Immigration: Impacts on the United States and Mexican Economies - Essay Example

Immigration: Impacts on the United s and Mexican Economies Immigration between United s and Mexico has serious economic implications. Happening either legally or illegally, it is mainly driven by poor economic conditions in Mexico. Immigrants provide cheap labor to companies thus driving most of the low-skilled natives out of jobs, majority of who are native Indians and Black Americans. The United States government bears serious economic effects ranging from welfare costs for its citizens who have been rendered jobless to huge medical and educational costs besides the massive resource transfer across the border to Mexico. Recent developments however indicate that improving economic conditions in Mexico is resulting in reduced immigration into the United States. It is yet to be seen whether organizations that have benefited from cheap labor in the past will crumble due to reduced influx of immigrant workers into the United States. More research also needs to be done to find out whether this reduced immigration is only for a short term and the possible long term implications. INTRODUCTION Immigration and its effects on the economies of the countries involved is an issue of major concern. It can either happen legally or illegally, with both cases usually being caused by financial hardships in the home country. These immigrants find opportunities in their new countries and proceed to send money back home to their families thus affecting the economy of the host country. There exists a complex interrelationship between the economies of the two governments and immigration especially as demonstrated by the issue of immigration between the USA and Mexico. A weak Mexican economy drives immigration which then causes serious economic implications on the USA. Both legal and illegal immigration from Mexico into the USA avails cheaper labor to companies while a lot of money is at the same time repatriated to Mexico. The difference between the economies of Mexico and USA is the most important factor in the issue of immigration of Mexicans into the USA where their presence then causes various economic implications. Recent developments in the Mexican economy and how they have affected immigration are studied herein alongside the impact of this immigration on the US economy. The Statistics: Mexico is the single-most largest source of both legal and illegal immigrants to the US1. It is the source of about six out of every ten illegal immigrants2. According to PEW Hispanic Center, 12.7 million Mexican immigrants lived in the United States as of 2008, nearly 17 times the 1970 figures. It accounts for nearly 32% of the total immigrants with the second group, the Filipinos coming at a distant 5%. Of these 12.7 million, a whole 55% are illegal immigrants converting to 59% of all the illegal immigrants in the United States. From a Mexican perspective, approximately 11% of individuals born in the country are now living in the United States as compared to only 1.4% in the 1970s. In the 1960s, Mexico was the seventh largest source of immigrants to the United States, but has overtaken the other countries and has twice as many immigrants as the second placed country in 1980. They are much younger than the other immigrants on average with the majority being males, pointing a connection to economic conditions. They are also more likely to be less educated, have lower incomes and higher poverty rates than other groups3. Recent developments however indicate that less and less immigrants have been arriving from Mexico probably due to improving financial fortunes in their home country4. Census figures in Mexico have shown 4 million more individuals than projected while figures from the United States also indicate that fewer immigrants are crossing the border as compared to previous years. However this does not mean that Mexicans are no longer crossing the border; more statistics from the United States show that immigrants who had become American citizens have legally helped 64% of their immediate relatives to cross the border - 220,500 from 2006 to 2010. Mexicans arriving as tourists have also increased from 67% to 89% while at the same time native farmers have hired 75% legal workers on a temporary basis since 2006. Impact of Immigration on the United States Economy: According to “Economic Costs of Legal and Illegal Immigration”5 the social and economic effect of immigration along the United States- Mexico border is simply staggering. About 40-50% of loss of wage by low skilled Americans is as a result of low-skilled immigrant workers, with about 1.88 million natives losing their jobs to immigrants yearly. The welfare costs for sustenance of these displaced citizens is above 15 billion dollars annually. Natives have lost averagely 1700 dollars in wages annually with native Mexicans and black Americans being the most affected. Remittance by Mexicans contributes one of the largest sources of revenue to Mexico after