Do illegal immigrants harm the economy ?
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IT’S THE ECONOMY
Do Illegal Immigrants Actually Hurt the U.S. Economy ?
By ADAM DAVIDSON
Published: February 12, 2013
THE NEW YORK TIMES
In 2002, Pedro Chan left his Guatemalan village for a long trip through Mexico and, with the help of a smuggler, across the Texas border. In 2004, he made it to Brooklyn, where his uncle helped him find work on small construction crews.
These days, Chan helps skilled (and fully documented) carpenters, electricians and stucco installers do their jobs by carrying heavy things and cleaning the work site. For this, he earns up to $25,000 a year, which is considerably less than the average entry wage for New York City’s 100,000 or so documented construction workers.
As Congress debates the contours of immigration reform, many arguments have been made on economic grounds. Undocumented workers, some suggest, undercut wages and take jobs that would otherwise go to Americans. Worse, the argument goes, many use social programs, like hospitals and schools, that cost taxpayers and add to our $16 trillion national debt. Would deporting Pedro Chan and the other 11 million or so undocumented workers mean more jobs, lower taxes and a stronger economy?
Illegal immigration does have some undeniably negative economic effects. Similarly skilled native-born workers are faced with a choice of either accepting lower pay or not working in the field at all. Labor economists have concluded that undocumented workers have lowered the wages of U.S. adults without a high-school diploma — 25 million of them — by anywhere between 0.4 to 7.4 percent.
The impact on everyone else, though, is surprisingly positive. Giovanni Peri, an economist at the University of California, Davis, has written a series of influential papers comparing the labor markets in states with high immigration levels to those with low ones. He concluded that undocumented workers do not compete with skilled laborers — instead, they complement them.
Economies, as Adam Smith argued in “Wealth of Nations,” work best when workers become specialized and divide up tasks among themselves. Pedro Chan’s ability to take care of routine tasks on a work site allows carpenters and electricians to focus on what they do best. In states with more undocumented immigrants, Peri said, skilled workers made more money and worked more hours; the economy’s productivity grew. From 1990 to 2007, undocumented workers increased legal workers’ pay in complementary jobs by up to 10 percent.
There are many ways to debate immigration, but when it comes to economics, there isn’t much of a debate at all. Nearly all economists, of all political persuasions, agree that immigrants — those here legally or not — benefit the overall economy. “That is not controversial,” Heidi Shierholz, an economist at the Economic Policy Institute, told me. Shierholz also said that “there is a consensus that, on average, the incomes of families in this country are increased by a small, but clearly positive amount, because of immigration.”
The benefit multiplies over the long haul. As the baby boomers retire, the post-boom generation’s burden to finance their retirement is greatly alleviated by undocumented immigrants.
As immigration reform seems more likely than at any time in recent memory, it’s important to remember that it is not the economic realities that have changed. It’s the political ones.
Do Illegal Immigrants Actually Hurt the U.S. Economy ?
By ADAM DAVIDSON
Published: February 12, 2013
THE NEW YORK TIMES
In 2002, Pedro Chan left his Guatemalan village for a long trip through Mexico and, with the help of a smuggler, across the Texas border. In 2004, he made it to Brooklyn, where his uncle helped him find work on small construction crews.
These days, Chan helps skilled (and fully documented) carpenters, electricians and stucco installers do their jobs by carrying heavy things and cleaning the work site. For this, he earns up to $25,000 a year, which is considerably less than the average entry wage for New York City’s 100,000 or so documented construction workers.
As Congress debates the contours of immigration reform, many arguments have been made on economic grounds. Undocumented workers, some suggest, undercut wages and take jobs that would otherwise go to Americans. Worse, the argument goes, many use social programs, like hospitals and schools, that cost taxpayers and add to our $16 trillion national debt. Would deporting Pedro Chan and the other 11 million or so undocumented workers mean more jobs, lower taxes and a stronger economy?
