I m m i g r a ti o n A n E c o n o m i c S t a n d p o i n t 1 Immigration An Economic Standpoint Saul Ruiz Professor Harris Moore 3 PM Section I m m i g r a ti o n A n E c o n o m i c S t a n d p o i n t 2 Immigration especially the issue of illegal immigrants is an example of an issue that transcends political economic and cultural boundaries Between 2010 and 2011 about 14 million immigrants entered the United States Opponents of illegal immigration believe that illegal immigrants violate American laws fail to become accustomed to the pertinent society and also pose a burden on U S taxpayers Supporters of immigration however argue that workers from other countries lower business costs by taking low wage jobs that many native born workers do not want Before making a judgmental call on whether immigration is right or wrong both sides of the matter must be analyzed and one must understand the political economic and cultural implications of adapting to a new country This literature review will examine the possible detriments of illegal immigration and compare them with the benefits that immigrants pose to this country s economic outcome which is the first step in coming up with a fitting response when one hears the word immigrant The Center for Continuing Study of the California Economy CCSCE establishes a study that targets immigration in California It states that in 2004 California had an estimated 36 6 million residents Of these 9 5 million were foreign born Out of the 9 5 million foreign born 2 4 million were unauthorized immigrants with 81 of the unauthorized immigrants coming from Mexico and other Latin American countries The age range for this group are concentrated in the 18 39 age group with 17 below 18 and only 11 above the age of 40 Mexica 5 Much of the hatred toward illegal immigrants is not innate whatsoever and mainly stems from media coverage which portrays immigrants pouring over the borders and flooding the United States Despite this most of the immigrants have entered while the Immigration and Nationality Act was put in place This act allows approximately 800 000 people to settle in the United States each year as permanent residents including about 480 000 who are admitted to reunite with their I m m i g r a ti o n A n E c o n o m i c S t a n d p o i n t 3 spouses children parents and or siblings about 140 000 who are admitted to fill jobs for which the U S Department of Labor has determined no American workers are available ACLU and about 110 000 refugees who are in search of political sanction due to political or religious persecution in their own homelands According to the CCSCE the skill level of current immigrants and their children will be determined by the quality of their K 12 educational experience and by their ability to get a college education yet the college participation rates of immigrants from Latin America and their children are currently below the participation rates for other groups in California Such information may seem to disprove the theory that immigration is beneficial from an economic standpoint but it should be seen more so from a case by case viewpoint The economic impact that immigration has on the overall economy includes changes in job levels the rate of economic growth wages prices unemployment and income and poverty levels This again depends on the specific case as noted by the statement can raise incomes for some existing residents and lower incomes for other residents Mexica 14 meaning that the economic effect of immigration can vary from person to person For instance immigrants who enter with skills that are needed in the U S economy or with money to form new companies are able to raise incomes for existing workers This in turn provides a positive output of economic growth for the community An example of this is in Silicon Valley where the immigration of entrepreneurs has had a positive economic effect for residents Mexica 14 Therefore it can be shown that immigration provides an economic benefit in a domestic sense which when taken into account as a whole formulates into positive growth for the economy An article titled New Studies Show Economic Bene t of Smart Immigration Reform by Marjorie Valbrun cites a study by m Manuel Pastor of the University of Southern California Center for the Study of Immigrant Integration which examines the potential economic effects I m m i g r a ti o n A n E c o n o m i c S t a n d p o i n t 4 of comprehensive reform on the state of California CSII 1 The study concludes that newly legalized immigrants earn higher wages spend more money pay more taxes and help create more jobs which ultimately leads to economic boom for the state of California Pastor mainly uses this study in an attempt to create reform in the United States citing that people continue to use their economic condition as an excuse and that through reform there would be an increase in the state and local tax base by about 350 million in the short run CSII 2 Such an idea reflects that the main motive as to why foreigners move to the United States money Immigrants would obtain a much higher annual wage here than they would in their own country due to international differences in labor productivity with labor in the United States being far more productive than in Mexico It can then be said that illegal immigration is not as disadvantageous as it is often mentioned but provides more of an economic output which can be used to boost the economy The article titled The Impacts of Immigrants in Recession and Economic Expansion by Giovanni Peri analyzes the economic situation of immigrants in the United States both in the long run and in the short run Peri states that in the long run immigrants do not reduce native employment rates but rather increase productivity and therefore average income Peri 4 In the short run however immigration may slightly reduce native employment and average income since the economic adjustment process is not immediate Peri 7 Most economic researchers and experts who have studied the relationship between immigration and employment in the United States have reported that immigrants create more jobs than they fill This is due to the fact that they start up new businesses invest capital and spend dollars on consumer goods thus benefitting the economy of the United States Various studies done by research groups such as the National Research Council and the Urban Institute come to the conclusion that immigrants I m m i g