September 21, 2021
There are many compelling reasons why having a large undocumented population is a problem for society. It undermines law and order, permits a shadow economy that is harder to regulate, and is simply unfair to the millions of immigrants who have come here legally. Yet, while the undocumented population frequently comes under fierce criticism, the data shows that a large number of the nearly 11 million undocumented immigrants here are working, paying taxes, and even starting their own businesses. They also play an integral role in our economy, often filling jobs in agriculture, construction, and hospitality that would otherwise remain vacant.
The DACA-Eligible Population
DACA-eligible people contribute billions of dollars to the U.S. economy. Clawing back the protections afforded to DACA recipients will likely upset local economies, communities, and schools, hurting employers and businesses dependent these young immigrants as workers and customers.
|Number of DACA Eligible Residents||1,250,202|
|Share of DACA Eligible Population in Labor Force that is Employed||93.3%|
|Number of DACA-Eligible Entrepreneurs||43,115|
|Taxes & Spending Power|
|DACA-Eligible Household Income||$23.4B|
|— State & Local Taxes||$1.8B|
|— Federal Taxes||$2.2B|
|Total Spending Power||$19.4B|
Filling Jobs in Key Industries
Most undocumented immigrants come to the United States because of work opportunities. These individuals are far more likely than the rest of the population to be in the prime of their working years, ranging in age from 25-64. Studies also indicate that undocumented immigrants are not displacing U.S.-born workers. Rather, they are filling jobs that few Americans are interested in pursuing.1 One sector, in particular, offers a striking illustration: Undocumented immigrants account for 50 percent of all hired field and crop workers, making them essential to the success and continued viability of American farms.2
1 Maria E. Enchautegui, “Immigrant and Native Workers Compete for Different Low-Skilled Jobs,” Urban Institute, 2015. Available online.
2 Thomas Hertz Zahniser Steven, “USDA Economic Research Service - Immigration and the Rural Workforce,” United States Department of Agriculture Economic Research Service, 2013. Available online.
|90.0 percent: Share of undocumented population, working age, 2016.|
|80.3 percent: Share of foreign-born population, working-age, 2016.|
|62.2 percent: Share of native-born population, working-age, 2016.|
|Tourism, Hospitality, and Food Service||7.1%|
|Occupation||Share of Workers, Undocumented||Number of Undocumented Workers|
|Agricultural Workers (All Types)||36.1%||244,459|
|Grounds Maintenance Workers||26.7%||266,551|
|Other Food Preparation and Serving-Related Workers, including School Cafeteria Attendants and Hospital Food Service Workers||25.1%||109,223|
|Textile, Apparel, and Furnishings Workers||23.1%||120,059|
|Cooks and Food Preparation Workers||22.6%||470,938|
|Construction Trades Workers||20.0%||1,066,648|
|Helpers, Construction Trades||19.3%||6,418|
|Building Cleaning and Pest Control Workers||19.0%||662,014|
|Food Processing Workers||18.6%||105,993|
Economic Contributors, not Criminals
Contrary to popular rhetoric, undocumented immigration is not linked to a spike in U.S. crime rates. Between 1990 and 2013, a period when the number of undocumented immigrants more than tripled, the rate of violent crime in the U.S. fell by 48 percent.3 Instead of committing crimes, the vast majority of undocumented immigrants in the country are working4 and paying into our tax system.5 And because they are ineligible for most federal benefits, experts have long argued they are net contributors to the Medicare and Social Security programs.6 They have a similar impact at the state and local level. Even in Florida and Arizona, states with large undocumented populations, immigrants pay more in state and local taxes than they draw down in public resources like education each year.7
3 Walter Ewing, Daniel E. Martinez, and Ruben G. Rumbaut, “The Criminalization of Immigration in the United States” (American Immigration Council, July 13, 2015). Available online.
4 George J. Borjas, “The Labor Supply of Undocumented Immigrants,” NBER Working Paper (National Bureau of Economic Research, Inc., 2016). Available online.
5 Lisa Christensen Gee, Matthew Gardener, and Meg Wiehe, “Undocumented Immigrants’ State & Local Tax Contributions,” The Institute on Taxation and Economic Policy, 2016. Available online.
6 Roy Germano, “Unauthorized Immigrants Paid $100 Billion Into Social Security Over Last Decade,” VICE News, 2014. Available online.
7 Emily Eisenhauer et al., “Immigrants in Florida: Characteristics and Contributions,” Research Institute on Social and Economic Policy, Florida International University, 2007. Available online.
