 Undocumented
immigrants contribute $970bn to U.S. economy
 DEC 3: Undocumented immigrants contribute $970
billion to the U.S. economy every year, may
number as high as 20 million and the government may be
foregoing $35 billion a year in income tax collections, says
an Associated Press news report, quoting New York based
investment banking firm Bear
Stearns and Barron's financial newspaper
estimates.
According to Barron's financial weekly newspaper, the size of the shadow
(underground) economy is estimated to be at about $970 billion, or nearly 9 percent of the
goods and services produced by the real economy.
Quoting Bob Justich, senior managing director for Bear
Stearns, AP report there are way more undocumented
immigrants in the country than the official estimates. The
government puts the number at around 8.5 million; But it is
more than double that -- closer to 20 million, mainly
because undocumented immigrants don't bother to respond to
Census Bureau forms" says Justich.
Bob has spent the last two years
meeting with immigrants, business owners, police and real
estate agents to determine the size of the underground
economy and its effect on the real economy.
And, according to him, more and more of the undocumented
immigrants, are spreading beyond traditional immigrant
states like California and Texas. "They are spreading
through the West and South, where there is tremendous
growth, affordable housing and family networks. They are
increasingly found in states like Utah, Washington,
Pennsylvania, Tennessee, Georgia and the Dakotas. And
they're heading to suburbia. And they are gaining a larger
share of the job market."For
years, the immigrant population mainly stuck to six
destination states -- California, Texas, New York, Florida,
Illinois and New Jersey. But in the past five years, the
most rapid growth has taken place in states once of little
interest to immigrants -- Tennessee, Mississippi, the
Dakotas, Ohio and Pennsylvania, said Bill Frey, demographer
at the Brookings Institution in Washington, D.C.
They are following rapid growth, going where the jobs are
and where the cost of living is low. Suburbs now attract
more new immigrants than cities.
In the West, the immigrant population in the Mountain states
is growing faster than the rest of the region. In the South,
the interior Southeast has higher immigrant growth than the
more glamorous coastal states, Frey noted.
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Underground economy at a
glance |
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UNDOCUMENTED WORKERS:
The U.S. government estimates there are around
8.5 million undocumented immigrants in the
country, though an expert at Bear Stearns puts
the number as high as 20 million, with 12
million to 15 million holding jobs.
WHERE THEY LIVE: Traditionally, the
immigrant population was mainly in six
destination states -- California, Texas, New
York, Florida, Illinois and New Jersey.
Recently, they have been following rapid growth
and jobs and heading to states that once held no
attraction: Tennessee, Mississippi, the Dakotas,
Ohio and Pennsylvania. Suburbs now attract more
new immigrants than cities.
WHERE THEY WORK: The service sector
employs the most illegal immigrants with 33
percent, followed by the construction industry,
production and food processing and farming.
HOW MUCH DO THEY MAKE: The average family
income of undocumented immigrants is $27,400,
more than 40 percent below the legal immigrant
or native family income of about $47,700.
WHAT'S BEING DONE ABOUT IT: In the wake
of the 2001 terror attacks, the government
focuses on illegal workers at national security
sites. Congress is looking at a complete
overhaul of the immigration system, with several
proposals being considered. The White House is
expected to soon propose a guest worker program.
Info sources: Bear Stearns, Brookings
Institution, Pew Hispanic Center, government
statistics, Associated Press files |
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These undocumented immigrants hold about 12 million to 15 million
jobs in the United States, or about 8 percent, according to
Bear Stearn's Justich. That may seem a small percentage, but the pressure
of its presence helps keep wages for unskilled jobs low, he
says. And
many of the jobs are off the books, meaning the government
may be foregoing $35 billion a year in income tax
collections, he adds.
That figure, however, is partially offset by employers
withholding taxes for undocumented workers who never file
returns or seek benefits, said Marti Dinerstein, a Center
for Immigration Studies fellow.
Justich projects undocumented immigrants will send $19
billion to $20 billion home to Mexico this year, remittances
by others from South Asia, Asia, notwithstanding.
According to the Pew Hispanic Center, the service sector
employs the most undocumented immigrants with 33 percent,
followed by the construction industry, production and food
processing and farming.
The hotel and restaurant businesses and construction are the
big employers. More than 1 of every 4 drywall installers and
landscape workers are undocumented, the center estimates.
About 1 in 5 workers in meat and poultry packing are
undocumented, as are about 1 in 6 in the leisure and
hospitality industry or construction.
