Illegal Immigration in North Carolina


Why Do We Tolerate Its High Costs?


Mike Scruggs- There are three principal categories of costs to illegal immigration in North Carolina and other states: fiscal costs, economic costs, and social costs. Most North Carolina workers and taxpayers are hurt by them.

There are 410,000 illegal immigrants in North Carolina. Nearly 323,000 North Carolina workers are unemployed, but 293,000 illegal immigrants in North Carolina have jobs. Illegal immigrants and their employers benefit from this. Most voters, taxpayers, and even many of the North Carolina workers hurt the most by illegal immigration are not aware of the magnitude of the fiscal, economic, and social costs they are bearing, largely for the benefit of employers who have become dependant on low-cost and easy to hire illegal immigrant labor.

In March, I wrote an article primarily covering the fiscal costs impacting state and local governments in North Carolina. These are borne by North Carolina and local government taxpayers. According to the Federation of Americans for Immigration Reform (FAIR), the fiscal costs of illegal immigration in North Carolina are over $2.0 billion per year, equivalent to 9.7 percent of the state’s $20.7 billion annual budget. This is $578 annually for each North Carolina native or naturalized citizen household.

Here is a breakdown of NC illegal immigration costs by category:

Public Education $1,300 million

(71% state, 29% county/local)

Healthcare $232 million

Public Assistance $79 million

Law Enforcement $216 million

General Services $212 million

Total $2,039 million

Approximately $1,001 million of the Public Education cost is for the children of illegal immigrants. The other $299 million is for supplemental English instruction. The healthcare figure assumes illegal immigrants use only healthcare benefits for which they are eligible. This may be quite conservative. Law enforcement costs do not include any estimate of the cost of crimes committed by illegal immigrants.

Illegal immigrants pay only $14 million in income taxes per year, but $288 million in sales taxes. These do not offset the $2.0 billion fiscal costs, however, because these illegal immigrants are displacing higher paid North Carolina workers.

This leads us into the economic costs of illegal immigration. The average illegal immigrant worker gets paid only about 70 percent of the wages paid to comparable U.S. workers. This seems to be up and down the scale from illegal seasonal agricultural workers to highly paid information technology workers with work visas (green cards). The latter comparison explains why many large IT companies—Facebook, Microsoft, and scores more—are joining agri-business, construction, landscaping, restaurant, and hospitality associations in lobbying hard for amnesty and 30 to 35 million more legal immigrants in the next decade. This would be bad news for most American workers and taxpayers, but big profits to them. This is not free enterprise. It is called “rent seeking” in economics and is basically the use of power politics to establish monopoly or special advantages over competitors or to drive down labor costs by flooding the labor market with low-cost foreign labor, legal or illegal.

Renowned Harvard University labor economist George Borjas, himself a Cuban immigrant, has estimated the amount of wage suppression for American workers caused by both legal and illegal immigration since about 1980. The current number of illegal immigrants in the U.S. is just under 12.0 million (FAIR). Borjas estimates that this drives down the wages of American workers about $109 billion per year. Based on the 104 million non-immigrant households used by the recent Heritage Foundation study of the fiscal costs of illegal immigration, the economic cost of illegal immigration is approximately $1,049 per non-immigrant household per year. This would also be approximately correct for North Carolina non-immigrant households. It would be much more, if we added the cumulative effect of illegal immigrants benefiting from seven amnesties since 1986. Legalizing illegal immigrants does not erase their negative impact on fiscal and economic costs. Because amnestied former illegal immigrants are eligible for more benefits and remain in very-low tax brackets, each amnestied household costs 32 percent more to U.S. and NC taxpayers.

Again, extrapolating from Borjas’ data, the economic cost per year to North Carolina workers for illegal immigration would be approximately $3.6 billion. This would be offset, however, by $3.9 billion in higher profits for the users of illegal immigrant labor, for a net economic benefit to the North Carolina economy of approximately $298 million, which is more than offset by the $2.0 billion annual fiscal deficit. North Carolina employer use of illegal immigrant labor is essentially transferring $3.6 billion dollars from North Carolina workers to their own pockets, and taxpayers are subsidizing this corrupt scheme at $2.0 billion per year (less employer taxes).

How about the social costs of illegal immigration in North Carolina? Like the cost of increased crime—which is real—it is very difficult to measure but worth heavy consideration. NCFIRE (North Carolinians for Immigration Reform and Enforcement) [NCFIRE@ncfire.info] has compiled the number of child rapes based on arrest and court date records in North Carolina involving confirmed or highly probable illegal aliens for the last six months

November 2013—87 individuals—350+ charges.

December 2013—89 individuals—350+ charges.

January 2014—52 individuals—250+ charges.

February 2014—34 individuals—150+ charges.

March 2014—82 individuals—250+ charges.

April 2014—93 individuals—350+ charges.

Each case may have multiple charges or multiple victims.

North Carolina Taxpayers are paying $2.0 billion dollars per year as an indirect subsidy to employers of illegal immigrants. North Carolina workers are losing $3.6 billion per year in wages, while illegal immigrant employers are making $3.9 billion more per year. Illegal immigrants have been involved in 437 child rape cases in the last six months. Why are our news media and political leaders silent about these things? Why are pro-amnesty and cheap-labor special interests pouring millions of dollars into North Carolina election campaigns? Follow the money and weep for our state, our country, and our children. We are near the edge.

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