Judith Gans, “Immigrants in Arizona: Fiscal and Economic Impacts” (Udall Center for Studies in Public Policy, University of Arizona, 2008). Available online.
|95.8percent: Employment rate of undocumented immigrants, 2018|
|$100 billion: Surplus generated by undocumented immigrants in the Social Security program in the last decade.|
|$35.1 billion: Surplus generated by undocumented immigrants in the Medicare Trust Fund, 2000-2011.|
|48 percent: Decline in U.S. violent crime rate from 1990-2013, a time when the undocumented population tripled.|
|— Federal Tax Contribution||$20.1B|
|— State & Local Tax Contribution||$11.8B|
Starting Businesses, Creating Jobs
Despite financing and licensing obstacles, undocumented immigrants frequently start their own businesses. In 2014, almost 10 percent of the working-age undocumented population were entrepreneurs. In more than 20 states, they boast higher rates of entrepreneurship than either legal permanent residents or citizens of the same age group. These self-employed workers frequently create American jobs. Their companies also generated $17.2 billion in business income in 2014.
|808,199: Number of undocumented entrepreneurs, 2018.|
|$15.2 billion: Total business income of undocumented entrepreneurs, 2016.|
|State||Business Income, 2016|
Costs of Deportation
More than eight out of 10 undocumented immigrants have lived in America for more than five years. Setting aside the question of whether policymakers have the political will to deport millions of individuals so well established in our society, studies indicate that any such effort would come at an enormous cost. The economist Doug Holtz-Eakin’s American Action Forum conducted one study on the cost of mass deportation.8 By even the most conservative estimates, finding, apprehending, detaining, processing, and transporting the undocumented population would deal a Great Recession-like blow to the U.S. economy.
8 Ben Gitis and Laura Collins, “The Budgetary and Economic Costs of Addressing Unauthorized Immigration: Alternative Strategies” (American Action Forum, March 6, 2015). Available online.
|6.4 percent: Amount the labor force would shrink due to mass deportation.|
|$1.6 trillion: Estimated reduction of U.S. GDP as a result.|
|5.7 percent: Amount the U.S. economy would shrink due to mass deportation.|
|$400 billion: Direct cost to the federal government.|
Deporting the estimated 8.1 million undocumented immigrants in the workforce would not automatically create 8.1 million jobs for unemployed Americans. The reasons are twofold: By shrinking the number of consumers, entrepreneurs, and taxpayers, mass deportation would shrink our economy and the number of jobs available. Secondly, natives and immigrants often possess different skills and education levels, meaning they are imperfect substitutes.9 Data from Arizona and Alabama, two states with strict immigration laws, offer cautionary tales.10
9 “Immigration Myths and Facts” (U.S. Chamber of Commerce, April 14, 2016). Available online.
10 Bob Davis, “The Thorny Economics of Illegal Immigration,” Wall Street Journal, February 9, 2016, sec. Economy. Available online.
12 Samuel Addy, “A Cost-Benefit Analysis of the New Alabama Immigration Law” (Center for Business and Economic Research, Culverhouse College of Commerce and Business Administration, The University of Alabama, January 2012). Available online.
|2.5 percent: Decrease in the total number of jobs available in Arizona due to the passage of SB 1070, 2008-2015.|
|<10 percent: Share of Arizona jobs once held by undocumented immigrants that were filled by U.S.-born workers and legal Hispanic immigrants by 2015.11|
|70,000: Estimated minimum number of jobs lost in Alabama within one year of passing its strict immigration law.|
|$10.8B: Estimated amount immigration law potentially cost Alabama’s total GDP.12|
Economic Impact of a Path to Legalization
If Congress provided a path to legalization for the millions of undocumented immigrants already here, the economic benefits would be sizable. While legal status would increase access to a variety of public benefits programs, it would also allow newly legalized immigrants to pursue new job opportunities, boosting productivity and earnings. The accompanying increase in consumer spending and tax revenue would help federal, state, and local governments offset associated costs. If undocumented immigrants were required to pay back taxes, U.S. tax revenues would see a further boost.13
13 Robert Lynch and Patrick Oakford, “The Economic Effects of Granting Legal Status and Citizenship to Undocumented Immigrants,” Center for American Progress, 2013. Available online.
|$68 billion: Additional state and local tax revenue that would result from legalization within a decade.|
|$116 billion: Additional federal tax revenues that would result.|
|$1.4 trillion: Estimated GDP growth due to legalization.|
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New American Economy is a bipartisan research and advocacy organization fighting for smart federal, state, and local immigration policies that help grow our economy and create jobs for all Americans. More…