Is illegal immigration bad?

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This post was written in connection with a larger post, Why I am voting third party, so I’m going to take a decidedly Trump-centric approach here. Sorry if you stumbled upon this looking for a more generic discussion. This is a long post that you may not agree with, so here is your trigger warning. Read at your own risk.

I’ve seen four primary arguments against immigration in recent days and over the years. They are:

  1. They’re taking our jobs
  2. They’re taking from our institutions without putting anything in
  3. They’re dangerous
  4. They don’t speak our language/they’re running down our cities/I just don’t like them

So, let’s address all of them, shall we?

They’re taking our jobs

A Rasmussen report survey conducted in August of 2015 found that 51 percent of likely U.S. voters believe undocumented hispanic immigrants are taking jobs away from U.S. citizens. In contrast, much of the economics literature shows that undocumented immigrants do not take jobs from Americans, but instead create more jobs and higher wages for natives. So, where is the disconnect?

For immigrants to be taking jobs away from natives, employers would have to be hiring immigrants instead of natives when both were pursuing the same job. This is challenging to prove, as it would require demonstrating that:

  1. natives are actively pursuing the same jobs as immigrants
  2. employers have incentives to choose immigrants over native workers

Are natives actively pursuing the same jobs as immigrants?

The idea that natives are not actively pursuing the same jobs as immigrants is the one I hear most often used when arguments are had about this topic. So, I’m going to try to cover my thoughts on it.

The pew research show that immigrants tend to work in low-skilled professions, such as service (maids, cooks, groundskeepers), construction, production, agriculture, forestry, and mining. Lots of immigration supporters make the case that these are undesirable professions, many of them manual-labor intensive, and that natives therefore do not pursue them. However, determining the desirability of a profession is not the easiest endeavor. The field of organizational behavior is dedicated to questions such as this, and researchers have proposed a variety of theories to attempt to categorize and evaluate various characteristics a job to determine how much satisfaction they bring. The professions that immigrants tend to work in do not score very well on many of the standard rating characteristics, such as variety of work, workplace safety, work conditions, job security, and independence, making them appear undesirable. That said, I’ve yet to find an ordered list that ranks jobs that has a strong enough methodology for me to buy into it. Buzzfeed just doesn’t do it for me.

The desirability of a job is not only based on the satisfaction the work itself brings, though. There are many other factors, including the level of education required, the experience required, the location, cost of living in that location, and perhaps the biggest one, how much the job pays. The North Dakota oil boom provides a great example. Those jobs scored low on many of the work satisfaction criteria. In addition, the housing was terrible (if it even existed) and rural ND doesn’t offer many amenities. Despite this, thousands moved there due to the six-figure salaries with minimal education and experience requirements.

The 2015 U.S. Census showed that 10% of the U.S. population did not finish high school or complete a GED, and 67% don’t have a bachelors degree. As usual, they (regrettably) failed to include technical diplomas. However, given that there are around 200 million working-age adults in the U.S., this means there are at least 20 million adults (and likely many more) who are dependent upon acquired skills and experience to find jobs in lieu of education. For those who are unskilled and have little experience, there are not many options. I find it difficult to deny that many may find themselves applying for the same jobs as undocumented immigrants, undesirable or not. This discussion has only focused on the so-called “undesirable” blue-collar jobs, while the pew study found that over 25% of undocumented immigrants work in what would be considered white-collar jobs. So, the chances of competition with natives are even higher. Given this discussion, I’d say it’s fairly likely that undocumented immigrants and natives do apply for the same jobs at times, so I must now turn to the employers and ask why they would hire undocumented immigrants over natives.

Why would employers choose undocumented workers over natives?

So, now we get into the messy part of this. In my experience, many people are often quick to blame undocumented immigrants for the sin of taking jobs. However, someone had to offer them those jobs. If the previous discussion is to be believed, it’s even worse…someone had to offer them those jobs instead of offering them to a native. Why would a business do this? The fact is that there are significant downsides to hiring an undocumented immigrant. They often don’t know English. They could, at any time, be caught and deported. In many states, the business could be fined for knowingly hiring an undocumented individual. Given these downsides, why would a business hire them? Well, businesses make hiring decisions based on a number of factors, and I’ve already talked enough about organization behavior today. However, the short version is, the key pieces are how well the individual will do the job, how well the individual fits with the organization, and how much the business will have to pay to hire and maintain the employee.

