Illegal Migration’s Effects on Wages, Prices, and Taxes

By Antonio Graceffo
Feb. 9, 2024 11:00 am



Allowing a flood of undocumented and unvetted migrants to enter the US without visas undermines national security and fosters problems such as crime, illegal drug smuggling, and human trafficking. There are also concerns about potential espionage or terrorism threats, especially now that more migrants are turning up from China, Russia, or the Middle East. However, what the average American experiences daily is the consequence of integrating a large number of desperate people into the economy. This strains taxes, depresses wages, increases unemployment, and raises housing and medical costs.

Around 10,000 migrants enter the United States each day, driven by various reasons. A key factor is their belief that they can enter without facing punishment, deportation, or being banned from returning permanently. Additionally, incentives such as gift cards, money, cellphones, the possibility of a pathway to citizenship, sanctuary cities, and DACA (Deferred Action for Childhood Arrivals) encourage them. If the border were better protected or if there were consequences such as being turned away, detained, or banned from reentering, the incentive to migrate would decrease, resulting in lower numbers. However, they know they can get away with it, so they come. Ultimately, their desire to be in the U.S. is driven by the prospect of earning more money.

The countries with the highest numbers of migrants arriving at the US Southern border include Mexico, Venezuela, Guatemala, Honduras, and Colombia. In the United States, the federal minimum wage stands at $7.25 per hour, equating to $1,160 for a month based on a 160-hour work schedule. However, several states have set their minimum wage above $15 per hour, resulting in a monthly income of around $2,400. In contrast, Mexico’s minimum wage at the border hovers around $567 per month, and it is approximately $377 elsewhere in the country. Venezuela’s minimum wage is about $100 monthly, while Guatemala, Honduras, and Colombia have minimum wages of $400, $670, and $328 per month, respectively.

The evidence of the adverse effects migrants have on working Americans is found in the economic principle of supply and demand, originally articulated by Scottish economist James Denham-Steuart in his seminal work “An Inquiry into the Principles of Political Economy,” published in 1767. According to this principle, as supply increases, prices decrease. Adding millions of people to the workforce increases the supply of workers, driving down the price or wage. Moreover, these people come from backgrounds where earning $1,000 a month is considered a dream. Liberals claim that migrants only do the jobs Americans don’t want to do. This is a myth. There is no job Americans won’t do, but there are a lot of jobs Americans won’t do for $1,000 a month.

The flip side of supply and demand is that when demand rises, so do prices. With an increasing number of migrants entering the country, the demand for housing and healthcare services goes up. As demand surges, prices follow suit. Typically, in a market economy, excessive prices would lead to reduced demand, causing prices to stabilize. However, the government covers the expenses for housing and healthcare for migrants.

And the government is insensitive to price increases, so prices just keep going up. Even worse, more migrants arrive each month, driving prices up even more. The irony lies in the fact that the pocket money, cell phones, housing, and healthcare for migrants are financed by taxpayer dollars. The unrestricted government demand for these goods and services further escalates prices, making them unaffordable for the average citizen.

Meanwhile, your taxes have to go up to fund these benefits for migrants.

Liberals may argue that taxes haven’t significantly increased, but the government debt is on the rise, essentially deferring taxes that citizens will eventually have to cover. Additionally, the IRS recently recruited thousands of new agents to ensure maximum tax collection from the working population. Another method of funding these programs, without an overt tax hike, involves cutting funding from programs that aid citizens and redirecting it towards migrants. Another ironic aspect is that if the same amount of money were allocated to completing the border wall and securing the Southern border, migration and associated spending would cease. However, due to the continued lack of border security, the costs of supporting migrants will only increase each year.

Congress is now concerned that lots of Americans, particularly people of color, cannot afford rent. If they implement rent control or subsidies, it brings us closer to socialism and entails increased taxes for everyone else. The same applies to proposals like universal basic income (UBI) and government-operated retail stores to maintain retail prices. The Democrats are seen as responsible for allowing illegal immigrants in, and their proposed solution involves taxing the working class while providing more funds to those unable to afford the higher taxes.

https://www.thegatewaypundit.com/2024/02/illegal-migrations-effects-wages-prices-taxes/