Ask Immigration Decoded

Published — January 8, 2019

Trump justifies shutdown, wall by bashing immigrants’ role in economy. What’s true?

President Donald Trump speaks at a roundtable on immigration and border security at U.S. Border Patrol McAllen Station, during a visit to the southern border, Thursday, Jan. 10, 2019, in McAllen, Texas. (AP Photo/ Evan Vucci)

Do undocumented people benefit the U.S. economy? Here’s what the research shows.

Introduction

This post is part of our new community-driven reporting project, Ask Immigration Decoded. Submit your questions, and we’ll answer the most popular questions on our blog, Immigration Decoded.

In this post, we’re answering a question we received from Callie: Please provide evidence-based facts, not just statements, about how undocumented people benefit the U.S. economy.

Blaming immigration — legal and undocumented — for depressing Americans’ earnings and economic prosperity is a constant theme of Donald J. Trump’s presidency.

It’s a claim that Trump campaigned on. It’s a claim he’s used to justify both the government shutdown and his controversial demand for $5.6 billion for a border wall. It’s also a subject complicated by immigration-restriction groups that produce reports about the alleged costs of immigration that appeal to immigration skeptics — but that economists have criticized as biased and methodologically flawed.   

So here is the bottom line: The consensus view among respected economists is that immigration on the whole plays an integral and beneficial role in the economy. Some research has found short-lived negative impact on immigrants already here, primarily, followed by high-school dropouts. But other research has found no initial negative impact or a positive effect on these same groups. Whether documented or not, new working-class immigrants — who are Trump’s primary target — tend to fill entry-level jobs in services and other industries that, in turn, help create higher-paying jobs typically filled by English-speaking citizens or immigrants who’ve been here longer.

Individual incidents of employers exploiting undocumented workers do occur, and they represent a real problem. But when considering the impact on the national economy, it’s wise to remember that undocumented workers represent a fraction of overall immigration nationwide. While unauthorized immigrants may be numerous in certain industries, as a group the undocumented are estimated at only 5 percent of the national labor force. Immigrants overall represent 17 percent.

It’s also useful to recall that before Trump’s rise, labor unions and small and large business associations were mostly on the same page: Both unions and businesses urged Congress to pass a comprehensive reform to legalize longtime undocumented workers, phase in required use of digital ID vetting and create a visa system that can adequately fill labor shortages as they develop.

Economists, too, argue that visa pool restrictions have chronically prevented employers from legally filling jobs with immigrants, who, nonetheless, have been getting hired. “The misalignment between restrictive laws and economic incentives has also caused the population of undocumented immigrants to expand rapidly,” University of California at Davis economist Giovanni Peri wrote in 2013.

This year, as in other years with virtually full employment, demand quickly outstripped availability of a limited number of seasonal non-immigrant non-agricultural H2B work visas. These are the temporary visas that Trump’s Mar-a-Lago Florida resort habitually uses to fill jobs, despite his “hire American” rhetoric.

In 2017, we reported on how Idaho exemplified America’s immigration dilemma.

We found that jobs that Americans occupied in a productive Idaho farm region wouldn’t exist were it not for the lower-paying entry-level jobs at dairies that undocumented immigrants filled, often using fake documents.

We met Idaho dairy owners involved in lobbying to persuade Congress to legalize dairy workers whom employers suspected were probably undocumented. At the same time, we met other Idahoans who were drawn to Trump’s anti-immigrant rhetoric — even though they owed their jobs in local cheese factories, trucking and other industries to dairy farms dependent on immigrants.

We also learned that these same townsfolk in Idaho didn’t understand the actual limits of the immigrant visa system.

Many agreed that dairies were reliant on immigrants because Americans had other options. But they were also under the false impression that dairy owners had access to visas, if they wanted, to sponsor workers, which they do not. Dairy farms, which are daily, year-round operations, cannot hire workers on H2B visas, for example. In addition, some townsfolk erroneously believed that if foreign workers wanted to work legally, all they had to do was get in a line in their countries and patiently wait a turn — also false.    

Their assumptions made it easier for local residents to buy into rhetoric excoriating immigrants.   

