Is Illegal Immigration Beneficial to the US Economy - Research Proposal Example

? General topic: Is illegal immigration beneficial to the US economy? Specific topic: Impacts of Illegal Mexican Immigration on the US Economy Introduction Illegal immigration is the act of migrating to a country by illegal means challenging the nation’s immigration laws and sovereignty. Obviously, illegal immigration has been a potential threat to the economy of the United States for centuries. As per reports, a vast majority of the illegal immigrants to the US come from Mexico. According to a Congressional report, Mexicans account for the 62% of the total 10.8 million illegal immigrant population residing in the United States. It is observed that illegal Mexican immigrants are less likely to become US citizens. Mexico’s close proximity to the US and noticeable difference in the living standards or life quality between the two countries are the major reasons amplifying the rate of Mexican migration flow to the US. For many Mexican immigrants, just finding a job is the main goal of their migration to US. Statistical data indicate that the rate of illegal migration from communities all throughout Mexico to the US significantly increased during the 1980s. Undoubtedly, illegal immigration has notable effects on the US social system also. This paper will analyze whether or not the illegal Mexican immigration would benefit the US economy. History of Illegal Mexican Immigration The history of illegal Mexican immigration can be dated back to the mid-19th century. The Treaty of Guadalupe Hidalgo led to the end of Mexican-American War in 1848 and this treaty reduced the size of Mexico by 45% because Mexico was forced to surrender the land known today as California, Nevada, Arizona, and Utah to the United States. Following the war, Americans had to recruit many workers to build a railroad and to enhance other infrastructure development activities. For this, Americans brought roughly 55,000 migrant workers to former Mexican territories during the period 1850-1880. American leaders were happy to welcome Mexican immigrants because those immigrant workers were willing to work under harsh conditions even though they were paid substandard wages. The immigration flow to the US particularly increased from 1910 with the Mexican revolution. During this period, nearly 50,000 Mexican people migrated to the US every year in order to find a job. American leaders welcomed Mexican immigrants with open arms until they realized that the employment difficulties caused was the result of the increased Mexican immigration. In response to the public protests, the US government forcibly deported almost 2 million Mexican immigrants, including native-born Americans, to Mexico in 1929. During the time of the World War II, United States was badly in need of labors and hence the country again encouraged Mexican immigration. Based on the Bracero Program mutually agreed by US and Mexican officials, Mexican workers again migrated to the US until 1964. Since then the US government and corporations has been indirectly encouraging Mexican immigration flow so as to meet their labor needs at cheap costs. As many authors point out, there is an unspoken agreement between illegal Mexican immigrants, the US government, and corporations. Statistics of Illegal Mexican Immigrants According to the American Community Survey, 11,478,000 foreign born Mexican immigrants were residing in the US as of 2009 (as cited in border relations, n. d.). Mexican immigrants constituted 29.8% of all immigrant populations in US in the same year. As Valdes (2012) reported in CNN July 13, report published by the Pew Hispanic Center indicates that over 58% of the identified illegal immigrants in the US are Mexicans. Surveys also report that Mexican illegal immigrants mainly reside in states including California, Texas, Florida, and New York. It is observed that the Illegal Mexican population tends to concentrate in a different set of occupations as compared to other illegal population. However, nearly 1.4 million Mexicans including documented and undocumented immigrants moved back to Mexico over the last five years. Economic Effects of Illegal Mexican Immigration on US While closely analyzing the influences of illegal Mexican immigration on the US economy, it is found that the issue poses short-terms as well as long-term threats to the US economic growth. First, illegal Mexican immigration has a negative effect on the wages. As Mishra (2007) points out, studies clearly indicate that nearly two-thirds of Mexican immigrant population has not completed high school and hence they constitute 22% of total high school dropouts in the US labor force. Although native American population is better educated than Mexican immigrants, over 10 million native Americans who lack a high school degree face severe