Immigration's Effect on the Economy and You

Its Pros and Cons


 Photo by Joe Raedle/Getty Images

U.S. immigration policy is highly controversial. Most of the debate centers around the economic impacts, security risks, and humanitarian concerns. As a result, U.S. immigration policy is a hodge-podge of laws, court decisions, and executive orders.

In 2017, there were 44.5 million immigrants in the United States. That's 13.7% of the total population. Most are citizens, many are here without documents, and some show up at the border to apply for asylum. Here are the facts around America’s immigrants, and how they affect the U.S. economy and you.

Types of Immigrants

Almost 75% of immigrants are documented. About 1.1 million immigrants a year receive green cards that allow permanent legal resident status.

There are 61 million immigrants with American-born children who are U.S. citizens. Those immigrants and their families make up 20% of all U.S. residents. Around 75% were allowed into the country legally. There is a backlog of 3.8 million applicants, some submitted as long ago as 1995.

There is a lot of controversy over three other types of immigrants: those who are living in the United States without documents, those who are applying for asylum, and refugees.

Undocumented Immigrants

In 2017, there were an estimated 10.5 million undocumented immigrants in the United States. That's 3.2% of the U.S. population of 320 million and 25% of the immigrant population. Half of them have lived in the United States for at least 15 years.

The number of undocumented immigrants has tripled since 1990, when there were 3.5 million in the United States. But it's down from a peak of 12.2 million in 2007. That was before the Great Recession, which didn't hit Mexico as hard as it did the United States. As a result, fewer immigrants migrated north.

In the workforce, there were 7.6 million undocumented immigrants in 2017. That's down from 8.2 million in 2007. 

The goal of Trump's immigration policies is to reduce the number of undocumented immigrants in the country.

Almost half or 3 million of undocumented immigrants pay taxes. In 2010, they and their employers contributed $9 billion to the economy. These immigrants do so even though they are not eligible for Social Security benefits upon retirement. They use outdated Social Security numbers or an Individual Taxpayer Identification Number. They hope that paying taxes will one day help them become a citizen.

Undocumented immigrants are not eligible to enroll in Medicare, Medicaid, CHIP, or Obamacare. But they can go to community health centers for primary care. As a result, complicated conditions don’t get treated until they become an emergency. Around $2 billion a year in emergency Medicaid funds go to hospitals who must care for anyone who shows up at the emergency room. Hospitals report that most of them are undocumented immigrants.

Less than half (47%) of undocumented immigrants came from Mexico in 2017. That’s fewer than the 57% in 2007. At the same time, the number from Asia and Central America has increased. One reason for the shift is an improvement in Mexico's economy. At the same time, crime in Honduras soared after Salvadoran drug gangs took over. The illegal drug trade to the United States moved there from the Caribbean.

A record 434,448 immigrants were deported by the Department of Homeland Security in 2013. By 2017, that number had dropped to 295,364. 

In total, the Obama administration deported 2.4 million. Of those, nearly half had a criminal record. 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.

U.S. law requires the government to allow anyone who shows up at the border to apply for asylum. They are referred to an asylum officer who determines if they have a “credible fear” of persecution or torture in their home country. Immigrants already in the United States can also apply for asylum to prevent deportation.

Asylum Seekers

In 2017, the government granted asylum to 26,568 applicants. Once immigrants get approved for asylum, they can stay in the United States. They receive authorization to work and apply for a Social Security card. The can apply for Medicaid or Refugee Medical Assistance. They can also petition to bring family members to America.

If the asylum officer doesn't find a credible fear, they order deportation. The refugee can appear before a judge to challenge the finding. 


In 2018, the United States granted 22,405 immigrants refugee status. That’s down from 84,988 in 2016. The record was over 207,116 1980 when the U.S. Refugee Act raised quotas.

A refugee applies for protection from persecution while outside their country of origin. If granted protection, the Office of Refugee Resettlement arranges benefits. Various non-profits help them resettle. For 30 to 90 days, they provide housing, furnishing, food, clothing, orientation, and employment services.

