Illegal Immigrants Add 18 Billion to Texas Revenue
Are undocumented workers good or bad for the economy of Texas? Are we better off if we arrest them and deport them?
There are a lot of people at the grass roots level who feel that they are a burden on the system here. They feel that they get free healthcare, free education, free police protection, fire protection, etc. and pay no taxes. They don't necessarily have precise concrete numbers to support that theory, but it seems logical.... ..... ......doesn't it?
This is a popular idea because there are politicians who promote such concepts for their own political purposes. They play upon the xenophobia of the average American. They make them feel like they are being inundated by a foreign force that is coming to take away their jobs, their lifestyle, their safety, their way of life. And since they feel threatened, they vote for someone to take steps to protect them from the perceived threat.
Bingo. There's the motivation.
Well, here is the truth. The numbers are in. The Texas State Comptroller's office has had a detailed look at the net effects of undocumented workers on the Texas economy and discovered that they actually CREATE 18 billion dollars of net revenue per year in the Texas economy. If they were all put on a bus and shipped back to Mexico, then the state would immediately suffer a loss of 18 billion dollars per year.
This was just released in a new report that is touted as the first of it's kind that has looked at the effects of undocumented workers on the budget of a state. No doubt, bringing these facts to light will cause some controversy.
These undocumented workers, primarily from Mexico, represent 6.3% of the workforce in the state. By removing them, we would cause labor shortages which would result in a rise in payroll costs. On some levels, higher salaries can be a boost to the economy - but only if the raises are due to increases in productivity. If the raises are caused by labor shortages, as would be the case here, then this has a negative effect on the economic competitiveness. The value of Texas exports would decline slightly as a result, thus negatively affecting us all.
Economists argue that one of the main factors that contributed to the economic success of America was the slave labor that we had hundreds of years ago. To have a large unpaid labor force to build infrastructure and produce saleable goods, either agriculture or manufactured, is a huge advantage to the economy of a country, especially when competing against other countries that do not have a free labor force.
Some might say that the undocumented workers of today represent the modern day equivalent of that slave-worker force. In those days, the workers were not paid anything, but they were housed, clothed, and fed, and given the basics of medical treatment to keep them healthy and productive. Now, the employers don't provide all those services to illegal immigrants, but they pay them a wage that equates to the cost of that most basic level of existence. Minimum wage in many cases. And less on occasion. But the net effect is the same. The economy advances. The middle and upper class citizens benefit from the profits of using the lower class to do the dirty jobs for the bare subsistence wages. In Texas, for example, housing is about 30% to 50% of similar homes in similar areas in the north where there are fewer illegal immigrants to fill construction jobs for low salaries.
Why do they come here to work so hard for such low wages? Well, many are happy just to be away from the staggering poverty of some countries south of here. The dangers of organized crime down there and other risks make life untenable for many people. There are many stories of the dangers of the trip from central America through Mexico to the US border. There was a horrifying account told on NPR radio recently about the gangs on the trains that throw people under the wheels if they don't hand over whatever money they have.
Most undocumented workers are content to live quietly here in the shadows of Americans. They are working at jobs most Americans won't do for wages that American's won't take and living in modest homes that most Americans would not live in. They cause no trouble. In fact, the LAST thing they want to do is to attract any attention to themselves. They are afraid of being deported. They are, after all, here illegally. And so they don't want anything as much as even a traffic ticket to attract the attention of the police or other authorities their way. So they try to live quietly and within the law.
Yet typically, undocumented workers are the scapegoats blamed for high crime rates, or overcrowded schools or just about every other social problem you can think of.
And yet in a recent UC Irvine study led by sociology Professor Ruben Rumbaut, it was found that 3.5% of American-born men ages 18 to 39 wound up incarcerated, while only 0.7% of foreign-born men of the same ages did. So, statistically, Americans are 5 times more likely to commit crimes than immigrants.
As for paying taxes, not all the undocumented workers have no papers. Most of them do in fact have papers. These are usually fake credentials that allow them to be employed. But since there is paperwork for employment, then the income taxes are subtracted at source just like they do for anyone else that earns money through employment. Also, since they live here, everything they buy here to live is taxable through sales taxes, and if they own a house, they pay property taxes as well, or if they rent, then the rent they pay has the property taxes factored into it. So, counter to what many people may think, they DO in fact pay taxes.
Without the benefits of a detailed analysis as was done by the Texas Comptroller's office, still, national economists have estimated that total national economic growth would be a half a point to two full points lower without immigrant workers.
Bernard Baumohl, executive director of the Economic Outlook Group, a research group in Princeton Junction, N.J. says "Immigration is actually critical, it allows the U.S. economy to grow more rapidly without higher inflation pressures."
Besides the restaurant, hospitality, and agricultural industries, another major industry that benefits from the lower cost labor of these undocumented immigrants is the construction industry. And this time, it was the construction industry and the housing boom that comprised 70% of the recovery from the most recent economic recession.
According to the Bureau of Labor Statistics, 22 percent of construction workers are foreign born, with 2.4 million immigrants working in the sector, the largest source of jobs for immigrant labor. Jerry Howard, CEO of the National Association of Home Builders, estimates that 25 to 30 percent of those working in resident construction are immigrants. Of these however, it is difficult to know exactly how many are here legally since many of them do show paperwork, but they may not be legal papers.
But Howard warns, "You take 30 percent of the labor out of any sector and you're going to have serious impact. The costs would go up and it would suppress demand to some extent because of the higher costs."
Howard points out that in northern regions of the country, such as Buffalo, N.Y., very few construction workers are foreign born, however in California, Texas and other places, immigrants may be as much as half of the workers on the average construction sites. And he added that it would be hard to replace certain skills such as stone masonry for example.
Then we also have to take into account the fact that not only are these workers building the homes, but they are also helping to sustain the market by buying them. Granted, they may be buying the lower-priced homes, because most of them cannot afford to buy the homes they work on, but it all helps the economy. And when they eat they buy their food from American grocery stores and American restaurants. They are consumers themselves in this economy, and so although some of them might try to send a few dollars home to help support their families back in the old country, most of their meager wages are taken up just trying to survive here and so it filters right back into the local economies where they live.
So don't be fooled by the rhetoric of those who are prejudiced, or simply misinformed. The undocumented workers provide a valuable service for a very modest cost. Granted, they represent a social factor that needs work. We need to provide adequate medical care to them so that they don't bring untreated disease here, and poverty creates economic necessity that does drive some crimes of need, and so we need law enforcement, and also, we do need to provide education to their children so that they have other options to support themselves besides joining a gang. So we have to share a little of the existing infrastructure of this society. But overall, our country would be a much less comfortable place to live if they were all to suddenly disappear tomorrow. If they suddenly left, we would have no one to cook the meals, make the beds, pick the crops, build the houses, AND in Texas alone, we'd be 18 billion dollars poorer every year.
Of course, that's just my opinion - I could be wrong. What do YOU think about it?
Here are some articles on the subject:
http://www.digitaljournal.com/article/69970/Report_Illegal_Immigrants_18_billion_boost_to_Texas
http://media.www.dailytitan.com/media/storage/paper861/news/2007/03/12/Opinion/Illegal.Immigrants.Unfairly.Blamed.In.Society-2772452.shtml
http://money.cnn.com/2006/05/01/news/economy/immigration_economy/index.htm
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