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Underground economy growing as
illegal immigrants head to new states, more jobs

By Angie Wagner
The Associated Press, December 3, 2005
http://www.detnews.com/apps/pbcs.dll/article?AID=/20051203/BIZ/512030376/1001

Reprinted under license from The Associated Press.
Click here for pdf of this article.


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Illegal immigrants hold about 12 million to 15 million jobs in the United States, or about 8 percent, according to Justich. That may seem a small percentage, but the pressure of its presence helps keep wages for unskilled jobs low. And many of the jobs are off the books, meaning the government may be foregoing $35 billion a year in income tax collections, he said.

That figure, however, is partially offset by employers withholding taxes for illegal workers who never file returns or seek benefits, said Marti Dinerstein, a Center for Immigration Studies fellow.

An analysis by Barron's estimated the size of the shadow economy at about $970 billion, or nearly 9 percent of the goods and services produced by the real economy.

The service sector employs the most illegal immigrants with 33 percent, followed by the construction industry, production and food processing and farming, according to the Pew Hispanic Center.

The hotel and restaurant businesses and construction are the big employers. More than 1 of every 4 drywall installers and landscape workers are illegal, the center estimates. About 1 in 5 workers in meat and poultry packing are illegal, as are about 1 in 6 in the leisure and hospitality industry or construction.

Illegal immigrants make far less than the rest of the population. Their average family income of $27,400 is more than 40 percent below the legal immigrant or native family income of about $47,700, the Pew Hispanic Center found.

That's because illegal immigrants work cheap and don't complain; those that do complain are easily replaced. They have little bargaining power, and employers take advantage of that.

'We're seeing the wage bases in these industries erode simply because there is a glut of low-skill labor flooding the low-skill market,' said John Keeley, spokesman for the Center for Immigration Studies. 'The business community has become addicted to it. It's a way for them to keep their business costs down.'

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