Undocumented workers give more than they get

The Urban Institute estimated in its May 1994 report, “Immigration and Immigrants, Setting the Record Straight,” that the undocumented population of the U.S stood between 2.5 and 3.5 million people in 1980, and rose to between 3 and 5 million just before the passage of the Immigration Reform and Control Act. After IRCA’s amnesty program, which allowed undocumented people to normalize their immigration status, the undocumented population fell to 1.8 to 3 million and had risen to 2.7 to 3.7 million by 1992, roughly the same level it was 12 years earlier.

That number continued to rise during the 1990s, and according to census figures today, stands at as many as 9 to 11 million. This undocumented population constitutes about 1-2 percent of the total population of the country.

The fact that this same phenomenon exists in other developed countries argues that undocumented migration is a stable process on a global scale and that its origins lie in the grossly (and increasingly) unequal distribution of the world’s wealth.

Migrant Watch International estimates that 130 million people in the world live outside their countries of birth. Neoliberal economic reforms and the transfer of enormous wealth from developing to developed countries make survival impossible for millions of people in their home countries. Many cope by migrating to places with greater employment possibilities and higher standards of living.

U.S. investment in Mexico (the source of most migrants to the U.S.), and the low-wage economic climate fostered by the governments of both countries, push people north along with repatriated profits. Under the rules of free trade, profits and investment have free passage across the border, but people don’t.

Far from being a social drain, the presence of undocumented people makes a net positive contribution to the U.S. economy. According to the National Immigration Forum, undocumented immigrants pay about $7 billion annually in taxes. Some taxes paid by the undocumented, including $2.7 billion annually to Social Security, and $168 million into state unemployment benefit funds, are direct subsidies to these systems, since undocumented workers cannot, by law, collect any benefits for their contributions.

In the state of California alone, which accounts for about 43 percent of the nation’s undocumented population, undocumented immigrants pay $732 million in state and local taxes, in addition to federal payroll and Social Security taxes. The state, in turn, according to the Urban Institute, spends $1.3 billion on education for undocumented children, and $166 million for emergency medical care for their families (the only kind of state-provided medical care for which they qualify.) It is difficult to make the case that expenditures on the education of undocumented children, or on emergency medical care for their families, is a net economic drain, given the gross under payment of benefits in many other areas.

According to a UCLA study from the mid-1990s, undocumented workers contribute approximately 7 percent of the $900 billion gross economic product of the state of California, or $63 billion. The Urban Institute estimated at the time that California accounts for 43 percent of the nation’s undocumented population, or about 1.4 million people. The gross economic contribution by each undocumented immigrant to the California economy was therefore about $45,000, including children, the unemployed, and those too old or ill to work. While no statistical surveys have determined the average wage of undocumented workers, their precarious status keeps their wages near, and sometimes even below, the legal minimum, which at (then) $4.25 per hour equaled an annual income of $8,840.

It is clear that the labor of undocumented workers not only pumps tens of billions of dollars into the state’s economy, but that the workers themselves receive only a small percentage of it, a much smaller percentage of the value which they produce than that received by workers who are either citizens or legal residents. That difference in the rate of exploitation is a source of extra profit for those industries that are dependent on a workforce made up largely of undocumented workers. The industries include agriculture and food processing, land development (including the residential construction and building services industries), tourism (including the hotel and restaurant industries), garment production and light manufacturing, transportation, retail trade, healthcare and domestic services.

U.S. immigration law has historically been used to drive down the price of immigrant labor in the U.S. Proposals for guest worker programs show a clear economic self-interest. But even without guest worker programs, employer sanctions have played a central role in holding down the price of labor in these industries. In an economy in which whole industries depend on an abundant supply of immigrant labor, maintaining a subclass of undocumented workers with fewer rights and less access to benefits is an important source of profit. As sanctions have made that subclass much more vulnerable, the labor of the undocumented has become much cheaper for employers.

Excerpted from Network News, the publication of the National Network for Immigrant and Refugee Rights. Reprinted by permission of the author.