Economic impact of legal and illegal immigrants on the United States

¶ … Immigrants: Economic Impact on the United States

The United States is a nation of immigrants. This is undisputed. But what has been the impact of migration on the U.S. economy? Are there applicable the same trends that were applicable in the 1980s when an important pro-migration movement was born? Have the difficulties of the new millennium overcome the benefits and has migration become a plague of the modern society? These answers and many others will be provided herein in an in-depth analysis of the causes of migration and its results.

Why do people migrate?

The main reason determining people to immigrate to the United States of America is the hope of economic gain, better living conditions for themselves and, often, the chance to help their families from home.

A large number of immigrants form the so-called "brain drain," that is very smart and well educated individuals with a lot of potential that are either employed by large American companies or are offered academic scholarships and, then, are employed.

Last but not least, there are the people who are literally fleeing from their countries of origin to the haven they believe the United States of America to be for them. These are the asylum seekers and the refugees. Although, practically, the United States is very hard to reach for persons fearing persecution in their country of origin, unless they travel by boat or plane, it holds a large number of refugees and asylum seekers due to the reallocation programs of the United Nations High Commissioner for Refugees. The reallocation programs are meant to offer relief in regions where large number of asylum seekers and refugees gather, i.e. countries that are in their easy reach, due to easy transportation or to already established people smuggling methods and countries that are situated next to conflict areas. Consequently a number of developed countries with lower numbers of refugees offer to receive a certain number of people. The United States of America has constantly been involved in this kind of programs and, therefore, now has a large number of refugees.

Who are the immigrants?

May there be economic reasons or humane ones; they must be very strong in order to determine people to live their homes, their country, lives, jobs and head on the path of migration. Most of them migrate illegally and this takes even more courage and determination, as their very lives and health is at risk.

Statistics have shown that immigrants, legal or illegal, are in the large majority young, strong, healthy, courageous and determined people. They come to gain a better living and they are prepared to surpass all obstacles and work as hard as they can in order to make a life for themselves or help their families at home. Usually families send their youngest and strongest members to work in the United States and support them financially.

An even greater percent of strong bold people is to be found amongst the illegal immigrants, as they have to surpass very harsh trials and a lot of barriers to get into the country and then to make it without getting caught.

Considering the set forth, there has been a large number of theories showing that immigrants are beneficial for the United States because they come with strong, smart, young forces.

Stanislav Kelman, in his study: "New People: Influence of Immigration on American Economy" expressed and supported the thesis that: "Although many Americans believe that immigration has a negative effect on the United States economic development, recent sociological studies have proven otherwise. Studies show that most immigrants are well educated, skilled, and highly motivated people who can contribute to America's economic growth."

He mostly refers to the phenomena called brain-drain. This is the process in which some of the greater American companies have been and are recruiting personnel from the developing countries. They are recruiting the best of the best, people with the right education, with great skills, who have obtained very good results in their work or in school. The most common form is recruiting people straight out of school based on their academics results, results in national and international competitions, relevant work and recommendations from professors and tutors. The employment of persons who already have a level of experience is less common than that of recent graduates.

Another form of brain-drain is the academic one, through scholarships. The best graduate and undergraduate students are recruited to study for a period of time in the United States and then they are hired here, in order for them to be able to make use of their knowledge. Other cases are those of professionals who are offered the possibility of a PhD or a master's course and are then hired.

Brain-drain is beneficial for the receiving country, i.e. The United States of America, because it receives and uses some of the best professionals in the world, with very little effort. These are very intelligent persons with a great determination who are willing to work for less pay that the American professionals because this is the chance of their life time, the chance to make a future for themselves. There is a great motivation coming from the knowledge that no matter how good you are, in the country you were born in you could never succeed and live a decent life.

Statistics show that the greater concentration of immigrants is to be found in the big American cities. It seems that in New York almost 30% of the residents are immigrants or foreigners. In fact, 40% of population growth from the United States comes from immigration. This is a tendency that has increased recently. In the old days, immigrants would mostly settle in the country where they could find work: construction and farm work. Nowadays, work is much easier found in large cities and for the illegal immigrants, big cities harbor better employers that are willing to offer them a job.

However, there is a great downside to all this. Poverty and crime come together with the immigrants. This does not mean that they are criminals themselves, but they are elements in well developed intricate networks of people smuggling, human trafficking, modern day slavery and sweat shops. They become the victims of crime. This mostly happens because they have to pay off the debts they incurred with their trip to the United States. They work for years for a petty pay, with others constantly threatening them, holding their passports and menacing their families at home until they are free and clear of debts.

One of the main concerns has been and remains the one about U.S. businesses that are employing illegal immigrants, paying them poorly, forcing them to work in inhumane conditions while threatening them that they will call the authorities upon them. They are the ones generating crime and the ones benefiting as they gain more and more money.

