How Does Immigration Affect the Economy and You?

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In 2015, there were 43.3 million immigrants living in the United States. That's 13.5 percent of the total population. In 2015, 69,920 immigrants were refugees. There were 26,124 who were granted asylum. (Source: "Frequently Requested Statistics on Immigrants and Immigration in the United States," MigrationPolicy.org, April 14, 2016.)

On March 6, 2017, President Trump signed an executive order banning visas for citizens from six countries.

Those countries are Syria, Iran, Libya, Somalia, Sudan and Yemen. They are "countries of concern" according to a 2016 law concerning immigration visas." That does not include 500,000 legal green card holders (permanent resident aliens) from those countries. It also exempts diplomats and members of international organizations. 

Refugees from any country that are not already scheduled for travel are banned for 120 days. During that time, Homeland Security will review the application process to prevent any exploitation by terrorists. Trump halved the total number of refugees accepted to 50,000 per year. (Source: "Trump Signs New Order Blocking Arrivals from Six Majority-Muslim Countries," NPR, March 6, 2017.)

History of U.S. Immigration

In 1970, there were only 9.6 million immigrants. They comprised 4.7 percent of the population. Since then, immigration from Asia and Latin America rose. That's because the Immigration and Nationality Act abolished the national-origin quotas in 1965.

Instead, it favors those with needed skills and families in the United States. (Source: "Coming to America," The Wall Street Journal, April 11, 2017.)

In 2014, America welcomed 1.3 million immigrants. That's up from 1.2 million in 2013. India sent 147,500. China (131,800) and Mexico (130,000) were almost tied.

So were Canada (41,200) and the Philippines (40,500). (Source: "U.S. Immigrant Population and Share Over Time," Migration Policy Institute.)

Today's percentage of immigrants is similar to the late 19th century, when almost 15 percent of U.S. residents were immigrants. Most were from Italy, Germany or Canada. They were tailors, stonemasons and shopkeepers with skills needed by the United States. While only 17 percent of native-born Americans were skilled laborers, 27 percent of the immigrants were. 

Those who remained in America for 14 years were just as likely to own businesses as the native-born. Their children were just as likely to be accountants, engineers or lawyers. (Source: "The Effects of Immigration on the United States' Economy," Penn Wharton School of Business, January 27, 2016. "How Unskilled Immigrants Hurt Our Economy," CityJournal.org.)

Today, immigrants are less educated than the average American. But that's improving. Thirty percent of those age 25 and older lack a high school diploma compared to 10 percent of native-born adults. But that's better than in 1970, when more than half of immigrants lacked a high school diploma. 

Twenty-nine percent of immigrants have a college degree similar to the 30 percent of native-born counterparts.

But forty-four percent of immigrants who entered since 2010 have that degree. In 1970, only 12 percent of immigrants had a graduate degree. It increased to 16 percent by 2012. (Sources: "Frequently Requested Statistics," MPI. "Immigration Does More Good Than Harm to Economy, Study Finds," The Wall Street Journal, September 22, 2016.)

Immigrants live with 40.6 million American-born children who are U.S. citizens. Those 81 million immigrants and their families make up 25 percent of all U.S. residents. Almost 75 percent are legal immigrants and their children. (Source: "61 Million Immigrants and Their Young Children Now Live in the United States," Center for Immigration Studies, March 2016.)

H-1B Visa Program

On April 19, 2017, Trump signed an executive order asking the Department of Homeland Security to review the H-1B visa program.

 He wants to make sure that only highly-paid skilled immigrants receive the visas. He doesn't want any to go to foreign workers that are paid less than their U.S. counterparts.It could take years for the review to be carried out. (Source: "Trump Signed an Executive Order to Review High-Skilled H-1B Immigration Visas," Recode, April 19, 2017.)

The order is directed at Indian firms like Tata Consultancy, Infosys and Wipro. They are located in the United States, but hire many immigrants from India. Facebook and Qualcomm are also big users of the H-1B visa. Fifteen percent of their workers are immigrants under the program. (Source: "Trump Signs Order That Could Lead to Curbs on Foreign Workers," The New York Times, April 18, 2017.)

Silicon Valley CEOs worry that President Trump might restrict this program. The Immigration Act of 1990 provides temporary visas to 315,000 foreign skilled workers. Two-thirds were for computer-related jobs. These companies would lose valuable employees without the H-1B visa program. That would hurt the success of some of Americas most profitable companies. (Source: "Donald Trump's Anti-immigration Stance Threatens the Heart of American Innovation," The Verge, November 11, 2016. "If Donald Trump Was President, Here's What Would Happen to the U.S. Economy," The Street, March 3, 2016.)

The Extent of Illegal Immigration

There were 11.1 million immigrants who were in the country illegally in 2014 (most recent figures). That's 3.5 percent of the total population. It's down from the peak of 12.2 million in 2007. Their numbers have tripled from 3.5 million in 1990.

Eight million of them are in the workforce. That's down from 8.2 million in 2007. Almost half (3.4 million) pay Social Security payroll taxes. They and their employers contributed $13 billion as of 2010 (most recent figures.) They do so even though they are not eligible for Social Security benefits upon retirement. (Source: "Why Undocumented Immigrants Pay Taxes," CNNMoney, April 19, 2017.)

Half are from Mexico. That percentage has declined since 2009. At the same time, the number from Asia, Africa, and Central America has increased. As Mexico's economy improves, it's begun gaining immigrants itself. Since 2000, more Americans have immigrated to Mexico than the reverse. (Source: "Five Facts About Illegal Immigration in the United States," Pew Research Center, November 3, 2016.) 