exports and oil sales (13.3 billion dollars); a massive wealth transfer while considering the number of Americans displaced. The medical and education expenditures for immigrants across each state have been observed to rise, while the tax-paying citizens are denied treatment or are forced to suffer long queues. Averagely, an immigrant without at least high school education costs the government about 89,000 dollars while one with only high school education costs 31,000 dollars during their lifetime in the United States. Several hospitals in Texas, California and New Mexico have been forced to wind due to bankruptcy as a result of free emergency services that are mandated by the federal government. Half a billion dollars of tax payers money annually goes to incarceration of illegal immigrants into the United States. The net cost of immigration into the United States is between 67-87 billion dollars annually. However, as shown by the statistics discussed earlier fewer immigrants have been arriving into the United States since 2008. “Less Immigrants from Mexico will affect US Economy” conceptualizes a situation where this reduced immigration from Mexico is expected to have a negative impact on the economy of the United States, where companies have been sustained artificially by the cheap labor from undocumented immigrants6. Those especially to be hit most include the agriculture and restaurants, hygiene and construction service industries. It will also have an effect on the price of commodities including foodstuffs and housing as companies strive to pass the rising costs of production to the final consumer. Immigration and the Mexican Economy: According to “Mexico lags behind in Regional Economic Growth”7, Mexico is one of the weakest economies in Latin America, generating less than a million jobs annually. During the global economic meltdown Mexican households were earning 12.3% less than what they earned before 2008. Such financial hardships are the main reason driving Mexicans to cross the border into the United States, either legally or illegally. This view is further supported by observation of a decline in Mexican immigrants into the U.S following an economic boom in Mexico. Expansion of the economy and education opportunities in Mexico alongside economic slowdowns in the United States has resulted in the lowest levels of immigration since the 1950s. A recent national census in Mexico found out 4 million more people than what had been projected, while census figures in America indicate that illegal Mexican entering the country annually had reduced to below 100,000 in 2010 from 525,000 in 20048. In “Less Immigrants from Mexico will affect US Economy” the main reason behind the reducing immigration is the continued improvement of the Mexican economy, occurring due to drop in fertility rates from 7 in the 1970s to 2 in 2010, besides a lower population which translates to more jobs. Improved education, increased earnings and political changes in Mexico have also contributed to economic recovery. This may have a negative effect on the United States economy but for the Mexican economy it is all gains as there is sufficient source of labor and a larger market for produced commodities. CONCLUSION Immigration is a serious issue all over the world causing staggering economic implications on the host countries. Statistics indicate that Mexicans contribute to the biggest proportion of immigrants into the United States, having 32% of all immigrants and 59% of all illegal immigrants. Most of these are young and male, perhaps indicating a connection to financial difficulties in their home country. American natives have lost wages and jobs on a large scale to the Mexican immigrants with native Mexicans and Black Americans being the worst hit. The economy of the United States is mainly affected through welfare paid to the displaced citizens, education and healthcare budgets and massive wealth transfer from the country. The Mexican economy is the most important factor in this issue as a weak economy means more emigration. Recent statistics show that fewer Mexicans are emigrating as a result of an economic boom in Mexico following the global economic meltdown. More studies need to be undertaken to find out whether this is a short term occurrence and whether sustained economic development in Mexico could reverse the immigration and thus bring forth desirable long term implications. Works Cited “Less Immigrants from Mexico will affect US economy”, Latinovations, 2011, Web. 2011 July 24 “Mexican Immigrants in the United States”, PEW Hispanic Center, 2009, Web. 2011 July 24 “Mexico lags behind in Regional Economic Growth”, News from Latin America and the Caribbean, 2011, Web. 2011 July 24 “Economic Cost of Legal and Illegal Immigration: Why Borders can not be opened.” CAIR, Web. 2011 July 24 Cave, Damien. “Immigration Upended: Changes at Home”, 2011, Web. 2011 July 24 Graybeal, Michael. “Mexico’s Economic Prospects Key to Passing Immigration Reforms”, 2011, Web. 2011 July 24 Read More