At the heart of the debate surrounding immigration, both legal and illegal, is the question of how much our policies actually cost the economy at large. These costs include factors like unpaid taxes and jobs lost that would have otherwise gone to natural-born citizens. Some argue that immigrants don’t only create a drag on the economy, but that they perpetuate it as well. This, despite the fact that many immigrants hold steady jobs, start businesses, and pay taxes in one form or another, has become one of the headline mantras of conservatives in the U.S.
To get a grasp on the approximate value that immigrants bring to the economy, researchers at the Economic Policy Institute (EPI) dug into whatever data was available — mostly Census data combined with research from Pew, as well as the EPI’s own research. The EPI says that there are roughly 40 million immigrants currently living in the United States, 11.7 million of whom (about 29%) are in the country illegally. Illegal immigrants make up 3.7% percent of the overall U.S. population but account for 5.2% of the labor force, mostly because the majority of them are working-age adults.
While most people picture people of Hispanic origin when the topic of illegal immigration comes up, it’s also important to note that there are significant populations of immigrants from Asia, Africa, and Europe in the U.S. as well.
The big picture
How much value are immigrants bringing to the economy, versus the overall costs it takes to adopt them into American society? This is a much more complicated calculation than it appears, but since there really is no accurate way to gather all the data necessary and do an intense analysis, a simplified calculation may give us a ballpark idea of immigration’s effect.
The chart above shows the overall economic input provided by the total population of the United States, divided up by U.S. born individuals and immigrants. The data shows that immigrants total share of economic input is just under 15% of the total. Immigrants make up 13% of the U.S. population overall, so when those two numbers are compared, it’s safe to say that the immigrant population appears to be pulling its own weight in terms of output.
There is also evidence to support the idea that if the immigration process was streamlined and reformed successfully, the results would have a positive impact on national deficit levels. Of course, that would require Congress to act on a reform bill of some sort, which they have been unable, or unwilling, to do for quite some time.
As far as the monetary costs of immigration go, the factors most often taken into account are effects on employment, wages, and the use of public resources. According to the EPI, immigration has both a positive and negative effect on the employment numbers of native-born citizens. “The evidence shows that in the long run, immigrants do not reduce native employment rates. But some evidence suggests that in the short run, immigration may slightly reduce native employment, because the economy takes time to adjust to new immigration,” the EPI says.
So there’s our answer as far as employment rates, but what about wages? Do immigrants cause a decrease in overall earnings? The chart above contains data sourced from another EPI study from 2010, which says that the people most likely to suffer as a result of new immigration are, well, immigrants. That is, those who could easily be replaced by other immigrants are in the greatest danger of seeing their wages depressed. From that data, it appears that most native-born Americans are at very little risk of running into issues with their wages as a result of new immigration.
Finally, what about public resources? Many people are quick to bring up instances of immigrants, particularly those here illegally, receiving food stamps or housing assistance. As it turns out, public welfare programs are used by immigrant families (both legal and illegal) at a fairly high rate. The Center for Immigrant Studies found that in 2011, 57% of households headed by an immigrant with at least one child used at least one social program, as opposed to 39% for natives. So, yes, both camps of immigrants are getting their hands on public money at a higher rate than natural-born citizens. It’s still unclear, however, how much that actually adds up to in dollars and cents.
After reviewing the data from a macro-level, it’s hard to say definitively that immigration is a boon on the economy. There are definitely many details that are being glossed over which can change this assessment, but by taking into account the major costs and economic input supplied by immigrant populations, it appears that there is an overall positive impact.