The American Border Security Challenge

As illegal immigrants stream across the U.S. borders at a rate of 3 million a year, they provide both benefits and burdens for the economy.

As a recent issue of the Herman Trend Report¹ reminds us, “A wide range of American employers use Hispanic workers as full-time, long-term employees, and as transient and temporary workers. Employers have found that these employees are most often dedicated and hard working.

“Undocumented Mexican workers in the United States are a primary source of day labor for landscapers, construction and home remodeling companies, cleaning contractors, and similar employers whose need for less-skilled labor may vary from day to day.”

According to a recent study by Robert Justich and Betty Ng of Bear Stearns, undocumented immigrants hold 12 million to 15 million American jobs, or 8 percent of the U.S. workforce. The pay is typically economical for the employer, but substantially more than the workers could make if they had remained back home in Mexico.

The study also estimates that between 4 million and 6 million of those jobs involve paying them in cash, usually a reasonable wage. This practice is illegal, of course, but enforcement authorities simply do not have enough staff to adequately police this shadowy segment of the economy. With low overhead, businesses employing this type of labor have a competitive advantage

Barron’s² magazine estimates the GDP output of this underground economy at $970 billion. And it argues that if taxes were collected on this output, the government could wipe out the budget deficit and create a budget surplus.

Moreover, for U.S. citizens, as well as the federal and local governments, illegal immigrants bring a need for social services such as healthcare, education, food stamps, and police; an increase in the crime rate; and for unskilled American workers, competition for jobs at the lowest depths of the labor pool.

Justich and Ng contend that, “The social expenses of healthcare, retirement funding, education, and law enforcement are potentially accruing at $30 billion per year.”

Finally, the presence of undocumented aliens in the United States and their ability to move at will across borders represents a “national security risk” in this era of terrorism.

In recent months, this has prompted the governors of New Mexico and Arizona to declare a state of emergency along their borders with Mexico. The Governor of California expressed agreement with the gravity of the situation, but has stopped short of such a declaration.