How Illegal Immigration Affects the Economy

The effects of illegal immigration on the economy are both positive and negative. Whether the bad overshadows the good or vice versa depends much on ones position in the economy. For employers who enjoy cheap labor provided by the illegal immigrants, the effects of illegal migrants occupancy can only be positive. The professional residents who believe that the illegal immigrant's cheap labor has cost them well paying jobs do not however hold the same sentiments.

While some government representatives are of the conviction that the country's economy receive a major boost from the taxes and by extension the gross domestic product, others believe that their contribution is far less that the government spends in providing basic infrastructural services to them. One thing that stands out and may be the reason why the government has never taken a stern action against illegal immigrants is the fact that the increased workforce means more production output. The increased population also translates to more spending by the different consumer groups on rent, food, education, healthcare among other products and services that can be either necessities or luxuries.

Illegal immigration also affects the gross domestic product upwards. Over the years, there has been a consistent immigrant boost of the GDP by $10 billion annually, which measured against the size of the economy, is quite significant. The effect of unlawful immigration on wages is extremely contentious among groups who think that the immigrants drive down remuneration packages. However, others believe that the immigrants encourage more investors to set up businesses, which ultimately, capitalize on the cheap labor, which means that their indirect contribution to the economy in such cases is very encouraging. The school dropouts however may hold a different opinion especially considering that unskilled labor is the most affected sector by the illegal immigration issues. Residents feel the most pressure in this sector.

In the free market economy, the illegal immigrants also affect prices on goods and services. Before setting the price however, manufactures consider things such as demand supply, affordability and the consumer's purchasing power. Employers who pay little wages to the immigrants, yet produce goods targeting the same people would have to adjust their prices to the level affordable by the majority consumers within that income range.

The greatest negative effect of the undocumented immigrants in the economy is the fact that they do not pay income tax, yet, they or their dependents still use basic facilities provided by the government. This drains the economy as the government is forced to increase its expenditure. However, when the effects of such immigrations are averaged, does the negative far out weights the positive or vise versa? The country wealth increases by less than one percent due to the immigration trends. Unlawful immigration has far less effect on the economy compared to industries such as automation and manufacturing. Overall, the unlawful immigrants have the same effect that most others have, the positive and the negative and whether one overshadows the other, is a matter of time and policies set by the government.