How does illegal immigration affect Californian economics - Research Paper Example

?Immigration to US has been increasing steadily since the last quarter of Twentieth Century (Pollin, . The immigration policy of United s of America has been very positive with regard to the accommodation of migrants from different countries. USA has been often referred to as a global nation which readily accommodates diverse cultures and people. (Nadadur, 1037). The human resource of the nation is largely dependent on these migrants. However, it has been continuously observed that illegal migration into the country is increasing. In the year 2004, it has been estimated that there were 10.3 million illegal immigrants in the country (Hanson, 15). Illegal migration in terms of overstaying and sneaking through borders, are turning to be of increasing concern. Illegal migration occurs through three generic channels. First amongst this is entry without inspection. The second type of illegal immigrants is ones who entered the geographical boundary of US legitimately having a valid visa but overstays after the expiry of the visa (Nadadur, 1039). Students and tourists who manage to acquire a visa for a short term entry and those who don’t leave the country even after the expiry of the visa falls into this category. The third category of illegal migrants is ones who have lost their status of legitimacy and are in the process of applying for asylum or change of status (Nadadur, 1039). The data on illegal migration provided by different organizations are varied in nature. This suggests the unaccountability of illegal immigration. The graph below explains the entry of illegal migrants and the statistics on general migration. This data is according to US Census Bureau. (Source :US Census Bureau ) California is increasingly emerging as a destination for the illegal migrants. Brown (143) has pointed out that migrants add immeasurable value to California’s economy and its future. It has been estimated that half of the population of Maywood, California is comprised of illegal migrants (Kirkwood, 18). The scenario in Maywood, a small city is a representative sample of the situation in California. A major source country of illegal immigration to California is Mexico. It has been estimated that 90% of immigrants to California is from Mexico (CCSCE, 16). Along with the direct economical costs that are incurred by the country other costs like cultural and social costs are also incurred as a result of illegal migration. However there are also arguments that, illegal migrants contributes to the economy. One very important factor which magnifies the impact of illegal migration is its unaccountability. There are no records on how the large quantum of immigrants influences various nationally relevant issues. The benefits of policy interventions by the government meant for its citizens are received in a large scale by the illegal immigrants. Owing to the unaccountability of people living illegally in the country, quantifying this is difficult. This results in deterioration in the expected results of the policies. Resultant would be the economic costs associated with this. Taking these serious implications into account, it is very important for the Government of United States to control illegal migration. However, there are certain benefits of illegal migration which has been pointed out. Many of the policy statements of the American government emphasize on the issue of illegal immigration as of prime importance. Despite this, the statistics on migration suggests increasing trends on illegal immigration. The objective of this essay is to critically analyze the impacts of illegal migration on the economy of California. The increasing count of illegal migration can cause acute impacts on the national economy and its distribution among the citizens. It has been estimated that illegal migrants are creating costs worth billions of dollars for the tax payers (Kirkwood, 19). In other words, these much money which was to be spent on national welfare is diverted. Federation for American Immigration Reform (FAIR), has estimated that every year on an average of $113 billion is spent on illegal migrants. Out of this a cost of $29 billion is incurred by the federal government. The remaining of $84 billion is borne by other stakeholders of the government. Resultantly each taxpayer in America is forced to bear a cost of more than a thousand dollar for the cause of illegal migrants. Out of this, the largest expense is incurred in educating the newer generations of these immigrants who are born in America. This comes up to $52 billion. When it comes to specific statistics on illegal immigrants in California, it is estimated that there are 2.55 million illegal occupants in California. The cost on them is 21.8 billion dollars per year. (Kirkwood, 19). The increasing occurrence of illegal migration has led to the strengthening of enforcement to check illegal migration. It has been estimated that in the span of 15 years between 1990 and 2005, the office hours spent on guarding US- Mexico border has increased 2.9 times (Hanson, 17). This would mean an increased cost of three fold in this account. . In the context of the current economic scenario, where budget deficit is becoming a serious concern, this economic consequence must be taken into serious consideration. It has been considered that this cost occurred due to illegal migration accounts to the budget deficit that struck California in 2011. This must be read together with the fact that in the year 2010-11 California had a budget deficit of 14.4 billion dollars (Kirkwood, 20). Relating this to the money spent on illegal migrants, it can be observed that the total budget deficit is half of the cost spent on those people. There are strong demands from the civil society that in the event of