Used with permission by the author.
by Joey Shelton
Joey’s blog post
The debate over illegal immigration is emotionally charged and the contentious points are highly nuanced. The economic issues are argued back and forth by those who want a more tolerant immigration policy and those demanding further restrictions or an stricter upholding of the laws already in place. There are numerous justifications cited by both camps; some are valid and others are not. We should go into some background before we get into the facts and figures of today’s immigration debate.
The origins of the so-called immigration crisis have roots in basic earthly struggles for survival. The competition for scarce resources is a battle waged by all species, humans included. What’s more, when we take a closer look at civilizations we see that fear of outsiders has been a common theme in world history. The Nazis considered Gypsies and Jews as outsiders to be eliminated. The Chinese built the Great Wall to keep out Mongol invaders. At different times, many Native American tribes enjoyed relations and trade with white settlers and later suffered starvation, disease, and annihilation. So while the antipathy against immigrants is to some extent natural, history shows us it is often based on hatred and paranoia, some instances are entirely legitimate, and that these feelings can alternate over time. In the historical discussion surrounding illegal immigration to the United States, the most paranoid assessments are often heard most piercingly.
The United States, while a relatively young nation, has a long history of selective exclusion of immigrants. Immigration barriers were directed against Chinese, Irish, Mexican, Jewish, and even many Southern Europeans deemed unworthy. Criminality, drunkenness, disease, and immorality have all been used as ammunition vilifying immigrants of various nationalities. The Alien and Sedition Acts of 1878 meant to deport those calling for an end to the Quasi-War with France. The Chinese Exclusion Act of 1882 sought to prohibit the Chinese due to their supposed wanton drug use and criminality, though overt racism was perhaps more significant. The policies enacted during the first Red Scare were a response to immigrants and other dissidents who challenged the U.S. economic system and foreign policies. The Immigration Act of 1918 was intended to do away with the unruly anarchists and communists in our nation. The huge numbers of Irish flooding the United States following the potato famine were resented for lowering the wages of native workers. There has never been a shortage of reasons to resent outsiders in our “nation of immigrants.”
While overt racism is seldom acceptable in today’s debate about Mexican immigration, the standard vitriolic accusations are employed. Now (again) it’s the Mexicans who are filling our prisons, desecrating the flag, having “anchor babies”, spreading leprosy, driving down wages, and increasing the tax burden on the native population. History repeats itself. While the sensational allegations usually merit disregard, some more sober inquiries concerning actual costs of illegal immigration should be openly discussed.
There are many qualifiers that need to be specified before continuing. When we discuss illegal immigration, it is important to note who we are talking about. As investigative journalist Juan Gonzalez pointed out, “75% of the undocumented immigrant population in this country comes from Latin America. And not only that, 65% comes from one country: Mexico. So the crux of the illegal immigration problem in the United States is the question of Mexico and the United States.” (Fact-Checking Dobbs, 2007) The current debate is largely about Mexico. It is also useful to point out that nearly half of all immigrants residing in the United States illegally were legal immigrants until their visas expired. (Modes of Entry for the Unauthorized Migrant Population, 2006)
We should also identify the various actors involved and some of the real and/or perceived costs to them. It seems obvious that the costs and benefits to business, to political leaders, to native workers, consumers, and to the immigrants themselves will vary. For example, white nationalist groups* in our society might argue that the threat posed by the “criminal aliens” and “invaders” is the very destruction of our society. According to the Southern Poverty Law Institute, the immigrant community as a whole feels the implications of this. Citing hate crime statistics gathered by the FBI, “anti-Latino hate crimes rose by almost 35% between 2003 and 2006.” (Mock, 2007) Indeed, many different groups are paying a price. For simplicity’s sake, I will elaborate on the actual dollar costs of illegal immigration to the native population.
According to our economic system, as the supply of a commodity grows the price drops. In this immigration discussion, workers are the commodities. The laws of capitalism suggest that an increase in available workers will decrease the overall wages of competitive workers. In their widely cited 2006 research paper, The Evolution of the Mexican-born Workforce in the United States, Harvard economists George Borjas and Lawrence Katz argued that there is a correlation between numbers of workers and fluctuations in wages. Since the 1970’s, average wages have declined. Borjas and Katz contend that the wage decrease of high-school dropouts since 1980 is caused exclusively by the increase in immigration. They further conclude, “The wage fell by 8.2 percent for high school dropouts and by 3.9 percent for college graduates… Overall, the immigrant influx from 1980 to 2000 is estimated to have reduced the wage of the typical native worker by 3.4 percent.” (Borjas and Katz, 2006) This includes all Mexican immigrants; not just undocumented ones. Theirs is one of the most cited, objective, and contemporary scholarly research articles on the subject. Those on the left and right of the immigration debate utilize it. Indeed, anti-immigrant CNN anchor Lou Dobbs cites it, as does liberal economist Paul Krugman.
