Effects of Illegal Immigration on the U.S. Economy

Running head: ILLEGAL IMMIGRATION AND THE U.S. ECONOMY 1
Effects of Illegal Immigration on the U.S. Economy
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ILLEGAL IMMIGRATION AND THE U.S. ECONOMY 2
Effects of Illegal Immigration on the U.S. Economy
Illegal immigration to the United States has always been a subject of heated discussions,
especially among politicians. Specifically, George W. Bush once stated that illegal immigrants
usually fill the positions that Americans reject, which only benefits the economy (Lynch &
Woodyard, 2006). The number of illegal immigrants, mostly arriving from Mexico, peaked in
2007, which prompted the then-president to call for endorsement of the guest worker program
that would allow to issue temporary work permits to foreign citizens without them having a
future opportunity to apply for permanent residency (Passel & Cohn, 2010; Lynch & Woodyard,
2006).
Economists, on their part, have stated that undocumented workers benefit the economy
more than harming it. For instance, social security and income taxes are deducted from illegal
employees’ wages, as indicated by Lynch and Woodyard (2006). The authors also state that
illegal immigrants are forced to pay all applicable property and sales taxes. On the other hand,
illegal immigrants use public services such as free education and medical care, which puts
additional burden on the government budget. Nevertheless, despite there being explicit indicators
of certain harm to the U.S. economy, illegal immigration and its resulting effects can be put to
good use for the benefit of the entire nation.
Adverse Effects of Illegal Immigration on the U.S. Economy
Notwithstanding evident positive impacts of illegal immigration, there are specific
arguments to the contrary that must be considered. The most popular claims refer to the illegal 
ILLEGAL IMMIGRATION AND THE U.S. ECONOMY 3
immigrants’ low wages, which attracts employers, and the money failing to stay within the U.S.
economy.
With their reduced wages, the undocumented immigrants take jobs meant for the
unskilled American workers and thus are viewed as jeopardizing the employment rate in the
country. This is perhaps the biggest legitimate objection to the illegal immigration, with studies
suggesting that such illegal workers have overcrowded the low wage jobs accounting for more
than half of the 11 percentage-point drop in wages for unskilled Americans in high-school
dropouts over the past few decades (Davidson, 2013).Many experts believe that the issue is
significant enough and thus worth revisiting as the unskilled legal American citizens are
disadvantaged from the below average wages paid to the illegal immigrants (Borjas, 1986).
However, the economists on their part disagree on the point of deporting such undocumented
immigrants as the U.S. citizens are not likely to fill all their job positions. According to the
American Action Forum’s analysis, even if the undocumented workers were driven away and all
their jobs taken up by the U.S. workers, there would still be more than 4 million jobs unfilled
(Vadell & Zaldivar, 2012).
Revenues from the undocumented workers do not circulate directly to the U.S. economy
as most of the undocumented workers’ wages find their way back to their countries of origin.
According to research, most of the undocumented workers usually work to support their families
back at home (Davidson, 2013). Despite the undocumented workers willing to work for lower
minimum wages, the little they earn is not going back to the U.S. economy but their motherland
instead. There has also been the belief that some of the undocumented workers fail to pay taxes
but continue to enjoy public facilities that are funded by the American citizens in form of taxes, 
ILLEGAL IMMIGRATION AND THE U.S. ECONOMY 4
including public hospitals and schools (Vadell & Zaldivar, 2012). However, while paying an
individual with stalemates and antiquity in the community, not only will their tax dollars go to
the U.S. government and be circulated in the economy via public assistance programs or
government contracts, but their earnings will go toward local businesses helping them thrive as
well (Vadell & Zaldivar, 2012). Such is believed to be the basis of a prosperous economy.
Positive Effects of Illegal Immigration on the U.S. Economy
Economists believe that getting rid of all illegal immigrants would most likely cost the
U.S. economy losses of about 1 trillion in U.S. dollars (Lyubansky, 2014). Some of the
arguments as to why immigrants do not hurt but indeed benefit the U.S. economy include the fact
that their wages are taxed for the benefit of the U.S. treasury and the positive side of cheap labor
they offer.
Through the taxes they pay, the illegal immigrants contribute to up to 12 billion dollars
annually in local and state taxes alone, thus benefiting the economy directly (Davidson, 2013).
The income and social security taxes are deducted f 


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