An Economic Poison Pill

The conversation surrounding illegal immigration is deeply personal for many people -- it is emotionally-charged and politically divisive. Debates often devolve into mud-slinging contests, and arguments morph into feigned outrage, even violent protests. But from an economic perspective the question is settled science: illegal aliens cost taxpayers billions, impoverish American workers, and are completely unnecessary for America’s economic success.

To begin with, illegal immigrants are expensive. According to the Federation for American Immigration Reform’s 2017 report, illegal immigrants, and their children, cost American taxpayers a net $116 billion annually -- roughly $7,000 per alien annually. While high, this number is not an outlier: a recent study by the Heritage Foundation found that low-skilled immigrants (including those here illegally) cost Americans trillions over the course of their lifetimes, and a study from the National Economics Editorial found that illegal immigration costs America over $140 billion annually. As it stands, illegal immigrants are a massive burden on American taxpayers.

Although border control is a federal responsibility, state and local governments shoulder two-thirds of the costs associated with illegal immigration. Unsurprisingly, this costs California more than any other state: California spends $30.3 billion on illegal aliens annually -- 17.7 percent of the state budget. Texas is next: illegal immigration costs the State of Texas $12.4 billion annually, or roughly 10 percent of the state's budget. In third place is New York, which spends $7.4 billion on illegal immigration.

Of course, the tax burden is only part of the story: illegal immigration also distorts the labor market, hurting American workers. Ever hear of the law of supply and demand? It is how the free market determines prices: when demand increases, prices increase (more people bid-up the price); conversely, when supply increases, prices decrease (less scarcity means less urgency), and vice versa. Supply and demand underpins the price of everything from gasoline, to apples, to the value of a person’s labor -- surgeons command high prices because there is a limited supply of surgeons, whereas store clerks make minimum wage because anyone can be a store clerk.

According to Pew Research, illegal immigration has flooded America’s labor market with at least 12 million new workers. This has dramatically, and rapidly increased the labor supply and therefore decreased wages for American workers. Ample evidence supports this claim. For example, before Hurricane Harvey, President Trump’s crackdown on illegal aliens had already caused wages for construction workers to rise by 30 percent in Texas (half of Texas’ construction workers were illegal aliens). Likewise, businesses in Maine were forced to hire American workers after the availability of visas for temporary foreign workers were restricted. As a result, unemployment decreased, wages increased, and working conditions improved in order to attract American workers. Illegal labor has distorted America’s labor markets, and hurt American workers in the process.

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