Anomalies Abound in the Economics of Illegal Immigration

The three-dimensional interface among illegal aliens, the labor market, and government programs contains a number of anomalies, some good public policy and some not.

As a mini-project I have collected these anomalies and listed them as useful public policy in bold face and bad public policy in italics. The bold face situations, such as illegals’ coverage by the minimum wage, are useful to society because, while they seem to grant a boon to the illegals, what they do more fundamentally is to run up the costs of hiring such workers, which one hopes will discourage employers from using them.

Here’s the set:

Illegal aliens cannot legally work, yet …

  • If employed, they must be paid the minimum wage.
  • If employed, they are covered by workers compensation. 
  • If employed, they must be paid by their employers. 
  • If employed, they must pay taxes and can secure certain tax breaks, but not others. (Illegal aliens can collect additional child tax credits, but cannot claim earned income tax credits as we outlined in an earlier report.)
  • If employed at low wages, an illegal alien’s family is treated more favorably by SNAP (food stamps) than an all-citizen family with an identical income.

Following such (illicit) work:

  • Illegal aliens cannot get unemployment insurance, as U.S. citizens can, if they are laid off.
  • Illegal aliens cannot claim Social Security benefits, though they may have contributed FICA taxes routinely. 
  • Illegal aliens cannot get cash assistance (TANF), but can sometimes get Social Security benefits with illicit SSNs.

Employers are not supposed to hire illegals, but if they do:

  • They avoid Obamacare mandates when hiring illegals rather than U.S. citizens.
  • Wages paid to illegals are regarded as a legitimate business expense.
  • Employer sanctions law is not really enforced.

The reader will note that most of the text in italics is in the employers’ category.

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