Illegal immigration does have some undeniably negative economic effects. Similarly skilled native-born workers are faced with a choice of either accepting lower pay or not working in the field at all. Labor economists have concluded that undocumented workers have lowered the wages of U.S. adults without a high-school diploma — 25 million of them — by anywhere between 0.4 to 7.4 percent.
The impact on everyone else, though, is surprisingly positive. Giovanni Peri, an economist at the University of California, Davis, has written a series of influential papers comparing the labor markets in states with high immigration levels to those with low ones. He concluded that undocumented workers do not compete with skilled laborers — instead, they complement them.
Economies, as Adam Smith argued in “Wealth of Nations,” work best when workers become specialized and divide up tasks among themselves. Pedro Chan’s ability to take care of routine tasks on a work site allows carpenters and electricians to focus on what they do best. In states with more undocumented immigrants, Peri said, skilled workers made more money and worked more hours; the economy’s productivity grew. From 1990 to 2007, undocumented workers increased legal workers’ pay in complementary jobs by up to 10 percent.
There are many ways to debate immigration, but when it comes to economics, there isn’t much of a debate at all. Nearly all economists, of all political persuasions, agree that immigrants — those here legally or not — benefit the overall economy. “That is not controversial,” Heidi Shierholz, an economist at the Economic Policy Institute, told me. Shierholz also said that “there is a consensus that, on average, the incomes of families in this country are increased by a small, but clearly positive amount, because of immigration.”
The benefit multiplies over the long haul. As the baby boomers retire, the post-boom generation’s burden to finance their retirement is greatly alleviated by undocumented immigrants.
As immigration reform seems more likely than at any time in recent memory, it’s important to remember that it is not the economic realities that have changed. It’s the political ones.
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Comments
http://www.opendemocracy.net/ourkingdom/usman-sheikh/deportation-increasingly-foreign-britain-at-war-with-itself
There is also not much chance of it happening whoever gets in.
http://uk.news.yahoo.com/yvette-cooper-labour-changing-approach-immigration-120000304.html
Of course removing the judges, Human Rights, the EU, the UN, age restrictions (where not clear) etc. from the immigration process and simply giving UKBA offers the power of instant deportation, would dramatically improve things.
In France a local magistrate just decides and they appeal at the French embassy back in their own country if they don't like it.
So while the economy does well - this is not the case for those working in it.
The comparisons in the OP refer to low-skilled work - allowing for the skilled artisan to concentrate on what they do best. However their has been a high increase in skilled immigrants - the effect of which is lowering the value of skilled work. The perception exists that the skilled workers - having not utilized that skill as they are replaced by the cheaper immigrants - this is even more the case in industries such as IT where specific skills have a life of about 2 years.
Incredible that a so-called liberal newspaper like the New York Times could argue that the way to fix the US economy was to bring in third world peons to work at below minimum wage to undercut the greedy, lazy US proles.
It was pointed out recently on Newsnight that wages for middle class - ie most - Americans have not increased in real terms now for 25 years.
In the UK we are now about 5 years into falling real-term incomes for most.
And yet high immigration and population growth is a net economic positive? To paraphrase Pyrrhus, how many more economic growth like this can we sustain?
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I dunno - the Labour Party was happy to listen to employers about the difficulty of finding workers - it just forgot to ask the workers if they had the skills (being charitable that is)
It's everyone's fault,apart form the "illegal" immigrants eh
I am not sure that they do. They certainly help keep wages and inflation low which gives a boost to the economy, you could also argue that they increase productivity by increasing the competition for jobs.
Perhaps they wouldn't come if such opportunities did not exist.
Perhaps some opportunities wouldn't exist if they didn't come
how do low wages boost the economy?
of course illegal immigrants harm the economy (key word being illegal). if they secure work, chances are its below minimum wage, so they would not be paying taxes. also, how much does it cost in the effort to track them down and hold them in detention centres whilst their claim is being dealt with. then there is the cost of deporting them.
There is another issue with immigrants and this at the bottom of the career ladder. Where the low end of the career ladder is filled by (lower cost) immigrants - then this drives the wages for these gateway jobs down - meaning that indigenous workers have to go to the roles just above - that require higher qualifications - which of course they may not have.
