Economic costs of legal and illegal immigration

I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country... Corporations have been enthroned, an era of corruption in high places will follow, and the money-power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic is destroyed."
Abraham Lincoln 1809 - 1865

Why borders can not be open

"Business interests however are short-term. Easy immediate access to labour will always be preferred to the costs of training and capital investment for the longer term. In the nature of economic cycles, yesterday's essential labour can often become, as the defunct factories and mills of Europe have shown, today's unemployed. Employers who demanded immigrant labour are not held to account for this or required to contribute to subsequent costs of their unemployed former workers. Few things are more permanent that temporary worker from a poor country. If business were made responsible for the lifetime costs of their migrant labour in the same way as they must now deal with the lifetime environmental costs of their products, perhaps enthusiasm for labour migration might be moderated and make way for longer-term investment in capital-intensive restructuring."7

A critique of economics

As noted in the sections below, the economic costs of illegal immigration are staggering. Yet economists - and the mainstream media - tend to downplay and often completely ignore this impact. Western economics is based upon the premise that "growth is good" and that economic stagnation and particularly negative growth are extremely undesirable. With mass immigration driving US population to double within the lifetimes of children born today, one must question whether the economic paradigm of unending physical growth is truly in the best interests of America - and of Americans, no matter what their race, creed, or color.

In the following video, Robert Johnson, Director of the Institute for New Economic Thinking, New York, explains some of the pitfalls of the art of economics:

In the video, Johnson states:

When the people become anxious they want the expert to tell them what's going to happen. And they feel good when their anxiety is relieved because they think they understand the future...

Economists are very much accused of "only seeing the economy through the eyes of the model" as opposed to seeing the economy and building a model as a map of what reality is...

"At the core economics is about politics and about power. And the question for the economists is: Whose power are you going to serve as an expert? Are you going to serve the public good of society or are you going to serve private consulting pay trends?"

Economic and social costs of illegal immigration

The economic and social consequences of illegal immigration across the 1,940 mile long America-Mexico border are staggering.

An average of 10,000 illegal aliens cross the border every day - over 3 million per year. A third will be caught and many of them immediately will try again. About half of those remaining will become permanent U.S. residents (3,500 per day).

Currently there are an estimated 9 to 11 million illegals in the U.S., double the 1994 level. A quarter-million illegal aliens from the Middle-east currently live in the U.S, and a growing number are entering by crossing the Mexican border.

FAIR research suggests that "between 40 and 50 percent of wage-loss among low-skilled Americans is due to the immigration of low-skilled workers. Some native workers lose not just wages but their jobs through immigrant competition. An estimated 1,880,000 American workers are displaced from their jobs every year by immigration; the cost for providing welfare and assistance to these Americans is over $15 billion a year." The National Research Council, part of the National Academy of Sciences, found in 1997 that the average immigrant without a high school education imposes a net fiscal burden on public coffers of $89,000 during the course of his or her lifetime. The average immigrant with only a high school education creates a lifetime fiscal burden of $31,000.8

80% of cocaine and 50% of heroin in the U.S. is smuggled across the border by Mexican nationals. Drug cartels spend a half-billion dollars per year bribing Mexico's corrupt generals and police officials, and armed confrontations between the Mexican army and U.S. Border Patrol agents are a real threat. There have been 118 documented incursions by the Mexican military over the last five years.

Illegal aliens have cost billions of taxpayer-funded dollars for medical services. Dozens of hospitals in Texas, New Mexico Arizona, and California, have been forced to close or face bankruptcy because of federally-mandated programs requiring free emergency room services to illegal aliens. Taxpayers pay half-a-billion dollars per year incarcerating illegal alien criminals.

Immigration is a net drain on the economy; corporate interests reap the benefits of cheap labor, while taxpayers pay the infrastructural cost. FAIR research shows "the net annual cost of immigration has been estimated at between $67 and $87 billion a year. The National Academy of Sciences found that the net fiscal drain on American taxpayers is between $166 and $226 a year per native household. Even studies claiming some modest overall gain for the economy from immigration ($1 to $10 billion a year) have found that it is outweighed by the fiscal cost ($15 to $20 billion a year) to native taxpayers."

"In the NAFTA era, a staggering 87 percent of Mexico's imports go to the United States, while Mexicans living in the United States send home more than $8 billion annually. Fox has said he considers his constituency to include the 22 million to 24 million Mexicans and Mexican-Americans in the United States. Mexican candidates now make campaign stops in U.S. cities like Los Angeles, Phoenix and Fresno, Calif." (Mexico's muddle, Ruben Navarrette Jr., March 26, 2003)

For more information, see The Washington Times article and series Chaos along the border, October 6, 2002, the FAIR reports Immigration and the Economy, Immigration Lowers Wages for American Workers.