This is where the controversy starts, because people start throwing out arguments on how immigrants have a greater work ethic and Americans are lazy. I don’t even want to touch that, but that’s why economics is called the dismal science. We have to touch it, because we need to find the reasoning here. So, let’s make it more science-y and less offensive. If undocumented immigrants have a higher level of productivity due to any source (strength, endurance, work ethic, punctuality, ability to learn quickly, experience, whatever) and they are willing to work for the same wage as a native, then the business should definitely hire the immigrant over the native worker. Free-market economics would say hiring the native here would be stupid. I’ve found that most who support deportation and stronger efforts against undocumented immigration are generally strong supporters of free-market economics, so there should be some cognitive dissonance here if you’re in that camp.

The funny thing is, even with an identical wage, we’re still not talking about a 1-to-1 substitution here. There are still significant downsides to hiring an undocumented immigrant. The amount of productivity that the immigrant has over the native would have to be to be large enough to eclipse the language barrier, potential for deportation, and potential fines. Are Americans really that unproductive? Well, the assumption here was that the business would have to pay the same wage to the immigrant as they would to the native. Is that truly the case, or can businesses pay undocumented immigrants less? Well, this is where most of the economic research has been, because this is where the discussion always eventually leads. I could have just started here, but I hear it’s more about the journey than the destination anyway, and it helps to demonstrate why this is the key to it all.

So, we’re finally to the big question. Can businesses pay undocumented immigrants less than natives? This question has interesting implications for the whole discussion. If they can, then wages in industries where undocumented immigrants compete would be lower than they would otherwise. The fact that wages in these industry are so low might discourage natives from applying for positions at all. If this is the case, then we’re back to the initial question, except with a different result. Perhaps natives aren’t applying for the jobs at all because of the suppressed wages, and so the undocumented immigrants have not only stolen those jobs but may have stolen the entire industry!

It’s quite fortunate that this all comes back to wages, since wages are one of the easiest data points to gather. So, what do the studies show about wage effects of immigration? Well, the answer is pretty clear. Borjas found evidence of suppressed wages in his 2013 study, as well as lower employment among groups with lower levels of skills and education. The State of Texas’ Comptroller’s Office in a 2006 study found that deporting all undocumented immigrants would result in an increase in wages of roughly 0.5%. A Congressional Budget Office (CBO) study from 2013 also showed decreased wages would result for a time after creating a path to citizenship for undocumented immigrants, though those increases would eventually turn to increases. Similar outcomes were found by Chassamboulli and Peri and Furtado and Hock. David Card, in his meta-analysis, found similar. So, case closed, right? Undocumented immigrants suppress wages and therefore steal jobs from natives. Well, the story’s not over yet.

One main way to look at economics is the study of consequences. There are fairly interesting consequences at play when wages go down generally, and in this case in particular. When wages go down, business owners have higher margins and can make more profits. Eventually, assuming it’s a competitive industry, one of them will realize they can lower prices, still make the same profits they used to, but get more business. The others will have to follow, and prices will fall in the long-term. Lower prices mean people can buy more stuff, and when people buy more stuff, businesses tend to hire more people to produce that stuff. To attract employees, these businesses may need to raise their wages. So, while undocumented immigrants may be putting downward pressure on wages and “stealing jobs” in some industries, their willingness to work for lower wages should eventually create jobs and may increase wages in other industries. Much of the research supports this. The same Texas study mentioned earlier shows that while wages would go up by 0.5% if all undocumented immigrants were deported, income would actually drop by 2.6%, disposable income would drop by 2.8%, and the employment rate would drop by 2.3%. This seeming conundrum is the source of much of the contention in the matter. Individuals who support deportation quote the increase in wages and job opportunities for individuals in industries competing with undocumented immigrants. However, due to eventual higher prices, people can’t buy as much stuff, businesses start laying off employees, and therefore the net effects on real wages (how much stuff you can buy with your money) and employment rates may be negative.

So, where does this leave us? Well, all economic outcomes are based upon millions of individual decisions made by people every day. We can never predict perfectly how people will make these decisions, but our best models to simulate these decisions and estimate what will happen show that illegal immigration increases our economy’s output, likely decreases the wages and job opportunities for unskilled native workers, temporarily increases the income of business owners, and may, in the long-run, increase the wages and job opportunities across industries. As Rasmusen said in his 2016 paper, “whether the total income of natives rises or falls with immigration is open to doubt.”

