5 Theories About The Economic Effects Of Illegal Immigration You Shouldn't Trust

5 Theories About The Economic Effects Of Illegal Immigration You Shouldn't Trust

A Texas judge’s decision on Monday to block the executive actions on immigration announced by the Obama administration last year has cast the issue of illegal immigration back into the national spotlight.

While the debate is ostensibly a fight over the limits of executive power pitting President Barack Obama and other champions of reform against Republicans in Congress and statehouses across the country, many opponents of immigration reform consistently appeal to economic arguments to explain why the government should continue to crack down on undocumented immigrants living in the country.

Rick Santorum, a conservative politician who ran in the GOP presidential primary in 2012, said last month that laws passed in the 1920s to restrict immigration from Asia and Southern Europe “did what was best for the American worker.”

Sen. Jeff Sessions (R-Ala.) has likewise framed the immigration debate as a struggle between American-born and foreign-born workers.

In a memo to Republican members of Congress posted to his office’s website, Sessions railed against a failed proposal for comprehensive immigration reform, writing that “for American citizens, the legislation offered nothing except lower wages, higher unemployment, and a heavier tax burden.”

Despite how often these ideas surface in the ongoing immigration debate, many of them don’t hold up to scrutiny. The consensus among economists is that immigration -- both legal and illegal -- has an overall positive effect on the U.S. economy.

Here’s five talking points about the economics of illegal immigration you should view with a healthy dose of suspicion:



Undocumented immigrants don't pay taxes.

Albert Lozano via Getty Images
Fact: While undocumented immigrants don’t hold legal migration status, they generally pay a host of taxes. Many file income tax returns, and more than 3 million have payroll taxes deducted from their paychecks.

Undocumented immigrants paid about $100 billion into Social Security over the last decade, Stephen Gross, the chief actuary at the Social Security Administration, told Vice News last year.

Despite paying an estimated $13 billion per year into the Social Security system, undocumented immigrants only withdraw an estimated $1 billion -- a net annual contribution of $12 billion.


Undocumented immigrants sap the welfare system.

Fact: Without legal residence, undocumented immigrants are generally ineligible for government assistance. Some critics have pointed to the undocumented immigrants’ use of the child tax credit, but that money goes to support U.S.-born children.


Undocumented workers drive down the wages of native-born workers.

Fact: Much research indicates undocumented workers have little impact on the wages of those born in the United States.

A study released by the Federal Reserve Bank of Atlanta, however, found that undocumented workers have only a “negligible impact” on the wages of documented workers who work at the same firm. The study found that documented workers earned 0.15 percent, or about $56 per year, less at firms that hired undocumented workers than they would at firms that hire only documented ones. Other studies have pointed in a similar direction.


Undocumented immigrants are a drain on taxpayers.

Fact: A 2007 report by the Congressional Budget Office found that:
Over the past two decades, most efforts to estimate the fiscal impact of immigration in the United States have concluded that, in aggregate and over the long term, tax revenues of all types generated by immigrants -- both legal and unauthorized -- exceed the cost of the services they use.

However, the report also pointed out that the money reeled in by the federal government from migrants doesn’t necessarily get distributed back to the states and localities bearing the costs.


Undocumented immigrants are stealing American jobs.

Bloomberg via Getty Images
Fact: As the U.S. Chamber of Commerce pointed out in a 2013 paper, undocumented immigrants generally offer different skill sets than native-born workers, meaning they often aren’t competing for the same jobs. Additionally, as entrepreneurs, consumers and taxpayers, undocumented immigrants also create jobs that wouldn’t exist without them.

“The U.S. economy does not contain a fixed number of jobs for which immigrants and native-born workers compete,” the report says. Rather than opening up job opportunities for native-born workers, if all undocumented workers in the United States were deported, the U.S. would lose jobs, the report says.

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