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Running head: EFFECTS OF IMMIGRATION IN THE ECONOMY OF TEXAS

Community Problem Report: Effects of Immigration in the Texas Economy

Diana Hernandez Vega
The University of Texas at El Paso

Abstract
Immigration in Texas has been increasing constantly. Its effects have had good and bad
influences on the economy of this state. The research made for this research paper included
looking for information online within 20 articles. The main negative effect that immigration had
in Texas economy was that millions of dollars where lost in the education costs. In addition,
health care costs are close to education expenditures. Poverty rates are higher too. Also, with the
extended research that was done, we found some positive outcomes that immigration has in
Texas such as the increasing of work force. With the small businesses created by illegal aliens,
the income has increased, adding worth to the economy. Tying in with this effect, the businesses
acquired employees, making the job growth more successful. Immigration can affect it all.

According to the U.S. Census Bureau in 2013, Texas is the home of 4,369,271
immigrants. This is more than the total population of Los Angeles, California. Migration can be a
voluntary or involuntary thing. People come looking for the American Dream and others come
because of violence, natural disaster, war, and so on. Either ways, migrating is not an easy step.
There are many factors you have to accommodate to, money being the biggest one. Immigration
in Texas has affected its economy by affecting the costs of education and health care, increasing
poverty rates, helping the work force, adding more jobs, and improving the income.
The most challenging outcome of immigration is the cost of K-12 education. It is
estimated that Texas spends about $9,000 on students in this educational level according to The
National Education Association (NEA). Other associations say that the expenditures are $11,000
and others say its about $10,000. In other words, it is spent about $9,000-$11,000 per students
between K-12. Another fact that needs to be in mind is that the population of illegal aliens is
about 2 million. The cost that is being inverted to these illegal aliens is about $22 billion dollars.
This amount is only for low education levels.
Post-secondary education, which means college, is another big spending. In 1996 that
required states to offer in-state tuition rates to residents of other states if they offer those rates to
illegal Texas residents Jack Martin (2014, p.9). Students take advantage of this act. One out of
eight illegal students pursue college after high school and completes a bachelors degree. If
illegal students where to pay out-of-state tuition they would pay about $1,300 for a two year
institution. If they were in a four year institution they would pay $11,000 more. If you were to
multiply this by the amount of students that pursue two year and four year colleges you would be
getting $97 million dollars out of this. This is the amount of money that is being lost due to this

act. Apart from education being a big loss in money, there are more factors that affect the
economy.
The second most problematic effects about immigration is the cost of health services.
The emergency room is one of the prime costs. Since it does not ask for immigration status,
people tend to take advantage of its services. Immigrants cannot pay these costs, therefore either
the federal government pays or covers the expenses with Medicaid, or the hospital absorbs these
expenditures. According to the Texas Hospital Association in 2002, the state costs to treat
undocumented people added up $393 million dollars. This was more than 10 years ago, hence by
now the cost must have gone way up.
This is not even the final result of all the costs added up. Health care covers more than
just uncompensated care to immigrants, it also covers temporary assistance to needy families,
Medicaid, emergency Medicaid, immigrant CHIP, children with special health care needs, and
federal reimbursement. Also take note that there are two different costs, the federal and the state
costs which each of them have their own cost. On Figure 1, you can see all the costs in dollars
for each item. The federal cost is
about $572.5 million, and the state
cost is about $385.5 million.
Adding both of those expenses you
would get about a billion dollars on
just health care expenses. All these
expenses are not all specified to
immigrants but the majority is.
Texas (Bernsen)

Figure 1. Total Health Care Costs to

Another damaging effect that immigration has on the economy of Texas is poverty.
Poverty is measured by comparing annual income to poverty thresholds, which are a set of dollar
values. These poverty thresholds vary by many factors like how many people are in a home and
their ages. In Texas, the poverty rates have increased drastically that they now are higher than
the rate of the country. In the 2013, the U.S Census Bureau said that about 15.8% of the
population lives in poverty. In Texas, according to the September 2013 bureau report, the poverty
rate is stated to be around 17.5%. The rates are imperfect all across country because the cost of
living depends on the city/town you might live in. Texas has a low cost of living but what makes
it have such high poverty rates is that cash welfare benefits are poorer. These welfare benefits
provide financial assistance until the person is able to get a job and be financially stable. The
main requisite to qualify for cash welfare benefits is being an American citizen. This is a problem
since immigrants do not qualify, making the rates get higher.
What some people do not realize is that moving to another city is already a big change.
Therefore, moving to a whole different country is a bigger adjustment. There are big differences
in the way people live between two countries. Everything changes, especially if you come
illegally, you lose so many right so it makes it even harder to adapt.
Do not think immigration as all that bad. It has its pros and cons like every other
controversial problem. Just like any other person, immigrants can also have all types of
educational levels. This makes them get into a job they are really good at. Because of this,
immigration has increased the labor force in Texas. Labor force is a number of people who are
employed or are looking for employment in a region within a certain age. Those of age 16 to 64
are the primary ones who join labor work. According to the American Community Survey (ACS)
of 2007-2011, there is a 67% rate of immigrants working between those ages while there is a

