Everyone knows the economy needs illegal alien labor, except economists. They think its contribution is fairly trivial.
Linda Chavez, for example, writes: "The American economy depends on these workers, who, along with legal immigrants, contributed significantly to the economic boom of the 1990s."
Harry P. Pachon, President of the Tomás Rivera Policy Institute, a Latino think-tank, claims in a New York Times article headed "Imagining Life Without Illegal Immigrants" [January 11, 2004, By Dean E. Murphy] that if illegal aliens were removed "There would be a ripple effect across the economy."[Email Pachon.]
Bunk. The American economy is extremely large and complex, running at $11 trillion per year. Thousands of factors influence U.S. economic growth - most of them far more critical than illegal immigration.
Consider these facts:
So illegals may produce about one per cent of GDP. But even this estimate has to be qualified. It doesn't account for the wages lost by undercut and displaced native-born workers. And it doesn't account for the substantial transfer payments from America taxpayers to illegals—education for their children (and welfare for their native-born children), emergency room care etc.
If the supply of illegal immigrants were to dry up, there would certainly be labor shortages in some sectors—fast food, cleaning services, seasonal agriculture, and lawn care. Employers in these sectors would scream. They lobby their Congressperson and gullible journalists. But ultimately, they would have to respond by offering higher wages and benefits to the remaining pool of unskilled workers. At the same time, they would look for ways to substitute new technology for labor.
The end result: maybe an imperceptible hiccup in aggregate GDP—coupled with a rise in GDP per U.S. worker. Most Americans would be better off.
[Number fans click here for tables.]