This puts policymakers in a precarious position. Since illegal immigration is actually increasing the economy’s output, reducing it or deporting undocumented immigrants would likely lead to a decline or even a recession. Since the estimates of wage and employment affects seem to be unpredictable, deportation just isn’t a very good blanket policy. An arguably better policy would be to enact job training programs for unskilled natives and those with low educational attainment so that they can get the jobs being created by people buying more things due to prices falling from immigration. Since undocumented immigrants are actually helping the economy and are willing to work for low wages, let them do so.

They’re taking from our institutions without putting anything in

I finally made it to the second point! Much of this point precedes from and informs the previous one. Even if illegal immigration may increase wages and decrease unemployment, some would argue that it is still draining resources from our institutions and is therefore a net loss. Is this true?

Revenue

Many people argue undocumented immigrants don’t pay any taxes, but it’s pretty much impossible to live in the U.S. and avoid all taxes. The nonpartisan Institute on Taxation & Economic Policy released a paper in February that provided very good data on how much immigrants pay in taxes. As stated in the paper, they pay sales and excise taxes when they purchase goods and services (for example, on utilities, clothing and gasoline). They pay property taxes directly on their homes or indirectly as renters. Many undocumented immigrants also pay state income taxes. The best evidence suggests that at least 50 percent of undocumented immigrant households currently file income tax returns using Individual Tax Identification Numbers (ITINs), and many who do not file income tax returns still have taxes deducted from their paychecks. Collectively, the paper estimated that undocumented immigrants in the United States pay an estimated total of $11.64 billion in state and local taxes a year. The Social Security Administration in 2010 came up with far higher estimates, stating that undocumented immigrants and their employers paid $13 billion into just the Social Security Trust Fund.

Expenses

Now that we have an estimate of revenue, we need an estimate of costs. Well, this is where things get messy. There are a number of studies that show revenues exceed expenditures on undocumented immigrants, but most of these are specific to certain states. A 2006 paper indicated that annual costs for unauthorized immigrants in Colorado were between $217 million and $225 million for education, Medicaid, and corrections. By comparison, taxes collected from unauthorized immigrants at both the state and local levels amounted to an estimated $159 million to $194 million annually, leading to a deficit. The Iowa Legislative Services Agency reported that the estimated 70,000 unauthorized immigrants in the state paid between $45.5 million and $70.9 million in state income and sales taxes in fiscal year 2004. The report did not quantify the costs of providing specific services to unauthorized immigrants. Rather, it estimated an average benefit of $1,534 per state resident based on total spending from the state’s general fund and the number of state residents (including unauthorized immigrants). Using that average benefit calculation, the estimated cost for providing all services to unauthorized immigrants was $107.4 million in fiscal year 2004. In contrast, the 2006 Texas study mentioned earlier estimated expenses on healthcare, education, and incarceration of undocumented immigrants and found them to be lower than tax revenues, causing a net revenue gain of $17 million. However, it also noted that there was an estimated expense to local governments of $1.4 billion that the state didn’t subsidize.

On the national level, the studies I’ve seen most often cited by opponents of immigration are those by the Heritage Foundation and the Federation for American Immigration (FAIR). Both of these organizations cite massive costs of illegal immigration. The 2013 FAIR report puts the costs at $113 billion annually. The Heritage Foundation report from 2013, on the other hand, put the cost at around $54 billion annually under current law. So, are these accurate? Well, the fact that the numbers from one conservative think-tank are double those of the other are concerning. I don’t have time or space to do a full critique of the FAIR report, so I’ll let another opposing group do it for me. While I’m at it, here’s a fun note. A paper by the libertarian Cato institute actually dismisses the FAIR report, encouraging the reader to “see Ruark 2010 for examples of poor fiscal impact analyses.” The Heritage Foundation report is less extreme, but appears to weave back and forth between citing numbers for undocumented immigrants and illegal immigrants, which really destroys its credibility. So, now that those two bastions of conservative numbers are out of the way, what are we left with? Well, let’s assume for a moment that the Heritage Foundation’s numbers are actually correct, and undocumented immigrants incur $54 billion in costs. This number dwarfs the $12-20 billion in revenues stated earlier. Between this and the earlier state and local results, it would be a closed case, right?

