Monday, April 24, 2006

Economic Implications

I have also heard it said that the high number of Mexican immigrants in Texas is responsible for the low prices and low cost of living that we enjoy, and that this explains why prices are so much higher on the east coast of USA.

I'm not so sure about that. I used to live in Missouri where the cost of living was even lower. Immigrants were few and far between. "In 2000, almost three-fourths (73.6 percent) of Mexicans living in the United States had arrived in the country in just the last 20 years." (Source). If I'm not mistaken, the high cost of living on the east coast started more than 20 years ago. The argument that the East vs. West America cost-of-living gap is due to Mexican immigrants doesn't hold water! [A far more detailed study of the effect on prices and wages can be found here.]

Unlike the America of the early 1800s, our country is not uncharted territory. America is arguably the most developed country in all the world. Manufacturing and many other blue-collar jobs have been going overseas. We don't need huge masses of uneducated, unskilled workers coming in. What will they do? With our minimum wage laws in effect, it'll still be cheaper for companies to continue sending their manufacturing overseas, so what we'll be seeing is a dwindling supply of blue-collar jobs and a rapidly expanding blue-collar work force. How will they survive?

The answer to that question is partly (not entirely) that the rest of us will partially subsidize their life with welfare programs and state services. Maybe this sounds like the same arguments that were used in older times, but consider a few things.

(Most of these statistics were sourced from a Report by the Dallas FED Bank and the Center for Immigration Studies)

  • Even after welfare reform, an estimated 34 percent of households headed by legal Mexican immigrants and 25 percent headed by illegal Mexican immigrants used at least one major welfare program, in contrast to 15 percent of native households.
  • The average head of household illegal alien costs taxpayers $2,700.00 in welfare money. With 15 to 20 million illegal aliens in the USA, that figures exceeds $20 billion of our tax dollars.
  • Mexican immigrants who have lived in the United States for more than 20 years, almost all of whom are legal residents, still have double the welfare use rate of natives.
  • Almost two-thirds of adult Mexican immigrants have not completed high school, compared to fewer than one in ten natives.
  • Mexican immigrants now account for 22 percent of all high school dropouts in the American labor force.
  • only 4.4 percent of Mexican immigrants have a college or graduate degree.
  • A Supreme Court ruling stated that Texas must educate all of its children regardless of their immigration status. I wonder who is paying for this?
This is hardly surprising. If they come from an impoverished background with no education and no skills, they aren't going to find a huge number of jobs waiting for them in a developed country like America. And how much is this a factor for us?
  • 2001–03, immigration accounted for 44.5 percent of Texas’ population increase. I would say this is very significant.
  • In 1999, the average federal income tax payment by households headed by Mexican immigrants was $2,156, less than one third of the $7,255 average tax contribution made by native households.
  • $56 billion in cash is sent to their home countries each year by illegal migrants. That’s after their children received free education, free lunches and free medical care paid for by the American taxpayer.
  • California with over three million illegals paid $79 million for their health care last year, and four of their major LA hospitals bankrupted and shut their doors in 2004. Texas with 1.5 million illegal aliens paid $74 million in hospital care.

In summary, the mass migration of uneducated, unskilled workers from Mexico is going to create a very real and significant drain on the American economy.

I would also argue that legalizing their employment with a "guest worker program" is not going to miraculously create millions of new jobs, therefore it will not solve the problem. Rather, I believe it will enormously encourage and accelerate the mass migration of impoverished Mexicans into USA, making the problem substantially worse.

I also believe the "vision" of Congress and the President behind this "guest worker program" has a lot more to do with winning over Hispanic voters than it does with the needs of our country. Democrats and Republican are always trying to gain power by targeting demographics in the electorate. This is one more scheme that will be at great expense to our nation.


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