job competition from low paid Mexican immigrants. US employers and corporations wish to employ more illegal Mexican aliens than natives because the illegal population is willing to work under harsh conditions at poor wages. US corporations consider Mexican immigrants as cost effective alternatives to native high school graduates and hence the increased employment of illegal Mexican immigrants badly affected relative wages of natives with high school diploma. To illustrate, a study organized by the RAND on California identified that the state faced potential challenges in 1980s when undocumented Mexican workers snatched job opportunities from the natives. Hence, the illegal Mexican immigrants depressed the wage rates of natives and significantly challenged the living conditions of the ten percent of the poorest native American workforce. More precisely, as per the findings of Center for Immigration Studies (n, d.), uneducated native born workers are in direct competition with low paid Mexican immigrants and therefore the native workers do face significant job challenges from the illegal Mexican immigrants. A research conducted in 2007 (as cited in Haas & Vezzoli, 2010) shows that Mexico has a GINI coefficient (which is measure to evaluate income inequality) of 46.1 whereas it is 40.8 in case of United States. A lower GINI coefficient indicates more equal or perfect income distribution while a higher GINI coefficient reflects more unequal income distribution. As compared to the Mexico’s GINI coefficient, it is clear that distribution of income in the US is not better even though the country maintains a high economic growth rate. The unequal level of income distribution in the United States can be attributed to uncontrolled Mexican immigration to a great extent. At the same time, illegal Mexican immigrants create some level of employment opportunities too. This immigrant population has their own demand for goods and services and therefore contributes to the total GDP growth of the country. However, it is difficult to evaluate the net effects of this demand change on wage structure and employment level. From the above section, it is obvious that most of the illegal Mexican immigrants earn low wages relative to natives and other legal immigrants. As Yaya (2012) points out, illegal Mexican immigrants need to pay lower amounts in income taxes as compared to the rest of the US population. However, most of the illegal Mexican families in US are larger in size and hence they consume public education and other government services unproportionate to the amount they pay in taxes. This situation forces the Federal government to raise additional funds to meet higher public service needs. Even though the employment of illegal Mexican immigrants would assist US organizations to cut production costs, inexpert production costs have a little effect on consumer prices. That means, consumer prices remain steady even while the number of workers earning cheap wages increases. This situation is one of the major causes of poverty. In addition, school aged-immigrant children require special facilities for bilingual education and this situation imposes additional economic burden on the public sector. Studies reveal that illegal Mexican immigrants’ combined total of earnings represents only a small percent of the total wages paid to workers in US. Likewise, today the United States offers very restricted employment opportunities for individuals with little education. In this context, continued undocumented (probably unskilled too) immigration would increase the size of the poor as well as uninsured population. While assessing the public goods and services they consume, it seems that these undocumented workers account for only a small share of the GDP. The US economy has not yet completely recovered from the shock of the recent global recession. In this situation, illegal Mexican population would adversely affect the economy’s recovery expectations because they (illegal immigrants) consume public goods and services unproportionate to their contribution to the economy. It is very frustrating to note that more than half of the Mexican immigrants who have been living in the US for over 20 years are in or near poverty and majority of them are uninsured (US Immigration Support, n. d.). Here, the Federal government is forced to spend a huge amount for the uplift of the immigrant population and hence to cut down other productive public spending. Economists point out the fact that increased immigration flow (both legal and illegal) from Mexico leads to a drop in domestic spending. To illustrate, Mexican immigrant workers in the United States periodically send a fixed percent of their salary to their dependants residing in Mexico. Official data indicate that the money earned in US is the Mexico’s third major source of revenues. It is