Both sides, the United States government and the representatives of the immigrants, are now striving to prosecute employers of illegal immigrants who are most times taking advantage of their situation and obligating them to work in inhumane conditions and without proper compensations. In 2005, Human Rights Watch pointed out the problems with meat and poultry plants where workers do not benefit even from the most basic working conditions. They are taken advantage of because of their "limited English skills; uncertainty about their rights; alarm about their immigration status if they are undocumented workers." Moreover, situations like these point out yet another problem: the mismatch between the increasing demand for workers and cheap labor and the U.S. immigration regulations. The latter, being very strict, allows these human rights breaches to take place.

The economic perspective

We have established that both the old and the nowadays immigrants are "intelligent, brave, and motivated people." The question is, if these qualities are put to good use, in both the United State's interest and the immigrant's personal interest. The debate is, unfortunately, only viable for legal immigrants, as for the illegal ones all the qualities and skills are used for the mere survival. They constantly struggle to get jobs, to hide from the authorities and so on.

Contrary to popular belief it can be statistically demonstrated that immigrants have had a positive impact over the American economy. And they have. They are a smart, cheap and strong source of labor and this could only be beneficial to the country as a whole.

Immigrants are fighters in general. This greatly distinguishes them from Americans as they have a goal and they put every effort into accomplishing it. If they are studying, they will be studying better and harder than the other students. This has been showed by statistics. Firstly they are more optimistic as Stanislav Kelman shows: "As surveys show, immigrants that are graduating from college "are highly optimistic about their prospects," while Americans are very concerned "about mass layoffs" The positive attitude is a step in the right direction and they accomplish more because they believe in themselves and in their potential.

During the years immigrants have proven a great talent in exact sciences and professions, i.e. information technology and engineering. They are hard working and more serious and manage to get ahead of the students born in the United States. Moreover, these are also the most important fields of business where brain-drain is mostly applied. Whole American IT companies function almost entirely on employees that have not been born in the United States.

Most statistics compare immigrants with persons born in the United States to determine what both groups have to offer in terms of labor and economic growth. One of the things that are taken into consideration herein is the medium level of education that the two groups posses. It seems that the persons born in the United States have an average of 12.5 years of study, while the immigrants only 10.7 years. However this is not a fair evaluation as there are different systems of education in different countries and subjects can be more or less condensed. For example, there still are some countries in Eastern Europe where the educations system does not contain the college. Students study in high school what Americans study in college and then may or mat not go on to university for a specialization. An even higher specialization comes from a master's course or a PhD. Therefore, it would be desirable, when comparing in terms of education to have in mind the system of each country or, better still, the knowledge of each particular individual.

Another factor disrupting the statistics is that immigrants are often younger than the persons born in the United States they are compared with and could not have had so many years of education. Moreover, in some third world countries the possibility of a good education is still something that only the elites have, or the governance system of those countries does not allow so many chances for an education. These persons should not be taking aside, as they may be very intelligent highly skilled individuals.

Furthermore, if one takes into consideration the immigrants that are studying in the United States the statistics change completely. Although their percentage compared to the one of the students born in the country is small, the percentage of achievements is very high. They get better results, better grades; go on to high education like PhDs and so on. There are some domains, as set forth, like engineering and information technology, where the percentage of immigrant students and professionals is highly increasing. In the recent years it has had top values of over 50% of the students.

Another thing to be noticed is that the percentage of immigrants is higher, the higher the investigated level of education is. Because they are so determined, immigrants tend to become more specialized than students born in the United States.

Another thing taken into consideration when comparing immigrants with persons born in the United States in terms of labor and economic growth is the wages the two categories work.

It is true that immigrants gain lower wager than Americans, especially recent immigrants. There is a 32% medium difference between the wages of recent immigrants and those of other employees. This is a natural process considering that even if they do know English they speak it with a strong accent and they have no experience on a particular job and experience in the United States in general. The lowest wages are, of course, those of illegal immigrants as they do not have where to choose from, taking what they can and working in petty conditions.

The situations changes with time. Those that are entrepreneurs, although having arrived in the United States of America without any money, gain the capital to start their own business. These small businesses bring value to the American economy as they offer employment for other immigrants; they offer taxes for the government and service a particular area or community. An example of this is that "in Miami alone "there are 25,000 small Cuban firms" and they all support the economy.

The immigrants that have been studying get jobs after graduation. If they are very good, they advance fast on the job hierarchy and work in the field they have prepared for earning accordingly. "Others work for big companies; for example, "about 40% of the 200 researchers in the Communications Sciences Research wing at AT&T Bell Laboratories were born outside the U.S." Many immigrants work for companies like Du Pont, or American Megatrends, or at large universities." The trend with immigrants working in universities is expanding. They come to the country with scholarships and either work to support themselves or they are part of study-teaching programs, like some fellowships of PhDs.