the economic crisis which America is facing now, government must stop funding illegal migrants and their children. The government spending on its citizens would be diverted to reach illegal migrants both directly and indirectly. This would spread further to different spheres in government interventions. For instance, the skilled jobs that the government would support to help its people would be taken away by illegal immigrants in large numbers. It must be noted apart from job losses, this is also wastage of tax payers money. Another example for this is the benefit shared by the illegal migrants on education. It has been estimated that around 60000 illegal migrants take benefit of college education in colleges where in-state tuition rates are applicable. The cost in this account comes up to $ 244 million every year (Kirkwood, 19).In event of serious cut downs on social security programme budgets after the 2002 Wall Street collapse, the consumption of funds by illegal migrants have attracted too much of anti-migration sentiments. As the salaries received by the illegal migrants are unrecorded, there is no scope of tax reception by the government from them. This is the reason that they are often referred to by researchers as a “hole in the economy”. Vang (2007) has agreed with this argument in the article on ‘illegal migration :its impact the US economy’. Scott (2009) has explained the increased cost on economy caused by the illegal migrants as they drain the social welfare funds. “Rising illegal migration may be partly responsible for the recent surge in remittances in the country, which rose from 0.1% of GDP in 1990 to 2.2% of GDP in 2004 and now generate more foreign exchange in the country than tourism or foreign direct investment” (IADB, 8). The impact on the labor market due to the inclusion of illegal migrants is also of concern. Illegal migrants cater their services to assignments of specific nature. These jobs require special skill sets. Adding to the phenomenon is the fact that these people cannot and do not engage in jobs which requires any sort of legal bindings. There are very established labor establishments and networks involving employers in the US, through which these employers manage to source these workers. On the other side, the migrants use the same source to find a job in US. This catalyzes illegal migration. These migrants end up in involving in only certain class of jobs. This sets forth disturbing trends in the labor market. The segmentation of Labor market and selective inclusion in employment are some examples of this. A larger consequence of this is that it would lead to huge differences in the ratio of economic distribution within the country. The objective of quota system for employees with different skill sets that the US government uses as a policy for legal migration is deterred. The government policy to regulate the inflow of migrants into different sectors of labor won’t find its intended results as the unaccountability of the illegal migrants would bring forth unintended consequences. US laws permits the children of illegal migrants who are born in America to be considered American citizens (Kirkwood, 20). They are referred to as ‘anchor babies’. Diasporas of illegal immigrants from specific cultures and nationalities create isolated subcultures with in American society. The interaction between the subcultures also will be limited. This accelerates economic imbalances in the country as the subcultures associate themselves only with jobs of certain economic standards. The stratification becomes evident in economic indicators like standard of living, consumer pattern etc (Vang, 2007). It must be noted here that government interventions in the case of illegal migration with regard to its monetary value is mostly undertaken in the sectors of education, healthcare and crime. It has been estimated that California spent 4 to 6 billion annually in these sectors (Kirkwood, 19). The fact that government is forced to spend billions of dollars to curb crime amongst the illegal migrants proves the social insecurity that illegal migration causes. There has been reports from Maywood in California, where about half of the population are illegal migrants, that certain police procedures and regulations were taken off as there were being increasingly violated. This suggests the danger of undesired changes in the social structure and norms of the society so as to accommodate illegal migrants. There are clear evidences of this economic decentralization and stratification. It has been observed that the economic buildup of different culturally based communities within California is differing largely. The multicultural approach of the economic policy has thus wont penetrate into these cultures within the culture. For instance, the illegal immigrants from Mexico are so well networked and stratified that they tend to settle near an individual from their native place in Mexico (Hanson, 18). Munshi (562) has observed that that immigrants from the Mexican State Guanajuato, settles down in Chicago or Dallas where as the illegal migrants from Jalisco tends to settle in Los Angeles or San Diego. Resultant is that government will have to undertake community specific economic approaches. Moreover, there is pressure on the government to acknowledge the existence of the stratified society and have specific economic interventions. Measures to improve the lives of illegal settlers are also an increasingly demanded in California (Kirkwood, 22). As poor living standards of any individual, be that a citizen of America, or an illegal migrant, would affect the stability of the country’s economic security index, the government will have to ensure basic welfare of illegal migrants. However, these sorts of pressures from the migrant community are signs of an emerging new economic order, where the presence of illegal migrants and their socio-cultural identity will be predominately established. Taking into account the large number of illegal migrants those who have already established themselves with Australia, the government must have a strategy to ensure the assimilation of them into the American society. Positive impacts of illegal migration on economy Migration from different countries has been perceived as a national policy by the United States to ensure population growth and develop the country’s human resource. Though the government has not legally agreed to an agreeable level of illegal immigration, it has been observed that the enforcement policies on migration leave substantial room for illegal migration. The relative statistics on migrants and illegal migrants in United States supports this argument (Hanson, 16). 