If you look at fruit picking - which while not much is at least a job. The kind of job that students and school leavers did 20 years or so ago - the wages are so low that it is only immigrants that want to do them - especially as such jobs can be 'By the piece' rather than by the hour (you are paid depending how many you pick or their weight rather than the number of hours you are working). Even hourly you are talking £5.81 (see http://www.pro-force.co.uk/fruit-picking-jobs.html) - that is below NMW wage for someone of 21 or over but over it for someone 18-21)
They make the cost of production less.
If the wages are that low they wouldn't be paying tax anyway if they were legal - they would be in receipt of welfare credits.
but by making the cost of production low, all they are doing is increasing profits for the company. goods and services wouldn't be cheaper. greed is good, as someone once said. thats why some companies take the risk of employing illegal immigrants on wages lower than NMW.
very low wages (which is what illegal immigrants would be on) do not benefit the economy. they obviously have very little money to spend on goods and services. and they would not be in receipt of welfare credits if they are illegal immigrants.
This is a bugbear of mine because I used to do this kind of work in East Anglia 30 years ago. At the time the basic hourly rate was a above the effective minimum (can't remember the exact figures, but I got a bit more in agriculture than I did for pub work). The big HOWEVER was that if you worked overtime, shifts, weekends etc you got paid at a higher rate, so if you were willing to put in a burst of hard work for a short time, you could do reasonably well.
Now, I know for a fact that ALL of that work is now Minimum Wage per Hour 24 hours a day, 365 day a year. That's where mass immigration is producing a genuine wage cut.
The second point is that many of the East European immigrant workers are effectively doing their gap years by working here. They are young, single, childless (or if not, they have parents young enough to take care of the grandkids) willing to put up with hard work, no free time, crap housing, so they can save enough money to go back home and buy a cheap house, car, bit of land, whatever.
It is incumbent on employers to employ people who are here legally. Illegal immigrants should not be employed.
Obviously you must know more than the majority of economists and academics who have researched the matter
Of course they would - the reason that much manufacturing moved to China was the low production costs, which could then be passed on to the consumer thereby undercutting the prices that UK manufacturers could sell for.
It may be but you assume that all employers are legal residents as well. An illegal immigrant, in order to live, must in some shape or form act in another illegal fashion. That may be working illegally but it may involve many other crimes. If we say illegality is good for the economy at what point do we draw the line?
It seems to me that either the rule of law applies or it does not, you cannot pick and choose the laws that can be ignored. I would love to but society does not let me, and that is as it should be.
I assume nothing. What I said was that it is incumbent on employers to employ people legally, that of course encompasses all aspects of doing so and would include being a de facto bona fide employer to begin with. I then added that employers should not employ illegal immigrants. that is one aspect of that whole.
Yes, Britain has a different system and different attitudes. France signs up to the same things as us, but their implementation is in France's interest. In Britain we think we have to obey every last rule, even if it damages the country, because were so worried about what the rest of the world thinks of us, whereas France is not.
I don't know exactly how the system works in France, but as far as I know it seems they have no Human Rights Act. Why France is so much better at deporting illegal immigrants has not gone unnoticed in the right wing media. There legal aid system seems quite tough.
http://www.french-property.com/news/money_france/courts_aide_juridictionnelle/
Legal aid in France, l'aide juridictionnelle
So firstly it is not available to illegal immigrants even on Human Rights grounds I guess.
Also if you are legal and you take the government to court on Human Rights grounds funded by legal aid and win, the pay out you receive must be used to pay back the legal aid, is that correct? So the government would pay you and you would pay it back to the government.
http://www.telegraph.co.uk/news/uknews/terrorism-in-the-uk/9191485/Why-David-Cameron-will-never-be-able-to-act-like-Nicolas-Sarkozy.html
So Human Rights has a far more destructive effect within our legal system than France's. No wonder they are so easy going about signing up for it. They can easily deport illegal immigrants if they want too. This discrepancy between the two systems and Humans Rights deserve a lot more study I think.