Things Will Never Be the Same How illegal immigrants are really affecting the US economy

The number of Americans ages 65 and older will more than double by 2060. And as our country’s workforce demographic changes, the economy is being affected. More and more high school students are enrolling in higher education, and unemployment rates have dipped as low as 4.8 percent. These seem like causes for celebration, but there is one unique problem caused by the changing workforce. Low skill jobs essential to our economy are now going unfilled by US citizens. But that does not mean that these jobs are not being taken. Rather, illegal immigrants now hold many low skill labor jobs, as they are abandoned by both citizens and legal immigrants alike. As much debate as there is surrounding illegal immigrants, they are becoming increasingly important to our economy. Illegal immigrants affect our economy in both positive and negative ways, but they are essential to our economy now and in the future.

Unexpected Positives

Despite what many people say, illegal immigrants have a surprising number of positive effects on the economy. One very interesting example of this is the relationship between skilled and unskilled workers’ salaries. Giovanni Peri, an economist at the University of California, Davis, reached an interesting conclusion about this. He said, “Undocumented workers do not compete with skilled laborers-instead, they complement them. Economies… work best when workers become specialized and divide up tasks among themselves.” Low skilled illegal immigrants allow this specialization to happen. By doing their tasks, such as cleaning a construction site, they allow more skilled workers to solely focus on doing their own, more complex work. This allows everyone in the work environment to be much more productive, working more hours and making more money. From 1990 to 2007, illegal immigrants increased legal workers’ salaries in complementary jobs, such as those mentioned above, by as much as 10 percent.

Revisiting the idea of our aging population, it is also important to consider how Social Security will be able to handle the increasing amount of benefits to be given out. As Social Security begins to work overtime, illegal immigrants can relieve some of the pressure. Although most illegal immigrants cannot receive benefits, their payroll taxes still go to Social Security. Illegal immigrants currently contribute about $15 billion a year to Social Security through income taxes, while taking out less than $1 billion in benefits. Over time, this has added up to $300 billion, which is almost 10% of the total Social Security Trust Fund ($2.7 trillion). These contributions will certainly be useful as the Baby Boomer generation continues to retire. And although it is rarely studied, illegal immigrants also tend to increase the wages of those not competing with them for work. In a study done in Georgia, a 1 percent increase in the amount of illegal immigrants in firms boosted wages by 0.1%. Although this may seem small, this specific correlation shows the potential benefits illegal immigrants can have on certain wages. Illegal immigrants have many constructive and helpful effects on our economy.

The Bad Part

Unfortunately, there are still some clear negative correlations between illegal immigrants and the US economy. Native born workers with similar skill sets as illegal immigrants are now forced to accept lower pay if they go into a low skill labor job. This is caused by the flood of illegal immigrants into these jobs, who are often paid below minimum wage. This often turns away citizens from taking these jobs. Labor economists have concluded that undocumented immigrants have significantly lowered the wages of US adults without high school diplomas. These 25 million citizens’ salaries have been reduced by anywhere from 0.4 to 7.4 percent. Illegal immigrants have generally lowered the salaries of these low skill jobs. Adam Davidson, an expert in economics, says that “As long as there are thousands of undocumented workers competing for low-end jobs, salaries are more likely to fall than to rise.” This is clearly true, as if workers desperate for a job accept below minimum wage pay, those looking for a higher salary will have all their jobs taken by the more desperate competition.

The areas in which illegal immigrants cause the most problems are the areas in which they are more densely populated. Heidi Shierholz, an economist at the Economic Policy Institute, says that illegal immigrants can be costly for both state and local governments in areas like Arizona and southern Texas. In these crowded areas, immigrants often compete against low educated workers, live in neighborhoods with high crime rates, and take advantage of public health care and schools that taxpayers have spent precious money on. It is frustrating for citizens to watch this, and these areas are often the sources of bad press on illegal immigrants, which is not totally undeserved. Illegal immigrants are still causing economic problems, especially in certain areas.

