The gamecock. (Columbia, S.C.) 1908-2006, April 05, 2006, Page 4, Image 4
Illegal workers have mixed impact on economic activity
Jeannfne Duersa
THE ASSOCIATED PRESS
WASHINGTON — They
pick fruit and vegetables
and clip hedges. They hang
drywall and clean houses,
hotels and office buildings.
The millions of illegal
workers in the United
States have come under a
fresh spotlight as Congress
and President Bush grapple
with revamping the nation’s
immigration policies.
Illegal workers’
relationship to the economy
is intricate.
They are willing to work
for lower wages than legal
workers, helping to keep
down prices. But illegal
immigrants also can depress
wages for unskilled, legal
workers and strain local
hospitals and schools.
“There is not a simple
economic case here. It is
complex. It is interwoven,
and it is very hard to
extract,” said Terry
Connelly, dean of the
Ageno School of Business
at Golden Gate University
in San Francisco. “It is like
pulling some sort of piece
of thread out of a fabric.
If you pull that thread out,
you don’t know to what
degree you have weakened
the fabric.”
There are an estimated 11
million to 12 million illegal
immigrants in the United
States. Some 7.2 million
of them are employed —
about 5 percent of the U.S.
labor force — according to
the Pew Hispanic Center,
a research organization.
The illegal workers are
mostly men and are
heavily concentrated in
construction, agriculture
and cleaning jobs, Pew says.
Those jobs tend to be low
skill or unskilled manual
labor, economists said.
“From lawn services to
meat packing. You name
it. The primary benefit
to consumers from illegal
workers is lower prices,”
said Nariman Behravesh,
chief economist at Global
Insight.
For businesses, cheap
labor can translate into
fatter profits. If owners use
those profits to expand their
businesses, it would boost
economic activity.
While consumers and
businesses may benefit from
such cheap labor, the U.S.
aorn-worker could be hurt
ay it, according to some
-esearch.
Between 1980 and 2000,
egal and illegal immigration
■educed the average
annual earnings of U.S.
aorn men by an estimated
Si,700 or about 4 percent,
according to research done
:n 2004 by George Borjas,
economics professor at the
[ohn F. Kennedy School of
Government at Harvard. •
The situation was worse
if one considers only the 10
million U.S.-born men who
!ack a high school degree.
For them, the increased
supply of workers depressed
wages by 7.4 percent, he
found.
Economists at the Federal
Reserve banks in Dallas and
Atlanta found no evidence in
2003 that wages of higher
skilled U.S.-born workers
were hurt by immigration,
although lower-wage
workers were affected.
Illegal immigrants use
federal, state and local
resources, including schools,
medical care and emergency
services, straining
government coffers and
costing taxpayers money.
However, many of the
costs are tied to their kids
— many of them American
born children who are U.S.
citizens.
At the federal level, the
big cost is through Medicaid
and food-assistance
programs, according to
Steven Camarota, research
director at the Center for
Immigration Studies, which
favors stricter immigration
rules.
Camarota acknowledges
that some illegal immigrants
pay federal taxes, but he
said their cost to the federal
government — $12 billion,
according to his estimate
— is greater.
There’s another way
to look at it. Since they
pay payroll taxes, they’re
helping to bankroll Social
Security and Medicare but
won’t get to participate in
the programs because of
their immigration status.
“From our standpoint,
this is not a top fiscal issue,”
said Pete Sepp, spokesman
for the National Taxpayers
Union.
Experts note that illeg^B
immigrants also spena
part of their paychecks in
this country — for food,
clothes, furniture, living
expenses and other things
— all of which contribute to
economic growth. But many
also send some of their
earnings to their families in
their native countries.
Still, they expand the
nation’s overall labor pool
and productivity. “We can
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can add to overall economic
activity,” said Andre^^
Bernard, professor
international economics at
Dartmouth College’s Tuck
School of Business.
House-passed legislation
takes a tough approach
on the issue, including
provisions making illegal
immigrants’ presence in
this country a felony. A
Senate proposal sets out a
path that would make illegal
immigrants who came to
the United States before
2004 eligible for permanent
residency.
If all the illegal workei^k
in this country were boote^F
out tomorrow, economists
believe wages would have
to rise significantly to get
U.S.-born workers to take
their jobs.
--
• , Ed Reinke / The Associated Press
Hundreds of demonstrators rally outside the federal courthouse in support of immigration reform Tuesday in
Louisville, Ky. Research shows that illegal immigrants working in the U.S. has good and bad effects on the economy.
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