64% of U.S. born Texans working

between those ages. As you can see,
immigrants have a higher rate, but
they earn less than minimum wage.
Without the illegal immigrants, the
workforce would decrease by 6.3%.
As seen in Figure 2, Texas (blue)
has a higher rate in labor force than
the U.S (black). No matter what
they earn, immigrants still work
hard increasing the labor force.

Figure 2. Share of Unauthorized Immigrants

in Labor Force (Passel, Cohn,

2010)
Furthermore to contributing to the labor force, immigrants contributed with their small
businesses. According to the Center for Public Policy Priorities (CPPP) report Immigrants
Drive the Texas Economy: Economic Benefits of Immigrants to Texas in 2011, $65 billion were
contributed by immigrants by wages, salary, and business earnings. Another $4.4 billion in
earnings were contributed by their small businesses to the economy in 2011. Immigration has
actually added worth to the economy.
Since immigrants start their own small businesses, this makes them create more jobs.
Obviously, not all businesses become big companies, but all these small businesses require
employees. Not only do they create jobs for themselves but also for American workers.
According to the Fiscal Policy Institute, these small businesses employed about 4.7 million

people in 2007, creating about $776 billion annually. These immigrants create jobs by buying
U.S. goods, and creating their own business. This is another positive impact that immigration
has.
As seen, immigration effects is a big debated topic all around the U.S. It is important to
know its pros and cons for future government arguments. Texas is one of the largest states to
receive immigrants around the world, especially from Mexico. The effects illegal alien
immigration has on the economy of Texas include how it affects the expenditures of education
and health care, poverty rates get higher, percentages in labor force and job growth are bigger,
and income is higher.

References
Bernsen, J. (n.d.). The Costs of Illegal Immigration to Texas. Retrieved November 5, 2015, from
http://www.lonestarreport.org/LinkClick.aspx?fileticket=5Vg_zxX8oz8
Value Added: Immigrants Create Jobs and Businesses, Boost Wages of Native-Born Workers.
(2012, January 13). Retrieved November 5, 2015, from
http://www.immigrationpolicy.org/just-facts/value-added-immigrants-create-jobs-andbusinesses-boost-wages-native-born-workers
Beeson, A., Helmcamp, L., & Cerna, A. (2014, September 17). Immigrants Drive the Texas
Economy: Economic Benefits of Immigrants to Texas. Retrieved November 5,
2015,

from http://forabettertexas.org/images/EO_2014_09_PP_Immigration.pdf

Orrenius, P., Zavodny, M., & LoPalo, M. (2013, November). Gone to Texas: Immigration and
the Transformation of the Texas Economy. Retrieved November 5, 2015, from
https://www.dallasfed.org/assets/documents/research/pubs/gonetx.pdf
Furman, J., & Gray, D. (2012, July 12). Ten Ways Immigrants Help Build and Strengthen Our
Economy. Retrieved November 5, 2015.
https://www.whitehouse.gov/blog/2012/07/12/ten-ways-immigrants-help-build-andstrengthen-our-economy
Martin, J. (2014, January). The Fiscal Burden of Illegal Immigration on Texans. Retrieved
November 5, 2015, from http://www.fairus.org/DocServer/researchpub/TexasCostStudy_2014.pdf

Ruark, E. (2011, May). Immigrant, Poverty, and Low-Wage Earners the Harmful effect of
Unskilled immigrants on American Workers. Retrieved November 5, 2015, from
http://www.fairus.org/docs/poverty_rev.pdf
Passel, J., & Cohn, D. (2011, February 1). Appendix A: Additional Figures and Tables. Retrieved
November 5, 2015, from http://www.pewhispanic.org/2011/02/01/appendix-aadditional-figures-and-tables/