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Posted on July 26th, 2012, by

In this paper we are going to discuss the notion of illegal immigration and its possible negative and positive impact on the country, taking as the base the situation with illegal immigrants in America.

There are normally three reasons for immigrants to be called illegal: “entering without authorization or inspection, staying beyond the authorized period after legal entry, or violating the terms of legal entry” (Smith, 5). According to the data of the United States Government Accountability Office – around 400 000-700 000 illegal immigrants came to America since 1992. Mostly these people managed to cross the border with Mexico and some – Canadian border.

This is evident, that such flow of people can not remain irrelevant for the general economical situation of the country. In order to put this process under better control this is certainly necessary to have the concrete information concerning the real influence of the process of mass illegal immigration. However, as it was mentioned in an article in The National Academies Press, “many of these [studies] represented not science but advocacy from both sides of the immigration debate…often offered an incomplete accounting of either the full list of taxpayer costs and benefits by ignoring some programs and taxes while including others” (Parker, 22).

There is no unique and one-sided approach to research of the problem of illegal immigration, there is a great number of factors, which should be taken into consideration and still there will be ambiguous conclusions. We are going to discuss several subdivisions of economy further in order to present a more or less clear picture of the illegal immigration’s impact upon economy.

Speaking about the participation in the free market, we could take as an example the situation with illegal immigration in California. Some researchers state, that restriction of this process there would rather bring negative outcomes such as stagnation in economy. As “demand for labor and the natural human desire of people to participate in the economy and in so doing better their economic situation. Labor is a mobile economic factor of production, efforts to limit its mobility are attempts at limiting the free market (for labor) (Smith, 12). In this case the illegal immigrants can not cause the problems with wages and employment for natives.

In 2006 law professor Francine Lipman studied the issues connected with illegal immigration and the way it can be related to taxation system. He came to the conclusion, that the statement about exploitation of economy by illegal immigrants is false, because their contribution to taxes, which is bigger, than their cost for social services. One the contrary their work could increase the productivity of goods at lower costs at the same time filing the positions, where workers are urgently needed.

The studies of the health care proved, that “the total federal cost of providing medical expenses for the 78% illegal immigrants without health insurance coverage was $1.1 billion, with immigrants paying $321 million of health care costs out-of-pocket” (Parker, 28). Usually immigrants don’t attend doctors as often as legal citizens, because these are mostly young people with normal health state and not suffering from chronic diseases.

Illegal immigrants can not be blamed for considerable influence upon the wages’ size in America. In fact, the studies show, that for most Americans there is no difference whether immigrants are coming to work or not, as their paychecks remain the same. The main reason for this is said to be absence of real direct competition between citizens and immigrants for work places. The researches prove, that the biggest part of illegal immigrants is concentrated in such cities like New York, Chicago and so on. This is a well-known fact and usually citizens from other parts of the country do not move to these places for jobs. Even if we presume, that industries, where most of illegal workers are working, would take only legal workers, this would immediately increase the wages for these spheres and as a result workers from other cities and industries would move to these cities and could create enough demand for work places and thus the wages would be again reduced.  For the jobs, which would be still rejected by legal workers, if there were no illegal immigrants, there will be probably new technologies developed and there would be no need for workers at any rate.

The influence of the illegal immigrants upon the unemployment rate is also sometimes overestimated. On one hand they really take the positions, which otherwise would be taken by legal citizens. On the other hand however, they serve as a source for new jobs as well, as they buy products and use services not less than citizens. As a result there is no substantial influence of them upon the unemployment rate.

Only high-school dropouts can experience problems due to illegal immigrants as their competitors. “Economists speculate that for the average high-school dropout, that would mean about a $25 a week raise if there were no job competition from immigrants” (Suarez-Orozco, 16).

The issue of social security is in this case related to the Immigration Reform and Control Act, according to which penalties should be paid by those employers, who knowingly provide work places for illegal immigrants. This made most of the immigrants use the false social security number to get a job. As a result when the tax payments were done from the numbers, which didn’t match either with names or with some other person’s information, this cost a lot of time and effort to check and to correct it. “The Social Security spends about $100 million a year and corrects all but about 2% of these (Parker, 29).

Another problem that illegal immigration can cause is connected to education for children of immigrants. According to citizenship laws of the country – all children born in the United Stated should be considered citizens. As a result the education system has to spend sufficient sum of money for education of immigrants’ children, the situation is worsened often by the fact, that some of the parents do not pay taxes and their children are educated at the expense of other tax payers.

Overall, we come to the conclusion, that illegal immigrants have both positive and negative influences on the economical development of the country. They do not cause problems like wages reduction or creating a serious competition for citizens with proper high education, they work in spheres and industries, where most of citizens wouldn’t work, thus influence positively the prices paid by Americans for goods or agricultural products for example.

At the same time most of illegal immigrants doe not pay taxes and are not able to pay for some government services like education or health care. Thus “economists generally believe that when averaged over the whole economy, the effect is a small net positive. Harvard’s George Borjas says the average American’s wealth is increased by less than 1 percent because of illegal immigration” (Smith, 41).

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