The purpose of this document is to provide an analysis of the economic impact on the U.S. economy from illegal immigration. From displacing low-skilled, low-wage blue collar workers to taxing already overburdened state social services, illegal immigrants have a deleterious impact on the U.S. economy. This analysis proposes that the U.S. fails to give enough weight to the economic potential of immigrants in setting immigration policy.
According to estimates from the Immigration and Naturalization Service (INS), more than 5 million illegal aliens currently reside in the U.S. with 400,000 more added to their numbers annually (Camarota 1). A majority of these illegal aliens reside in border states like Texas, California, New Mexico and others where there numbers put an excessive burden on state resources. According to one report, illegal immigrants use $42 billion more in welfare resources than they pay into the U.S. tax system (Borjas 44).
Illegal immigrants also displace many low-skilled, low-wage employees living in this country legally. Employers risk prosecution for hiring illegal immigrants, but thousands of them cannot resist paying them much lower wages. On any given day in Los Angeles, Texas, or New Mexico, you can drive to a specific location and find waiting a group of illegal immigrants who will hire out for the day for lower wages than legal residents. In addition to having the negative effect on the economy of raising unemployment, illegal immigrants also use more welfare resources than natives. According to George J. Borjas, “In 1970 immigrants were less likely to receive welfare than natives. By 1998, 20 percent of immigrants received assistance, compared with only 13 percent of natives” (A23).
There have been many stories reported about employers firing African American workers in order to replace them with lower-paid illegal immigrants.