Background
According to Gheen (1), illegal immigration originated from legal migrations that took place between the late 1800s and the early 1900s. In 1928, Edward H. Dowell who was the vice president of the California Federation of Labor announced that 67000 Mexicans had legally immigrated to America the previous year but an even larger number had illegally immigrated to America. Gheen (1) further argues that massive illegal immigration started in the early 1940s due to labor shortage on America. The federal government arranged for the temporary importation of Mexican labor to contribute to agriculture, under the Bracero Program. Even after the temporary Bracero Program, some of the Mexicans who were previously under the program crossed back to America in search of labor (Gheen 1). In 1951, the New York Times reported that the influx of illegal immigrants from Mexico in large numbers overworked the border patrol officials. Although the government was keen in enforcing the law, the immigrants’ labor was necessary for jobs that Americans natives did not consider to do (Gheen 1). Therefore, the American economy is in constant need of the labor offered by the illegal immigrants for businesses to thrive.
How businesses benefit
Illegal Immigration offers businesses a source of cheap labor compared to the wages and salaries that the resident Americans would accept. Businesses in America employ illegal immigrants out of necessity since resident Americans will not opt for some jobs search as garden work, animal meat de-boning, building houses, or dangerous jobs just to mention a few. The cheap and necessary labor offered by the illegal immigrants contributes positively to American businesses net earnings since the cost of labor is quite low. The illegal Immigrants offer Custom to the American businesses while they are working and living in America. The immigrants need to spend money on food, shelter, clothing, transport, entertainment among other needs, which benefits American businesses. The presence of illegal Immigrants in America increases financial activity, which benefits financial institutions, as the immigrants receive and spend their wages and salaries.
How businesses lose
On the other hand, some of the illegal immigrants take advantage of the permeable borders of America for illegal activities such as illegal drugs trade, robberies, trespass, and property destruction. The illegal Immigrants also strain public resources and amenities such as energy, water, health services, and education. The strain in resources reduces efficiency in doing business as well as the deterioration of the working environment for resident Americans and legal immigrants. The illegal immigrants are a source of increased government expenditure on border patrol personnel and equipment. The money used for border patrol would have benefited American businesses and the American population as a whole, if the funds put to public amenities and resources maintenance thereby improving the working conditions as well as efficiency of doing business. The American government deploys huge sums amount of money for border patrol and this amount increases year after year due to the increased influx of illegal immigrants. Hence, the government has to increase taxes in order maintain border security. The increase in taxes eats into the American businesses net earnings thereby reducing profits.
Illegal immigrants provide businesses with unskilled labor, which they are willing to offer at viable prices for businesses to run profitably as well as custom to American businesses’ goods and services.
Constant need of unskilled labor
The American economy needs unskilled labor for most of the businesses to function. This is evident in the various immigration policies that the American government has had to change on a frequent basis after the realization that there was a shortage in unskilled (Gheen 1). Orrenius et al. (86) argues that the increase in illegal immigrants came about after the imposition of border restriction. This restriction led to a reduced flow of legal immigrants but the demand for unskilled labor was left unsatisfied. Therefore, the rise of illegal immigrants ensued because of the increasing demand for unskilled labor and the travel restriction imposed by the American government (Orrenius et al. 86). In 1986, the American government initiated policies against illegal immigrants via the Immigration Reform Control Act (IRCA), which punished American employers who deliberately employed illegal immigrants (Espenshade 211). This measure restricted illegal immigrants for a short while, but as businesses expanded, the demand for unskilled labor also grew thus attracting illegal immigrants (Nadadur 1040).
Labor Theory
A business needs two types of labor primary labor and secondary labor. Primary/skilled labor is expensive to train, acquire, maintain, and lose hence primary labor addresses the aspects of stable market demand. The employer needs to pay more to maintain Primary labor. On the other hand, a business needs secondary/unskilled labor which is cheap and readily available, to cater for unpredictable market demand (Nadadur 1042). The illegal immigrants offer the needed secondary labor.
