How Immigration Reform Will Explode the Welfare Rolls

And cause millions more to enter the U.S. illegally

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When considering “comprehensive immigration reform” I want to encourage you to do something that makes the Washington D.C. political class very nervous.  Yes – I want you to think rationally.

The question that must be answered is – since the United States has sustained high unemployment for the last several years (about 8% and when you factor in those who have stopped looking it’s in double digits) – why is there a demand for illegal alien labor?  What is it that illegal immigrants bring to the labor market that employers cannot find elsewhere, especially among the nation’s unemployed?

To answer this question we have to look at competitive advantage.  What trait do illegal aliens have that make them so attractive to employers?  It doesn’t take an economist to surmise what that trait is.

The Competitive Advantage of Illegals in a Labor Market

The reason employers like to hire illegals is very easy to understand.  Illegals are willing to work for lower hourly wages.  There is no minimum wage for illegals.  Illegals are willing to work without a health insurance plan.  Employers do not have to pay taxes on illegals; no social security or Medicare taxes to worry about.  Illegals are not covered by OSHA requirements.  Illegals do not get paid overtime.

In fact, when you look at the issue with any degree of common sense – you don’t have to be a business genius to realize that hiring illegals saves big money.  The rich figured this out long ago, hiring illegals to do lawn work, clean swimming pools, or perform nanny duties.

Illegals have a huge advantage when competing with U.S. citizens in the labor market.  They can simply underbid Americans.  Even if a U.S. citizen would agree to work for a lower wage, the government would never allow the minimum wage laws, insurance requirements, and taxes to be ignored.

In fact, there is really no other advantage to hiring illegals.  If illegals were not incredibly cheap, they would not be hired.  Why would an employer hire an illegal, a drifter who speaks and writes English marginally, if he had to pay that illegal the same wages and benefits as a U.S. born worker?  Anyone looking at the issue honestly would agree – the only reason illegals get work is because illegals are incredibly cheap.

How the “Pathway to Citizenship” Is Actually a Plan That Will Put Millions on Welfare.

Proponents of comprehensive immigration reform do not understand competitive advantage.  They do not understand basic economics.  How else can you explain a plan that will drive an estimated 11 million illegals toward the welfare rolls?

Let me explain.

When the 11 million illegals “come out of the shadows” and are granted resident alien status they will be for the first time living legally in the United States.  Sponsors of the immigration bill proudly point out that the resident aliens will have to “pay taxes and fines” just like everyone else.

In other words, the comprehensive immigration reform plan will take illegal aliens who find work because they work for low wages and turn those same people into resident aliens who NO ONE WILL HIRE.  Once an illegal has to be paid minimum wage, insurance, payroll taxes, etc. – they are no longer worth hiring.  When employers are faced with low-skilled, non-English speaking resident aliens that cost just as much as a U.S. born worker – employers will look elsewhere for employees; the market for resident aliens will collapse.

Proponents of the bill are literally taking away the one thing that makes illegals competitive:  Cheap Labor!

Another Wave of Illegal Aliens Comes Next

So where will employers find cheap labor that they still demand?

The same place they get it now – illegal aliens.

Once you have 11 million “documented workers” who cost just as much as anyone else to employ – there will be a new demand for new illegal aliens.  We will see a new wave of illegals flood into the United States for the same reasons they have come in the past – they are willing to work below minimum wage, without insurance, taxes, etc.

The new wave of illegals will have a competitive advantage against the old wave of illegals (the newly documented aliens).

There will be absolutely no improvement in the job market, no reduction of illegals flowing into the United States, and no reduction in the number of illegal aliens that no one can account for.  Even worse, the illegals (now living in the shadows) will be in the open and unemployed.  They will be wards of the state – collecting welfare, food stamps, and other hand-outs; because welfare is still better than returning to Mexico.

The False Promise of “No Welfare for Documented Aliens”

One of the most often repeated claims from proponents of the comprehensive immigration reform bill states “no resident alien will be eligible for welfare, food stamps, health care, etc.”   Unfortunately, this is simply not realistic and it is highly deceptive.

Consider this – an illegal alien becomes a “documented guest worker” and is forced to pay fines and taxes.  Are you seriously asking me to believe that someone who is required to pay taxes is not going to be eligible for the government programs his taxes are funding?

How long will it be before a lawyer is arguing in federal court that his client, a resident alien, pays taxes and is denied “equal protection under the law?”  In fact, it is entirely plausible, and should be expected, that aliens paying taxes will not only get access to welfare, but also the right to vote.  A lawyer will make that argument based on “no taxation without representation.”  Heard that one before?

Economic Laws Will Not Be Denied

Economics is common sense.  The law of competitive advantage is a law.  It will not be denied by political word-twisting, spin machines, and lawyer-games.  Economics cannot be willed away by politicians looking for votes in 2016.  This bill will explode welfare rolls and encourage more illegal immigration to the United States.

-cj cheetham

Copyright © 2013 cjcheetham