Contradictions in Immigration Policy: How Restrictive Measures Undermine Economic Progress
2024-12-11
Introduction
“One of the biggest reasons why our young people can’t afford to buy a home is because, under Kamala Harris’s leadership, we have let in millions upon millions of people.” This statement, made by Vice President JD Vance at a rally in Detroit, exemplifies the false claims often leveled against immigrants by prominent political figures. Such misinformation, coupled with anti-immigration rhetoric, has fueled a narrative blaming immigrants for various societal challenges, including economic struggles, strains on healthcare, and increases in crime and gun violence. Despite repeated debunking of these claims by experts in these fields, a significant portion of the American public, particularly among supporters of President Donald Trump, strongly backs hardline immigration policies, including mass deportations of undocumented immigrants and efforts to revoke birthright citizenship.
This issue came to a head in the recent election, where immigration and economic concerns were central to voters’ choices. Over half of Trump supporters, motivated by a belief that immigration undermines economic progress, cast their votes based on these issues. The logic behind this belief—that curbing immigration is crucial for economic growth—rests on a flawed understanding of immigration’s role in the economy. In fact, the very restrictive immigration policies many support could ultimately harm economic priorities, creating a fundamental conflict between the goals of strict immigration reform advocates and the broader economic goals they espouse.
This analysis will highlight that immigrants, both documented and undocumented, play an indispensable role in sustaining key industries like education, healthcare, social services, transportation, and construction. These industries are vital to the U.S. economy, supported by immigrants through their labor force participation, GDP contributions, and tax revenue. By exploring these contributions through various data visualizations, this analysis also demonstrates how restrictive immigration policies risk labor shortages, stagnate growth in immigrant-dependent sectors, and reduce potential tax benefits from legalization. Ultimately, this report underscores that immigration is not a detriment but a vital engine of economic resilience and growth.
Immigration and Economic Priorities: A Critical Contradiction
It is important to recognize that most of the data presented in this report pertains to foreign-born residents, which include both non-citizens (47.8%) and naturalized citizens (52.2%). Proposed immigration policies will impact both groups: non-citizens may face deportation, while the prevalence of naturalized citizens may significantly decrease due to stricter laws surrounding legal status. These policies threaten to undermine both the immediate and long-term benefits that immigrants contribute to U.S. society and the economy, particularly in labor markets and industries reliant on immigrant labor.
In the context of the recent election, the economy and immigration were major concerns for voters, especially those supporting President Trump. A survey conducted by Pew Research asked registered voters who supported then-candidate Trump to select the issues that influenced their vote. Respondents were able to choose more than one issue.
As illustrated in the visual above, 93% of Trump supporters identified the economy as a crucial factor influencing their vote, while 82% cited immigration as a significant issue. This overlap presents a critical contradiction: while voters prioritize economic growth, their support for restrictive immigration policies could unintentionally harm the very industries and workforce dynamics essential for economic expansion.
Despite immigration being portrayed as a central threat to the economy, foreign-born individuals actually comprise just about 15% of the total U.S. population as of March 2024.
As illustrated above, the foreign born population has consisted of between 45-50 million between 2016 to present.
However, this statistic masks the outsized impact immigrants have on the workforce, as highlighted in the visual in the following section, which underscores their higher labor force participation rates compared to native-born citizens.
The Workforce Contribution of Immigrants
Labor force participation among foreign-born residents has consistently outpaced that of U.S.-born citizens from 2016 to 2024.
While native-born participation hovered around 62%, foreign-born participation remained closer to 65%. Both groups experienced a brief decline in 2020 due to the pandemic but rebounded swiftly.
Some critics, such as Michael Capuano, argue that the increase in labor force participation among immigrants is detrimental to native-born workers. Capuano, a researcher for the Federation for American Immigration Reform (FAIR), claims that foreign-born workers have gained 2.6 million jobs since the pre-COVID peak, while native-born workers have lost 700,000 jobs. He contends that post-pandemic job growth has disproportionately benefited foreign-born workers, a trend he attributes to “lax border enforcement” and policies that flood the labor market with “low-skill illegal aliens” to address a labor shortage that he believes does not exist (Capuano, 2022). However, this perspective overlooks the fact that immigrants often fill lower-paying, physically demanding, or undesirable jobs that native-born workers are less willing to take. For example, in the agricultural sector, native-born Americans generally avoid jobs that involve long hours and strenuous labor in difficult conditions. Data from The Associated Press shows that in California, farmers posted ads for over 1,100 farmworker positions, yet only a small fraction were filled by native-born applicants. As farmer Steve Fortin pointed out, “It’s just not something that most Americans are going to pack up their bags and move here to do.” Immigrants, on the other hand, continue to fill these critical roles, ensuring that industries reliant on such labor remain operational and contribute to the broader economy.
