Immigration, Good or Bad for the Economy?

So is immigration good or bad for our economy?  I hear a lot about the drain on public services.  Illegal immigrants reaping social benefits without paying taxes.  Helping to push state and local governments near the brink of bankruptcy.  On their own each of these arguments seem to make sense and produce a pretty strong case for immigration crack downs as are happening in Arizona.  However, what about the big picture?  What if the hundreds of thousands of people here in the US where given a path to contribute?  I’m not saying just flip a switch but from an economic standpoint I’d argue the more contribution the better.

Take for example the fact that illegal immigrants in this country make cash under the table and then spend that cash.  That is the only form of money they have and it significantly limits what they can buy and how much they can spend.  Just consider for a second if a million people were given even a low limit credit card?  What might happen then from an economic standpoint?

This isn’t about a specific nationality, just merely about economics and economics is a numbers game.  I say if we want our economy to rebound more quickly put more spending power in the hands of as many people as possible.

Stolen American Dreams

I find this video very powerful as it brings up both sides into perspective: the immigrant side and the American side. As immigrants, it is really hard to put ourselves into the shoes of American people. The reality is that with over 12 million illegal immigrants in this country, and with numbers increasing by the thousands every day, Americans are being deprived from their American dream. There are 150 countries around the world which each has less population than the amount of illegal immigrants in the USA.

Companies are not hiring illegal immigrants just because they are better workers than Americans; the main reason is because immigrants are willing to take the same jobs for less pay. I cannot imagine having to compete for a job with 12 million people where what matters the most is what I am willing to take as pay. You might wonder how illegal immigrants can afford to take a low paying job; here is the answer: because of their immigration status their goal is to make as much money as possible and send it back to their country so they can go back and start a new life. It is normal to see large number of people living in a small apartment, maybe up to 10 in a 2 bedroom apartment. They have no incentive to live in better conditions as they can be deported anytime. If you do the math, a $500 apartment will cost each person $50 a month plus utilities.

So, “What we have here is a failure to communicate.” Because companies are in for the money, they do not care about who they hire; they are looking at their bottom line. It is only natural to blame illegal immigration for all the problems but who is incentivizing these people? The government plays a big role here too, they are not doing anything! We need workers coming here legally, employers hiring legal immigrants, and our government implementing an immigrant worker program as well as enforcing the law not only with illegal immigrants but with companies hiring people illegally.

Now, who is stealing the American dream from US Citizens?

Are YOU Ready to Pick Tomatoes?

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As the illegal immigration issue continues to heat up, my economist side keeps on lingering in my thoughts. Many illegal immigrant workers are employed by farms in states close the Mexican border. These workers are usually underpaid, their salaries are somewhere in the neighborhood of $60 per day.  Competition from Latin American crop producers is also an issue; tariffs do not seem to stop foreign products from making it into the US market.

Although I am not in favor of illegal immigration, our economy needs the human resources provided by illegal immigrants. A massive deportation is not the answer to the current economical downturn. As the unemployment keeps on rising, more and more attention is being paid to illegal workers. We did not pay much attention to illegal immigrants during the “dot-com” era, but since jobs are now scarce, it is only natural to put our eyes on illegal workers.

Now the question is: are we Americans willing to take their jobs for the same pay?  There may be a small group that may be willing to do so, but I do not think this small group will fulfill the demand for farm workers. Higher salaries would be required in order to draw Americans to the farming fields and hence crop prices would soar. If prices soar, competition from outside the US would have an advantage over our produce and the demand for US grown products would fall. Under this scenario we would lose jobs to foreign competition.

It is true that not all immigrants are hard workers but, farm workers have demonstrated over and over how valuable they are to our economy. We cannot punish these people for the wrongdoings of others. We need to put an immigrant farm worker program in place in order to keep our crop prices low and in order to compete with foreign grown produce.

I am sure many will not agree with me but I am personally not willing to pay more for produce. Are you?