But undocumented immigrants make far less than the rest of the
population. Their average family income of $27,400 is more
than 40 percent below the legal immigrant or native family
income of about $47,700, the Pew Hispanic Center found.
That's because undocumented immigrants work cheap and don't
complain; those that do complain are easily replaced. They
have little bargaining power, and employers take advantage
of that.
"We're seeing the wage bases in these industries erode
simply because there is a glut of low-skill labor flooding
the low-skill market," said John Keeley, spokesman for the
Center for Immigration Studies. "The business community has
become addicted to it. It's a way for them to keep their
business costs down."
"In the sidewalks around cities, contractors and landscaping
companies pull up constantly. No one cares that men are
taken to job sites where they will be paid under the table
for a day's work, usually around $8 an hour. The practice is
widely known and largely unchecked."
If all the Undocumented workers in America packed up and
left the country tomorrow, business wouldn't come to a halt,
but experts believe it would be dramatically affected, says
the news report.
With cheap labor no longer available, prices would rise --
for food, child care, household maintenance. Businesses
would have to pay workers more, and the demand for workers
in some trades would drop. Some smaller providers would be
forced to shut down, Justich of Bear Stearns told AP.
"It's a problem for people who aren't underground," Justich
said. "How do they compete? Some businesses suffer. There'd
be a void because this is a trend that has been growing over
10 to 15 years and to abruptly disengage this segment of the
work force would have an impact."
This summer, farmers in Michigan and Oregon complained they
didn't have enough fruit pickers because of crackdowns on
border crossings and raids of farms and communities, though
the government said it wasn't doing any sweeps.
Congress in the meanwhile is looking at a complete overhaul of the
immigration system, with several bills proposed to address
immigration reform. One bill would provide temporary legal
status for farm workers who can prove they worked at least
100 days in agriculture since July 2003.
President Bush is campaigning to allow undocumented
immigrants who came to the United States before February
2004 to qualify for guest-worker (Temporary workers) visas. Those who arrived
later would be deported.
But a guest worker program guarantees wages will never go
up, and there is no way American citizens can compete with
guest workers, said Vernon Brigg,
a Cornell University labor economics professor.
"The toleration of illegal immigration
undermines all of our labor."
"They will take over the jobs. The guest workers are tied to
the industry. They are tied to the employer," he added.
Bush last year introduced a plan that would allow
undocumented workers to get three-year work visas. They
could extend that for another three years, but would then
have to return to their home countries for a year to apply
for a new work permit, something John Gay, co-chairman of
the Essential Worker Immigration Coalition, considers
absurd.
"It doesn't really serve a purpose," Gay said. "You can't
take 10 million people out of the economy for a year. Why
would you want to do that?"
Instead of all the new reform ideas, Briggs and other
experts don't understand why the government doesn't just
enforce the existing immigration laws.
Maria-Cinta Lowe, executive director of the Hispanic Center
of Greater Danbury, Connecticut says "Immigration is a huge
issue, even President Bush doesn't know what he wants to do
about it."
While farmers and allied
business groups lobby for Bush's guest-worker program to
regulate the millions of undocumented workers already here
or wanting to come, hard-line restrictionists push for law
enforcement solutions to illegal immigration. That dynamic
is dividing Republicans.
There are several major reform proposals out there -
differing in details, but one thing all sides seem to
agree on is that the situation urgently needs attention.
GOP Senators John Cornyn of Texas and Jon Kyl of Arizona
propose letting immigrant workers enter the country for two
years, followed by a one-year break. Workers could repeat
that pattern two more times, but then they have to return
home.The result, immigration policy analysts agree: Don't
bet Congress will pass comprehensive reform proposals.
With congressional elections in 2006 and a politically
weakened president, even a promise to debate guest-worker
proposals early next year in the Senate might not amount to
much, some say.
"The president's political capital is so low right now.
Is he going to use what little he has left on immigration
reform?" asked Jaime Regalado, director of the Pat Brown
Institute of Public Affairs at California State University,
Los Angeles. "Maybe, but I don't think so."
Meanwhile, Israel Gonzalez will rise
before dawn every day and head to the sidewalks to wait for
a job. There, alongside other men, he will watch for pickup
trucks that slow down, hoping today he will be chosen for
work.
It's a morning ritual played out
regularly in cities and towns as day laborers, mostly
illegal immigrants, scramble for work in a country that
comfortably accepts their work while disavowing their right
to be here.
A trillion ($970 billion actually) dollar question is
waiting to be resolved at a congressional hearing next year
- and hopefully a hefty $35billion greenbacks every year for
a government blue or red, doesn't matter. |
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