Illegal Immigration And The Underground Economy

By Chris W
The Libertarian Patriot

Victor Davis Hanson has an interesting piece on PajamasMedia today, detailing the immigration problem in California and brings up some interesting points regarding the cash-only economy that has sprouted up.
There is a vast and completely unreported cash economy in Central California. Tile-setters, carpenters, landscapers, tree-cutters, general handymen, cooks, housekeepers, and personal attendants are all both finding work and being paid in cash. Peddlers (no income or sales taxes) are on nearly every major rural intersection. You can buy everything from a new pressure washer to tropical fruit drinks. For this essay, I stopped at one last week and surveyed their roto-tillers, lawn mowers, and chain saws, new and good brands.

New “restaurants” are sprouting all over the highways — mobile stainless-steel encased canteens with awnings and chairs set up along the road. And yet for all the cash economy, it seems almost everyone in the food stores and doctors’ offices are on food stamps, Medi-Cal, and rent subsidies. A carload of people drove in last week, inquiring about a house nearby; the occupants assured me that they had county housing vouchers.

Cash wages have meant augmented entitlement money and are competitive with those who are formally employed and who pay 30% of their money in payroll, health care, and federal, state, and local income tax deductions. The result is an odd sort of poverty, in which superficially the unemployed and poor to the naked eyed are almost identical to the upper middle classes.
Herein lies the problem with the federal government, and California for that matter, turning a blind eye to the issue. While these illegal immigrants who work under the table are subsidized by taxpayer funds, receiving assistance for food, housing, education and health care, they are in many cases better off than those of us that work on the books and pay taxes due to the fact that they pay no taxes on their income and receive free services from the government.

And this is not a problem that is isolated to California. Illegal immigrants nationwide are afforded the same government benefits while earning incomes off the books. While they have the best of both worlds, free government services and a tax-free income, those of us who go to work within the system and suffer from the legal plunder of government on the federal and state levels are left with less.

So what is the solution?

First and foremost the borders need to be secured. Without this, there can be no immigration reform. If people can enter the country illegally at will, all of the reform in the world will not matter.

Second, we need to end the welfare-state. Without government subsidies, many illegal immigrants will not have the initiative to come to the US. This would also decrease the financial strain on the states because it would lessen their costs in the areas of education, health care and other social services.

Finally, we need to have a common sense program that allows for would-be immigrants, along with those who are already here illegally, to gain temporary, legal work status in this country. Guest workers would need to apply for entry and be subject to a background check along with paying a processing fee. After completing this they would be issued a guest worker/taxpayer ID card, which would subject them to the same taxes that the rest of us pay, and be allowed to work in the US for a predetermined period of time. This would be a zero-tolerance policy and anyone failing to comply would face immediate deportation. The same would go for anyone convicted of a felony. Employers who don't comply would also face strict penalties.

We cannot continue to whistle past the graveyard on this issue. Our nation and states are in too deep of debt to continue to subsidize those that only take and do not contribute to the well-being of our republic. Instead of calling for greater contributions from those who are already paying more than their fair share, we should demand that those who currently take advantage of our generosity put some skin in the game.

Via Memeorandum


  1. This comment has been removed by the author.

  2. Great read, Chris. And you are totally correct on the peril re: illegal immigration and the unfettered welfare state that we have today. We simply cannot have both an open border and an unlimited welfare system.

  3. Great read, Chris. And you are totally correct on the peril re: illegal immigration and the unfettered welfare state that we have today. We simply cannot have both an open border and an unlimited welfare system.

  4. Reb

    If people want to see what the US will look like under the progressives' socialistic ideal, they need to look no further than CA.

  5. Yet, my mother wonders why should I land an Actuary job, my only stipulation is it can't be in California (or any other socialist state like NY, IL, PA or MASS), and strongly considering Texas (which I fear will eventually become one once the illegals gain big enough numbers there as well). It's getting really sad and scary when oversea jobs (as in the case of Actuaries) look more attractive than home grown jobs. Yet, that is what this unencumbered invasion and selling out of our country is leading to.


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