The following visual further illustrates this point, showcasing how even at their peak annual earnings, they only made 88% of native-born citizens annual earnings during the pandemic.
Foreign-born workers earn lower annual wages on average compared to native-born workers, despite their significant contributions to economic recovery during the pandemic. This wage disparity may reflect the fact that immigrants often take lower-paying jobs in industries such as construction and agriculture—roles that native-born workers typically find less desirable. These industries, which rely heavily on immigrant labor, are crucial to the functioning and recovery of the economy, yet the compensation for these essential roles remains comparatively low.
Immigrants in Key Industries
Foreign-born workers play an essential role in specific occupational sectors that are vital to the economy. The next visual highlights how foreign-born workers represent a greater proportion within specific occupational sectors compared to native-born workers in those same sectors. This does not mean they make up the majority of the workforce overall but rather that a larger share of foreign-born workers are concentrated in these industries relative to native-born workers.
For instance,as seen in the above visual, 21.8% of foreign-born workers are employed in service occupations—roles that include healthcare support, food preparation, building and grounds maintenance, and personal care services. Another 15.2% work in production, transportation, and material moving occupations, while 13.8% are employed in construction and maintenance. In comparison, native-born workers represent 15% in service roles, 11.8% in production and transportation, and just 7.8% in construction and maintenance. In essence, these sectors, which are vital for both economic stability and growth, rely heavily on immigrant labor.
In contrast, native-born workers are more likely to be employed in management, professional, and related occupations, but foreign-born workers still represent 36.1% of this sector, contributing significantly to areas like business, financial operations, computer science, and engineering.
Immigrant Contributions to GDP and Tax Revenue
The next visual illustrates how immigrant workers contribute to the U.S. economy, particularly in sectors like Professional and Business Services, Education, Healthcare and Social Services, and Construction.
These industries, where foreign-born workers are most concentrated, add 13%, 8.6%, and 4.4% to the overall GDP, respectively. Together, these sectors generate a combined $7,099.3 billion in GDP revenue.
In addition to supporting key industries, undocumented immigrants make substantial contributions to public finances through tax revenues. Although they often lack access to public services like Social Security and Medicare, their tax contributions help fund these essential programs.
In 2023, states with large immigrant populations saw the highest tax contributions from undocumented immigrants. For example, California received approximately 8.5 billion, followed by Texas at $4.8 billion, and New York at 3.1 billion. If granted legal status, their potential tax contributions would increase significantly, with projections of 10.3 billion for California, 5.3 billion for Texas, and 3.9 billion for New York. These figures demonstrate how undocumented immigrants are an essential source of funding for state economies, public services, and infrastructure.
Projected Impacts of Restrictive Immigration Policies
Looking to the future, the projected impacts of restrictive immigration policies could significantly alter the U.S. labor market and economy. The following visuals explore three projection scenarios—main, low, and zero immigration—and the effects on population trends.
Under the zero and low immigration scenarios, population growth slows, directly impacting the labor force. A decline in the working-age population could hinder economic growth, as fewer workers lead to lower output, reduced tax revenues, and higher dependency on government benefits. According to economist Jared Franz, long-term economic growth depends on both population growth and productivity. As the population ages and fewer young workers are available, economic growth could stagnate, especially in industries reliant on immigrant labor. The resulting imbalance—more retirees and fewer workers—could increase government spending on social services while reducing tax revenues, ultimately weakening the economy’s growth potential.
Conclusion
Ultimately, immigrants are a cornerstone of the U.S. economy, driving growth and stability across key industries, labor force participation, GDP, and tax revenue. However, while their contributions are undeniable, the current system is not without its flaws. Poor labor conditions in sectors that heavily rely on immigrant workers, such as agriculture, construction, and service industries, highlight a pressing issue. These jobs often come with low wages, minimal protections, and unsafe working environments, making them undesirable to native-born workers and exploitative for immigrants.
To address these challenges, meaningful reforms are needed. Strengthening labor protections, enforcing fair wages, and ensuring safe working conditions are critical steps toward building a more equitable labor market. Additionally, creating clearer pathways to legal status and citizenship for undocumented workers would provide stability for families and enable these workers to contribute even more fully to the economy. Such measures would not only improve conditions for immigrant workers but also elevate standards across the workforce, benefiting all employees.
Recognizing these problems and implementing solutions is crucial for maintaining the U.S. economy’s resilience and competitiveness. Immigrants are not a liability but an asset, and addressing systemic issues in the labor market will allow their contributions to be even more impactful, ensuring long-term economic prosperity for the nation.
Sources
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