http://www.npr.org/templates/story/s...toryId=5312900
Nearly 12 million illegal immigrants are estimated to be living in the United States. The vast majority work in low-skill, low-wage jobs. More than half work in construction, manufacturing or leisure and hospitality.
Advocates on both sides of the immigration debate predict dramatic change if illegal immigration is drastically curtailed. Supporters of a crackdown argue that the U.S. economy would benefit if illegal immigrants were to leave, because U.S. employers would be forced to raise wages to attract American workers. Critics of this approach say the loss of illegal immigrants would stall the U.S. economy, saying undocumented workers do many jobs few native-born Americans will do. NPR business correspondent Adam Davidson explores the issue.
(i would like to point out that increasing wages would drastically hurt the economy because companies would not be able to compete with forgien companies. This would cause further outsourcing. If the government made more tariffs to make companies better able to compete, the prices of many products would increase.)
Q: How do illegal immigrants affect the overall U.S. economy?
Illegal immigration has both negative and positive impacts on different parts of the economy. As noted above, wages for low-skilled workers go down. But that means the rest of America benefits by paying lower prices for things like restaurant meals, agricultural produce and construction. Another negative impact is on government expenditures. Since undocumented workers generally don't pay income taxes but do use schools and other government services, they are seen as a drain on government spending.
There are places in the United States where illegal immigration has big effects (both positive and negative). But economists generally believe that when averaged over the whole economy, the effect is a small net positive. Harvard's George Borjas says the average American's wealth is increased by less than 1 percent because of illegal immigration.
The economic impact of illegal immigration is far smaller than other trends in the economy, such as the increasing use of automation in manufacturing or the growth in global trade. Those two factors have a much bigger impact on wages, prices and the health of the U.S. economy.