Immigration Reform

The news channels are currently abuzz with talk of immigration reform. It seems as though people from around the country are calling for those who did not go through the proper immigration channels to be rounded up and fined, jailed or- worse- deported. These thinkers also want to help those who are here illegally become proper American citizens. As a dissenting voice- probably in the minority on this matter- I would like to present the following issues for your consideration.

Illegal immigrants do a great deal of good for the American economy. Sure, they can be a strain on our country’s public services (e.g.- public health care, law enforcement, etc.), but the good they do for our economy outweighs this burden.

For starters, illegal immigrants- usually out of necessity- quickly pick up the menial tasks that the current “entitlement-generation” Americans simply refuse to do. Failing that argument, it is without question that these “illegals” will, in fact, do this work at a substantial discount to American labor.

Federally protected American citizens, in short, cost a lot. While it is easy to argue that paying minimum wage (varying from state to state, but usually around $6.00 per hour) is cheaper than paying an “illegal” as much as $12 per hour, this opinion is- at best- uninformed.

When an American works, there are two ways of measuring how much that individual is paid. The first is the straight salary most people are accustomed to discussing. The second is the more accurate reflection of how much that individual’s time actually costs the employer. This rate- known as the “loaded labor rate”- takes into account the base salary, taxes, fees, insurance and all other overhead associated with keeping the individual employed. As a general rule, the salary a person receives is about 40% of the loaded labor rate.

This rate becomes a key consideration when discussing cost in the American economy. Because illegal immigrants are not officially American citizens, they are not subject to the taxes and fees the rest of America pays. Because of this key fact, it is cheaper to employ illegals in menial tasks such as home construction and harvesting.

To delve a little deeper into this consideration, consider this fact: McDonald’s currently pays $50 for 125 buckets of tomatoes. This rate is equal to $0.40 per bucket of tomatoes. For simplicity of math, assume there are ten tomatoes per bucket, with a resultant cost of $0.04 per tomato. Because the loaded labor rate is only 40% of total expense, though, this price would skyrocket to $0.10 per tomato. While this six-cent increase certainly doesn’t sound like a lot, we can all rest assured that the “dollar menu” offerings would quickly become a thing of the past.

The price increases would spread far beyond the fast-food genre, however. The price savings afforded by using “illegal” labor to build homes would be substantially magnified. For the case of this argument, assume that a private residence can be built by ten illegal immigrants in 100 hours. At a pay rate of $10 per hour (a very conservative estimate), the present price for labor in building a home is $10,000. If all of the individuals involved in the construction of the home were fully legal residents, however, this price would shoot up to $25,000; this amount is a noticeable increase even in the price of a house.

There can be no doubt that there is a need for immigration reform in the United States today. To protect our economy, though, these changes should be approached with caution. Illegal immigrants provide a valuable service to our economy- one which far outweighs the strains they put on our country’s social services.