Economic effects of enforcing immigration laws

[jimhcom]

Originally Posted by user_id

The costs? I don't think anybody denies there are costs, the question is what are the costs? All the estimates by independent organizations are low...

In terms of illegals in jail, these are usually gang members and if you send them back they often are back in the US within months. California did this with MS-13 members and the gang just got more powerful.... The real issue here is that the federal government needs to provide more funding to border states to handle these issues. The borders need to be secured as well, but then this means developing a system that allows non-criminal laborers easy entry into the US.

Agreed for the most part, but independent organizations often have political agenda's too, especially when it comes to illegal immigration.

The problem with securing the border is that it would require a government that was responsive to the people and the good of the country and not corporate mega bucks.

I do not foresee that happening any time soon.

[jertheber]

Generally speaking wages and profits have the same effect on their respective recipients, that's to say that both get spent and both recipients need more after they are spent. How wages are to be determined has produced the never ending bouts of speculation ranging from babble about 'fairness" to the absolutely greedy notion of tough S**T for those without a lot of skill.

The truth of most economic ism's is that they are all making some attempt to mitigate those extreme views that result in a terribly unbalanced distribution of money. Money that comes from foreign labor here in the US whether it be legal or illegal is still very much the same green stuff that all of us legals carry around. Business wants low wages, even when it has been pointed out that low wages result in low consumer spending they still want them on the chance that "their" business may be immune from that lowered spending.

All of our national laws governing the use of foreign labor are generally written by those in the business community that directly benefit from low wages, period. Agricultural workers are not covered by the laws that have been thought of as a given for other workers, they don't receive unemployment, they aren't covered by labor and industries compensation or oversight on the job, those foreigners that work in the food service and food processing jobs are generally not thought of as much of a threat to the higher paid jobs and therefor don't cause much of a stir in the mind of most American's.

In his book "The End Of Work" Jeremy Rifkin has spelled out the greatest threat to American workers not to mention workers around the globe, he states that automation has taken more work and money from workers than all the foreign workers put together whether they be here or in those nations that have been building on the notion of a good future in manufacturing. All of this consternation over foreigners taking our jobs will soon be a thing of the past when workers regardless of legal, illegal, foreign, or American are out of work while machines produce a greater form of automata throughout our economy.

America should have curtailed ALL immigration a long time ago, legal or illegal, it doesn't make sense that American's should be out of work while there is work to do. Much has been made of the "need" for more IT types from foreign countries, America has produced a ton of just such skilled workers while those like Bill Gates have denied their presence and availability. Laws are rarely if ever written for the common man, most of our laws are the work of those who owe their collective soul to the people who get them elected. It looks like we workers are mostly doomed by the greed of America's corporations and their partners in the white house, regardless of party they are all puppets of the money crowd and therefor will continue to run down America for their own greed....Less work, more taxes, bigger military, more monopolies, more government by the rich, less government by the people...

[Mircea]

Originally Posted by jimhcom

Seeing as they are not eligible for welfare or other government programs, they must be making money to survive somehow.

No, they are eligible. The 14th Amendment guarantees equal protection under the law for all persons, not all citizens.

Originally Posted by jimhcom

Your assumption here is that employers would have to pay more for legal workers than illegal. I am not sure that is the case.

That is absolutely the case.

First, I don't have to pay over-time. People in other countries are accustomed to working at a daily rate, rather than an hourly rate, so I can offer $80/day for a 10-hour day and they will either accept or decline.

Because I don't pay over-time, I don't pay the Social Security taxes, the Medicare taxes, the federal unemployment tax, or the State unemployment tax, and I don't pay State, county or local taxes that are tied to wage payments

That's the benefits of not paying over-time.

The benefits of not paying regular wages on the books are that I don't have to pay Social Security taxes, Medicare taxes, federal unemployment tax, or the State unemployment tax, and I don't pay State, county or local taxes that are tied to wage payments

Also, since my workers are off-the books, that means when Valentine & Associates comes round to do their payroll audit to assess worker's compensation insurance fees, I pay less in worker's compensation.

