Illegal immigrants ruining the US economy...?

Question

The main issue I have is that illegal immigrants aren't keeping their money in the US. The money they receive from working is going back home to their families, not staying in the US.

What do you guys think about this?

Answer 1

While you may be correct in principle, the size of this effect is very small. Let's say there are 15 million illegal immigrants in the U.S., and each is working and sending to his/her family $300/month. So the total amount of capital flight from the U.S. it causes would be about $54 billion a year, or about 7% of the U.S. trade deficit, or about 0.4% of the U.S. GDP. (Interestingly, the estimate obtained above is fairly close to the U.S.' net private remittances, which in 2006 amounted to $56 billion.)

Moreover, while illegal immigrants may create a small capital outflow from the U.S., the rest of the world keeps bringing money in. In 2006, Americans invested about $1.1 trillion abroad, while foreigners invested about $1.9 trillion in the U.S., so the U.S. has received about $800 billion in net capital inflow...

Answer 2

Many of them pay taxes, and the low incomes they receive result in far lower costs for food, housing, and manufactured goods, which result in much lower costs for US consumers.

Despite the low wages, many do send significant amounts of money home to Mexico. Much of this money is then spent on goods made in the USA, which is (obviously) a tremendous benefit for US firms, their employees, and the US government (in terms of tax revenue).

So - low cost labor, increasing US exports, goods and services produced in the US - is that ruining our economy?

Our employment levels are still quite high - unemployment in the US is less than 5%, an exceptionally low rate, historically; inflation is moderate to low, despite high pressure on food and fuel margins; college enrollment is at an all-time high; productivity is increasing; there are more millionaires in the US than ever before; the stock market has been in a "bull" market for 17 of the last twenty years - is our economy in bad shape?

Answer 3

I understand and appreciate your concerns but it isn't like they are giving the money to folks that don't need it. Many of the ii's work at sub standard wages, live a lifestyle substandard to most of us and do so willingly to help their loved ones. What I disapprove of are the mega companies that take from everyone to give to their board of directors. They pay poor wages to the workers and overcharge the consumer. All so they can bank or piss away billions instead of millions of dollars.

Answer 4

It's an unusual problem because many business owners can't afford to pay higher wages without raising prices. Higher prices in the stores or lower prices but much of the money leaving the country. They are both evils, which one is worse?

Answer 5

Even if they DID keep their money in the country it would still weaken the economy. But not as much.

Answer 6

Yeah, and what are we to do about it? Summon the power of angry Yahoo! Answers users?