Don’t take the economic arguments from us, though: Check out the latest study by the National Academies of Sciences, or NAS, that exhaustively reviewed research on immigration, costs and benefits.  

We link to the NAS report in a story we did in 2018 about how former Trump Attorney General Jeff Sessions — while he was in the U.S. Senate — cherry-picked slanted arguments to help Trump mount a campaign theme claiming that immigration drives down Americans’ earnings.

This rhetoric isn’t hard for many in the public to swallow: The zero-sum view that with fewer workers, you naturally will have higher wages is commonly accepted around kitchen tables. But that’s not the prevailing view among economists about how the modern economy works.

According to economists who worked on the NAS report, the U.S. economy will continue to need immigrants to maintain healthy growth.

Here are some overarching NAS conclusions:

·       “Importantly, immigration is integral to the nation’s economic growth. Immigration supplies workers who have helped the United States to avoid the problems facing stagnant economies created by unfavorable demographics—in particular, an aging (and, in the case of Japan, a shrinking) workforce.”

·       “If the American economy grows and requires more workers both to replace those who retire and to create new firms and industries, the primary source of labor will be first and second-generational immigrants. This basic fact will hold at all levels, from low-skilled service jobs to professionals with postgraduate degrees.”

It’s also worth noting another substantial benefit Americans have been getting from undocumented immigrants: the substantial cash that the undocumented pay into Social Security—and will not get back.

Here’s a link to a Bipartisan Policy Center immigration explainer with multiple links to source material, including data straight from the Internal Revenue Service.  

“The IRS estimates that undocumented immigrants pay over $9 billion in withheld payroll taxes annually,” the report by the Washington, D.C.-based policy research group says. “Undocumented immigrants also help make the Social Security system more solvent, as they pay into the system but are ineligible to collect benefits upon retiring. In 2010, $12 billion more was collected from Social Security payroll taxes of undocumented workers than were paid out in benefits.”

Read more in Inequality, Opportunity and Poverty

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Jsorto
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Jsorto

What a waste of an article, clearly biased. FYI I am the son of two legal hispanic immigrants. I’m sick of the b.s. where one group says “we need to stop illegal(or undocumented) immigrants” and someone on left says “immigrants are good for the country” stop dodging the question and dig into the situation of undocumented people in this country. This article completely brushes the question aside. You claim “Our mission is to protect democracy and inspire change using investigative reporting that exposes betrayals of public trust by powerful interests.”, yet all you’re doing here is playing liberal partisan. What… Read more »

Venkat Iyer
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Venkat Iyer

Center for Public Integrity To: The Editor(s) of the Center for Public Integrity As a long time supporter of the CfPI, I am embarrassed by this article. An amateurish opinion piece, which recycles illogical arguments and biased opinions, does not deserve space on your website. The CfPI I supported was a true investigative organization committed to protecting the public from government excess and corruption, not a propaganda agency with no regard for the truth or the public interest. If you wish to retain the trust of intelligent Americans, you must stop publishing transparently biased and illogical articles like this. This… Read more »

Cito stl
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Cito stl

Lol I was feeling until the end wtf? Bro most Americans don’t even know that’s happening they don’t even know who Buddha is or where China is let alone understand the politics of another place when they focused on getting a job that’s pays well howa that racist lol bad example my guy haha

Ross740
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Ross740

I was excited to find this website, I’m always interested in finding centrist news, and I had hopes this website would be a fine source. This article is literally the first one I’ve read on the site, since there are strong arguments to be made on both sides, and this piece of journalism is one sided rubbish, especially with respect to the thrust of the title of the article. I came to this site looking for something that is sorely needed, which is unbiased news. You claim to pursue this goal, but have failed, specifically with the title juxtaposed to… Read more »

Afiq
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Afiq

“The consensus view among respected economists is that immigration on the whole plays an integral and beneficial role in the economy.” And the consensus would also says that LEGAL immigration is vital for the economy. We definitely do not need the ILLEGAL ones. How is it supposed to be good when we have no idea who is entering the country and let us just have an open border? Its crazy. Have it ever occured to u that an opem border might increase drug dealing activities, increase the inflow of rapists, terrorists, muderers, welfare reliant person, etc. The idea that we… Read more »