Legal and Illegal Immigration for the U.S. Economy

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Illegal immigration is one of the continued challenges faced by politicians in the United States. The number of illegal immigrants among the US population has increased from five million to approximately twelve million in the past decade, making the challenge a pronounced one for the policymakers in the country. It has given rise to the charge against the ruling governments that the country has lost its control over its borders.

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There are continued efforts of the government in tightening the enforcement along the borders especially along the U.S.-Mexico border for preventing unauthorized immigrants from entering the country by reforming the immigration laws. The debate on the ways to deal with illegal immigration culminated in the passage of the Immigration Reform and Control Act, 1986 (Andreas 86).

Legal immigrants who constitute more than two-thirds of all foreigners entering the U.S. accounting for 50 to 70 percent of the new immigrants arriving in the country are subject to lesser public scrutiny (Hanson 3). It is a strong belief that immigrants legally entering the country supports the economy, while the illegal entrants adversely affect the economy. Despite differing points of view, there is consensus among politicians and policymakers that there would be a drastic improvement in the U.S. economy if the country were able to reduce the number of illegal immigrants into the country, by either converting the illegal immigrants into legal ones or by preventing them entering the country by any means.

Different questions arise in this context. Are there any factors contributing to existing contentions on legal and illegal immigration? Are legal entrants contributing to the economy more as compared to undocumented individuals towards the costs and benefits of the economy? What should be the expectations of the U.S. government from the operation of its immigration policies on the economic front? Is the present immigration policies of the government are sound and adequate to deal with the issue? Are the legislative proposals under the consideration of Congress consistent with achieving the economic objectives of controlling legal and illegal immigration?

This report addresses these questions in the light of available resources. The aim is not to present a comprehensive review of all the issues associated with immigration; but to focus on the costs, benefits, incentives, and disincentives of illegal immigration from an economic perspective to the extent it affects the U.S. economy. From a broad and general economic point of view, the most advantageous immigration policies must allow individuals who possess skills, which are scarce in the country and whose payment of taxes, after netting the expenses incurred in offering public services to them are more. Allowing immigrants to work in scarce occupations, would lead to enlargement of income for the economy, even though such immigrants do not possess high levels of skill.

“In the United States, scarce workers would include not only highly educated individuals, such as the software programmers and engineers employed by rapidly expanding technology industries, but also low-skilled workers in construction, food preparation, and cleaning services, for which the supply of U.S. native labor has been falling” (Hanson 4).

Despite the changes in the economic scenario recently, the availability of labor for these types of works was tight implying that the wages for these occupations within the country were high as compared to the wages offered for similar positions in other countries.

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It is important to consider the fact that the economic impact of immigration policies of the government does not take into account other major issues, which have a bearing on such policies. These considerations include the impact of immigration on border security and the protection of citizens’ rights. There are obvious flaws associated with illegal immigration at any level. Foremost is the weakening of the ability of the policymakers to strengthen the regulations governing the movement of the labor force since continuing high levels of illegal immigration will destabilize the rule of law.

Even though there are no instances of terrorist activities associated with individuals who sneaked across the U.S – Mexico border, there has always been a concern that large illegal immigrants entering through Mexico border are likely to be the cause of exposure of the country to international terrorism.

Another concern is that of the relaxation of the commitment of the U.S. employers to the domestic labor-market institutions, as with employing illegal immigrants, a contingent of the labor force with no possibility of any movement is created and they are not given any identity. These are some of the major concerns deserving consideration in analyzing the impact of immigration policies on the country. However, often within this analysis, no mention is made of the real dimensions of the economic impacts of illegal immigration how do they fare with those arising from legal entrants.

This report argues that there is little evidence for the preference of legal immigration over illegal immigration. It can be found that illegal immigration reacts to market forces more swiftly and in ways, which legal immigration cannot. At a point in time, when the U.S. economy is booming more unauthorized workers enter the country and move towards states, where there are potential employment opportunities. On the other hand, legal immigration with its arbitrary selection criteria and associated bureaucratic delays does not consider the domestic labor-market conditions and it is mostly dissociated with it (Martin).

This is evidenced by the fact of the low level of response of legal immigration to the employment rate in the country for a large of the last century. The immigration policies of the country allowed more than two-thirds of the entrants based on the presence of their relatives within the U.S. without considering the matching of the skill levels of those immigrants to the demand existed in the country. The process of obtaining a visa is often laborious and time-consuming for those who visit the country as temporary legal immigrants at the invitation of their U.S. employers. Once entered the country, the temporary legal immigrants cannot switch jobs and it limits their contribution to the betterment of the U.S. economy.

Although there are many concerns about the rising level of illegal immigration, the policymakers should not lose sight of the fact that illegal immigration has a clear economic logic. Illegal immigration provides the U.S. economy the type of workers the country needs, at the time they are needed and at the places where they are needed.

