Do unskilled immigrants hurt the American economy?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The impact of unskilled immigrants on the American economy is the source of a great deal of controversy.  Conventional wisdom holds that such immigrants do drag the US economy down.  Some economic studies, on the other hand, have suggested that the immigrants’ overall impact on the economy is positive, though they do have small negative effects which are overcome by the benefits they bring.

The basic argument against unskilled immigrants is that they create an oversupply of labor.  Because there are so many of them and because they are willing to work so cheaply, they reduce the wages that are paid to workers who are already in the country.  The second argument commonly heard is that such immigrants are often illegal and therefore do not pay taxes even as they consume services.  This means that they constitute a drag on the economy.

Economists, as seen in the links below, dispute these claims.  They point out that immigrants do pay taxes in the form of payroll taxes, sales taxes, property taxes (largely indirectly, through their rent) and others.  While it is true that they do not pay income taxes they are also unable to claim things like Social Security when they retire, meaning that the money they paid in payroll taxes is essentially a gift to Social Security and Medicare.

As for the claims about impacts on wages, immigrants may harm some at the lowest levels of the American economy. When immigrants take low-paying jobs, those who had those jobs and are too old to train for new jobs will have a hard time finding new careers.  However, as the links show, economic studies say that unskilled immigrants actually create more jobs for Americans.  Their cheap labor makes possible businesses (for example, restaurants) that employ Americans in the positions that are more highly paid.

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