Study: Illegals Depress Wages by $1.4 Billion in Arizona

Mike Sunnucks, Phoenix Business Journal, January 7, 2008

Illegal immigrants depressed wages in Arizona to the tune of $1.4 billion in 2006 and dipped lower-skilled legal workers’ pay by 4.7 percent.

That is according to a study by a Harvard University economist commissioned by the Maricopa County Attorney’s Office. The MCAO had the study done as part of its defense of the state’s new employer sanctions law.

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The study by Harvard economist George Borjas said hiring illegal immigrants depresses wages because they work for lower pay and sometimes are paid under the table. The study said illegal immigrants primarily impact wages and jobs held by legal workers with lower education levels. Borjas said that illegals make up 10 percent of all state workers and decrease all wages by 1.5 percent.

The study did not look at the economic benefits of immigrants, such as the taxes paid or whether the lower wages result in lower costs for food and other items.

Employers say they hire illegals for a host of reasons including that they are unable to find legal employees to take certain jobs and that immigrants’ have a better work ethic than legal workers. Sanctions law backers say businesses hire illegals because they offer cheap labor.

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A University of Arizona study published in October concluded that illegal immigrants had a net fiscal benefit of $940 million to $1 billion. The UA study found that illegals paid about $2.4 billion in various taxes but cost the state about $1.4 billion in services.

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