The Immigrant 'Cheap Labor' Myth
By Jon E. Dougherty (05/27/05)
In nearly every news story, report or analysis of the nation's illegal immigration problem, it is presented as fact that cross-border migrants have a net positive economic effect on U.S. communities.
Perhaps that's no surprise, given that the U.S. government maintains this. In the 2005 Economic Report of the President, which touts President Bush's work-for-amnesty program, the administration observes, "Immigration has touched every facet of the U.S. economy and America is a stronger and better nation for it."
In reality, however, this "fact" is a myth. The truth is, immigrants – legal and illegal – inflict a net drain on the U.S. economy, when you factor in all of the expenses associated with providing them taxpayer- and consumer-supported benefits and services.
While it is true there are some industries benefiting from cheap labor – agriculture, for one – bare-bones, unbiased, non-partisan statistics prove beyond reproach that illegal immigrants are costing the nation much more than they contribute to it.
"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," says an analysis by the Center for Immigration Studies. "The net 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.
"This is especially true of illegal immigration," the report continues. "Even though illegal aliens make little use of welfare, from which they are generally barred, the costs of illegal immigration in terms of government expenditures for education, criminal justice, and emergency medical care are significant."
The costs are worse for border states. CIS estimates California taxpayers spend upwards of $3 billion to $4 billion per year providing services for illegal immigrants. The Federation for American Immigration Reform, another group seeking common-sense border policies, says Texas spends even more – "more than $4.7 billion per year for education, medical care and incarceration," or about $725 per Texas household "headed by a native-born resident." Even factoring in the economic "contributions" made by illegal migrants, FAIR says Texans still shell out about $3.7 billion per year.
Where is all the cash going? Quite simply, it is going back to Mexico.
The BBC reported last year that remittance payments – money sent back home by migrant workers – reached $140 billion globally. Of that amount, say separate studies, nearly $17 billion was sent to Mexico by its migrants working "abroad" (meaning in the United States), making that infusion of hard currency the second-largest source of income for Mexico after oil revenues.
In fact, Mexican migrants working in the U.S. have even formed collectives and associations, which in turn help spur economic development in the migrants' home states and towns across the border.
Americans, by and large, are not a selfish people. While we contribute billions to scores of charities every year, our government acts as one of the world's most generous benefactors. Washington's foreign aid payments alone overshadow some nations' annual budgets.
In terms of relations with our southern neighbor, much of our economic foreign policy in this hemisphere has been a direct benefit to Mexico City. The North American Free Trade Agreement (which, by the way, was supposed to curb illegal immigration), has been worth hundreds of billions of dollars to Mexico, while costing the U.S. in terms of job and economic loss.
NAFTA is just one example. Remember the 1995 Mexican peso bailout? While the International Monetary Fund is credited with providing the actual funding, a substantial portion of Washington's nearly $14 billion annual foreign aid budget goes to the IMF and World Bank.
On top of all this, the State Department says the U.S. government provided more than $33 million in stand-alone foreign aid to Mexico last year alone.
Yet Mexican leaders and politicians, in tandem with U.S. immigrant "rights" groups and sympathetic legislators, bemoan the U.S. is not doing enough for these "selfless" migrants, most of whom are supposedly doing so much good for the American economy. Some Mexican leaders, President Vicente Fox, are so focused on pawning off their nations' economic problems on U.S. taxpayers they have even gone so far as to insult American minority groups.
You want to talk bottom line? Well here it is. There is nothing "cheap" about the Mexican "cheap labor" myth, especially if you're an American taxpayer.
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