In the American Heritage Dictionary the term Anchor baby is as defined - A child born to a noncitizen mother in a country that grants automatic citizenship to children born on its soil, especially such a child born to parents seeking to secure eventual citizenship for themselves and often other members of their family.
The term is a derogatory statement and should be labeled as such. The definition of the word makes it sound like the purpose of undocumented people coming to a country is to intentionally have babies only to secure them a spot for later citizenship. This definition is simply not true and it is no one's sole purpose to do to use their children in such a way. it's dehumanizing, an attack on an innocent child and says more about the user of such a term than the one being labeled.
So we need to label this term a derogatory or remove it from the dictionary!