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Immigration Plusses and Minuses
Subject Immigration
Topic Labor Markets
Key Words Immigrants, labor force, growth, developing nations, documented and undocumented workers, guest worker, employment, taxes, services, prices
News Story

Some people argue that immigrants are taking jobs away from U.S. citizens. The proportion of immigrants in the U.S. stands at 11 percent, thirty percent of whom - approximately 7.2 million - are Mexican. However, the fact remains that immigrants, both documented and undocumented, are responsible for one-fourth of the labor force growth and much of the nation's economic growth over the last 20 years. In Texas, the contribution of immigrants rises to one-third.

The availability of jobs in the U.S. and workers in developing nations has led President Bush and Mexican President Vicente Fox to discuss "regularized status" for undocumented Mexicans in the U.S. There is also talk of a guest worker program that would allow the employment of immigrants without the right to legal residence.

It is important, however, to consider the broader economic effects of immigration. Immigrant workers pay taxes, but use few federal services. But tending to be young and have more children, they impose costs on local school districts. If they do not have health insurance, they tend to delay treatment until emergency room care is needed. Nevertheless, on balance, one study estimates that the tax payments by an average immigrant and his or her descendants exceed the public services used by $80,000 over the long term.

The influx of low-skilled immigrants has also kept prices lower. For example, in Texas, it has been estimated that babysitting, housekeeping, and yard work prices are 17 to 24 percent lower than elsewhere in the U.S.

While immigration is high, it is declining. The number of border apprehensions is down from 220,000 in March 2000 to 170,000 in March 2001. This is probably due to the economic slowdown in the U.S., and more hope among Mexicans due to President Fox and his politics.

(Updated December 1, 2001)

Questions
1. Draw a supply and demand diagram of the market for non-immigrant U.S. labor, showing the equilibrium wage and employment level.
a) Illustrate what happens to the equilibrium when immigration increases. Also show the new level of non-immigrant employment with reference to the original supply curve.
b) How does what you have drawn match up with the news story?
2. Draw a supply and demand diagram of the market for housekeeping in Texas. Show the initial equilibrium price and quantity.
a) Depict the effect on the equilibrium price and quantity of housekeepers' wage rates changing in the manner shown in your previous diagram.
b) Would the same changes occur in all product markets and states? Why or why not?
3. Immigration is said to affect public schools.
a) Draw a diagram of the supply and demand for public school education. Show the initial equilibrium price borne by the community and the number of students in the system.
b) What effect does an increase in the number of immigrant children have on the equilibrium price and quantity? Illustrate your answer.
c) Also show how the total cost of education changes.
Source Rebecca Rodriguez, "Migrant labor has ups, downs," The Arizona Republic, October 22, 2001.

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