Mexico is also gaining immigrants. Its legal foreign-born population doubled from 2000 through 2010. It's now one million total. Of these, 750,000 are Americans. As a result, more Americans have immigrated to Mexico over the past few years than vice-versa. (Source: "For Migrants, New Land of Opportunity Is Mexico," The New York Times, September 21, 2013.)

Between 700,000 to 850,000 new immigrants arrive illegally each year. More than half slipped across the U.S. border. The rest (45 percent) crossed the border legally but didn't return home when their visas expired. (Source: "Modes of Entry for the Unauthorized Migrant Population," Pew Hispanic Center, May 22, 2006.)

Trump's Immigration Plan

President Trump plans to build a wall on the Mexican border. Statistics show a wall alone won't stop illegal crossing from Mexico. Even if it were successful, it would only stop half of illegal immigration.

He promised to force Mexico to pay for it. If it refused, he would threaten to change a rule under the USA Patriot Act antiterrorism law. That would confiscate Western Union money transfers sent to Mexico from immigrants in the United States illegally.

The Mexican central bank reported that it received $25 billion from abroad. There are no exact figures on how much of that is from U.S. immigrants. (Source: "Standing Up for Our Law Enforcement Community," WhiteHouse.gov, January 21, 2017. "Trump Reveals How He Would Force Mexico to Pay for Border Wall," The Washington Post, April 5, 2016.)

On January 6, 2017, Trump asked Congress to appropriate the money in April to pay for the wall. He would ask Mexico to pay for it at a later date. (Source: "Trump Asking Congress, Not Mexico, to Pay for Border Wall," CNN Politics, January 6, 2017.)

 In 2013, the Department of Homeland Security deported a record 434,015 immigrants. Of those, 45 percent had a criminal record. The Obama Administration deported 2.4 million. It sent home more in its first five years than the Bush Administration did in eight years. That's despite deportation relief for 580,946 young immigrants under Obama's Deferred Action for Childhood Arrivals (DACA). (Source: "Table 39. Aliens Removed or Returned," U.S. Department of Homeland Security. "U.S. Deportations of Immigrants Reach a Record High in 2013," Pew Research Center, October 2, 2014.)

The Department of Homeland Security reported in 2013 that there were 1.9 million "removable criminal aliens." That included all types of immigrants. President Trump promises to deport them "immediately." (Source: "Trump Plans to Immediately Deport Two Million to Three Million Undocumented Immigrants," The Washington Post, November 14, 2016.)

Impact on Economy

The Center for American Progress estimated that mass deportation would reduce U.S. gross domestic product by 1.4 percent. This liberal research group estimates that farmers would have a hard time finding replacement workers. Instead, they would be forced to cut their production to fit the reduced labor supply.

The conservative Cato Institute reported that it would cost $60 billion to deport the 750,000 people protected by DACA. They contribute $28 billion a year to the economy. (Source: "Trump Immigration Plans Bad for U.S. Economy and Workers," Business Insider, February 24, 2017.)

Immigration more than pays for itself. Immigrants add $1.6 trillion to the economy each year. Of that, $35 billion is a net benefit to the companies and communities where they live. The rest (97.8 percent) of that growth returns to the immigrant workers as wages. They repatriate $25 billion back to family members in Mexico. They spend the rest in America. 

Native-born workers who compete directly with the immigrants for jobs are hurt the worst. Those are the young, less-educated, and minority workers. Their unemployment rate is higher than for older, college-educated, and white workers. 

Illegal immigration lowers wages by 3 to 8 percent for low-skilled occupations. That averages out to $25 a week for native-born workers without high school diplomas. President Trump promised during his campaign to require companies to offer all jobs to Americans first. (Source: "Immigration Debate," University of Michigan.)

Between 2000 and 2013, the number of native-born workers fell by 1.3 million. Studies show that they left the workforce. Many older workers retired or went on disability. Younger workers went back to school. (Source: "Immigrant Workers Enhance and Expand the U.S. Economy," Immigration Impact, June 29, 2016.)

During that same period, the number of working immigrants rose by 5.3 million. That's out of 16 million immigrants who arrived in America. 

Immigrants cost the U.S. government between $11.4 billion and $20.2 billion each year. That means they use that much more in services than they pay in taxes. On the other hand, they cost the government less than native-born Americans with similar education and work histories. (Source: “The Use of Public Assistance Benefits by Citizens and Non-citizen Immigrants in the United States,” Cato Working Paper No. 13, February 2013.)

Immigrants with college degrees generate $105,000 more in revenue than they receive in services over their lifetimes. Almost 53 percent of immigrants have some college. Of those, 16 percent have a graduate degree. (Source: "Immigration Does More Good Than Harm to Economy, Study Finds," The Wall Street Journal, September 22, 2016.)

Immigrants living in the United States illegally cost the country less than legal ones. That's because they are not eligible for many government programs. If the government granted them amnesty, the costs to society would double. (Source: "The Fiscal and Economic Impact of Immigration on the United States," The Center for Immigration Studies," May 2013.)

How Immigration Affects You

Immigration has major effects. It hurts those in low-skilled jobs. Many of those jobs go to immigrants who accept lower pay. But what hurts workers, also helps consumers. Immigrants lower the price of goods and services for everyone. And that's because they provide low-cost labor that allows companies to reduce prices of consumer goods.

Contrary to other claims, immigrants are not more likely to commit crimes than the native-born population. They only make up 5 percent of the nation's prison inmates, but comprise 7 percent of the total population. There are 1.9 million immigrants convicted of a crime. Less than half (820,000) are in the country illegally. Of those, 300,000 have felony convictions. (Source: "Contrary to Trump's Claims, Immigrants Are Less Likely to Commit Crimes," The New York Times, January 26, 2017.)