Numerous studies concur with the findings. The 1997 study by the National Research Council found basically the same. The growth of the immigrant community “reduced the wages of all competing native-born workers by about 1 or 2 percent.” (Smith and Edmontson, 1997). The economic consequences of this “surplus population” are as real today as they were when Karl Marx scrutinized the system in 1867 concluding, “the general movements of wages are exclusively regulated by the expansion and contraction of the industrial reserve army.” But while Marx attacked the system, we often blame the workers.
TAXES AND SOCIAL SERVICES
There is a concern that undocumented workers are a drain on native taxpayers who foot the bill for food stamps, emergency medical care, schools, etc. Polls show that this is an area of resentment for many citizens. Depending on how the question is worded, 87% are, “very or somewhat concerned about illegal immigrants overburdening government programs and services.” (Teixeira, 2006) The National Research Council cited earlier found that in California, “immigrant households received an average net fiscal transfer of $3463… which amounted to an average fiscal burden on native households of $1178.” While services and taxes vary from state to state, Economist Gordon Hanson asserted, “The continuing increase in the immigrant population suggests that these transfers are likely to grow over time, raising the potential for political opposition to immigration from native taxpayers.” (2005) Even those who recognize the tax contributions of undocumented workers admit that immigrant families have more children than natives and thereby demand more resources from local schools. Pro-immigrant, liberal economist Paul Krugman admits, “Unfortunately, low-skill immigrants don’t pay enough taxes to cover the cost of the benefits they receive.” (2006) It’s important to note that Krugman didn’t specify the legal status of the immigrants in his estimate. So if legal immigrants don’t pay their fair share in taxes, what does this suggest for the undocumented workers who might escape federal taxes?
MORE TO CONSIDER
The issue is far from settled, as there are many other variables to consider. Even the notion that immigrants are solely to blame for wage decline is disputed. For example, figures from high immigration states like California found a 17% decrease in wages presumably from immigration. Economist Eduardo Porter cautions readers to look closer, “Ohio remains mostly free of illegal immigrants. And what happened to the wages of Ohio’s high school dropouts from 1980 to 2004? They fell 31 percent.” (Porter, 2006) Restructuring of the economy away from manufacturing and toward the service sector probably had far more to do with the drop in wages according to many economists.
Borjas does not stray from his assertion about falling wages, but he does admit an economic reimbursement from immigrants, “These wage changes also appear to have benefited U.S. consumers by reducing the prices of nontraded goods and services that intensively employ less-skilled immigrants.” This leads to a $5 billion boon to all consumers in the United States. Borjas believes that immigrants do use $1.1 billion more in social services than they contribute in taxes, nevertheless, “Subtracting this… from the $5 billion annual increase in national income, the United States benefits from immigration…” (2006)
Many critics fail to recognize that immigrants, regardless of legal status, do pay taxes. Property and sales taxes are paid by anyone who pays rent or buys anything in the formal economy. This means that the equitable contribution even from undocumented workers to fund local schools is being paid. One of the other major perceived tax drains is the use of Medicaid and Food Stamps. It is important to note that only citizens and some legal residents can receive these benefits. Undocumented workers need not apply. Still, the argument can be made that undocumented parents of children born in this country indirectly benefit from these programs as they are able to redirect resources away from those needs.