40 percent of the growth in national population has been attributed to migration. Interestingly, out of this 35-40 percent are illegal or undocumented migrants (Pollin, 87). It must be noted that economic growth of a nation is very much dependent on its population growth at an optimum level. Pollin (87) has referred to a study which concludes that the inclusion of illegal migrants in employment are not taking away jobs from the natives. In this regard, it is interesting to note that as illegal migrants generally are less accomplished in terms of education, communication skills and other skills, they engage themselves only in low profile jobs. Thus illegal migrants are contributing to the economy by taking up jobs that others don’t take up. Moreover, illegal migration is a source for the employers for cheap labor. At a larger sense this leads to the economic growth of the region. The economic benefits that the illegal migrants bring forth for the country have been argued to be of indirect in nature. The benefits in terms of productivity and economic growth due to illegal migration are substantial (Vang, 2007). The immigration policy of American government has emphasized on migration as a source for human resource in selected sections of labor market. Illegal migration automatically serves this purpose of filling the skilled labor gap in the country. In contrast the migration efforts of the government, this does not cause economical costs for the government. Pollin (88) has observed that illegal migrants not only increase the labor flow but also increase the market demand. The businesses that the migrants start along with their consumption of various products increase demand for consumer products and business related supplies. Here a counter argument for job loss for natives is that the businesses owned by illegal migrants create job opportunities as that of lawyers, bookkeepers and accountants Pollin (88). Pollin (89) has also suggested that the illegal migrants contribute to national treasury through indirect tax payments. He has argued that the indirect tax payments made by the illegal migrants are compensating the cost that the government incurs for the sake of illegal migrants. Another prevalent assumption is that the illegal migration, especially from Mexico is driven by “by the needs and rhythms of agriculture (Hanson, 9)”. This means that the illegal migration from Mexico constitutes agricultural laborers from the villages of Mexico. They emigrate illegally depending on the agriculture cycle in US. One the peak agriculture season is over, it’s assumed that they go back to their native places in Mexico. This population is assumed to include only adult males. (Hanson, 9). They are generally uneducated as well. This assumption suggests that this sort of immigration does not affect American Society, but in turn supplies additional human resource, thus helping the economy. These arguments contradict the accusations on illegal migrants to have caused serious economic implications in terms of budge spending and labor consequences. Thus a holistic approach to quantity both indirect and direct economic consequences of illegal migration must be formulated. This would further help the government to have more precise policies on immigration. References Brown K (1993) Illegal Migration: Lets Get On With Solving the Problem, Speech Delivered at Town Hall of California Public Issues Forum, Los Angeles, Sep 29, 143-146 CCSCE (2005) The Impact Of Immigration On The California Economy Report on California Regional Economies Project, Center for Continuing Study of the California Economy: California Hanson G (2006), Illegal Migration from Mexico to the United States, National Bureau of Economic Research, 25 November 2011, http://ilar.ucsd.edu/assets/022/8795.pdf Hanson G (2007), The Economic Logic of Illegal Immigration, Council On Foreign Relations CSR No. 26 Hayworth, John D; Eule, Joe. "Extract" in Whatever It Takes : Illegal Immigration, Border Security, and the War on Terror , Hayworth, John D & Eule, Joe , 2006 a, 5-15 . Inter-American Development Bank (2004) “Sending Money Home: Remittances to Latin America and the Caribbean.” IADB Report, May. Kirkwood,C R ( 2010). Illegal Aliens: Economic Consequences, The New American , November 22, 2010, p 18-22 Munshi, Kaivan (2003) “Networks in the Modern Economy: Mexican Migrants in the US Labor Market.” Quarterly Journal of Economics 118 (May): 549-97. Nadadur R (2009) Illegal Immigration: A Positive Economic Contribution to the United States, Journal of Ethnic and Migration Studies, Vol. 35, No. 6, pp. 1037-1052 Pollin R (2011) Economic Prospects Can We Please Stop Blaming Immigrants?, New Labor Forum, Vol 20, No.1: 86-89 U.S. Department of Homeland Security. .“2005 Yearbook of Immigration Statistics. Immigration Statistics, 2006. Vang Bruce, ‘Illegal Immigration - It's Impact on the US Economy, 25 November, 2011, http://ezinearticles.com/?Illegal-Immigration---Its-Impact-on-the-US Economy&id=858220 Read More