“If policy reform succeeds in making U.S. illegal immigrants more like legal immigrants, in terms of their skills, timing of arrival, and occupational mobility, it is likely to lower rather than raise national welfare. In their efforts to gain control over illegal immigration, Congress and the administration need to be cautious that the economic costs do not outstrip the putative benefits” (Hanson 5).

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Before discussing the impact of illegal immigration on the economy of the United States, it is important and pertinent to have a basic understanding of immigration in the context of the country. The following two sections provide brief accounts of the status of immigration in the U.S. and the impact of immigration on the U.S. population. The general economic impact of immigration is presented in another section.

Current Immigration Status in the United States

Current policies of the U.S. government concerning immigration exhibit both stability and variations in the status of immigration in the country. The arrival of about 104,000 foreigners into the country every day reflects continuity (Martin and Midgley 1).

There are two factors, which have given a renewed vigor to the immigration reform debate. The recent financial crisis, which is the worst since the Great depression has worsened the unemployment situation and it has caused a decline in the number of unauthorized entrants into the country. However, most of the illegal immigrants did not leave the country even though they have become jobless since there are not enough opportunities in their home countries either. The recent economic recession resulted in the loss of 8 million jobs. The government has also stepped up the enforcement of immigration laws, which rekindled the immigration debate.

“There was also stepped-up enforcement of immigration laws, especially after the failure of the U.S. Senate to approve a comprehensive immigration reform bill in 2007, including the proposal to require employers to fire employees whose names and social security data do not match” (Martin and Midgley 1).

There is agreement among the experts and consultants that the number of illegal immigrants has reduced in 2008-09 for the first time in the last two decades, although they do not agree on the reasons for such decline. Some of the researchers think that the recent economic recession has resulted in the decline and the number of illegal immigrants will go up once the economy bounces back and there is job growth. There are other studies, which suggest that the decline is the effect of enforcement of the immigration laws by the federal and state governments. The following chart shows the position of legal immigrants in the country between 2005 and 2009.

Category 2005 2006 2007 2008 2009
Legal Immigrants 1,122,373 1,266,129 1,052,415 1,107,126 1,130,818
Immediate relatives of U.S. citizens 436,231 580,348 494,920 488,483 535,554
Other family-sponsored immigrants 212,970 222,229 194,900 227,761 211,859
Employment-based 246,878 159,081 162,176 166,511 144,034
Refugees and asylees 150,677 216,454 136,125 166,392 177,368
Diversity and other immigrants 75,617 88,017 64,294 57,979 62,003
Estimated emigration -312,000 -316,000 -320,000 -324,000 -328,000
Legal Temporary Migrants 32,003,435 33,667,328 37,149,651 39,381,925 36,231,554
Pleasure/business 28,510,374 29,928,567 32,905,061 35,045,836 32,190,915
Foreign students (F-1) 621,178 693,805 787,756 859,169 895,392
Temporary foreign workers 882,957 985,456 1,118,138 1,101,938 936,272

The second factor causing renewed debate on immigration policies is the initiatives of more states and cities to enact laws, which deal with illegal immigration. For example, the State of Arizona has passed legislation in April 2010 declaring the presence of illegal immigrants in the State a punishable crime. The opinion polls conducted among the public has revealed widespread dissatisfaction about the breaks in the immigration system.

There have been continued debates in Congress during the whole of the last decade, but there were no new legislative measures implemented. The House of Representatives approved in 2005 and followed by Senate in 2006, a three-pronged approach presented in the form of a bill. However, Congress has been unable to agree on the package. This approach includes tightening the enforcement against illegal immigration, legalizing most illegal immigrants, and creating new guest worker programs, and at the same time expanding the current ones.

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Immigration and Population

Immigration has a significant impact on the economy of the country, because of its effect on the size, distribution, and composition of the population of the United States. The fertility rate of the U.S., females was 3.7 children per female towards the end of the 1950s.

The rate fell to two presently. This fall has enabled significant contribution by immigration to the population growth in the U.S. “Between 1990 and 2010, the number of foreign-born U.S. residents almost doubled from 20 million to 40 million, while the U.S. population rose from almost 250 million to 310 million. Thus, immigration directly contributed one-third of U.S. population growth and, with the U.S.-born children and grandchildren of immigrants, immigration contributed half of U.S. population growth” (Martin & Midgley).

In the year 2009, there have been 39 million expatriates in the United States. Out of these 39 million, 11 million of them representing almost30 percent resided in the country with legal status. The status of the immigrants indicates that the U.S. has the most number of foreign-born residents than any other country in the world. The number of foreign-born residents is three times more than that of Russia, which stands next to the U.S. in second place. The country has more illegal immigrants than any other country. The United States has a higher proportion of foreign-born residents at 13 percent of the total population.

