Impact of Immigrants on the US economy

“There are some 44.7 million immigrants in the U.S., making up about 13.7 percent of the total population”, as stated by the American Immigration Council.

Immigrants, including those without documentation, pay billions of dollars in taxes to federal, state, and local governments every year. Immigrants paid $458.7 billion in taxes in 2017, including an estimated $27.2 billion in taxes paid by undocumented immigrants and deployed $1.2 trillion in spending power.

According to an article in the National Immigration Forum, “without these important economic contributions from immigrants, the U.S. economy would be smaller, and governments at all levels would see revenues decline without the taxes paid by immigrants. Research analysts have examined the economic contributions of immigrants and have concluded that, when looking at the taxes paid by immigrants versus the cost of services provided to them, immigrants have a significant positive balance. Immigrants have helped make the American economy the strongest in the world. “

The U.S. economy will be smaller and there would be a decline in revenues for governments without these important contributions by immigrants. Research indicates that by examining economic contributions of immigrants and comparing taxes paid versus the cost of services, for the immigrants, immigrants have a net positive impact to the economy. 

Here are some interesting points from a study conducted by Wharton School of Business, University of Pennsylvania

  • While some policymakers have blamed immigration for slowing U.S. wage growth since the 1970s, most academic research finds little long run effect on Americans’ wages.
  • The available evidence suggests that immigration leads to more innovation, a better educated workforce, greater occupational specialization, better matching of skills with jobs, and higher overall economic productivity.
  • Immigration also has a net positive effect on combined federal, state, and local budgets. But not all taxpayers benefit equally. In regions with large populations of less educated, low-income immigrants, native-born residents bear significant net costs due to immigrants’ use of public services, especially education.                            “

Hence, as noted above, immigrants have a net positive impact on the US economy, though in a few regions, native born residents might bear significant costs.

For some Americans, immigrants can cause a reduction in wage rate. As stated in an article by University of Michigan, “It is estimated that undocumented immigrants’ lower wages by approximately 3 to 8 percent for low-skill jobs. Furthermore, Americans who compete with immigrants for these jobs stand to make an additional $25 a week if undocumented immigration were to be severely cut down.”

Let’s have a look at which countries are people coming from. According to an article in the balance, “In 2018, one-fourth of immigrants living in the U.S. were from Mexico. Another 6% were from China, 6% from India, 4% from the Philippines, and 3% from El Salvador.”

According to the  National Academy of Sciences,” Research shows that immigrants who work in child and elder care, food preparation, house cleaning and repair, and construction provide valuable services and lower the prices of many goods. This benefits immigrants and native-born consumers alike. In many cases, immigrants who provide these services also free up native born people to go after jobs that contribute to the size and growth of the overall economy.”

To sum things up, the United States has long been a country welcoming immigrants. As stated in an article by Tufts University, “the dominant position the United States holds in the world economy attracts young smart people from all over the world, and the resulting influx of immigrants continually rejuvenates the U.S. workforce”. Though the immigration has been impacted in the last few years, people are optimistic with Joe Biden being elected as President of the United States(Read our article on the impact of Joe Biden being elected as the President of the United States here).

To maintain legal status in the US, make sure you file your documents correctly, with the help of a lawyer. At InstaLaw, we have created a platform to enable people to connect with a trusted lawyer in no time. We will help you connect with an immigration lawyer within minutes. Download the app now (link) and connect to a lawyer seamlessly. 

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