The U.S. Citizenship and Immigration Services screens and interviews all applicants prior to arrival in the United States. They determine if the refugee has “suffered past persecution or has a well-founded fear of future persecution on the basis of race, religion, nationality, membership in a particular social group, or political opinion in his or her home country.”

History of U.S. Immigration

In 1924, Congress established national-origin quotas with the Immigration Act of 1924. It awarded immigration visas to just 2% of the total number of people of each nationality in the United States as of the 1890 national census. It excluded all immigrants from Asia. People were anxious because of World War I and heartily supported limits on immigration. By 1970, immigration had fallen to a low of 4.7% of the population. That was down from a high of 14.7% in 1910. 

In 1965, President Lyndon Johnson pushed Congress to change immigration policy with the Immigration and Naturalization Act. It eliminated quotas based on nationality. Instead, it favored those with needed skills or who were joining families in the United States. 

Today's percentage of immigrants is similar to the late 19th century when almost 15% 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.

Below you can see a breakdown of historic immigration to the United States from 1850 to 2017.

How Immigration Affects You

Immigrants have driven 15% of U.S. economic growth between 1990 and 2014. They founded 30% of U.S. firms, including more than 50% of startups valued at over $1 billion. 

Immigrants have about the same education as the average American. In 2016, 30% of immigrants had a college degree or higher. That's similar to the 32% of native-born counterparts. One reason is that global literacy rates are improving. Another is that Asia has surpassed Latin America as the largest source of newly-arrived immigrants. More than half of Asian immigrants have a college degree or more.

Newly arrived immigrants have one thing in common that reduces their ability to compete with native-born workers. They generally don't speak English as well. That means they are less likely to take jobs that require strong communication skills. For example, natives in management and media don't face a lot of competition from newly arrived immigrants. Immigrants with advanced degrees gravitate toward scientific and technical jobs that don't require high communication.

Immigration has a negative effect on workers without a college degree. That's especially true in agriculture and construction. In 2014, immigrants held 33% of agricultural jobs and almost half of those were documented, according to the Pew Research Center. In construction, 24% of the jobs went to immigrants, and half were documented. The biggest share was domestic workers. There, 45% were immigrants and less than half were documented.

In those industries, immigration lowers wages and drives out native-born workers. That pushes native-born workers into jobs like sales and personal services that require superior communication skills.

What hurts some workers helps consumers. Immigrants lower the price of goods and services for everyone. That’s because they provide low-cost labor that allows companies to reduce the prices of consumer goods.

Immigrants in the workforce pay taxes into Social Security and Medicare. It improves the age dependency ratio. That's the number of working people who support the nation's senior population. The ratio is worsening because the U.S.-born population is aging. There aren't as many in the working-age population to support them. As more immigrants enter the workforce, the age dependency ratio improves.

Contrary to other claims, an increase in undocumented immigrants in an area does not lead to a similar increase in violent crime. Furthermore, only 8% of the prison population was there for immigration crimes.

Future of Immigration

Immigration dropped during the Great Recession and has not returned to pre-recession levels. Instead, immigration from Latin America may continue to weaken. There were two reasons, according to researchers from the University of California, San Diego. First, the economies of Latin American countries continued to improve. As a result, there isn't as much of an income gap between those countries and the United States.

Second, the baby boom continued through the 1970s. There weren't enough jobs to employ all those young workers entering the labor force in the 1990s. But the economies have had enough time to absorb these workers in the last 20 years. As a result, there isn't the same demographic push sending immigrants to the United States.

Immigration from Latin American will increase as global warming worsens conditions in Latin America. Climate change could send up to 1.7 million people north by 2050, according to the World Bank. Drought, shifting rain patterns, and extreme weather destroys crops and leads to food insecurity. Almost half of Central American immigrants left because there wasn't enough food, according to the World Food Program.

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