Illegal Immigrants are customers
The illegal immigrants spend their salaries and wages in America for their day-to-day sustenance. Many illegal immigrants use the Matrcular debit card to keep remittances and to send money to their homes. The No Border Inc is an American company that benefits from the sale of the Matricular debit cards to illegal immigrants as one of their customers (Nadadur 1046). The Californian insurance company Blue Cross sells insurance to Matricular cardholders including illegal immigrants (Nadadur 1046). Grow (1) gives an example of Inez and Antinoio who are illegal immigrants living in America. They promoted various American businesses through the purchase of a used Ford vehicle, Verizon communication services, and Wells Fargo services using their Matricular debit cards. Financial institutions also open bank accounts for illegal immigrants using their Matricular debit card. Financial institutions also award loans and credit cards based on Metricular card bank account (Grow et al. 1). Grow et al. (1) also adds that companies in the insurance, banking, money lending, credit card, and communications industries noticed the consistent growth of the illegal immigrants’ population, which they perceive as an opportunity to seize since it is not against the law to sell to illegal immigrants.
Tax payment
A significant number of the illegal immigrants pay taxes (Espenshade et al. 2010). They pay tax in the form of income tax, social security tax, and excise tax on the goods and services they purchase Nadadur (1049). Illegal immigrants such as Inez and Antonio, use their Matricular debit card to apply for an Individual Tax Identification Number (ITINS) from the Internal Revenue Service, so that they can pay tax and eventually they can qualify for a home mortgage (Grow et al. 1). Tax payment is a complimentary effort since their tax contribution spent in the maintenance of the public amenities enjoyed while working in America. The tax contributions of the illegal immigrants’ cushions tax increment which is desirable for American businesses.
Increase rate of production
Illegal immigrants receive pay that is below the remuneration of legal immigrants and American natives, they accept poor working conditions, and even work for long hours for a lower pay (Rivera-Batiz et al. 92). The fact that the illegal immigrants are willing to work for a longer time with poor working conditions, means that that business owner will spend less on the working environment which reduces cost, and the business can benefit from increased goods production without increase in cost of production therefore, the business will experience increased profit.
Business Diversification
Illegal immigrants carry out low paying jobs therefore their purchasing power is lower than that of American natives. The low purchasing power is an opportunity that businesses exploit to produce cheaper brands of goods in order to capture that market (Nadadur, 1045). Businesses can produce and market goods that satisfy low purchasing power customers in addition to the high purchasing power products.
Conclusion
(Djajić 108) notes that sanctions on businesses and restrictions against immigrants’, increases the cost of unskilled labor as well as raising the number of illegal immigrants. The American economy needs the services of the illegal immigrants; hence, the government should change the immigration policy such that it accepts the illegal immigrants as legally accepted. The illegal immigrants contribute to the American economy as consumers, they offer cheaper labor, and a significant number of them pay tax. The acceptance of illegal immigrants will lower the cost of doing business and the number of illegal immigrants paying tax will increase, and in turn translate to additional to tax cushion for American businesses and the American population, as well as increased sales and profits for the American businesses.
Works Cited
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Espenshade ,Thomas J. and Calhoun, Charles A. An Analysis of Public Opinion toward Undocumented Immigration. Springer. (1993). Web. 19 Jul.2012.
Grow, B., Carter, A., Crockett, & Roger O. Embracing Illegals. Business Week. (2005).Web18 Jul.2012.
Gheen, William. History of Illegal Immigration in U.S.. End Illegal Immigration Article. (2012). Web. 18 Jul.2012.
Nadadur, Ramanujan. Illegal Immigration: A Positive Economic Contribution to the United
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Orrenius Pia M. & Zavodny Madeline. The Economic Consequences of Amnesty for Unauthorized Immigrants. Cato Journal.(2012).Web. 20 Jul.2012.
Rivera-Batiz & Francisco L. Undocumented workers in the labor market: An analysis of the earnings of legal and illegal Mexican immigrants in the United States. Journal of Population Economics. (1999). Web. 19 Jul.2012.