But we should take a closer look at the federal tax contributions of undocumented workers. Stephen Goss, chief actuary of the Social Security Administration, admitted that most undocumented workers pay income taxes using fake or stolen social security numbers during the employment process, “Our assumption is that about three-quarters of other-than-legal immigrants pay payroll taxes.” This $7 billion per year surplus ends up in the “earnings suspense file.” This means that ¾ of undocumented workers are paying federal income taxes and will not receive refunds. (Porter, 2005) What’s more, since 1996, the IRS offered Individual Taxpayer Identification Numbers (ITIN) allowing undocumented workers to pay their share of federal taxes. Roughly a million and a half undocumented workers filed this way in 2006. (Toness, 2007)
We should also look at the allocation of tax revenues. Compared to the total defense budget, social programs make up a small portion of the federal budget. This is an important distinction because as economist C. Fred Bergsten states, “At the federal level, immigrants make a positive net fiscal contribution. Adding taxpayers through immigration lowers the effective amount the federal government must charge native taxpayers to cover defense outlays.” (2005)
The effect on wages requires further analysis and perhaps a solution involving economic restructuring. It is clear that immigrants do pay taxes and assist native consumers by lowering prices. So it is worth asking, do natives subsidize immigrants or is it the other way round?
One of the questions rarely asked is, why are all these people coming to the United States? Many think the United States is innocently exceptional and subsequently burdened by the envy of the world. But we seldom take the time to really investigate the push factors that cause people to leave their communities, homes, and families behind. We need to look at that picture, and the part we may have played.
Mexicans have been encouraged to come and work in the United States on multiple occasions. This happened during both world wars as millions of working age men were drafted to go overseas and fight. History professor and coordinator of Latin American Studies at Salem State College, Aviva Chomsky, explains another historical factor,
The United States took Puerto Rico from Spain in 1898 as part of the Spanish-American War and ruled it as a colony until 1952. Globally, this kind of long-standing relationship is an important one to look at in understanding migration. People from India and Pakistan go to England; people from Senegal and Algeria go to France; people from Morocco go to Spain; people from Mexico and Puerto Rico come to the United States. Colonization sets the stage for later migration. (2007)
Many believe that economic colonization is still going on to this day.
Critics saw the 1994 North American Free Trade Agreement (NAFTA) as a blatant continuation of neocolonialism. Historians Benjamin Keen and Keith Haynes observed, “By eliminating tariff restrictions and restrictions on investment, [NAFTA] ensured that Mexico would become a cheap-labor preserve for U.S. industry, with a loss of better paying jobs in the United States.” They go on to point out, “Mexican workers’ wages fell by 29 percent since 1994. As a result of NAFTA, poverty rates in Mexico in 1999 rose to 60 percent from an annual average of 34 percent between 1984 and 1994.” (2004) As the economic situation in Mexico deteriorated (as expected), the rate of immigration north skyrocketed (as expected).
President George W. Bush is a vocal supporter of immigration, but his proposed guest worker programs, many of which are already in place, have been staunchly condemned by the Southern Poverty Law Center as being “Close to Slavery.” As there 2007 report states, “guest workers are routinely cheated out of wages, held virtually captive by employers or labor brokers who seize their documents, forced to live in squalid conditions, and denied medical benefits for on-the-job injuries.” (2007) The implications suggest a repeat of the historic exploitation of labor in this country. While slavery and child labor have been eliminated, the struggle for workers’ rights goes on. Andrew Barlow, author of Between Fear and Hope; Globalization and Race in the United States, offers this scathing analysis, “the… status of ‘illegal aliens’ meant that Mexicans could be compelled to accept low wages and horrendous work conditions, and lacked the legal and political means to do anything about it.” (2003) Surprisingly, this is the basic analysis of the more moderate George Borjas, “Immigration policy is just another redistribution program. In the short run, it transfers wealth from one group (workers) to another (employers).” (2006) The reserve army of labor, lacking basic rights, helps to keep wages and prices low while profits remain.
The economic difficulties surrounding the so-called immigration crisis can be worked out. We should first challenge our ingrained understanding of the way our economy works. We should question the very assumption that there will always be some class of people, high-school dropouts or immigrants for example, who will do the unwanted work of society and receive very little pay for it. As Aviva Chomsky put it,
Do immigrants compete with low-skilled workers for low-paying jobs? Yes. But the reason that this competition exists is because too many people are deprived of rights… The answer to the low-wage problem is not to restrict the rights of people at the bottom even more (through deportations, criminalizations, etc.) but to challenge the accord between business and government that promotes the low-wage, high-profit model. (2007)
We should welcome all workers into our ranks allowing them an equal say in the society they live in. The AFL-CIO, long opposed to immigration, has finally come around noting, “Immigrants are not the cause of our nation’s problems.” Their 1993 resolution encouraged the development “of programs to address the special needs of immigrant members” and cooperation with “immigrant advocacy groups and service organizations.” (quoted in Chomsky, 2007)
Minimum wage laws should be enforced for everyone, including the traditionally barred domestic and seasonal farm workers, and should be accurately adjusted for inflation. Had the minimum wage kept up with inflation, it would be around $9 per hour. U.S. companies doing business in Mexico should be forced to comply with whichever labor and environmental standards are strictest. People would argue that such restrictions would put a burden on business that would raise prices. The same argument was used to deter the abolition of slavery. If consumer prices and a “healthy economy” are the most important factors when determining labor standards, then perhaps slavery should be reinstated starting with our brown skinned neighbors to the south.