Well, here’s the problem. Economics is the study of consequences. We found in point number 1 that the downward pressure on wages from undocumented immigrants actually causes people to buy more things and jobs to be created. When people buy more things, they pay taxes on the things they buy. When jobs are created, they pay payroll taxes on their new wages. So, while undocumented immigrants only pay $12-20 billion directly in taxes, their willingness to work for lower wages creates forces in the economy that cause tax revenues to be much higher. This is how the Texas paper found revenue exceeded costs. When you start looking at these effects, you move from a static model looking at a single point in time to a dynamic model that looks at effects over time. In 2013, the Congressional Budget Office ran a dynamic model to determine the effects of senate bill 744, a bipartisan bill that would have completely reformed the immigration system in various ways. It would have provided paths to citizenship, increased worker visas, and a host of other pro-immigration reforms. They found the bill would boost GDP by upwards of 5% over 20 years and would lead to increased tax revenues of $1.2 trillion dollars. The Bipartisan Policy Center found a similar result in their analysis. When you divide $1.2 trillion by 20 years, you get $60 billion annually, which significantly exceeds even the Heritage Foundation’s estimate of costs.

They’re dangerous

Now that I’ve covered the economic costs and benefits, it’s time to turn to the argument oft-used by Donald Trump. “They’re bringing drugs. They’re bringing crime. They’re rapists. And some, I assume, are good people.” If this is true, we should see significantly higher rates of crime and incarceration by undocumented immigrants in studies.

So, from what I can find, pretty much all the studies by any group whose name does not start with Heritage or FAIR find that this is false. Given their previous failings, I’m not terribly inclined to trust them. Most of the studies, once again, seem to be mixing all immigrant data (documented or not) in to their reports on the matter. In contrast, here’s a long quote from a 2009 study by the Police Foundation, a nonprofit group that attempts to help police do their jobs better through research.

Data from the census and a wide range of other empirical studies show that for every ethnic group without exception, incarceration rates among young men are lowest for immigrants, even those who are the least educated. This holds true especially for the Mexicans, Salvadorans, and Guatemalans, who make up the bulk of the undocumented population. These patterns have been observed consistently over the last three decennial censuses, a period that spans the current era of mass immigration, and recall similar national-level findings reported by three major government commissions during the first three decades of the twentieth century, as did another U.S. commission in the 1990s. Given the cumulative weight of this evidence, the rise in immigration is arguably one of the reasons that crime rates have decreased in the United States over the past decade and a half—and even more so in cities of immigrant concentration. A further implication of this evidence is that if immigrants suddenly disappeared and the U.S. became immigrant-free (and illegal-immigrant free), crime rates would likely increase. The problem of crime and incarceration in the United States is not “caused” or even aggravated by immigrants, regardless of their legal status.

Bianca Bersani’s 2014 paper agrees, saying “foreign-born individuals exhibit remarkably low levels of involvement in crime across their life course.” Akins, Rumbaut, and Stansfield’s 2009 paper explored the rising homicide rate in Austin, Texas to determine if it was caused by the rising immigration rates. They found that “After controlling for structural predictors of homicide and correcting for spatial autocorrelation, our findings indicate that recent immigration is not associated with homicide.”  Akins and Rumbaut followed this up with a 2013 paper focused again on Austin in which they found “that recent immigration is not associated with an increased rate of burglary, larceny, or motor vehicle theft once important structural predictors of crime are controlled for.” I don’t have time to investigate all of the methodologies of these papers, but to me, the evidence here is clear. Immigration does increase crime rates, because whenever there are more people stuffed into a small area, crime seems to go up. I’m sure some undocumented immigrants commit crimes. However, the evidence shows that they do not commit crimes at a higher rate than natives.

They don’t speak our language/they’re running down our cities/I just don’t like them

I’m sorry to hear that. I do like them. The Venezuelan hole-in-the-wall restaurant near me is incredible. Buford Highway has amazing Mexican and latin American food. As to the language, I’m positive most of them would really love to learn English. Having lived in Spain for a summer, it sucks not knowing what people are saying. However, learning a language is incredibly hard as an adult, and even with significant training, it’s intimidating to speak it with natives. Yes, it’s occasionally slightly annoying that I have to wait one more second for the automated voice thing to tell me to “Marque numero dos” to “continuar en español,” but I’ll get over it.

So, where does this leave me?

Economics

From all this research, I’m convinced that from an economic point of view, illegal immigration is a net positive for the state and national economies. The expense required to lock down the borders and increase deportations is massive, on the scale of hundreds of billions of dollars. However, the harm it would cause to the state and national economies to suddenly have labor prices jump up in a number of key industries would be worse than that. Due to this, I will never support an across the board deportation for these purely economic reasons. I think it is incredibly foolish and harmful to the economy.