Too Late Now to Say Goodbye

Whether the net effect of illegal immigrants on our economy is positive or negative is debatable. What is certain is that our economy is dependent on illegal immigrants to support the base of our economy. Undocumented workers account for 18% of employment in agriculture, 13% of employment in construction, and 10% of employment in restaurants, hotels, and casinos. These are workers that we currently can’t afford to lose, as employers struggle to fill low level jobs. In 2007, Arizona implemented very strict laws regarding illegal immigrants, causing many to leave the country. The economy then shrunk by 2 percent, which was not a coincidence. Without undocumented workers holding down unskilled labor jobs, the economy could not function as efficiently as it previously had. Our economy has become dependent on illegal immigrants, and there are devastating effects without them. Economists have noted that by filling the low paying jobs no longer done by Americans, illegal immigrants have helped to hold up the US economy, even as the workforce ages. For economic growth, there must be a steadily growing supply of workers, which contradicts the United States workforce, which is continuously becoming slower growing. Illegal immigrants have helped to sustain our economy during this transition of our workforce demographic, and we are completely dependent on them.

In the Long Run

The future of our economy is never certain, but it is important to consider what role illegal immigrants will play in it. Currently in politics, mass deportation of undocumented workers is being debated and deliberated, and it is currently unclear what the end result may be. However, large scale deportation will be devastating in it’s effects to the economy. Ben Gitis, director of labor market policy at a conservative think tank, reached a shocking conclusion regarding the effects of deporting illegal immigrants. He says that if all of 6.8 million undocumented workers in the country were deported, that even at full employment, there would not be enough legal workers to fill all the jobs in our country. In fact, at least 4 million jobs would go unfilled.

When the consequences of deportation are considered, it is clear that it is not the best choice. There is simply not a large enough legal workforce to fill all the necessary jobs in the US. Economist Ryan Edwards, at Mills College, says, “US employers would likely shrink their businesses-rather than search in vain for legal workers- if they lost workers to mass deportations.” This has proven to be true in the past. When employers are given the choice, it seems to them a waste of time to search for employees that are no longer there. When you examine the facts, deportation clearly is not the right answer for the country. Losing illegal immigrants would threaten the future of our economy.

The Bottom Line

Clearly, illegal immigrants are extremely important to our economy. When you consider what is best for the nation’s economy, it is clear deportation is not the answer. Illegal immigrants have affected us in both positive and negative ways, but they are essential to our economy. Political ideals on immigration policy should not cause us to overlook the economic realities of the potential solutions. Adam Davidson agrees that politics should not get in the way of what is best for the economy. He says, “As immigration reform seems more likely than at any time in recent memory, it’s important to remember that it is not the economic realities that have changed. It’s the political ones.” And that is the truth. No matter how you feel about illegal immigrants, they are necessary for our economy.


Demographic: A specific segment of the population that shares some similar characteristic(s).

Social Security: A federal government benefit program that includes retirement income, disability income, Medicare, Medicaid, and more. It gives out hundreds of billions of dollars per year in benefits.

Social Security Trust Fund: An account used for all excess contributions for Social Security, which can be used at a later date in which Social Security needs more funds.

Baby Boomer generation: The generation born after World War II, when there was an increase in birth rates. It is typically defined as those born from 1946-1964. Many members are now retiring or reaching retirement age.

Correlation: A mutual relationship between two (or more) things

Net effect: Final outcome

Works Cited

Davidson, Adam. "Do Illegal Immigrants Actually Hurt the U.S. Economy?" The New York Times. The New York Times, 16 Feb. 2013. Web. 17 Apr. 2017.

"Wage War." The Economist. The Economist Newspaper, 25 Aug. 2016. Web. 17 Apr. 2017.

"Why Deporting Undocumented Immigrants Could Slow US Economy." Washington Post. N.p., n.d. Web.

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