However, a great problem that immigrants have to face, even the most qualified ones, is that of discrimination in employment. They are faced with a great intolerance from people who believe the most popular statistics and follow the most popular trends. This is a real setback even for the most skilled and knowledgeable immigrant. At a first glance, Americans seem to be very liberal and welcome foreigners with open arms. However, at a closer look the situation is not so clear. "On paper, constitutionally and internationally, Americans respect the rights of non-citizens. But inspiring words on a statue in New York Harbor notwithstanding, unadulterated welcome has never been our actual stance." American intolerance has been fueled lately by national security fears. All Islamic immigrants are regarded as terrorists. All other immigrants are regarded as possible terrorists. "Immediately after 9-11, the U.S. government questioned thousands of non-citizens of Arab and south Asian descent who were selected for no reason other than their ethnic or religious backgrounds. A full 752 were arrested for routine immigration violations. While none was ever charged with terrorism, the government gave them the slanderous moniker of being of "special interest" to the terrorism investigation."

Moreover, the average American includes in the category of illegal immigrants all aliens, that is: the refugees, asylum seekers, workers, students and even tourists. These are in fact legally in the United States and benefit from all the rights and civil liberties.

The greatest argument that statistics have in showing the negative effects of immigrants is that they supposedly drive down wages in general, for other categories of workers as well. This happens because they are a cheap labor force and they are willing to do more for less pay, thus a person born in the United States who wants to work has to adapt to this, as discrimination or no discrimination, any sound business man would hire somebody if it brought him some leverages in comparison to another, may he be American born.

However, this decrease in wages, only applies to non-skilled work. As we move to higher levels of professionalism, education and knowledge we do not see this trend. "Nevertheless, research by two professors from Princeton University shows that "in no case" was there found "a large or statistically significant effect of immigration on the rate of increase of wages for the least-skilled workers." The main reason for this is that the labor market is in a continuing demand for professionals, as it has not been saturated yet. Therefore, here immigrants and Americans are not competitors, but rather companions. Unfortunately, due to discrimination, the immigrants' wages, even at this level, are lower than the others'.

Another problem to be dealt with considering the economic impacts of migration is the one of welfare. Twenty years ago, only 8.8% of the immigrant families benefited from the American social security system in comparison to 8% of the American households. The difference is very small considering what immigrants had to go through. Moreover statistics from the time showed that the 11 million immigrants working were bringing in $90 billion in taxes compared to the $5 billion used for welfare in their case.

A great problem regarding welfare is that people who need it are sometimes not able to benefit from it. Immigrants may not benefit from welfare in case they do not have a source of income and consequently may, in some U.S. states not benefit from government assisted health benefits, either. Illegal immigrants are of course excluded from the American social security system.

What are the costs of immigration?

The "costs" of immigration, i.e. The negative impact it has on the American economy can be divided into direct expenditures (incurred by the state in order to support the immigrants, like welfare) and indirect expenditures (incurred by the native Americans due to the changes the immigrants cause, like unemployment).

Since the 1980s the level of welfare paid for immigrants has greatly increased in comparison with the taxes they pay, due to the great increase in illegal migration, unemployment and of the overall number of immigrants. This results in Americans paying higher taxes in order to support the welfare of the immigrants. Statistics show that in reality, due to the fact that only a small percentage of the taxes paid by immigrants goes to social security, i.e. 9%, they do not cover by far the sum necessary for the welfare and thus they are annually costing the state, thus the citizens, $16 billion.

The costs incurred by the state other than social security are: those of health care, prison costs, food stamps and civil protection costs.

The indirect costs, or displacement expenditures, are mostly referring to the decrease in the wages of the Americans. They may even be laid off due to the cheap workforce and even forced to move to a different region with fewer immigrants. "The various estimates conclude that the elasticity of the native wage with respect to the number of immigrants is at most -0.1. This implies that a city with 10% more immigration than another will have wages that are 1% lower. In other words, a $10.00 per hour wage will fall to $9.90." It is easily observable that this effect is small compared to the vastness of the American economy. Moreover, as set forth, it only happens with regard to unqualified work.

Unemployment is a factor that scares most native Americans when it comes to immigration. However, statistics have shown that here to the percentage of change is much to small to matter within the economy as a whole. Therefore the impact of migration over the unemployment rate is more of a media gimmick to agitate the spirits and create a negative view over immigration.

Measured and sized up in numbers: "In sum, direct expenditures result in a net loss of $16 billion, and loss of native wages add another $44 billion for a total cost from immigration of $60 billion."

There have been many scholars who have sized up the benefits of immigration for the economy of the United States. The most important ones are: "increases in economic welfare, increase in cultural diversity, and increases in the standard of living of immigrants."

The increase in economic welfare comes from the very decrease in wages. The money that the employers gain from paying lower wages are invested into developing and expanding their business. This in turn creates more activity, a greater turnover and extra jobs, thus being beneficial. Another gain is the decrease of the price of the products for the consumers due to the decrease of the labor costs. In reality, what native Americans lose in wages the overall economy gains and thus grows even greater. The money is simply redistributed.

The work of the immigrants is also beneficial as the goods they produce come to service a certain demand on the market and are usually cheaper. In terms of goods, a beneficial aspect is the fact that their range diversifies with the diversity of the immigrants producing them. This gives birth to a whole range of industry which comprises of traditional clothing, ethnic restaurants, household goods, cultural centers, places of social gathering and so on.