This is higher than any other European country but less than that of Australia and Canada. (United Nations report indicates that immigrants account for 11 percent of the total population in France. Immigrants constitute 11 percent of the United Kingdom. In Canada, immigrants are 21 percent of the population. In Australia, the immigrants’ population is 22 percent of the total population.)

Foreign-born residents consisting of the majority of Hispanics and Asians have brought significant changes in the population of the U.S. The following figure depicts this change in the composition.

The population of the U.S

“In 1970, about 83 percent of the 203 million U.S. residents were non-Hispanic whites and 6 percent were Hispanic or Asian. In 2010, the United States had 310 million residents; two-thirds were non-Hispanic white and 20 percent were Hispanic or Asian. If current trends continue, by 2050 the non-Hispanic white share of U.S. residents will decline to about 50 percent while the share of Hispanics and Asians took together will rise to one-third” (Martin & Midgley).

Economic Impacts of Immigration

Most of the immigrants enter the United States for augmenting their economic opportunities. There are on average about 100,000 immigrants a year constituting less than 10 percent enter the country as refugees or asylum seekers escaping from harassment in their own countries. The labor-force of the United States comprises about 50 percent of immigrants and U.S.-born persons. Foreign-born men account for a higher share of the U.S. labor force than foreign-born women are. The statistics for the year 2009 reveals that nearly 15 percent of the U.S. workers were people who are born out of the country.

The immigrant workers have a significant impact on the labor markets of the United States and this impact has given rise to hot debates on the issue. “Economic theory predicts that adding foreign workers to the labor force should increase economic output and lower wages, or lower the rate of increase in wages” (Martin & Midgley). A study by the National Research Council confirmed this economic theory. According to the study, immigration has enhanced the Gross Domestic Product of the country.

It has also contributed to increasing the value of all products manufactured in the country. The extent of such an increase is calculated at one-tenth of one percent in the year 1996, which increased the GDP of the year of $ 8 trillion by $ 8 billion (Smith and Edmonston). The GDP of the country for the year 2010 was $ 15 trillion suggesting an increase of $ 15 billion contributed by immigrant labor (Smith and Edmonston). There has been a reduction of 3 percent of the average wages of the country because of the contribution of immigrants. However, comparisons of the statistics relating to different cities having different proportions of immigrants have not supported the theory of wage depression affected by immigrant labor (Card).

Economists observe the effect of immigrant labor among the total labor force of the country instead of in particular states and regions. This is because of the internal migration of the workers within the country. The impact of the immigrant labor force is assessed by grouping the immigrants and domestic labor force according to their age and education. For example, such grouping will enable determining the extent to which 20 to 25year old immigrants having lesser high school education influence similar people belonging to the group of U.S. born workers. Borjas assumes that immigrants and domestic labor of identical age and education can substitute each other.

This implies that an employer will treat both types of workers as interchangeable. However, if foreign-born workers are made to complement U.S.-born workers the efficiency of the U.S.-born worker is increased and it increases the wages of the U.S.-born worker as compared to similar other U.S. born worker (Peri). “Immigrants are playing dominant roles as innovators and job creators” (Herman & Smith 5).

The economic benefits of immigrants beyond the work they commit to doing. The immigrants add to the tax revenue and they utilize public services. More than fifty percent of the 12 million U.S. workers, who do not have a diploma, are from immigrant communities. Most of these people have only lower wage earnings. Most of the taxes flowing to the federal government take the form of Social Security and Medicare taxes.

However, immigrants mostly use education and similar public services extended by states. Because of this situation, many states look at immigration as a burden imposed by the federal without any funding. In return for the services rendered to the immigrants, the local and state governments claim funding from the federal government towards the cost of providing such services. Estimated impacts on immigration depend mostly on assumptions and economists are unable to reach definitive conclusions (Lowenstein).

Illegal Immigration

Illegal immigration to the United States has a large impact on the development of the American economy. Although during recent years, there has been strict enforcement of border control measures there has been an increasing trend in the number of illegal immigrants entering the country. Between the years 2000 and January 2008, the number has swelled by more than 3 million people (Hoefer, Rytina & Baker, p 2).

The following graph represents the growth in the number of illegal immigrants in the country.

Illegal Immigration

“U.S. law regards as illegal immigrants, those who cross the border illegally on American soil and remain permanently or for an undeterminate period. In the same category are the tourists, temporary workers, and students, who entered in America legally and then exceeded the permissible stay period given by the visa (Sorin-Stefan and Liviu-George)”

As the above chart illustrates, the last decade witnessed a growing number of illegal immigrants in the United States. The number peaked in 2007 with 11.8 million illegal immigrants in the country. The number was reduced to 10.8 million in the year 2009. One of the major causes of such a decline is identified to be the recent U.S. financial crisis and increased unemployment in the country. Another reason is the tightening of the enforcement of illegal immigrant legislations and increased border control measures.

