Economic Implications

From WolfWikis

The overall impact of legal and illegal Hispanic immigration on the U.S. economy is a heavily debated issue. The potential negative impact of immigration involves immigrant’s use of American infrastructure (hospitals, schools, police etc.) and the potential job and wage loss amongst native labor. The potential positive impact of immigration involves added productivity in the labor force and lower consumer costs for services and products. Despite substantial arguments from both sides, immigration has serious implications for a growing and globalizing economy.

Contents 1 Infrastructure 1.1 Education 1.2 Health Care 2 Labor 2.1 Guestworkers 3 Conclusion 4 Additional Information 5 References

Infrastructure

The National Research Council has estimated that the net fiscal cost of immigration ranges from $11 billion to $22 billion per year, with most government expenditures on immigrants coming from state and local coffers, while most taxes paid by immigrants go to the federal treasury. ^[1] The deficit is caused by a low level of tax payments by immigrants, because they are disproportionately low-skilled and thus earn low wages, and a higher rate of consumption of government services, both because of their relative poverty and their higher fertility.

While illegal immigrants make little use of welfare, the cost of illegal immigration in regards to government expenditures for law enforcement, education, and emergency medical care are significant. In an executive summary to estimate the total impact of illegal immigration on the federal budget, it was found that 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 $2,700 per illegal household. ^[2]

This may lead to the conclusion that immigrants are a net fiscal drain because immigrants contribute less per capita in tax revenue than they receive in benefits. Many proponents argue that these studies fail to acknowledge that this has more to do with low-wage employment than with nativity. Native-born workers in low-wage jobs similarly receive benefits in excess of the level of taxes paid. However, net tax revenue is not the same as net economic benefit. In addition, this analysis ignores the fact that in the absence of sufficient immigrant labor, unfilled low-wage jobs, regardless of the relative tax implications, hurt the economy.^[3]

Education

As immigrants come to the United States, the use of public school system and higher level education are critical in order to educate and train a more effective work force. The incorporation of U.S. immigrants and their children into the government funded U.S. public school system is a series source of contention. In order to address the concern over the skill and education levels of immigrants, the U.S. Congress offered revised legislation in the form of the Immigration Act of 1990 to draw foreign workers with higher skills and education. ^[4]

In a report funded by "Excelencia" several critical links were associated with education and economic development^[5]:

1. Economic competition increasingly requires more knowledgable workers
2. A higher education degree is increasingly essential to a competitive workforce
3. The Latino Population is one of the largest growing segments of the population
4. Educational attainment levels for Latinos are substantially and significantly lower than those of other ethnic groups

The major criticism against immigrants (especially amongst illegal immigrants) is that their children utilize the public school system which is a drain on the U.S. taxpayer and hinders an already over-burdened U.S. public schools. However, in 1982 the U.S. Supreme Court ruled in Plyler vs. Doe that public schools were prohibited from denying immigrant students access to a public education. The Court stated that undocumented children have the same right to a free public education as U.S. citizens and permanent residents. Undocumented immigrant students are obligated, as are all other students, to attend school until they reach the age mandated by state law. ^[6]

Health Care

Immigrants to the United States all utilize the public health care system. Research indicates that immigrants have dispraportionate low access and utilization of the health care system. Opponents of mass immigration contend that immigrants play a significant role in America's rising health care costs. The Federation for American Immigration Reform (FAIR)contends that that immigrants effect the U.S. health care system because immigrants do not have health insurance and have a disproportionate use of hospital and emergency services. ^[7] Opponents even claim as a significant burden to U.S. taxpayer is the delivery of babies to illegal alien mothers. A California study put the number of these anchor baby deliveries in the state in 1994 at 74,987, at a cost of $215 million. At that time, those births constituted 36 percent of all Medi-Cal births, and they have grown now to substantially more than half or the annual Medi-Cal budget. In 2003, 70 percent of the 2,300 babies born in San Joaquin General Hospital’s maternity ward were anchor babies. Medical in 2003 had 760,000 illegal alien beneficiaries, up from 2002, when there were 470,000. ^[8]

Proponents for immigration argue that Whether or not they have health insurance, immigrants overall have much lower per capita health care expenditures than native-born Americans,1 and recent analyses indicate that they contribute more to the economy in taxes than they receive in public benefits. In a study from the RAND Corporation, researchers estimated that undocumented adult immigrants, who make up about 3.2% of the population, account for only about 1.5% of U.S. medical costs. ^[9] Many immigrants do not seek medical treatment unless they are injured or acutely ill; at our clinic, patients with type 2 diabetes often have florid symptoms and even incipient renal damage by the time their disease is diagnosed. ^[10]

Despite arguements from both sides, the federal Medicaid program has always been restricted to U.S. citizens and legal residents, but recent federal and state laws designed to strengthen enforcement of eligibility rules have created new barriers, even for infants and children who are citizens. The 2005 Deficit Reduction Act requires all persons applying for or renewing Medicaid coverage to provide proof of identity and U.S. citizenship. Since that law went into effect, at least eight states have reported dramatic declines in Medicaid enrollment, and some Medicaid-eligible infants and children have gone without immunizations and needed medical care because of delays in coverage.^[11]

