The current political climate has overshadowed the fact that large numbers of us still believe that overall immigration has positive economic effects. And facts that may support this view, for example that high-skilled immigrants pay taxes and help make America wealthier, are often drowned out by anti-immigration rhetoric. A focus of this rhetoric are the claims that admitting low-skilled immigrants adversely affects native low-skilled workers and immigrants take disproportionate advantage of government assistance programs.
The first part of this anti-immigration argument is based on the economic tenet of supply and demand. When the supply of workers increases to equal or exceed demand, firms can pay workers less. Over the last 50 years, trends in wages suggest that those working groups with the most immigrants receive lower pay relative to working groups that had fewer immigrants. A high percentage of immigrants have few skills, so it is low-skilled American workers, including many blacks and Hispanics, who have suffered the most from lower wages attributable to immigration.
And their wage loss is sizable. The typical high school dropout earns about $25,000 annually. According to Census data, immigrants admitted in the past two decades lacking a high school diploma have increased the size of the low-skilled workforce by roughly 25 percent and the earnings of this group of workers dropped by between $800 and $1,500 each year.
However, we don’t need statistics to see how our capitalist economy uses supply and demand. We can simply follow the news. A decade ago, Crider Inc., a chicken processing plant in Georgia, was raided by immigration agents, and 75 percent of its workforce vanished over a single weekend. Following that loss of workers Crider placed an ad in the local newspaper announcing job openings at higher wages. There have also been reports of abuse of the H-1B visa program, showing that firms will dismiss their current tech workforce when they find cheaper immigrant workers. Examples like these make economic sense to the owners of and investors in companies, and they provide fuel to the anti-immigration argument.
Further complicating the supply and demand scenario are industries with jobs that do not seem able to attract sufficient numbers of native workers These are the industries where illegal, undocumented workers are most often found. Agriculture relies the most on an undocumented workforce, with the Department of Agriculture estimating that about half of the nation’s farmworkers are unauthorized. In the construction industry, 15 percent of workers lack papers and in the service sector, jobs such as fast food and domestic help have an undocumented workforce of about 9 percent. Removal of undocumented workers would represent a major loss in these industries, with no guarantee that the openings would be filled by native-born Americans.
Whether immigrants take jobs or work where no one else will, they do contribute billions of dollars in taxes to the United States every year. Immigrants authorized to work here file the same taxes as any US native, including local, state, and federal taxes. They paid $223.6 billion in federal taxes and $104.6 billion in combined states and local taxes in 2014, the most recent year for which Census data is available. Unauthorized immigrants also pay taxes using individual tax identification numbers. Undocumented immigrants paid an estimated $11.7 billion in combined state and local taxes in 2014. Part of this tax money goes to benefits programs Americans use every day, like Social Security and Medicare, programs that an undocumented worker cannot access.
But legal immigrants do access these programs and the anti-immigration argument claims they do so at higher rates than natives. The higher cost of all the government assistance provided to immigrants and the lower taxes they pay (because they have lower earnings) is used to argue that, on a year-to-year basis, immigration creates a “fiscal imbalance.” Calculating the cost of services to immigrants compared to how much immigrants pay in taxes is complicated and depends on which factors are included, but there are sources that counter the anti-immigration argument and find the net fiscal contribution of a new immigrant and that immigrant’s children over a 75-year period is positive.
Seventy-five years is the long view of the economics of immigration while lost jobs, lower wages, the cost of benefits and education are immediate and local. We are a nation of immigrants and our willingness to welcome others comes at the expense of some native-born Americans. Perhaps instead of focusing on immigration numbers and legal versus illegal, we should be honestly asking where immigration adversely affects the economic well-being of a group or community and how we can mitigate those effects.
—Lesley Frost, Advocacy Chair
Sources: Wikipedia, CNN, Politico, New York Times, Homeland Security website, factcheck.org, Washington Post, bipartisanpolicy.org, American Immigration Council, National Immigration Forum, ACLU, Council on Foreign Relations, NBC news, time.com