OPINION: Undocumented workers take jobs Americans won’t, and then pay taxes


Caleb Garbuio, Columnist

Since his election campaign, President Donald Trump has often stated that undocumented migrants take more from the United States than they contribute. Trump’s assertion is false because migrant workers pay taxes and help domestic producers by taking jobs domestic workers do not want.

During the 1960s, President John F. Kennedy ended the “bracero” program that allowed foreign workers to temporarily work on farms. According to the Law of Supply for labor, this would lead to higher worker wages due to the absence of agricultural work and an increase in domestic labor.

However, data analyzed by Michael Clemens and Hannah Postel from the Centre for Global Development found that this policy led to a, small, temporary rise in domestic jobs. Yet, while wages initially rose, domestic agricultural jobs continued their decline. Wages also fell during this period, prior to an  increase in undocumented immigration during the 1970s.

Even if wages were to rise, there is ample evidence to suggest that Americans would not be willing to work in the fields. The Los Angeles Times reported in 2017 that many California farms cannot hire domestic workers despite raising their wages to $15 an hour

The absence of domestic workers willing to work on the fields is not contained on the West Coast. 

In 2014, Chalmers Carr from Titan Farms submitted 500 applications for seasonal work paying $2 above minimum wage to a local newspaper near Columbia, South Carolina. Only 31 applicants applied for work, and only six remained. The majority quit or stopped showing up.

Harvard economist George Borjas offers a potential solution to this problem when he  suggested that if wages were higher, then more domestic workers would consider working in the fields. However, there is evidence to suggest that this type of work would become automated before wages would rise to these levels. 

This is due to the increase in marginal cost being higher than the marginal profit resulting in firms losing money. A rise in wage labor via minimum wage will lead to higher levels of unemployment for unskilled workers, according to Reed economist Jeffrey Parker.  This is due to firms losing money and cutting costs, leaving firms two options: outsource work through machines or a cheaper labor supply, or through producing products with a lower marginal cost.

While marginal cost and marginal revenues are important aspects of business behavior,  the supply of workers and employer demand determine worker’s wages. If employers find a shortage of workers, they will raise the wages to attract more workers. The U.S. is currently experiencing a tight labor market, meaning employers are competing to obtain workers. This has a positive impact on the collective labor market as a whole, including low skilled labor.

Eduardo Porter from The New York Times reported in April that lower skilled jobs ,such as brick-layers, are now currently offering wages up to $25 an hour, not accounting for union pay. While this boom may not last, it highlights the unwillingness of domestic laborers to fill  these jobs, even with high wages. Raising the question of the impact on domestic workers willingness to take these jobs when wages are lower and when the labor market picks up slack.

Undocumented immigrants are an indispensable part of business behavior, and they contribute towards fiscal expenditures. In other words, immigrants contribute more in taxes than they receive in benefits. According to The Institute on Taxation & Economic Policy, undocumented immigrants contribute $11.64 billion annually. ITEP also reported that undocumented immigrants pay 8% of their income to national taxes, 3% higher than the wealthiest Americans who pay 5%.

ITEP reported that granting legal status to undocumented migrants would increase local and state tax contributions by $2.1 billion annually, an estimated 8.6%. While there may be abuses from certain individuals taking advantage of the system, the majority of undocumented workers are just like American citizens; they work hard and pay their taxes.

Others can argue about granting legal status to undocumented immigrants, but their economic benefits to the U.S. are undeniable.