$60 billion dollars are earned by illegal aliens in the U.S. each year. One of Mexico's largest revenue streams (after exports and oil sales) consists of money sent home by legal immigrants and illegal aliens working in the U.S. Economists say this will help Mexico reduce its $17.8 billion defecit and may bolster the peso. $10 billion dollars (as of 2003) are sent back to Mexico annually, according to the Pew Hispanic Center, reported in an Associated Press article, up $800 million from the previous year. ($9 billion dollars were previously sent back annually, according to a September 25, 2002 NPR report). That figure equals what Mexico earns annually from tourism. This is a massive transfer of wealth from America - essentially from America's displaced working poor - to Mexico.

A May 28, 2004 study by Bendixen & Associates6 found that legal and illegal immigrants send a total of $30 billion to their home countries on an annual basis. Mexico receives $13.3 billion a year. The largest amount in remittances ($9.6 billion) is sent from California, followed by New York ($3.6 billion), Texas ($3.2 billion) and Florida ($2.5 billion). Of those surveyed by the study, 24% were Latin American-born U.S. citizens, 39% were legal residents, and 32% were illegal aliens. Sixty-one per cent of those surveyed send remittances overseas at least once a month. A typical remittance is between $150 and $250.

(See the article by Fred Elbel: Remittances - a Massive Transfer of Wealth. Also see this state-by-state map of remittances.)

Education costs

The total K-12 school expenditure for illegal immigrants costs the states $7.4 billion annually—enough to buy a computer for every junior high student nationwide.9

For more information, see CAIR's education section.

'Anchor baby' Hospital costs

The 14th Amendment to the U.S. Constitution reads in part, "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and the State wherein they reside."

It's estimated there may be over 300,000 anchor babies born each year in the U.S. Thus, illegal alien mothers now add more to U.S. population each year than immigration from all sources in an average year before 1965. These babies are called anchor babies because they act as an anchor that pulls the illegal alien mother and a host of other relatives into permanent U.S. residency.

FAIR estimates "there are currently between 287,000 and 363,000 children born to illegal aliens each year. This figure is based on the crude birth rate of the total foreign-born population (33 births per 1000) and the size of the illegal alien population (between 8.7 and 11 million). In 1994, California paid for 74,987 deliveries to illegal alien mothers, at a total cost of $215.2 million (an average of $2,842 per delivery). Illegal alien mothers accounted for 36 percent of all Medi-Cal funded births in California that year."

FAIR research shows that "the Urban Institute estimates that the cost of educating illegal alien children in the nation's seven states with the highest concentration of illegal aliens was $3.1 billion in 1993 (which, with the growth of their population to 1.3 million, would be more like $5 billion in 2000). This estimate does not take into account the additional costs of bilingual education or other special educational needs."

In a recent year in Colorado, the state's emergency Medicaid program paid an estimated $30 million in hospital and physician delivery costs for about 6,000 illegal immigrant mothers - average of $5,000 per baby. Those 6,000 births to illegal aliens represent 40% of the births paid for by Medicaid in Colorado. Those 6,000 babies immediately became U.S. citizens and qualified for full Medicaid services, with a cost yet to be tabulated.

An illegal alien mother only has to say she is "undocumented" in order to receive immediate - and free - medical care. Denver Health is now proposing that taxpayers approve a bond issue to pay for a bigger obstetrics unit. The present unit was built for 1,600 births a year, yet last year alone it handled 3,500.

For more information, see the Fourteenth Amendment and Birthright Citizenship website. Also see the Denver Post article Track 'anchor babies', by Al Knight, September 11, 2002, the article Pretending Immigration Isn't an Issue, by Phyllis Schafly, September, 2002, and the FAIR article Anchor Babies: Is U.S. Citizenship Owed to Illegal Aliens' Children?

Medical care to illegal aliens

"Mexican ambulance drivers are driving their hospital patients who can't pay for medical care in Mexico, to facilities in the United States. They know that the federal Emergency Medical Act mandates that U.S. hospitals with emergency-room services must treat anyone who requires care, including illegal aliens.

Medical service for Americans in affected communities is being severely damaged as hospitals absorb more than $200 million in unreimbursed costs. Some emergency rooms have shut down because they cannot afford to stay open. Local tax-paying Americans are either denied medical care or have to wait in long lines for service as the illegals flood the facilities. In California, the losses are calculated to be about $79 million, with $74 million in Texas, $31 million in Arizona, and $6 million in New Mexico."1

These costs are staggering. The Cochise County, Arizona Health Department spends as much as 30 percent of its annual $9 million budget on illegal aliens.3 The Copper Queen Hospital in Bisbee, Arizona, has spent $200,000 in uncompensated services out of a net operating budget of $300,000.3 The University Medical Center in Tucson may lose as much as $10 million and the Good Samaritan Regional Medical Center, also in Tucson, has lost $1 million in the first quarter of fiscal 2002.3

As noted above, in a recent year in Colorado, the state's emergency Medicaid program paid an estimated $30 million in hospital and physician delivery costs for about 6,000 illegal immigrant mothers - average of $5,000 per baby.

