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Bulls & Bears
Trading Pit: Illegals Stealing Our Economy?
Illegal immigrants are coming over here looking for a better life, but are sticking us with the bill. Taking jobs from Americans, driving down wages, and burdening our schools and health care systems. What's this mean to our economy?
Paul McGuire: Illegal immigration is a titanic problem for America. Illegals pay $16 billion in taxes, but cost us $36 billion in goods and services. 33 percent of prison inmates in California are illegal. It costs taxpayers $55,000 during the average lifetime of an illegal immigrant. If you add up the medical, school, education it’s a huge loser. The only people who benefit are a handful of highly paid CEOs. The average middle class American is getting ripped off. In California, 50 percent of the hospitals are in the red or going bankrupt due to illegal immigrants. And in Los Angeles, you have to wait 2-3 hours before you can see a doctor because so many illegals are in the waiting room!
Tobin Smith: Those numbers are absolutely accurate. However, you have to take that over a $13 trillion economy. From an economic standpoint, the cash payments and all the unrecorded numbers take the economy way down. Most important, you have to look at the value that is added by these jobs. These illegal immigrants are being hired because Americans won’t do these jobs.
Scott Bleier: For every illegal cheap laborer in America, you have a family behind them that needs healthcare, schools, and social services. Illegal immigration is a big problem, but people are going to come here whether we like it or not. So, we have to give them an opportunity to become legal through work and paying taxes.
Gary B. Smith: It probably does decrease wages for the average people living and working in California. That’s the argument for raising the minimum wage. Those workers benefit, but everyone else pays extra because the prices for all the goods and services prices rise. All of our efforts to keep the illegals out aren’t working. We have to find a pathway to help them become legal. We do need them for unskilled positions in construction, retail, and tourism. Without them, the cost of filling those positions skyrockets.
Joe Battipaglia: This is a national hot button issue because it is an issue of national security, not because they are illegal. While there is no hard data on the economic contribution of illegals, the domestic economy has flourished over the past 25 years. During this period, 43 million jobs were created along with $30 trillion of wealth. I would argue they have a place in this society and that they’re not hurting the stock market.
Pat Dorsey: This country was built on immigrants, and we'd be fools to turn them away. The only folks who get unambiguous gains out of this are the employers who break the law who hire them. Why are we talking about the folks who risk their lives to work for $6 and hour instead of the employers who hire them? We need to attack this issued from the demand side and require that they register and get real social security numbers. There's a reasonably free global market for human capital just like the one for financial capital. If we dissuade people from coming here, they'll go elsewhere and benefit someone else's economy.
It’s April Fool’s Day, but we’ve got the stocks you’d be a fool not to buy!
Joe Battipaglia: I really like Lexington Corporate Properties (LXP), which offers a 7 percent yield on an equity REIT (real estate investment trust). It has a lot of opportunity for growth. (Lexington Corporate Properties closed on Friday at $20.85.)
Tobin Smith: I don’t like it. You’re a fool for getting in now.
Pat Dorsey: Dana Auto Parts, which has had accounting problems, is a big tenant of Lexington and I’m worried about its credit risk.
Scott Bleier: The yield is safe, but you will need some patience to own this one.
Go with Western Digital (WDC). It makes computer disk drives. These are everywhere and the popularity is only getting bigger. This is one you’ve got to buy. It’s going to $30. (Western Digital closed on Friday at $19.43.)
Pat Dorsey: This is an intensely competitive business. Stay away.
Tobin Smith: Don’t buy it.