I feel like blushing even discussing the possibility of rising prices due to equitable minimum wage laws. CEO salaries have seen a 400% increase over the past 30 years while workers’ wages have dropped below or have barely kept up with inflation. Where is the discussion about the upward pressure on prices caused by Exxon Mobile CEO, Lee Raymond’s $405 million pension? We exert too much energy on discussing the threat of raising the wages of the lowest paid workers and too little considering the possibility of paying everyone a just wage. As Warren Buffet, the second richest man on the planet, admitted, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
Adam Smith, “the father of capitalism,” offered advise to those reviewing the economic policies advanced by the elites of the world,
The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted, till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
On that note, we should dismantle NAFTA and question our economic policies in general. Here is a great irony in the debate; millions of our tax dollars go to subsidize multi-million dollar agribusiness firms whose products are sent south which then undercut Mexican farmers in turn pushing them north of the border. These Mexicans accept low wages in U.S. companies due to their legal status and then we complain about the economic costs associated with all these immigrants. If we want fewer immigrants entering the country, legally or otherwise, we should first dismantle the economic institutions instigating that migration.
But there are other benefits that don’t fit into the usual model. Polling attitudes of newly arrived Latin American immigrants show a consistent dissent concerning U.S. military policy. Latin America has a special understanding of U.S. military incursions and has repeatedly opposed U.S. invasions of Middle Eastern countries. When we talk about costs to whom we should consider the Iraqi and Afghan lives lost over the past five years. A 2006 Johns Hopkins study found that nearly one million Iraqis had died since the U.S invasion in 2003. What were these lives worth? To who? They seemed to be worth little to American pundits, nevertheless, these fathers and mothers, brothers and sisters were considered priceless by someone. Had recent Latin American immigrants been given a stronger voice in those foreign policy decisions, that awful toll might not have been paid.
The success of the immigrant rights movement could be another step in bringing about a more just world. The Abolitionist Movement, the Civil Rights Movement, the Women’s Rights Movement, and the Gay and Lesbian Rights Movement were all efforts by disaffected minorities and their supporters to raise the bar of justice. These efforts changed the norms of acceptable behavior in significant ways. As the saying goes, “Liberty isn’t given, it’s taken.” As Sociologist Charles Gallagher rightly contends in Hispanics in a Multicultural Society: A New Dilemma?,
The challenge is for Hispanics to muster a unified response, drawing on all their resources and capabilities, and become an integral part of the movement to uncover complex forces intensifying inequality, poverty, political passivity, exploitation, and social isolation, not only within their own ranks but in the United States as a whole. This means reaching out and grasping every opportunity to share in the scholarly debate, policy assessment, and organized movement to restore priority to human rights objectives, despite the limitations under which all such initiatives now operate.” (2004).
There are indications that this is indeed happening. The largest mass protest in U.S. history took place on April 10, 2006 over the xenophobic immigration bill being discussed in congress at the time. If that demonstration is any indication of the immigrant community’s potential then perhaps a more inclusive nation is on the horizon.
*Membership in white nationalist groups has increased 600% over the past two years. (Mapping the New Nativism, 2007)
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Borjas, George. For a Few Dollars Less. Wall Street Journal. April 18, 2006.
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Chomsky, Aviva. “They Take Our Jobs!” and 20 other myths about immigration. Beacon Press, Boston, 2007.
Close to Slavery, Guestworker Programs in the United States. Southern Poverty Law Center. 2007. http://www.splcenter.org/legal/guestreport/index.jsp
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Toness, Bianca Vazquez. U.S. Tax Program for Illegal Immigrants Under Fire. All Things Considered, National Public Radio. March 5, 2007.