At the heart of the debate over illegal immigration lies one key question: are immigrants good or bad for the economy? The American public overwhelmingly thinks they’re bad. In a recent New York Times/CBS News poll, 74 percent of respondents said illegal immigrants weakened the economy, compared to only 17 percent who said they strengthened it. Yet the consensus among most economists is that immigration, both legal and illegal, provides a small net boost to the economy. Immigrants provide cheap labor, lower the prices of everything from produce to new homes, and leave consumers with a little more money in their pockets. They also replenish—and help fund benefits for—an aging American labor force that will retire in huge numbers over the next few decades. Also, an increase in the number of American workers is needed to prevent the U.S. from having too few working-age adults to pay for retiree benefits in a few decades, as many European nations currently do. So why is there such a discrepancy between the perception of immigrants’ impact on the economy and the reality?
There are a number of familiar theories. Some point to the ravages of the Great Recession, arguing that people are anxious and feel threatened by an influx of new workers (though anti-immigrant sentiment ran high at times prior to the crash of 2008). Others highlight the strain that undocumented immigrants place on public services, like schools, hospitals, and jails. Still others emphasize the role of race, arguing that foreigners provide a convenient repository for the nation’s fears and insecurities. There’s some truth to all of these explanations, but they aren’t quite sufficient.
To get a better understanding of what’s going on, consider the way immigration’s impact is felt. Though its overall effect may be positive, its costs and benefits are distributed unevenly. David Card, an economist at the University of California, Berkeley notes that the ones who profit most directly from immigrants’ low-cost labor are businesses and employers—meatpacking plants in Nebraska, for instance, or agribusinesses in California’s Central Valley. Granted, these producers’ savings probably translate into lower prices at the grocery store, but how many consumers make that mental connection at the checkout counter? As for the drawbacks of illegal immigration, these, too, are concentrated. Native low-skilled workers suffer most from the competition of foreign labor. According to a study by George Borjas, a Harvard economist, immigration reduced the wages of American high-school dropouts by 9 percent between 1980 and 2000. Not surprisi