Undocumented Students

Policymakers in the United States face illegal immigration as one of the most controversial issues among many others. Despite the support by many politicians and professionals to comprehensive reforms to the immigration laws and policies, the “complexity, polarization and political risks” associated with the phenomenon has made it a marsh area for the lawmakers and voters. It can be said that much of the inequities existing in the current system originate from the omnibus approach accorded to the issue of illegal immigration, representing a far from homogenous population. Immigrants arrive from diverse backgrounds and they are made to face different circumstances affecting their lives.

I feel that it is essential that a just legal system should take into account all these factors while considering any reforms to immigration laws. I am also of the opinion that to implement effective reform measures, immigration laws must provide for discrepancies of fallibility. The policymakers and the government should adopt forward-minded policies to ensure that just legal principles are applied to the subpopulation of immigrants who are unique.

It has to be conceded that the circumstances surrounding undocumented students create a uniqueness of their situation from an ethical perspective. “They arrive as children, accompanied by parents trying to make a new life in the United States. They grow up in American communities, absorb American culture, and integrate into American life – many times without knowledge or understanding of their legal status” (Turner). These children get their education in primary and secondary schools, with many of them excelling in their academic performance. This makes such children heavily involved in their communities. Once they graduate and come out of high school, they are made to face tremendous and many times insurmountable challenges.

Under the existing legislation, undocumented students face unpleasant legal consequences. “Their immigration status does not prohibit access to higher education; however, in many states, it enjoins them from receiving state financial aid, in-state tuition, and formal employment” (Turner). These challenges have a significant adverse impact on the future life of undocumented students. There are approximately 65,000 undocumented immigrant students expected to complete their school education each year.

Despite the presence of these obstacles, several undocumented students pursue their higher education, since most of them consider collegiate education as an important step for seeking professional employment. Many other students view higher education as a most valuable asset, which they must acquire in a country, which views their presence as illegitimate. For all these students’ education has become a race against time and money, before the occurrence of an unfortunate incident of deportation or the drying up of private scholarship. Even the graduation by undocumented students might open a few doors only. Those students who have been successful in getting a diploma may not be able to get employment in the area of their study, because of the restrictions imposed by federal and state laws on the willful employment of undocumented immigrants.

However, undocumented students are hopeful that there will be policy changes, which will enable them to have free access to higher education and an opportunity to use the degree or diploma they obtained in relevant fields in the country of United States. All that the undocumented students lack is a piece of paper to legitimize their patriotism, even though they all feel unequivocally Americans. The students try desperately to identify a pathway that will lead them to citizenship to earn an equal place in the only country they know.

Current Legal Position

So far, there exist no legislations or court rulings, which expressly prohibit the admission of undocumented immigrants to higher educational institutions. However, the federal and several state governments have enacted legislation, which indirectly addresses the issue. These legislations deny the availability to undocumented students any sort of financial assistance or concessions. There are statutes like the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) and the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA), which addresses the issues relating to undocumented immigrants. Congress passed PRWORA in 1996 as one of the elements in the Clinton-era reform measures addressing the welfare, which also prominently addressed the plight of undocumented immigrant people.

“In current immigration law, PRWORA denies undocumented immigrants access to federal, state, and local public benefits, such as retirement, welfare, healthcare, disability, assisted-housing, education aid, or food-assistance. Regarding education, the term “benefits” includes “postsecondary education…or any other similar benefit for which payments or assistance are provided.” Thus, the Act focuses solely on monetary assistance and does not specifically address attendance (Sharron)” (Turner).

IIRIRA was passed at the same time as the other Act (PRWORA) and the legislation was aimed at reducing dependence on welfare and covered the aspects of fiscal responsibility and anti-immigration sentiment. This Act affects the in-state tuition requirements of undocumented students. More specifically under section 505 of IIRIRA, illegal aliens become ineligible for “postsecondary benefits based on residency”.

This provision entitles the illegal immigrant’s in-state tuition rates at the point where all the citizens of the United States would be eligible for that benefit. This brings loss of additional financial support from out-of-state students to the state universities, as the universities have to allow in-state tuition rates to the out-of-state students if they make such an allowance to undocumented students. Thus, this provision acts as an indirect deterrent on the universities to offer in-state tuition rates to undocumented students.

In response to the federal regulation, many of the states have opted to make their interpretation of PRWORA and IIRIRA in such ways that they will be able to fix their criteria concerning tuition rates and state benefits.

There are certain specific problems that undocumented students encounter with the current laws. First, there is no legal way for undocumented students to make a self-petition for residency status, while they reside in the United States. Under certain Title 8 CFR provisions, an undocumented immigrant may petition for a new visa on the expiration of his/her visa provided the applicant to marry a lawful citizen. “However, undocumented students who enter the country illegally and without any paperwork are prohibited from applying for adjustment status regardless of their desire to become lawful citizens” (Turner).

