How Does Illegal Immigration Hurt The Economy?

Written by J. Hirby and Fact Checked by The Law Dictionary Staff  

Some people believe that illegal immigration hurts the U.S. economy because it introduces an unregulated group of workers that are often underpaid, rarely reported for tax purposes and take jobs that would otherwise be taken by citizens or legal immigrants. They say that stricter immigration controls would prevent these practices from taking place.

Illegal Immigration and the Economy

The economy consists of the free flow of money, goods and services as well as the production of such goods and services. Illegal immigration has a direct economic impact, though the details are a little more complicated than the storyline of "they're taking our jobs." It has more to do with the drive for companies to cut costs due to the pressures of a tight market.

At the same time, illegal immigrants often work to support family back home, for whom the U.S. dollar goes much farther than it does here. They are more willing to work for less than the minimum wage, and what money they do make doesn't go back into the U.S. economy. While paying someone with ties and a history in the community, not only will their tax dollars go the U.S. government and be returned to the economy through public assistance programs or government contracts, but their earnings will go toward local businesses and help them thrive as well. This is the foundation of a successful economy.

When illegal immigration occurs, these economic foundations become troubled. On the other hand, the company able to produce products at a cheaper rate can then provide its services or products in greater number to a wider market at more affordable prices, which arguably helps the economy. It is certainly convenient for shoppers looking for better deals, no matter where the company employing illegal immigrants is located along the supply chain.

Why Hire Illegal Immigrants

Illegal immigration doesn't exist in a vacuum. A company that doesn't want to pay taxes on its workers' pay, doesn't want to pay them the minimum wage, and thinks it can avoid U.S. labor laws will hire illegal immigrants to try to cut costs and get a leg up on its competitors. They do so because the illegal immigrants are willing to work for this low amount and, arguably, because official policies don't do enough to curtail illegals or provide a means for illegal immigrants to become legal. It is a complicated situation that resists easy slogans for people actually trying to understand the problem.

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