Illegal Aliens Cost The US $148.3 Billion A Year: The Border Wall Costs $21.6 Billion

National Economics Editorial – by Spencer P Morrison

President Donald Trump announced that he will fulfill his campaign promise to build a nearly 2,000 mile long wall (not a fence) along America’s southern border with Mexico.

The idea is that a physical barrier will act as a low-cost deterrent, and will help stem the flow of illegal immigrants entering America via Mexico—the hope is that once an illegal alien (particularly a criminal migrant) is deported, they won’t return. 

The plan is simple and time-tested—China’s Great Wall did it’s job, so did Hadrian’s Wall in Roman Britain—and yet it’s come under fire from the mainstream media.

They claim that the wall will be prohibitively expensive, that illegal immigrants contribute to America’s economy (so there’s no reason to deport them), and that the wall won’t work.

They’re factually wrong on all accounts—let’s look at the numbers.

How Much Will Trump’s Wall Cost? $21.6 Billion.

The first question we must address is very straightforward: how much would it cost to build a wall along the Mexican border?

We don’t know for sure (construction costs rarely align with initial estimates), but we have a few good estimates.

Senate leader Mitch McConnell said Congress estimates the wall will cost $15 billion at most—he said it would likely fall within a range of $12 to $15 billion.

However, according to more recent information acquired by Reuters, the border wall will cost $21.6 billion, and will take roughly 3.5 years to build.  This is according to a document from the Department of Homeland Security.

It’s probably our best current estimate, and this article will proceed under using this cost assumption.

On the high end (which can’t be totally discounted, given the nature of construction projects), the left-wing advocacy group cum “newspaper” the Huffington Post said the wall would cost roughly $40 billion.  Their evidence is based on a study done by MIT (although their assumptions about the size and building materials may be why the projection is so high).

Either way, the cost of the wall pales in comparison to the cost of illegal immigrants in America.

In fact, illegal aliens cost just the state of California over $30 billion a year.

I encourage you to read my detailed report on the subject: it breaks the costs down comprehensively, in a way this article won’t.

How Many Illegal Immigrants Live In The US?

In all honesty, no one really knows—they’re undocumented.

All I can give you are some estimates.  On the low end, Pew Research estimates that the number of illegal immigrants in the US is roughly 11.1 million—this number tracks fairly closely with official government figures.

On the high end, estimates peg the number of illegal aliens in the US at roughly 30 million people.  This number has been proposed by conservative author Ann Coulter, who based the figure off banking and remittance payment records, government service demand, and migration projections from ICE.

Frankly, I think the math makes much more sense with the high estimate, but in the interests of neutrality, this article goes with the low estimate (11.1 million).

The Annual Cost Of Illegal Immigration In America: $148.3 Billion

Illegal immigrants are expensive, despite what open-borders and open-market activist groups like the Cato Institute think.

Not only do illegal aliens cost the government far more far more than they pay in tax, but they increase competition for work, which drives wages down and causes unemployment for citizens who can’t work for $2 an hour (due to obvious legal impediments).

There are 3 basic types of costs I included in this estimate.

1. Federal Expenses: $31.9 Billion

Expenses incurred at the federal level total $28.6 billion, according to the FAIR report.

This number includes things like educational subsidies ($2.1 billion), healthcare costs ($5.9 billion, of which $750 goes to Obamacare subsidies), and justice costs etc.

2. State & Local Costs: $93.3 Billion 

This category includes a much broader range of expenses which I won’t go into here.

Again, you can get a sense of what this looks like by reading my cost analysis on California.

Once adjusted for inflation, as per the Bureau of Labor Statistics calculator, the US government spends roughly $125.2 billion per year on illegal immigrants.

This is slightly mitigated by the fact that migrants contribute $14.9 billion in federal, state, and local taxes (inflation-adjusted).

3. Remittances: $38 Billion

The final major category are remittances (money transferred from someone working in the US to their family abroad).

For this calculation, I assume that remittances are being sent by first generation immigrants (legal or illegal), and that they are equally likely to remit.  I include remittances in my calculation because it’s a financial drain on the country—the money evaporates from the economy, never to be spent domestically or support local businesses.

According to Pew Research America lost $133.6 billion in remittances in 2015—$136.9 billion when adjusted for inflation.

Given that there are 40 million foreign-born American citizens, and roughly 11.1 million illegal immigrants (again, according to Pew), this means there are 51.1 million people sending remittances.

Given this ratio, we can guess that illegal immigrants send $38 billion from America every single year.

Of course, the wall wouldn’t impact illegals from a different continent who overstayed their visas, but when combined with reinvigorated border security, it would certainly help staunch the bleeding.

When all is accounted for, illegal immigration costs America $148.3 billion per year.

“But We Need Illegal Immigration To Grow The Economy”

Some argue that we need illegal immigration to grow the economy and maintain our quality of life.  They’re wrong.

Why?

1. It’s simply untrue.  Just look at places like Japan.  Japan has very little immigration, and yet is able to maintain its high standard of living by investing in better technology, and becoming more efficient.  They can still afford their morning cup of coffee, don’t worry.
2. Economies grow, and become more prosperous, when they become more productive—increasing the population my expand the economy, but it doesn’t necessarily make people better off (which is the whole point).If anything, cheap labor (which at this point is starting to resemble a serf class) is undermining our need to invest in better technology, which is stunting our long run economic growth.  And as I’ve mentioned, it’s also distorting our labor market by depressing wages and creating artificial unemployment.

The only people that benefit are the rich.

Will The Border Wall Work? Yes.

The final question is whether or not Trump’s wall with Mexico will work, because if it doesn’t, the whole argument is pointless.

https://twitter.com/netanyahu/status/825371795972825089

Of course it will work: it worked for the East Germans (Berlin Wall), for the Hungarians, and for the Israelis—say what you want about Netanyahu, he knows how to build a wall.

It’s simple, walls always work.

The evidence for this is overwhelming.  I won’t spoon-feed it to you, but here’s a starting point.

A sturdy wall, combined with competent border patrols is 90-99% effective.

What this means is that Donald Trump’s wall is a good investment.  It will help ensure that once illegal immigrants (particularly criminals) are deported, they won’t be coming back.  This will save us a ton of money in the long run.

Illegal aliens are costing this country $148.3 billion every single year.  If we can even cut that down by a third, the wall’s more than paid for itself in a year.

Build the wall.

National Economics Editorial