Immigrants Boost, Don't Drain, the U.S. Economy
Undocumented Workers Contribute More Than Their Fair Share
SALOMï¿½N R. BALDENEGRO
June 13, 2002
"There are great misperceptions that immigrants are a drain on our economy, but many studies have confirmed that the opposite is true. Even undocumented workers - commonly referred to as 'illegal' contribute more than their fair share to our great country." (Alan Greenspan Federal Reserve Board chairman, congressional testimony, July 2001.)
Diatribes against Mexican undocumented workers seem to be the vogue these days, appearing in letters to the editor and columns in newspapers all over the country, including local ones. These diatribes go way beyond run-of-the-mill xenophobic pieces. They are venomous. They are mean-spirited. They are hateful.
After posting the obligatory falsehood that Mexicans are draining the local economy, one columnist bemoans that in his city "the school district gets browner by the day" and that American culture is "being transformed by a (Mexican) semi-literate underclass." Another writer says he sees "the infrastructure of our nation's ideals crumbling" as a result of these lazy Mexicans, who come here to "mooch off of our government" and "live an American life" on "our tax dollars." What more credible source is there to refute this nonsense than the country's chief economist, the undisputed expert on the American economy?
Alan Greenspan informed Congress that immigrants, including undocumented workers, in essence donate $27 billion to state and local economies. This is the difference between what they pay in taxes ($70 billion) and what they use in services ($43 billion). In Illinois alone, he testified, "Illegal workers pay $547 million in taxes yearly, compared to $238 million in services used." This is a net "profit" for Illinois of $309 million. This phenomenon is the norm, not the exception, in states where undocumented workers pay taxes. Indeed, rather than take money from, undocumented workers donate money to the American economy and thus to Americans.
A recent (February) study by the University of Illinois found that even as undocumented workers paid federal and state income taxes (one study pegs the amount of taxes paid at $90 billion per year), they did not claim the tax refunds for which they were eligible. These unclaimed refunds amount to the donation of billions of dollars to the public coffers.
Another study by the Urban Institute found that undocumented workers contribute $2.7 billion to Social Security and another $168 million to unemployment insurance taxes. Because of their legal status, these workers will not be able to access these programs even if they wanted to. These contributions amount to outright donations to the country's economy. In essence, undocumented workers are subsidizing, to a significant degree, American recipients of these benefits.
In addition to the above tax donations, undocumented workers pay billions of dollars in local and state sales taxes when they purchase appliances, furniture, clothes and other goods. The diatribists are also addicted to the falsehood that undocumented workers come here to get on welfare and utilize other government services.
The reality, as documented by the UI study, is that the overwhelming majority of undocumented workers "do not receive any assistance under government safety-net programs," a fact that was reinforced by Greenspan in his congressional testimony.
No matter how hard the hate-mongers try to distort things, "mooching" simply cannot be squeezed out of these realities. Yet another falsehood to which the poison-penners are addicted is that "them Mexicans" take away jobs from Americans. We don't need Greenspan for this one. This is easily refuted by a simple eyeball test. Drive by the fields where stoop labor in 12-hour shifts for less-than-minimum-wage pay is performed. You'll see no line of Americans clamoring to be hired. Nor is there a single instance of white folks suing growers for "reverse discrimination" for not allowing them the opportunity to be exploited shamelessly. Ditto for the other industries that exploit these workers, primarily by paying less than the minimum wage.
A recent U.S. Department of Labor study noted that the notion that immigrants take jobs away from American workers is "the most persistent fallacy about immigration in popular thought." The reality is that undocumented workers create jobs.
The UI study found that as a result of the immense spending by undocumented workers (their purchasing power in Illinois alone is $18.7 billion, according to Greenspan) and of the founding of small businesses by this group, they create jobs. In Chicago alone, undocumented workers generated 31,000 jobs in the local economy.
It is not all about money: Undocumented workers also bring to our society many things we claim to value, such as solid family structure. Studies show that children of immigrants are more likely to be raised in a two-parent household than are children of native-born Americans.
On another front: Thousands upon thousands of Mexicans crossed the border to volunteer to fight in World War II, Korea and Vietnam. Many of them were killed, wounded or maimed fighting under our flag and saving American lives. Where are the "moochers" in this bunch? In the American lexicon, "donating," "generating" and "paying" are antonyms of "draining" and "mooching." Among other things, the hate-mongers need to work on their vocabularies.