Great demands on government services

Many native-born Americans observe that their ancestors came to America and did not place great demands on government services. Perhaps this is true, but the size and scope of government were dramatically smaller during the last great wave of immigration. Not just means-tested programs, but expenditures on everything from public schools to roads were only a fraction of what they are today. Thus, the arrival of unskilled immigrants in the past did not have the negative fiscal implications that it does today.

Moreover, the American economy has changed profoundly since the last great wave of immigration, with education now the key determinant of economic success. The costs that unskilled immigrants impose simply reflect the nature of the modern American economy and welfare state. It is doubtful that the fiscal costs can be avoided if our immigration policies remain unchanged Driving Mexico–U. S. migration are the higher wages and job availability prevailing in the United States. Underdeveloped capital markets in Mexico are a contributing factor because they make borrowing difficult for most people.

In surveys, migrants often cite the need for capital to start businesses, build houses, repay loans or pay for medical procedures as a main reason for migrating to the United States. The policy backdrop in the receiving country also can be important. Laws that exist but are not enforced, such as sanctions on employers who hire undocumented workers, signal acceptance of illegal immigration. The most important domestic policy challenge in the 21st century is found in the labour market. Alone among industrialized nations, the United States has a massive class of unskilled workers.

This unskilled workforce is being buffeted by globalization-enabled labour arbitrage, the automation of blue-collar jobs, and, yes, and the arrival of millions of low-skilled labourers through illegal immigration illegal immigration, which is of course one form of globalization, and its lamentable effect on income distribution. After all, most economists - even redoubtable liberals like Paul Krugman -- have concluded that the vast increase in low-skilled immigration over the last forty years has depressed the wages of low-skilled citizens. It is a basic economic principle: the more you have of something, the less it costs.

So it would seem to stand to reason that the more workers you have in any particular industry, the fewer employers will have to pay in wages. Republican Congressman Steve King of Iowa says illegal immigration is currently proving the validity of that theory, contending that a flood of low-skilled undocumented workers is depressing wages and causing greater unemployment for U. S. citizens who lack a university education. Research suggests that "between 40 and 50 percent of wage-loss among low-skilled Americans is due to the immigration of low-skilled workers.

Some native workers lose not just wages but their jobs through immigrant competition. An estimated 1,880,000 American workers are displaced from their jobs every year by immigration; the cost for providing welfare and assistance to these Americans is over $15 billion a year. The National Research Council, part of the National Academy of Sciences, found in 1997 that the average immigrant without a high school education imposes a net fiscal burden on public coffers of $89,000 during the course of his or her lifetime. The average immigrant with only a high school education creates a lifetime fiscal burden of $31,000 .

The reality is employers hire desperate aliens who will work for much less than Americans, driving wages down and making it impossible for American workers to compete," said Steve King. Appraisals: Approaching immigration through the lens of economics, the results are surprising. By focusing on the economic costs and benefits of legal and illegal immigration, the stemming illegal immigration would likely lead to a net drain on the U. S. economy—a finding that calls into question many of the proposals to increase funding for border protection.

Moreover, Gordon. H. Hanson argues that guest worker programs now being considered by Congress fail to account for the economic incentives that drive illegal immigration, which benefits both the undocumented workers who desire to work and live in the United States and employers who want flexible, low-cost labor. Unless policymakers design a system of legal immigration that reflects the economic advantages of illegal labor, such programs will not significantly reduce illegal immigration.


1)    Weinstein, D. E & Davis, D. R. The NBER paper. 2)    (1995) Roget’s II; the New Thesaurus, Third Edition. New York: Houghton Mifflin Company.