According to the opponents of legalization measures, the only way for undocumented students to become legal immigrants is to return to their country of birth and reenter the U.S. under standard visa laws. However, the enormous waiting time accompanying the standard visa procedures makes it prohibitive for the students to wait indefinitely and put their lives on hold. Given the long waiting periods, many of the students decide to delay the petitioning for legalization unless they are deported.

There are several federal and state legislations, which prohibit the employment of illegal immigrants. This makes employment eligibility a major challenge for the undocumented students, who would like to reap the benefits of their higher education. Even though there is no guarantee that higher education will provide an opportunity to gain a permanent residency status, undocumented students pursue higher education to gain an additional asset in their struggle for legitimacy. In the case of deportation, they would still be better off as the qualification acquired by them are of value in most other countries to enable them to get decent employment.


Faced with the problems and ambiguities of the existing legislation, the Development, Relief, and Education for Alien Minors Act (DREAM Act) was proposed. The objective of this Act was to provide undocumented students with a legal pathway for earning a permanent and lawful residential status. The unique plight of undocumented students has been recognized in the form of the proposed legislation of the DREAM Act.

This Act is expected to enable the students to utilize their education from the status of legal residents of the country. When implemented as a piece of legislation this Act would provide for temporary residency of the students, enabling them to have easy and free access to higher education. The Act will enable undocumented students to acquire permanent resident status on getting an under-graduation degree or after serving a term in the military service.

Nevertheless, the unfavorable political climate and disagreements among the policymakers have kept the implementation of the DREAM Act pending since its initial introduction to Congress in the year 2001. It is the view of the opponents that such an Act would allow access to undeserving illegal immigrants to the limited resources of the country. The opponents also claim that there would be chain immigration and it represents a reward for unlawful behavior. However, the continued support from activists, educators, and students to the DREAM Act has made it one of the primary issues in all debates about immigration.

“The DREAM Act has two goals: resolve the question of whether states can grant undocumented students in-state tuition by repealing IIRIRA, and make higher education and employment more accessible by providing undocumented students an opportunity to obtain conditional residency upon graduation from high school and permanent residence late” (Turner).

Effect of DREAM Act on Undocumented Students

“A report by the Migration Policy Institute estimates that, if the DREAM Act were passed, 360,000 unauthorized high-school graduates age 18 to 24 would immediately become eligible for conditional legal status” (Immigration Policy Center). In the future, the Act is most likely to provide for the legalization of the residential status of an additional 715,000 students aged between 5 and 17. Policy analysts think that these students when offered the legal immigrant status will have not had any struggle in their lives.

They will continue their education in the schools, be educated, and will become involved in their communities. There will be a drastic improvement in the quality of their lives and they will be able to generate greater tax revenue for the system. There will be a higher level of motivation among these students to complete their education, which is an important element in a country having high dropout rates.

From a national perspective, allowing undocumented students to have access to higher education will increase the availability of a skilled workforce, which will increase the global competitiveness of the country. Further, enhanced education levels will have a significant impact on the long-term financial structure of the country. A report prepared by the Center for Immigration Studies concluded that the financial burdens of the states concerning both legal and illegal immigrants have a direct association with the education levels of such residents. The report cited a study of the National Research Council to provide the estimated net lifetime burden of $ 89,000 for an immigrant, who does not have a high school diploma.

The net lifetime burden created by the immigrant is reduced to $ 31,000 when the immigrant has high school education. On the other hand, an immigrant having education beyond high school education provides an estimated financial benefit of $ 105,000 to the government. “Increasing immigrant’s earning potential would provide long-term benefits through increased tax revenue and reinvestment in the economy” (Turner).

There are several voluntary organizations like ShebaUSA, the one in which I was doing an internship for a short period of five months for assisting new immigrants to get cultural orientation in the U.S. In my short tenure, I came across several undocumented students who have spent several days without jobs even after qualifying themselves in different disciplines, just because they did not possess the legal status. In many cases, the individuals did not have enough means to have a decent living and were living on help extended by voluntary organizations like ShebaUSA (ShebaUSA ORG).

At this point, they cannot leave the country and go back to their home country, when they have burnt all the bridges back home. The plight of this type of student needs sympathetic consideration when the policymakers consider any changes to the immigration policy of the country. After all, economists think that the immigrants only add to the value of the economy over the long term. DREAM Act is one of the measures such people have been expecting to change their plight and to offer them legal status so that they can pursue their career and life in their dreamland of the United States.

Impact of Immigration on New York Economy

As of 2007, 37 percent of the population of New York City comprised of foreign-born individuals. Without the presence of immigrants, the population of the city would have declined. Immigrants have been responsible for changing the face of the City. Since immigrants are a large part of the NY economy, the economic success of the City depends on getting the immigration equation right. “Cracking down” on immigrants is likely to give rise to unintended consequences with significant negative impacts (Fiscal Policy Institute). “English only” policies, racial profiling or a generally motivated anti-immigrant atmosphere will hurt the economy of NYC.