The Gwinnett, Georgia, Hospital System expects has established a $34 million reserve to cover its anticipated outlay for illegal aliens in 2003. Los Angeles Times columnist Ronald Brownstein wrote in his December 30, 2003 column that the 'Health-Care Storm Brewing in California Threatens to Swamp U.S... the impending Medicaid disaster is not a problem the states can handle alone; their budget shortfalls are too big.'2

"The General Accounting Office traveled to southern Arizona to study the impact of illegal immigrants on Arizona and other border state hospitals. In 2002, three hospitals located in Cochise County funded more than $1 million in uncompensated health care costs... The Florida Hospital Association surveyed 28 hospitals and found that health care for illegal aliens totaled at least $40 million in 2002."2

Illegal aliens cost $10 billion in 2002

A Center for Immigration Studies report was released in August, 2004 that shows that illegal immigration cost $10 billion in 2002.4 Based on Census Bureau data, the study estimates that households headed by illegal aliens used $10 billion more in government services than they paid in taxes in 2002. These figures are only for the federal government; costs at the state and local level are also likely to be significant. The study also finds that if illegals were given amnesty, the fiscal deficit at the federal level would grow to nearly $29 billion. Among the findings:

* Illegal alien households are estimated to use $2,700 a year more in services than they pay in taxes, creating a total fiscal burden of nearly $10.4 billion on the federal budget in 2002.

* Among the largest federal costs: Medicaid ($2.5 billion); treatment for the uninsured ($2.2 billion); food assistance programs ($1.9 billion); the federal prison and court systems ($1.6 billion); and federal aid to schools ($1.4 billion).

* If illegal aliens were legalized and began to pay taxes and use services like legal immigrants with the same education levels, the estimated annual fiscal deficit at the federal level would increase from $2,700 per household to nearly $7,700, for a total federal deficit of $29 billion.

* Because many of the costs are due to their U.S.-born children, who are awarded U.S. citizenship at birth, barring illegals themselves from federal programs will not significantly reduce costs.

* Although they create a net drain on the federal government, the average illegal household pays more than $4,200 a year in federal taxes, for a total of nearly $16 billion.

* However, they impose annual costs of more than $26.3 billion, or about $6,950 per illegal household.

* About 43 percent, or $7 billion, of the federal taxes illegals pay go to Social Security and Medicare.

A 1997 report by the National Research Council (NRC) on the fiscal impact of immigrants concluded that education levels and resulting income is the primary determinant of tax payments and service use, which is also a central finding of this report. The results of this study closely match the findings of a 1998 Urban Institute study. Our estimated average tax payment for illegal households in New York State are almost identical to that of the Urban Institute, when adjusted for inflation. The results of this study are also buttressed by an analysis of illegal alien tax returns done by the Inspector General’s Office of the Department of Treasury in 2004, which found that about half had no federal income tax liability, very similar to the study's findings of 45 percent.

Immigration causes average wage decline of $1,700

Two decades' growth in the supply of immigrant workers cost native-born American men an average $1,700 in annual wages by the year 2000, a top economist has concluded.5

Hispanic and black Americans were hurt most by the influx of foreign-born workers, says a report by Harvard University's George Borjas, considered a leading authority on the impact of immigration....

"What past immigration has done -- and what the temporary worker program will continue to do on a potentially larger scale -- is to depress wages and increase profits of the firms that employ the immigrants," Borjas said. "The reduction in earnings occurs regardless of whether the immigrants are legal or illegal, permanent or temporary. It is the presence of additional workers that reduces wages, not their legal status."


1. The Mexican Fifth Column by Tom DeWeese

2. Illegal Aliens: The Health Cost Dimension by Joe Guzzardi, VDARE, January 25, 2003.

3. The Outrages of the Mexican Invasion, by Tom DeWeese, American Policy Center, February 27, 2003

4. The High Cost of Cheap Labor - Illegal Immigration and the Federal Budget, By Steven A. Camarota, Center for Immigration Studies, August, 2004.

5. "Immigration found to cut American workers' pay", San Francisco Chronicle, May 4, 2004.

6. Immigrants Drain $30 Billion in Cash Annually, by Joseph A. D'Agostino, Human Events Online, May 28, 2004.

See FAIR news release $30 Billion in Remittances Sent Home by Immigrants - Only a Small Piece of the Cost of Mass Immigration, May 17, 2004: "According to a new survey by the Inter-American Development Bank (IDB), Mexican and Latin American immigrants living in the U.S. send $30 billion a year in remittances back to their native countries.")

Also see Remittances from the US to Latin America, 2004, Inter-American Development Bank, Bendixen & Associates. Includes state-by-state map of remittances.


8. Center for Immigration Studies report Immigration From Mexico - Assessing the Impact on the United States, subsection Impact of Mexican Immigration on Public Coffers.

9. Breaking the Piggy Bank: How Illegal Immigration is Sending Schools Into the Red, Federation for American Immigration Reform.