There are many other cost-saving benefits. If I fire one of them for drinking on the job and then damaging a fork-lift, I don't have to hire an attorney to appear at the unemployment compensation hearing and convince a civil servant who as zero education in law, zero understanding of laws, zero ability to evaluate evidence and zero brains for making decisions that the employee's actions quite clearly fall under the State's guidelines and I am not responsible for paying unemployment benefits and the employee should be denied unemployment benefits.

I also don't have to worry about bogus worker's compensation claims and I don't have to waste my money hiring an attorney and private investigator to prove an employee is committing fraud and waste time and money going to an administrative hearing before a civil servant who has zero education in law, zero understanding of laws, zero education in medicine or medical training, zero ability to evaluate evidence and zero brains for making decisions and zero ability to determine that the employee's actions quite clearly fraudulent and that his claims that his neck is injured is bogus since this video-tape clearly shows that the person can play offensive guard for a semi-professional football team, attend all the practices and games and play without exhibiting any pain and that he should be denied worker's compensation benefits (true story: the guy played for the Cincinnati Vikings, a semi-professional football team and the administrator ruled it was "casual" and did not violate the State's rules and so the employer had to continue paying worker's compensation to someone who could clearly work if the wanted to).

For those who do not have degrees in Economics or have run their own business (I have both), there is something called a Wage Cost and then there is a Labor Cost.

The Wage Cost is what you actually pay the employee in wages, say $10/hour.

The Labor Cost is what it actually costs you to pay the employee $10/hour, and it is a helluva lot more than $10/hour.

In some places in the US, it may cost you $26/hour to have a $10/hour employee, because in addition to the wages, you pay Social Security, Medicare, FUTA, SUTA, worker's compensation, Holiday Pay, Vacation Pay, health care and a host of other benefits and taxes that are levied by counties, municipalities, the State and federal government.

If those employees are not on the books, then a $10/hour employee costs you exactly $10/hour and nothing more.

Originally Posted by jimhcom

The recent story about the number of people applying for Mc Donald’s jobs shows a gigantic number of unemployed willing to work for minimum wage.

Why would you automatically make the blatantly false assumption that McDonald's pay's minimum wage?

Here, McDonald's starts a $8.50/hour with a $0.25/hour raise after 30 days and a $0.25/hour raise 60 days after that bringing the wage to $9/hour, which is over minimum wage.

In fact, none of the fast food restaurants here have paid minimum wage for more than 10 years. They've all paid OVER minimum wage. A friend who runs a Taco Bell was starting at $7.50/hour when minimum wage was $4.25/hour.

Today's youth don't want to work. They show up when they want, leave when they want, and they don't like working weekends, so if you want people to show up, on time, and work the entire shift, you need to hire older more mature people and that means you have to pay more to attract those kinds of people.

White Castle's starts at $9/hour and within 6 months you're at $10/hour with good benefits, including health care.

Originally Posted by jimhcom

I have also heard the argument that illegals are paid less than minimum, but no one to my knowledge has provided any proof of that.

Um, they are illegal, and it is illegal to hire off-the books, so don't expect reams of documentation.

Originally Posted by jimhcom

If there were upward pressure on wages, would that not put more money into the economy by the people most likely to be spending it in the marketplace?

Unemployment generally creates downward pressure on wages, since wages are a function of Supply & Demand. However now that is something that would appear over the long-term instead of the short term. Thanks to bogus discrimination lawsuits, hourly employees no longer have the ability to negotiate their wages. Employers now pay the same starting rate for all employees, regardless of experience or education, and raises are generally the same as well, although some employers do try to utilize an objective-based approach to handing out annual raises, even that is jeopardized by bogus discrimination lawsuits (I'm a woman, therefore I should be allowed to call off as many times as I want, and leave early or come late as many times as I want with no penalty and to pay me a lesser raise because I did call off 18 times and showed up late 32 times and left early 46 times is discrimination).

Originally Posted by jimhcom

Also the major political parties supporting illegal immigration are not mom and pop businesses; they are major corporations like Tyson, who are translating lower wages into corporate profits that do little to improve things for the average citizen.

As soon as you amend the US Constitution you can block corporations from writing laws and bribing politicians to vote for the laws corporations write for their own benefit.

