How Does Immigration Affect the U.S. Economy?

Political Context

• Immigration is a major political issue in the U.S., especially in the 2024 election cycle.
• Presidential candidates Kamala Harris and Donald Trump agree on reforming the asylum system and border security but differ on economic benefits of immigration.

Economic Contributions of Immigrants

• Immigrants contributed $1.6 trillion to the U.S. economy in 2022.
• Paid over $579 billion in taxes (local, state, federal).
• High immigration can reduce U.S. federal budget deficit by $897 billion over the next decade (Congressional Budget Office).

Impact of Undocumented Immigrants

• Spending power totaled more than $254 billion in 2022.
• Combined income of $330 billion with $76 billion paid in taxes.
• Debated as a net drain on state and local budgets.
• Some argue immigration contributes to housing cost issues, though others claim zoning and housing preferences are bigger factors.

Labor Force Participation

• 31 million immigrants worked in the U.S. in 2023, making up 19% of the civilian workforce.
• Immigrant labor force participation rate: 67% vs. 62% for native-born.

Industries with High Immigrant Employment

• Service fields: 21.8%
• Natural resources, construction, maintenance: 13.8%
• Production, transportation, material moving: 15.2%
• Many undocumented in gig work or informal jobs often facing unsafe conditions.

Temporary Foreign Worker Visas

• U.S. issues visas like H2A and H1B to fill temporary jobs; 576,000 visas issued in 2023.

Immigrant Entrepreneurship

• Immigrants founded 55% of U.S. start-ups valued at $1 billion or more.
• Produced 23% of all patents between 1990 and 2016.

Proposed Immigration Policies

Donald Trump

• Focus on illegal immigration; proposes largest domestic deportation, could reduce GDP by up to 7%.
• Plans to curtail legal immigration further.
• Supports merit-based system and green cards for immigrant college graduates.

Kamala Harris

• Advocates for comprehensive reform and citizenship pathway for undocumented immigrants.
• Potential to grow U.S. GDP by $1.7 trillion over a decade.
• Backs restrictive asylum policies and significant border security funding.

Conclusion

• Immigration has complex impacts on the economy, involving contributions to growth, debates over costs, and varying political strategies.