Labor

In recent decades, the United States has had more immigrants come to live in the United States than in any decade in the nations history. According to the U.S. Department of Homeland Security, the United States adds roughly 9.1 million legal and 3.5 million unauthorized immigrants to its population during the 1990's. ^[12] The U.S. has become increasingly dependent on immigration for its labor-force growth. In 1960, the share of foreign-born workers in the labor force was 1 in 17; by 2000, it had jumped to 1 in 8, or about 13% of our total labor force of roughly 142 million. ^[13]

Overall, immigrants are overrepresented in low-paying service and manual jobs because the general educational system in Latin America is almost non-existant. Census 2000 data show that Latin Americans, who make up more than half of all immigrants now entering the country, have lower high school completion rates than the native born, 49.1% versus 86.9%, respectivelly. ^[14]

Guestworkers

Temporary workers, or guestworkers, are nonimmigrants who are admitted to the U.S., often for a considerable amount of time, to work for specific employers. Most often these workers are legally or practically unable to change the terms of employment or to switch employers and hence are, in effect, captive workers. American agriculture imports such workers via the H-2A program.

The H-2A program is a U.S. Department of Labor certification for temporary or seasonal agricultural work. Employers that need low-skilled laborers during particular times of the year (example: harvesting crops) can apply with the Department of U.S. Citizenship and Immigration Services stating that there are not sufficient workers who are able, willing, qualified, and available, and that the employment of aliens will not adversely affect the wages and working conditions of similarly employed U.S. workers. ^[15]

As recently as 1981 there were only 44,000 temporary workers and trainees admitted to the U.S. By 1990, that number had grown to 139,000; and by 1996, 227,000. The total number of such workers present at any one time is in the hundreds of thousands. ^[16]

Conclusion

In 1997, the National Research Council published what is generally viewed as the seminal study on the influence of immigration on the overall economy, The New Americans: Economic, Demographic, and Fiscal effects of Immigration. The Council found that immigration has a net positive benefit to the United States economy of about $10-billion a year. But the report was quick to point out that relative to the $10-trillion U.S. economy, that benefit is relatively small. ^[17] Ultimately the immigration debate will be decided on more than simple economic terms.

Additional Information

Humorous perspective toward U.S. Immigration policy

References

1. ↑ Center for Immigration Studies http://www.cis.org/
2. ↑ Camarota, Steven A. “The High Cost of Cheap Labor: Illegal Immigration and the Federal Budget” http://www.cis.org/articles/2004/fiscal.html
3. ↑ Siciliano, Dan. Executive Director, Program in Law, Economics, and Business, Stanford Law School “Testimony on the Impact of Immigration on the Economy” November 16, 2005 http://www.visaportal.com/downloads/Dan%20Siciliano%20Testimony.pdf
4. ↑ Hagan, Jacqueline Maria. “Work and Occupations; Contextualizing Immigrant Labor Market Incorporation: Legal, Demographic and Economic dimensions.” Sage Publications http://wox.sagepub.com/cgi/content/abstract/31/4/407
5. ↑ Santiago, D.A. (2006) "California policy options to accelerate Latino successin higher education." Washington, D.C.: Excelencia in Education. www.edexcelencia.org/research/pubs.asp.
6. ↑ http://www.americanpatrol.com/REFERENCE/PlylerVDoeSummary.html
7. ↑ http://www.fairus.org/site/PageServer?pagename=iic_immigrationissuecenters64bf
8. ↑ Madeleine Peiner Cosman, Ph.D., Esq. “Illegal Aliens and American Medicine,” Journal of American Physicians and Surgeons, Spring 2005.
9. ↑ Goldman DP, Smith JP, Sood N. Immigrants and the cost of medical care. Health Aff (Millwood) 2006;25:1700-1711
10. ↑ Okie. Susan, M.D. Immigrants and Health Care — At the Intersection of Two Broken Systems. The New England Journal of Medicine.Volume 357:525-529. August 9, 2007. http://content.nejm.org/cgi/content/full/357/6/525
11. ↑ Okie. Susan, M.D. Immigrants and Health Care — At the Intersection of Two Broken Systems. The New England Journal of Medicine.Volume 357:525-529. August 9, 2007. http://content.nejm.org/cgi/content/full/357/6/525
12. ↑ U.S. Department of Homeland Security. (2003). "yearbook of immigration statistics." Washington, DC: U.S. Government Printing Office.
13. ↑ U.S. Bureau of Census. (2004) "U.S. interim projections by age, sex, race, and hispanic origin."
14. ↑ U.S Bureau of Census. (2003) "Foreign-born population of the United States current population survey- March 2000, revised detailed tables-weighted to census 2000" http://www.census.gov/population/www/socdemo/foreign/ppl-160.html
15. ↑ http://www.foreignlaborcert.doleta.gov/h-2a.cfm
16. ↑ http://www.cis.org/topics/guestworkers.html
17. ↑ Parker, Serena. “Immigrants: US Economic Savior or Social and Economic Burden?” http://www.voanews.com/english/archive/2005-05/2005-05-02-voa53.cfm?CFID=239251705&CFTOKEN=44867642

Annotated Bibliography for Economic Implications of U.S. Immigration

Back to US Immigration Policy