Originally Posted by bradykp

i personally live in a state where there are plenty of illegal immigrants, but with friends and family in the medical profession, i know of no examples of an illegal immigrant getting assistance.

No kidding. That's because they go to the emergency room for things like common colds and earaches, instead of going to the doctor's office.

Originally Posted by bradykp

basic math would indicate that legal workers would be paid more.

That is absolutely correct. Even if they were not paid more, they would cost the employer more in taxes, benefits and other government mandated costs.

Originally Posted by user_id

it doesn't make sense to put them "off the books" as they lose the deductions associated with their labor, that is, the illegal labor costs become profit and are taxed as such.

That would depend on the type of business. For a maid service or landscaping business, it makes perfect sense to keep them off the books, and it costs you the owner significantly less.

Originally Posted by floridasandy

illegal workers usually don't have training, certifications, or licenses.

That doesn't matter, and "training, certifications or licenses" aren't always relevant. I worked as paralegal for Arthur Andersen and two different law firms, including the third largest law firm in Florida. However, I cannot work as a paralegal now, because I am not, um, "certified," and the only way to get "certified" is for me to pay $6,000 and waste 2 years of my time going to school to have someone teach me something I already know have been doing for years, just so I can take a test and be "certified."

Originally Posted by slackjaw

For what? Running a leaf blower, loading dishes into a dishwasher, cleaning a hotel room, picking grapes, or shoveling gravel?

Of course there are exceptions but the majority of illegals aren't doing work that is heavy in certs of licenses.

That's true. The Sheriff (aka the Bastard) of Butler County, Ohio is the "Ivan the Terrible" of illegal immigrants.

He makes it his mission not only to keep illegals from working in Butler County, but to keep them out, completely. He has pulled thousands of illegals off of job sites. He also goes after landlords who rent to illegals, so hats off to Roy Harper.

In one raid, he pulled 75 illegals out of a home construction site in a large development.

So, which one of you morons wants to argue that brick-laying, roofing, hanging dry-wall, flooring, painting, carpentry, installing HVAC, plumbing or electrical work pays minimum wage?

He also pulled illegals out of a very popular Chinese restaurant (that is now closed).

Originally Posted by user_id

The stealing jobs thing makes no sense, they are just new entrants to the economy and in that sense they are no different than someone getting their first job out of college.

But they ARE different. They're illegal. They are committing a felony by being here illegally.

My family came here legally, with documents, and then filed the proper documents to get Green Cards, and then filed the proper documents to become naturalized citizens.

75 illegals on a home construction site, that's 75 jobs that could be worked by natural born, naturalized or legal immigrants who have the proper documentation, and who are not committing felonies.

No one has a problem with immigrants, the problem is illegal immigrants.

Maybe you all are too dense to understand the process. To immigrate legally, you have to go to a US Embassy, Embassy Mission, Consulate, Consular Activity or other office and file the paper work, and then a criminal background check is run, and where a US doctor will performs a medical physical examination.

That keeps people with drug-resistant TB from entering the US, unless you want that, or perhaps you'd prefer your children have it. It also helps keep criminals out.

I think it's funny how people support illegal immigration right up until the time they or a family member are the victim of a crime perpetrated by an illegal immigrant and then they scream bloody murder. I consider it karma.

Originally Posted by MilkDrinker

The salaries can be way much higher without raising the prices... I work in manufacturing and the labor costs are insignificant...

That would apply to your particular factory and no other. Making an across the board assumption isn't very intelligent.

Originally Posted by MilkDrinker

Actually outsourcing something to China or making it in the USA results in a difference of just 5% (and the big companies are so greedy that they care for that 5% and the problems that it brings)

Again, that would be for your particular facility or your field, but that doesn't necessarily hold true for every company in the US.

Not only that, but you've missed the entire point. The reason I outsource to China is not so I can get 5%, it is so I can stay alive.

GM is going to manufacture cars in Detroit and then ship them to China for sale and make a profit?

Wrong answer. I'll build my plant in China, saving labor costs, and shipping costs, and then sell them for less than GM does and still make a greater profit than GM.

