Are illegal immigrants helping or hurting the economy?

The immigrants that find work add to the economy, but the majority that don’t work cost taxpayers plenty.

Since 2021 it is estimated that up to 10 million immigrants have illegally entered the US, although some estimates are much higher.  Once these people enter the country, they must find a means of support.  In many “sanctuary” cities and states, the government temporarily supplies food and shelter.  After that, they are on their own, meaning that they must find a way to support themselves.

Large numbers have entered the workforce and apparently many get hired, even though that may be illegal.  Yet to survive these illegals must find some way to support themselves. The data is a bit murky when trying to determine exactly how they do that.

The US admits about one million immigrants legally each year. That figure is greater than the total of every other country in the world combined.  Yet for the past three years, more than 2 million people annually enter the country illegally.

Since the end of the pandemic, the US economy has had more job openings than unemployed people.  So, it seems natural that employers would seek to fill open jobs by hiring illegals, even if the employers are not permitted to do so.

The immigrants are willing to work at wages much below that which US citizens would require to fill many jobs.  That makes hiring immigrants very attractive.

Tyson Foods has said that they intend to replace thousands of their workers with immigrants.  Tyson’s associate director of human resources, Garrett Dolan, said the company is looking to hire 52,000 people in 2024. With the current labor shortage, they will look to hire immigrants.  That will save the company money.

A large publicly traded company like Tyson Foods would presumably hire legal immigrants, but Bloomberg reports, “…in February, Tyson hired 17 immigrants seeking asylum from Mexico, Colombia, and Venezuela to work at its plant in Tennessee. Tyson has also been reported to have recently hired 70 more asylum seekers.”

Tyson further said they expect to hire more refugees.

Some argue that immigrants provide a boost to the job market by filling open jobs.  They further argue that their presence has increased consumer spending by .2% resulting in a .1% increase in annual GDP.  Mark Zandi, chief economist at Moody’s Analytics, recently told CNBC that foreign workers are “taking the pressure off the economy.”  In fact,” Zandi says, “it’s probably one reason why the economy grew so strongly last year.”


If he means that the increased deficit spending by the government for immigrants is helping to stimulate economic growth, that may be true.  But the immigrants are a net negative on the economy.

According to Steven Camarota, Director of Research at the Center for Immigration Studies, “Illegal immigrants are a net fiscal drain, meaning they receive more in government services than they pay in taxes.”

Camarota continued, “The fundamental reason that illegal immigrants are a net drain is that they have a low average education level, which results in low average earnings and tax payments. It also means a large share qualify for welfare programs, often receiving benefits on behalf of their U.S.-born children. Like their less-educated and low-income U.S.-born counterparts, the tax payments of illegal immigrants do not come close to covering the cost they create.”

But in the job market, they are helping, meaning they are getting jobs. Since the pandemic, employment in the US has increased by more than 16 million.  Of that total 3.3 million are newly created jobs while nearly 13 million are workers returning to their prior job.

Interestingly, the Bureau of Labor Statistics reports that all those new jobs were taken by “foreign born individuals.” Native born American employment is 300,000 less than pre-pandemic levels.  There is no clarification as to how many of the foreign-born workers are legally permitted to work in the US.

The bottom line is that the US needs immigrants to fill jobs and expand the economy.  But the country needs legal immigrants who will contribute rather than just receive benefits.  The federal government must fix the immigration problem immediately.  Since 1986, our elective officials have simply kicked the can down the road so the next group of elected officials can deal with the problem.

We are now at the end of the road.

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Michael Busler

Michael Busler, Ph.D. is a public policy analyst and a Professor of Finance at Stockton University where he teaches undergraduate and graduate courses in Finance and Economics. He has written Op-ed columns in major newspapers for more than 35 years.

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Michael Busler

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