estimated that nearly six to eight billion dollars earned by the Mexican population in the US are sent to Mexico every year. Since these earnings are not spent in the US, this situation leads to a decline in the domestic consumer spending. Therefore, illegal Mexican immigration can be considered as a major factor impeding the growth status of the United States. Different theoretical concepts also point out long term adverse effects of illegal immigration. For instance, Lorenz curve and Roy model 1 and 2 clearly reflect the inverse relationship between immigration and the national distribution of income. As Arnold (2006, p. 276) states, the area between the line of perfect equality and the obtained Lorenz curve is GINI coefficient. When the level of illegal immigration increases, this area will be larger in size and this situation indicates higher level of income inequality in the country. Hence, it can be undoubtedly stated that the high flow of illegal Mexican immigration will cause great inequalities in the national distribution of income in US. Social Impacts of Illegal Mexican Immigration Due to an increased fertility rate, Mexican immigrant families are very large in size and hence they are likely to enjoy the social programs developed by the US government and other national interest groups. In other words, the native American population often does not obtain the benefits of such programs. Since the undocumented and uneducated Mexican workers take employment opportunities away from the Americans, majority of the native population adopts a hostile approach to illegal Mexican immigrants. Naturally, this situation leads to ethnic disparity issues and social class system. Furthermore, the emotional conflict between Mexican workers and natives promotes violent activities such as gang crimes, gun crimes, and sexual assaults. It must be particularly noted that not all Mexicans illegally cross the US border to find job. On the other hand, some of them come to the US to find a fertile land for enhancing their anti-social activities such as drug selling, gang activities, and sexual attacks. Hence, the illegal Mexican immigration raises potential challenges to the US law enforcement system too. In addition, many reports indicate that illegal Mexican population living in the US does not get any protection even for their fundamental human rights. Those people are assigned with more risky but low paid jobs and hence face different forms of workplace discrimination. Many scholars hold the view that educational programs and healthcare reforms are not getting effective in US mainly due to the growing illegal Mexican population in the country. Conclusion In total, the illegal Mexican immigration to the US can have dreadful impacts on the country. In an economic perspective, illegal Mexican immigrants negatively impact the country’s wage rates as they are willing to work for cheaper wages. In addition, they take a notable percent of employment opportunities away from the natives. Illegal immigration from Mexico is one of the major reasons leading to income inequality problems in the nation. Theoretical concepts also suggest that inflow of illegal Mexican immigrants would raise troublesome challenges to the US economy in the long term. Finally, the social problems like increased crime rates, ethnic discrimination, and human rights infringement also can be attributed to the illegal Mexican immigration. References Arnold, R. A. (2006). Microeconomics. US: Cengage Learning. Border relations. (n. d.). Plan el Paso. Retrieved from http://planelpaso.org/wp-content/uploads/2012/ELP%2011%20Border%20Relations_for%20web.pdf Center for Immigration Studies. (n. d.). Impact of Mexican Immigration on Wages and Prices in the United States. Retrieved from http://www.cis.org/articles/2001/mexico/wages.html Haas, D. E & Vezzoli, S. (2010). Migration and development Lessons from the Mexico-US and Morocco-EU Experiences. Working Papers. IMI. Retrieved from http://www.imi.ox.ac.uk/pdfs/imi-working-papers/wp-22-hein-simona Mishra, P. (2007). Emigration and wages in source countries: Evidence from Mexico. Journal of Development Economics, 82:180 – 199. US Immigration Support. (n. d.). Illegal Immigration from Mexico. Retrieved from http://www.usimmigrationsupport.org/illegal-immigration-from-mexico.html Valdes, G. (2012). Young immigrants prepare for new U.S. deportation policy. CNN U.S. July 31. Retrieved from http://articles.cnn.com/2012-07-31/us/us_mexico-immigrant-citizenship_1_mexican-consulate-mexican-officials-young-immigrants/2 Yaya, M. E. (2012). Within Income and Education Inequality Characteristics of Immigrants in the United States: Social Mobility and Adaptation. Retrieved from http://www.hhh.umn.edu/centers/rwc/conferences/fourth/pdf/MehmetYayaWithinInequalityCharacteristicsofImmigrantsintheUnitedStates_Yaya.pdf Read More