Undocumented workers aid economy, study claims
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By Devona Walker
Published: July 8, 2008
A recent study conducted by the Waco, Texas-based Perryman Group shows Oklahoma would lose $1.8 billion in spending and nearly 13,400 jobs if undocumented workers were removed.
Oklahoma ranked 13 among states most heavily impacted by undocumented workers. Consumer spending nationwide is estimated to decline by $1.7 trillion without undocumented workers, and there would be an estimated loss of about 8.1 million jobs.
"The undocumented work force is vital to U.S. business growth and prosperity and in some cases sustainability and thus an enforcement-only and removal approach is simply not viable,” said Ray Perrryman, a financial analyst and president of the Perryman Group.
"It eliminates a huge part of our work force without looking at our work force needs or offering any alternate solutions. If you put a program in place with nothing but building walls and penalizing business, it's going to disrupt the economy.”
In Texas, Perryman said there are about 450,000 unemployed people but 1.2 million undocumented workers.
Consequently, it is not logical that, even if every available worker in Texas was gainfully employed, the state could absorb the loss of undocumented workers.
"And a lot of those domestic workers don't have the skills to do construction or the stamina for agriculture, not to mention they are not located where the jobs are,” Perryman said.
Perryman conceded that while undocumented workers create economic positives for the federal government, many business and ultimate savings for consumers, local governments receive the short end of the stick. Local governments must bear the burden of increased spending on public education and safety, he said.
On one end, undocumented workers pay into programs like Social Security and Medicare even though they are not legally entitled to participate. In fact the Social Security Administration rakes in more than $7 billion annually into its suspense fund — largely made up of contributions from undocumented people working under fraudulent Social Security numbers.
"The federal government sees big profits but where the losses are occurring is for local governments. The money does not go to where it is needed,” Perryman said.
Cost-benefit disconnect
Illegal immigration foes say this analysis is less economic theory than mere eye balling. It does not take the effect undocumented workers have on low-skilled, native-born workers. The Center for Immigration Studies estimates undocumented workers pay about $16 billion per year in various taxes, but they create a tax burden of about $22 billion.
"There is no question that the U.S. economy is significantly larger in size because of immigrations, illegal and otherwise,” said Steven Camarota, the center's director of research. "But that does not in anyway tell us if the native-born population is any better off.”
Immigrants, according to CIS research, have suppressed low-skilled wages by 10 percent in the last two decades.
When looking specifically at men without high school diplomas, that number balloons to about 22 percent. For men with high school diplomas, the effect is about 11 percent.
"Is that really fair? Is that good policy? Is that really what you want? Clearly it's good for the immigrants and in the short-term and for some sectors it's good for business and consumers,” Camarota said, adding those short-term benefits pale in comparison to the burden on taxpayers in the United States.
"The idea that the key to economic success in the U.S. is to dramatically increase the supply of high school dropouts does not make sense. It's problematic. It reduces wages for our own poor. It creates a large cost to our taxpayers. In addition, it retards economic mechanization,” Camarota said.
"You can't just say that all that matters is willing workers and willing employers. There is just so much more to it than that.”
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as far as this study goes: duh! of course undocumented workers aid the economy by spending, still doesn't make it right. like ray said, drug smugglers do the same thing on some level. still wrong.