker by appproving paying them a substandard wage that is less than the minimum wage which they pretend is so near and dear to their hearts? They are freeking hypocrites.

The best thing that could happen to the illegal worker would be the immediate securement of the Mexican American border because then all of the illegals that are here could be legalized and then paid the minimum wage like other workers.

This problem could be solved immediately simply by securing the border and opening up legal immigration to suit the realistic requirements of the US economy. Until then, the politicans will continue to approve of the exploitation of the illegal immigrant workers through the de facto laize faire policy towards immigration, legal or illegal.

[Zeebadee]

Quote by: brien So how does one address the exploitation of the illegal immigrant worker when they are paid a substandard wage?

The same way one does when a pimp sends his girls out to earn. Not much difference between that and sending poor people north to be exploited while benefitting from the money that gets sent back. Not only that, but the exploiters also get to pocket the money that should have been spent to provide social services for those sent north. The exploitation begins in mexico, it just gets added to here.

[brien]

The exploitation begins in mexico, it just gets added to here

I would substitute the words added to with legitimized.