It is a fact that cities with the largest increase in immigrant workers have experienced the fastest growth since the year 1990 (Young). NY C is one of the examples of this phenomenon. Immigrants are a big reason for the ability of NYC to weather the recent economic crisis as compared to the country as a whole. According to Mayor Bloomberg of NYC has supported the implementation of the DREAM Act and has considered the potential DREAM Act beneficiaries as critical to the development of the City’s as well as for the U.S. national economy. According to Bloomberg

“But why shouldn’t our economy benefit from the skills these young people have learned right here in our public schools? They’ve played by the rules, worked hard, and shown they value education or military service. They are just the kind of immigrants we need to help solve our unemployment problem. Some of them will go on to create new small businesses and hire people. Others may discover the next life-saving drug or pioneer the next big invention” (Hoy).

I consider the views of Bloomberg to represent the true benefits of immigrants to the City and the country as a whole.

Views on the Effect of Immigration on the Economy

This part of the paper discusses different views on the effect of immigration both legal and illegal on the polity and economy of the United States.

Peri, Peri, and Sparber examined the impact of immigrants on the U.S. economy and these studies have made a systematic analysis of how the immigrants affect “total output, income per worker and employment in the short run and long run.” These studies have not found any significant effect of immigration on net job growth for U.S. born workers. The findings suggest that the U.S. economy can accommodate immigrants by generating more employment instead of denying jobs to domestic workers. Secondly, immigrants can contribute to increased productivity per worker in many states.

However, this effect can be experienced only in the medium term and long term, when the enterprises make suitable modifications in their capital bases. During a short period, when the enterprises have not modified their capital base, immigrants hurt the economy.

“Finally, immigration is associated with an increase in average hours per worker and a reduction in skills per worker as measured by the share of college-educated workers in a state. These two effects have opposite and roughly equal effects on labor productivity” (Peri).

Thus, economists who have focused on the effects of immigration on local labor markets have failed to establish a large influence of immigration on employment and wages of U.S.-born workers (Borjas: Card; Card and Lewis).

“In the heated debate over the impact of illegal immigration on the U.S. economy, Andrew Sum is one of those focusing on the negative,” says Isidore. “But even Sum would concede that the U.S. economy is larger, and growing faster, due to the supply of illegal immigrants, and that most Americans with higher job skills are better off for their presence” (Isidore). According to Sum, without the immigrants, the labor market of the country would suffer a decline of 3 to 4 percent.

“But Powell and many economists say that the economy would face significant problems if there was any significant cut in the amount of immigrant labor coming into the country” (Isidore). According to Bernard Baumohl, executive director of the Economic Outlook Group, illegal immigration allows the U.S. economy to grow more rapidly by protecting it against high inflation pressures.

I think that the immigration policy of the government must be realistic. The policymakers must acknowledge the reality of the global marketplace and the positive impact of immigration on the US economy. It has to be accepted that it is not going to be possible to stop the flow of immigrants into the country. The government must also accept the reality of the existing illegal immigrants. Sound immigration policy should acknowledge both the realities – the flow and the existing illegal immigrants. There must be realistic policies to bring the illegal immigrants above the ground by any means.

The problem relating to illegal immigration is considered a universal problem concerning industrially and economically advanced countries. It is the endeavor of all the countries to find suitable strategies, which will address the issue in its entirety. However, it is the problem of all these countries that there are no means available to precisely estimate the exact magnitude of the problem and arrives at the correct number of illegal immigrants. All strategies for controlling the problems or reducing the number of illegal immigrants are worked out based on a rough estimate of the number of illegal immigrants. This is one drawback, which the countries have to address for improving the effectiveness of the strategies.

The next issue is concerning the reduction of the existing illegal immigrants. While different strategies can be evolved for limiting the further influx of illegal immigrants, no country can identify a definite plan for reducing the number of illegal immigrants. The option to crack down on the existing illegal over-stayers is not considered feasible both from the ethical and cost angles and therefore it cannot be construed as an effective strategy for reducing the number of illegal immigrants.

The other option that may be considered is giving an amnesty for all the illegal immigrants. This option may be objected to on political grounds and it may not find favor with the citizens of the receiving country. Therefore, no ruling political party would dare to take a bold decision of giving amnesty to the existing illegal immigrants. The regularization schemes may provide temporary relief from the problems of illegal immigration but it cannot altogether put an end to the issue. Therefore, it appears that countries do not have any feasible solution for reducing the number of illegal immigrants.

One of the policy proposals may be that the employers may be made to check on the immigration status of the foreign workers being employed by them and report to the government about any anomaly in the details provided by the employee. Several state governments have also proposed to impose fines and other penalties on illegal immigrants. However, the effectiveness of these measures can be proved only over time.

