Friday, March 31, 2006

The Economics of Illegal Immigration

I believe in the free market and that competition lowers prices. Illegal immigrants that drive down labor wages are great for those industries that use them. In turn those industries can offer lower prices to their customers. But as a believer of Capitalism I still oppose illegal immigration because of the subsidies generated.

Normaly, a subsidy is a direct government bail out. Like after 9-11 the money given to the airlines to keep them in business, or the billions of dollars given to the American agriculture industry. With Illegal immigration the subsidies are given in the form of government services that outweigh the economic benefit of cheap labor.

It costs the United States $10 billion a year to host illegal immigrants. In 2002 households headed by illegal immigrants used $26.3 billion in government services and paid only $16 billion in taxes.

The amnesty to be given will not eleviate this problem. The Center for Immigration Studies (CIS) in 2004 gave a report, based on U.S. census data, that if amnesty was given to the current illegal immigrant population the annual cost would skyrocket another $20 billion because of the additional government services they would be eligble for.

Also as a Capitalist I must oppose illegal immigration because the rule of law is being undermined. The amnesty program being put forward will only encourage more illegal immigration in hopes of yet another future amnesty.

When our laws are flagrently disobeyed by employers that hire illegals the rule of law is undermined. The central authority that keeps our economic activities fair and open is ignored, hurting our economy.

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