The Cost of Cheap Labor

As Congress considers the Immigration Bill proposed by the gang of eight, it is worth considering a few lines from my book ALL YOU REALLY NEED TO KNOW ABOUT ECONOMICS, pg. 79.

“Data reported by the Center for Immigration Studies[1] indicate that services for illegal aliens in 2002 cost the federal government $23.6 billion but illegals paid only $16 billion in taxes, for a net deficit of $7.6 billion, or $2,700 per illegal household. Some of the more dramatic costs were for:

Medicaid and other treatment for the uninsured: $4.7 billion

Food assistance (WIC, food stamps, school lunch program): $1.9 billion

Federal aid to schools: $1.4 billion

Federal prison and court systems: $1.6 billion

And there were only about eight million illegal immigrants in 2002. What will be the cost of the estimated 20 million or so we have today? And if this is not scary enough, just wait until illegals qualify for Social Security benefits.”

[1] The High Cost of Cheap Labor:


This was for 2002 and some pretty drastic changes have occurred since.  We can update to 2009, the last year reliable data are available.  Total federal taxes paid by households headed by illegal immigrants were $4,212 each.  Costs of benefits per illegal household were $6,949.  The fiscal balance (taxes minus cost) for each illegal household was minus $2,736, for a total of $10.4 billion.

Thee are costs to the federal government.  It is hard to tell the cost to individual states, but the cost of illegal immigrants to California is estimated to be $10.5 billion per year!  Cost to taxpayers in Arizona is $2.7 billion, according to a public interest group that helped write the state’s immigration law.  Cost to taxpayers in Texas are n=more than $4.7 billion a year!

Can we afford all the cheap labor illegal immigrants bring to this country?


Posted by at June 21, 2013
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