Reforming Immigration Policy

The changes to U.S. immigration policy which are contemplated by Congress include slowing illegal immigration and allowing the “legal permanent immigration and temporary immigration of high-skilled workers” without any change. If the government proposes to pass a bill reforming the immigration policies, it is more likely to (i) tighten the enforcement against illegal immigrants, (ii) enhance the number of temporary work visas by expanding guest worker programs, and (iii) revise the provision relating to the petitioning by the illegal immigrants for getting legal status. This section analyzes how such reform measures will influence the U.S. economy.

One of the issues on which Congress agrees is that there should be stricter border enforcement, since with the current enforcement measures; approximately 400,000 illegal immigrants are crossing the borders of the United States every year. Preventing such a flow would require the deployment of a large volume of additional resources. The current outlay on border enforcement is already much more than the financial benefits arising from reducing the number of illegal immigrants.

The proposals also include provisions to redirect some of the allocations to electronic verification of employment eligibility. The reform proposals also include the reassigning of the border patrol personnel to other spots where their presence is required more to deter to halt the illegal immigrants. These reallocations might be effective in deterring further illegal immigrants from entering the country.

However, there may be a need to provide an additional budget allocation to strengthen the border security force. Presently the U.S. employers are not accountable for the immigration status of the people they are hiring as they have the excuse of plausible denying their knowledge at the time of the hearing. By implementing a system of electronic verification, it is possible to eliminate the plausible deniability making the employers accountable, by placing the burden on the employers to screen and find out the immigration status and employability of the prospective candidates. However, considering the number of resources to be employed, preventing illegal immigration is likely to cause a net drain on the economy of the U.S.

President Bush and few members of Congress advocated enlarging the number of temporary visas that could be issued to low-skilled immigrants. According to the Bush administration, this step would absorb illegal immigrants already existing in the country, apart from reducing the incentives for any future entry of illegal immigrants. The proposed increase in the number of temporary visas may appear to be large. It must however be remembered that guest workers are purely temporary.

Enlarging the annual number of temporary visas to the estimated 260,000 would NOT mean that 260,000 new PERMANENT workers would enter the economy each year. Guest worker programs provide for the return of the workers to their home countries after the expiry of a certain period. Let us assume that each guest worker was given a one-year visa eligible to be renewed up to two times. This makes the maximum length of stay of the guest workers to be three years.

Assuming that all the guest workers renew their visas (although this is highly unlikely with the experience of the current H-1 program) the long-run increase in the stock of foreign workers can be expected to be somewhere in the region of 780,000, which number is equal to the number of illegal immigrants entering the U.S. every two years. Therefore, the changes in the guest workers program proposed by Congress would be able to absorb only a few years’ worth of the illegal immigrants currently entering the country. In the absence of a substantial increase in resources to strengthen the enforcement, the guest worker program proposed by Congress cannot be expected to do much to reduce the long-term demand for illegal labor.

Apart from the magnitude of labor inflows, it is important to recognize that one of the attractive features of illegal immigrant workers for U.S. employers is the flexibility offered by illegal immigrant labor. Illegal immigrants were able to fill up jobs for which the supply of U.S. born workers was scarce. Illegal immigrants were large in numbers when the U.S. economy was booming and they moved between different employers and different regions of the country based on the demand for such kind of labor. Considering how the temporary work visas are defined, the process by which they will be awarded, new guest workers may not have the qualities that the illegal immigrant labor possesses.

Another issue to be considered concerning the guest worker program is the bureaucratic delays in the processing and award of visas. Under the current H-2 visa program in the U.S., employers have to apply for guest workers much before the time at which they would like to have them in place. The employers have to establish that there are no other U.S. workers are available to fill up the designated jobs.

They also need to demonstrate that they are paying the guest workers the prevailing wages Once the guest workers arrive in the U.S. guest workers have to stay with the employers who have sponsored them. This prohibits their chances of taking up new opportunities that may arise elsewhere in other organizations. “The planning, occupational limitations, and bureaucratic hurdles involved in hiring guest workers reduce their value to the U.S. economy relative to comparably skilled unauthorized workers.”

Immigration Policy Initiatives of President Obama Administration

According to President Barack Obama, the country cannot bear the burden of about 11 million people living in the country illegally and outside the immigration system. The President thinks that “over the past few years, the immigration debate has been portrayed as a false choice between amnesty and mass deportation. The real debate over immigration is whether we keep a broken system that undermines our economy and national security or whether we work together to fix it” (Organizing for America).

Obama has made it clear that there is the need to implement a comprehensive reform of the immigration system, which is grounded on the principles of accountability and responsibility. The responsibility has to be fixed on the federal government for securing borders and the businesses. The employers must be made accountable for their exploitation of illegal immigrants, who weaken the domestic workers. The responsibility is also on the people who live illegally to admit that they broke the law and face the consequences by way of paying the penalty and taxes. These people must get right with the law before they can earn their citizenship.

