The Trouble With Immigration: Economic Effects

AP/Wideworld

The Trouble With Immigration: Economic Effects

Foreigners can bring more than just their luggage. The economic strain that a profusion of immigrants—legal and illegal—can create on a host country can be considerable.

Immigration is a hot discussion topic in America. In a few states, illegal immigration has become so prevalent and its negative effects so dire that the state government has declared certain counties to be in a “state of emergency”—a protocol generally used in the wake of hurricanes, floods, mass riots or other catastrophes.

Over 1.2 million legal and illegal immigrants settle on American soil each year. Since 1990, the number of aliens living in the United States has mushroomed 43 percent; the Latino population alone doubled between 1980 and 2000, constituting 40 percent of all U.S. growth. Today, 1 in 10 people in America is a foreigner.

The immigration explosion is not exclusive to the U.S. Fully 40 percent of today’s Canadians were either born abroad or are the children of Canadians born elsewhere. By 2011, immigrants are projected to account for all net population growth in Canada.

Over the next 25 years, 84 percent of the United Kingdom’s population growth is expected to come from immigration.

As for illegal immigration, national borders are more porous than ever. In Canada, “gaps in Canada’s border security are so severe that an airport accepts international passengers without on-site immigration checks, a marine border unit has no boat, a computer glitch systematically hides information about terrorists, and officers at 62 border crossings are unable to link to a computer to screen incoming travelers” (National Post, April 11).

In the crowded UK, where the population is roughly 60 million, an estimated 500,000 workers are thought to be illegal. If spouses, dependents and those not working are added, the “illegal” population is close to 1 million and climbing. The topics of immigration and multiculturalism have taken on extra meaning in the weeks and months since the London terrorist bombings in July. In this globalized world, immigration has become a global quandary!

Governments are polarized over the issue. In America, some yearn to liberalize immigration laws. Others assert that uncontrolled immigration has burgeoned into a huge disaster that is rapidly getting worse.

This issue has become a two-edged sword. What was once seen as a blessing to many nations has become a terrible curse, with some seemingly unsolvable repercussions. And too few understand the crux of this complex problem.

Two areas affected by immigration cause particular concern: the economy and crime.

Economic Impact

The hard work and perseverance of America’s early immigrants did much to help the U.S. become the richest and most powerful nation in the world. By 1869, as a result of the industrious nature of its population, America had attained the highest per-capita income in the world. That phenomenal wealth, together with a burgeoning population, created the world’s first consumer-driven economy.

But economic tragedy struck. The stock market crash of 1929 gutted the American economy and thrust the nation into unprecedented economic hardship. It was in the midst of this economic depression that American politicians laid the foundation for a welfare state. From this time forward, the American government became the crutch on which failing citizens could lean.

Concurrent with the rising popularity of the federal welfare programs was the burgeoning rise of immigration into America. Immigrants began streaming into America where many of the poorest and least educated were no longer required to subscribe to the traditional American work ethic and instead could rely on the federal government to take care of them. Similar problems occurred in Britain, Canada, New Zealand and Australia.

This trend remains today, and the economic impact of immigrants on the federal government is phenomenal. Immigration analyst Norman Matloff stated, “The reason for this increased reliance on welfare is that for many immigrant groups, welfare in recent years has lost its stigma and has instead become a magnet, drawing them to the United States. As one Chinese senior in Oakland puts it, a common point of view is mh hou sit dai, Cantonese for ‘Don’t miss this great opportunity’” (Sacramento Bee, Dec. 14, 1994). Matloff cited census data showing that, for example, 55 percent of the Chinese seniors who immigrated to California from 1980 to 1987 were on welfare by 1990.

In the era of Big Government, burdening the middle class and the rich with heavy taxes and giving handouts to an increasing number of poor dependents is heightening the ethnic strife and racial stereotypes. In this respect, even legal immigrants are placing an increasing burden on the U.S. economy. When we factor in the economic cost of illegal immigrants, the picture grows increasingly dire. Illegal and legal immigration is costing America billions!

The Center for Immigration Studies (cis) estimated the total impact of illegal immigration on the federal budget: “[W]hen all taxes paid (direct and indirect) and all costs are considered, illegal households created a net fiscal deficit at the federal level of more than $10 billion in 2002. We also estimate that, if there was an amnesty for illegal aliens, the net fiscal deficit would grow to nearly $29 billion” (“The High Cost of Cheap Labor,” August 2004).

No state has been more impacted financially by both illegal and legal immigration than California. “Analysis of the latest census data indicates that California’s illegal immigrant population is costing the state’s taxpayers more than $10.5 billion per year for education, medical care and incarceration. Even if the estimated tax contributions of illegal immigrant workers are subtracted, net outlays still amount to nearly $9 billion per year. The annual fiscal burden from those three areas of state expenditures amounts to about $1,183 per household headed by a native-born resident” (Federation for American Immigration Reform, “The Costs of Illegal Immigration to Californians,” November 2004).

The economic costs associated with immigration are hitting the UK as well. The influx of immigrants has profoundly cost the government. The budget of the Immigration and Nationality Department of the Home Office in the fiscal year of 1998-1999 was £300 million; by 2003-2004 that amount had risen to £1.9 billion—a jaw-dropping increase of 633 percent.

Many of these immigrants are asylum seekers. More people apply for asylum in Britain than in any other EU country. Why? Because it’s easier to enter, remain and claim asylum status there compared to other EU countries like Germany or France. Anyone can claim asylum upon arriving in the UK and cannot be expelled until his claim is rejected and he has exhausted any right of appeal. “Meanwhile, the claimant is entitled to free accommodation, emergency health care, children’s education, a cash allowance and free legal aid” (www.migrationwatch.org).

Families that are denied asylum “continue to receive benefits worth an average of £15,000 a year tax-free” (ibid.). Britain’s shadow immigration minister admitted to the presence of over 250,000 failed asylum seekers in the UK (Express, May 18).

An added economic consequence of immigration is the bleeding of cash from host countries. Upon locating work in their host nation, many immigrants (legal or illegal) send a portion of their paychecks back home to their families. In the U.S., for example, Mexicans will send home $20 billion this year alone, according to projections by Mexico’s Central Bank. This flood of cash will probably be the largest source of foreign exchange in Mexico. The cash from Mexicans working in the U.S. is a driving force behind Mexico’s economy—it amounts to the equivalent of 2 percent of its gross domestic product. No wonder the Mexican government has done little to curb the flow of illegal immigrants into the U.S. and in many documented cases, actually condoned their illegal entry.

In 2004, India received $17.5 billion in the same manner. China, Pakistan and the Philippines also receive substantial wads in remittance.

There is no doubt that immigrants contribute to the American economy. But how much is being withheld, and returned to their native land?

To be continued