No, Illegal Immigrants Do Not Make the Country Rich

 

Photo courtesy of Senator John Cornyn (Republican, Texas), “The Biden Border Crisis,” n.d.

 

There is a joke about immigration: “If illegal aliens grow the economy, then the countries they left must be rich.” The reality is, however, that rather than making the country richer, illegal immigrants cost the country money. The amount of money the government spends on illegal aliens each year is “the equivalent of $500 per American man, woman, child, and retiree.”

Every day, approximately 5,000 illegal aliens enter the United States. The media claims that immigration is growing the US economy, using this argument to justify open borders and illegal immigration. However, there are several intentionally misleading points here. First, the economic growth attributed to immigration includes the wages earned and taxes paid by legal immigrants, which has nothing to do with illegal immigration. The fact that legal immigrants contribute to the economy does not justify what is happening at the southern border.

Yes, every additional person living in the country adds to GDP; however, there is nothing special about illegal aliens that contributes more to this growth. In fact, legal aliens are significantly better for the economy because they pay taxes and are less likely to send most of their earnings out of the country. Legal immigrants are more likely to buy a home and pay property taxes, which fund local schools. They are also more likely to start a business, creating jobs.

Adding people to the economy who do not work or contribute only grows the economy by the amount of government transfer payments they spend. However, these transfer payments come from taxes already paid by citizens or from government debt that will need to be repaid in the future. Additionally, these transfers draw funds away from existing social programs.

In economics, there is a concept called “the broken window fallacy,” which illustrates why poor decisions by the government do not actually grow the economy. The story goes like this: kids are playing baseball and accidentally break a shop window. Some politicians argue that a broken window is beneficial because someone must be paid to fix it. The repair person has to buy the glass, so the glass vendor makes money. The glass vendor and the repair person then use the money they earned on the broken window to buy groceries, pay rent, and pay for services, creating jobs for others.

The fallacy is that before the window was broken, the shop had a window, and the shop owner had cash. After the repair, the shop still has a window, but the owner no longer has his cash. Society is no better off because nothing new was created. If the shop owner had instead used the money to expand his shop, he would create jobs while also providing better or more services to the community.

When politicians claim that illegal aliens added hundreds of billions to the economy, they are counting the money the government paid to support them. While it is true that this money went into the community because the illegal immigrants purchased food and services, or these were purchased on their behalf, this spending simply added to government debt. It is akin to the government cutting checks and sending them to people, as was done during COVID-19. This type of stimulus does not create real growth; it just creates inflation.

According to research by the Center for Immigration Studies, “Illegal immigrants are a net fiscal drain, meaning they receive more in government services than they pay in taxes.”

The lower education levels of illegal immigrants mean they are low earners and often qualify for welfare programs, frequently receiving benefits on behalf of their U.S.-born children. “The tax payments of illegal immigrants do not come close to covering the costs they create.”

The Center for Immigration Studies found that the annual cost to care for and house illegal immigrants could reach up to $451 billion. The Federation for American Immigration Reform (FAIR) arrived at a lower figure, determining that illegal immigrants are costing the US at least $150 billion per year. Supporters of illegal immigration may claim that this money, spent on goods and services for illegal immigrants, is added to the economy. However, this money is not added to the economy; it is diverted away from taxpayers.

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Dr. Antonio Graceffo, PhD, China MBA, is an economist and national security analyst with a focus on China and Russia. He is a graduate of American Military University.

You can email Antonio Graceffo here, and read more of Antonio Graceffo's articles here.

 

Thanks for sharing!