Illegal Immigration: Good or Bad for the Economy?

The Pew Hispanic Center estimates the 2005 population of illegal aliens at 12 million.
According to the World Bank, 53% close to 24% of Mexico's population live in extreme poverty, which means they live on less than $1 a day. Unemployment in Mexico is estimated at 40%. With these facts one can see why illegal immigration into the United States is a highly desirable option for many. Many vilify immigrants for being here; however, government, businesses and the US economy overall benefit from illegal immigration. Immigrants make important contributions to the American economy. They
help the economy grow by adding to the labor force; they fill in jobs at the
lower end of the skill distribution.

Opponents of illegal immigration may argue that undocumented immigrants are exploiting the United States' economy. The widespread belief is that illegal aliens cost more in government services than they contribute to the economy. This belief is undeniably false. Many studies have shown undocumented people contribute by paying taxes, by their investments and consumption of goods and services; by filling millions of essential labor positions, and their substantial contributions to Social Security, Medicare and unemployment insurance programs. Each year undocumented immigrants add billions of dollars in sales, excise, property, income and payroll taxes. Yet undocumented immigrants are barred from almost all government benefits, including food stamps, Temporary Assistance for Needy Families, Medicaid, federal housing programs, Supplemental Security Income, Unemployment Insurance, Social Security, Medicare, and the earned income tax credit (EITC). Contrary to what the opposition may say, the only benefits federally required for undocumented immigrants are emergency medical care, subject to financial and category eligibility, and elementary and secondary public education. The truth is that many undocumented immigrants will not even use these services for fear of government officials and deportation. The con team may argue many of these points. They may say that Illegal aliens generally pay no taxes, and typically send a significant amount of their earnings back to their families in their country of origin. However, nothing could be farther from the truth. The fact is that a stunning two-thirds of illegal immigrants pay Medicare, Social Security and personal income taxes. The Immigration Reform and Control Act, did little to deter employers from hiring illegal immigrants. But for Social Security's finances, it was a great piece of legislation. Immigrant workers arrive in the United States in the prime of their working lives and they pay into the system for decades. However, since undocumented workers have only fake numbers, they'll never be able to collect the benefits these taxes are meant to pay for. Last year, the revenues from these fake numbers which the Social Security administration puts in the “earnings suspense file”, added up to 10% of the Social Security surplus. The file is growing, on average, by more than $50 billion a year. The New York Times states that "for illegal immigrants, Social Security numbers are simply a tool needed to work on this side of the border. Retirement does not enter the picture”.
In 1996 the Internal Revenue Service began issuing identification numbers to enable illegal immigrants who don't have Social Security numbers to file taxes. Close to 8 million of the 12 million illegal immigrants in the country today file personal income taxes using these numbers, contributing billions to federal and state government.
It is true that some money is sent back to the countries of origin, however one can not disallow the money that American businesses make from providing services to immigrants. Companies like Western Union who took in $1.1 billion last year from such money transfers. Then there is the money that is kept and spent here. Immigrants have tremendous buying power. Twelve million people who contribute to the economy everyday. It may be against the law for the illegal immigrants to be in the U.S. or for an employer to hire them, but there's nothing illegal about selling products or services to them. Many businesses are targeting this untapped community. They have come to realize that these families open bank accounts, purchase vehicles, pay utilities, rent or purchase homes, they need cell phone service, buy groceries, buy clothes and they want to be the ones to provide it. Experts agree that the undocumented people, a majority of whom are Hispanic, are one of the nation's largest sources of population growth. They add 700,000 new consumers to the economy every year. 84% of illegal immigrants are 18 to 44-year-olds, in their prime spending years. Many smaller companies are building their entire business around undocumented immigrants.
The opposition may also argue that Americans cannot find jobs because illegal immigrants are taking all of the jobs. Immigrants have skill sets that complement those of Americans, and they do not compete for the same jobs as most Americans. Immigrants tend to go to segments of the labor market where there is the most demand and less supply. Lower-skilled immigrants who come into the United States are typically taking jobs that most Americans are not interested in. According to the Department of Labor, at least half of the nearly 2,000,000 crop workers in the United States are illegal aliens. The cheap labor they provide is crucial to the $30-billion U.S. farm industry. Illegal immigrants now comprise fully half of all farm laborers. In the landscaping industry, there is a heavy reliance on an immigrant labor force. California's licensed landscape contractors employ more than 86,500 workers and contribute an estimated more than $5.5 billion to the state's economy. In many cases, the business could not survive without them. Removing immigrant workers would mean invading workplaces across America and disrupting business on an unprecedented scale.
Labor economists say the flow of immigrants provides the U.S. economy with a more flexible labor force that keeps industries growing while delivering lower prices to American consumers.

In 1997, the National Research Council published a seminal study on the influence of immigration on the overall economy. The Council found that immigration has a net positive benefit to the United States economy of about $10-billion a year.