And when I get enough money, I'll just buy up shares in GM stock until I have 51% and then I'll shut the doors on GM forever. Or maybe I'll keep one plant open for pity's sake.

I think we can safely conclude that you don't have the mind-set to compete globally.

Originally Posted by MilkDrinker

Usually the labor costs are just 2-3% of the final production cost. But it depends on what kind of products you manufacture...

Again, that varies from site to site and the type of product or service.

Originally Posted by Willy702

Serious businesses with over 50% margins. You are kidding right? How many S&P 500 companies have over 50% margins on a manufactured product outside of technology or services?

You know the GAP? GAP Brands?

Okay, they import stuff from other countries. Denim jeans come 12 to a carton and they're made in Mexico, Romania, Mauritania, the Philippines etc.

How much does GAP pay for one pair of denim jeans?

Survey says.....$0.12 per pair.

Let's take a GAP facility, like the one in Hebron, Kentucky. What is the break even point for operating that trans-shipment facility?

Survey says....$0.117 per carton.

That means if GAP can take a carton of denim jeans off of the truck, scan it into inventory, hand it off to a stocker who will then stock the carton of jeans, have a picker go to the carton and pull jeans then give them to packers to box the jeans up with other sizes of jeans and t-shirts and shirts and other things GAP sells (and by the way t-shirts cost $0.08 to $0.10 each and shirts are $0.11 to $0.14 each) and then ship it to someplace like an Old Navy store, and do it for $0.117 per carton then that facility breaks even.

Breaking even means the rent is paid, the utilities are paid, the maintenance is paid, the taxes are paid, the employee's wages and benefits are paid, et cetera, et cetera, et cetera.

And what is the price of a pair of denim jeans at GAP?

And you don't think they can get a 50% margin?

A pair of denim jeans is $0.12 per pair and it costs $0.117 per carton and there are 12 jeans in a carton so that is $0.117 / 12 = $0.00975 so the jeans cost GAP $0.12975 and again, what is the price per pair?

It costs GAP $0.23 per carton for an Old Navy store to receive the carton, stock the merchandise and then sell it to customers. A carton could have anywhere from item to 40 items, so it would be pointless to break that down.

Let's assume one pair of jeans is in the carton.

Those jeans would cost GAP $0.35975 and what is the price of a pair of jeans? And you don't think they can get a 50% margin?

Grocery is a different animal. Your mark-up is maybe 10% to 30% for grocery items, so no, your margin is less than 50%.

Manufacturing is another animal still. Margin there will vary from 20% to 600% it just depends on what you're manufacturing and selling.

[LauraC]

"The cost of harboring illegal immigrants in the United States is a staggering $113 billion a year."

"an amnesty program wouldn’t appreciably increase tax revenue and would cost massive amounts in Social Security and public assistance expenses."

This is why people in DC (can't see it from my house) including the President have little to no problem with amnesty and the states not on the border or close to it pooh-pooh the problem:

“The most important finding of the study is the enormous cost to state and local governments due to lack of enforcement of our immigration laws,” Martin wrote. The report found that the federal government paid $28.6 billion in illegal related costs, and state and local governments paid $84.2 billion on an estimated 13 million undocumented residents."

Illegal Immigration Costs U.S. $113 Billion a Year, Study Finds - FoxNews.com

The reason why there are laws on the books (now being ignored) to prevent illegal immigration is not because we don't want Mexicans here, it's because the American taxpayer can't absorb masses of poor people coming here. Immigration laws (when enforced) protect American taxpayers.

I assure you if Mexican doctors and lawyers and businessmen were running over the border, there would be less resistance to making them legal because they would not be a financial burden on the rest of us.


"The U.S. has a responsibility to protect the economic interests of all of its citizens, yet the immigration system, which adds hundreds of thousands to the labor force each year, is bringing in workers faster than jobs are being created. Moreover, only a small portion of admissions are based on skills or educational criteria, creating an enormous glut of low-skilled workers who struggle to rise above poverty."

FAIR: Immigration, Poverty and Low-Wage Earners: The Harmful Effect of Unskilled Immigrants on American Workers (http://www.fairus.org/site/News2?page=NewsArticle&id=24138&security=1601&news _iv_ctrl=1901 - broken link)