In its broadest, since the Obama administration favors legislation that would legalize the illegal immigrants by recognizing; they violated the law. I feel this is the right approach and the authorities and policymakers must consider the plight of illegal immigrants sympathetically and try to bring them into the system given the distinct advantages that result in the economy because of immigrant labor (New York Times).

Arizona Bill

The toughest bill on illegal immigration requiring police officers to detain without authorization people, who are subject to reasonable suspicion was passed in the State of Arizona in April 2010. “The Arizona law will require law enforcement officers, “when practicable,” to detain people who they reasonably suspect are in the country without authorization and to verify their status with federal officials unless doing so would hinder an investigation or emergency medical treatment” (Kevin).

The bill considers it as a “state crime” if an individual does not possess proof of his/her immigration status. The bill permits individuals to file suits against public bodies if there are circumstances for them to believe that there is no enforcement of immigration legislation.

The Arizona law provoked widespread criticisms at the state as well as across the nation. According to President Obama, the Arizona law threatened, “to undermine basic notions of fairness that we cherish as Americans, as well as the trust between police and our communities that is so crucial to keeping us safe.” Given the wide criticisms, changes were made to the law giving effect to “explicitly ban the police from racial profiling and allow officers to inquire about immigration status only of people they stop, detain or arrest in enforcing existing state law” (New York Times).


Laws governing immigration have been poorly formulated, therefore allowing a big percentage of illegal immigrants to cross the U.S border in search of greener pastures. Over the years, the U.S government has been very reluctant to enforcing laws that would ban illegal immigration, therefore increasing the number of illegal immigrants in the country. Looking at the immigration statistics figures, provided by the Centre for Immigration Studies in 2007, the total number of immigrants was estimated to be 12% of the total population. One-third of that percentage was illegal immigrants and most of them were from Latin America and Mexico.

Illegal immigration has been the greatest challenge for the U.S government for many years posing great challenges to the U.S immigration policies. To be able to deal with immigration problems, especially illegal immigration, Congress should adopt a comprehensive reform plan that would enhance strict laws on immigration. The objective of immigration policy must reflect “a political consensus that inevitably incorporates the conflicting social and economic interests of various demographic, socioeconomic, and ethnic groups as well as political and humanitarian concerns (Borjas, Heaven’s Door: Immigration Policy and the American Economy 5).”

Immigration problems will only be resolved efficiently through the legislative process of Congress. Therefore, to address issues on immigration, Congress should stop politicizing the whole matter and congressional representatives should have the interest of the people at heart, ignore their self-interest, and pass legislation that would enhance excellent immigration policies in the country. Reforms on immigration policies should be incorporated in the legislation process, resulting in the formation of efficient laws governing immigration.

I would therefore propose reforms in the following areas; secure borders, laws on illegal immigration, an improvement on the immigration system, and laws that would allow registration of illegal immigrants who have stayed in the country for more than 10 years. To solve the immigration problems, reforms must first be made to the United States immigration system. Since the 1986 extensive immigration reforms, the U.S government has never embarked on any other thorough reforms on immigration, despite the growing numbers of immigrants. As a result, there has been a breakdown in the immigration system, which needs urgent attention to control the growing numbers of both legal and illegal immigrants.

This is a result of the bureaucracy involved in securing a legal immigration permit, which necessitates immigrants to utilize other avenues therefore resulting in illegal immigration. To control illegal immigration, the bureaucracy involved needs to be reduced to allow easier and legal reunification of families (McCarthy).

Secondly, all incentives, which have been encouraging illegal immigration, such as employers who hire undocumented workers, should be eliminated. If laws were put in place, that would oversee the efficient recruitment of qualified and registered workers, most illegal immigration cases would be eliminated. Most employers would stop hiring undocumented immigrants, and as a result, illegal immigration would be discouraged.

Thirdly is to secure the U.S borders, to ensure that no undocumented immigrants will have undue access to the country. This would involve recruiting more law enforcement officers on all the borders, especially the U.S -Mexico border, which has the highest number of illegal immigrants. It would also involve improving the available border technology, to improve screening and verification of immigrants. The personnel involved in the registration and examination of immigrants should also be increased, to improve the efficiency of work done on the borders. All of these processes will discourage illegal immigrations (McCarthy).

If the government would work on ways to improve the economic relationship between Mexico and the United States, it would help reduce the number of illegal immigrants crossing the Mexico border in search of jobs in the United States. As President Obama suggested in his Campaign manifesto, it would help a lot to collaborate with Mexico economically to boost their economy so that many of its citizens find jobs in their own country rather than crossing the U.S illegally (Macfadyen). Lastly, Congress should act on reforms that would recognize people who have stayed in the United States for more than 10 years to become legal citizens. Though it may take some time and a lot of political sacrifices, it would benefit the country to embark on serious immigration reforms.

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