I would support efforts to massively increase the number of work visas available to provide legitimate means of work and as a means of collecting more taxes. I would consider supporting paths to citizenship for individuals who have worked here for a period of time, though that would have to be balanced against the cost of the benefits (social security, etc.) that would be provided. It gets much more complicated when looking at local level effects, as most of the costs of undocumented immigrants are incurred in education and healthcare funded by local governments. I would support efforts to have the federal government provide more funding to schools and healthcare for communities supporting undocumented immigrants or those with temporary work visas. I would support efforts to provide more scholarships and funding for technical schools so unskilled U.S. citizens can learn skills and move away from competing against immigrants who are lowering their wages.

I would support all these things not based on morality, but based solely on economics. Some might say this is not a conservative viewpoint…that I’m moving to the left. Well, border patrols, massive walls, and deportation are incredibly inefficient ways of dealing with the realities of a labor market that wants cheap labor and individuals who are willing to take great risks to provide it. Since when did conservatives abandon giving the free market what it wants? When did they abandon the goal of coming up with inexpensive, small government-focused, efficient solutions to challenges? I agree with Cato institute’s Alex Nowrasteh, who said, “even if the fiscal costs of immigration were consistently larger than the fiscal benefits, there are far easier and cheaper methods to lower the cost than scaling back or outlawing immigration. Reforming welfare, charging immigration tariffs, or allowing more immigrant workers could all redress a possible net fiscal cost.”

So, there we go. Those are the economical arguments for immigration. What about morality? Well, on this note, I once again find myself echoing Nowrasteh, who said “A worldview that seeks to judge whether immigrants are beneficial based on their fiscal impact, where the chief value of an additional American is determined by the size of their net-tax contribution, is fundamentally flawed and a testament to how dehumanizing a large welfare state can be.” So, let’s turn to some moral conversations.

Morality

As far as morality goes, a dozen arguments can be made that unless you’re a full-blooded Cherokee or Siuox, you also are an immigrant…about how we’re a melting pot and we’ve lost something of that, how we should still believe in the American dream and giving people opportunities. I could talk about how deporting a child of an undocumented immigrant to Mexico who was born in the U.S. and doesn’t even speak Spanish is a moral failure.

However, the most opposition I’ve seen to immigration has, sadly, come from friends and family who are Christians. So, that’s the angle I’m going to take. I really want to get messy here and question when we as Christians started putting personal safety, comfort, and financial stability above the goal of spreading the gospel to people who are coming to our communities in such need. However, my goal here is not to speak out against anyone, but to just share my beliefs. So, as a Christian, I believe in these scriptures:

  • Hebrews 13:1-2 – “…show hospitality to strangers, for by doing that some have entertained angels…”
  • I John 3:18 – “…Let us love, not in word or speech, but in truth and action.”
  • Jeremiah 7:5-7 – “if you do not oppress the foreigner, the fatherless or the widow and do not shed innocent blood in this place, and if you do not follow other gods to your own harm, then I will let you live in this place, in the land I gave your ancestors for ever and ever.”

The first one sounds like an opportunity, the second a command, and the last a promise. Given my feelings on adoption and abortion, seeing a verse that is often trumpeted in those two causes while ignoring the first part of it is heartbreaking. Scripture tells me I am a stranger in a strange land, not home yet, and that I am to be a peculiar person. I pray that I would be given the grace to be able to live into all of these things and be a friend to the foreigner.

5 thoughts on “Is illegal immigration bad?

  1. Captain Atlanta

    I agree with many of your points…

    However, talk to me about why you committed the same sin as the studies you referenced which blur documented and undocumented immigrants? Subtle at first… I wondered if you knew what you were doing. I challenge you to review the whole blog and distinguish between relevant “undocumented/illegal” immigration references and irrelevant legal/documented immigration references.

    Trump’s argument has, notably, been against illegal immigration, not legal immigration. Saying immigrants have lower crime rates is irrelevant as it does not speak to crimes committed by illegal immigrants, the ones most people take issue with, particularly those supporting Trump. Trump is, notably, very much in favor of legal immigration and reforming immigration system to make it easier for good people to come and stay or get work visas. So the arguments against immigration are irrelevant against Trump and, I should think, to the title of this blog.

    I’ve found that important distinctions like that have defined this race…

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