The Economic Case for Immigration: What the Data Shows About America’s Workforce

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Drawing upon the most recent data from the Congressional Budget Office, the Bureau of Labor Statistics, the American Immigration Council, and various economic research institutes, this analysis provides a rigorous, evidence-based examination of immigration’s impact on the economy.

It reviews the immediate economic feedback loops triggered by recent policy restrictions, contrasting the stated goals of these policies with their actual outcomes in local communities and national tax revenue.

The GDP Engine

The $28 trillion U.S. economy is frequently analyzed through the lens of interest rates and trade deficits. However, the human capital component, specifically the inflow of foreign-born workers, remains one of the most potent variables in the equation of national growth.

Recent data shows that immigrants are not passive beneficiaries of American wealth but active, primary generators of it.

Economic Output

The correlation between immigration levels and Gross Domestic Product (GDP) growth is one of the most robust findings in modern economics. In 2023 alone, immigrants generated approximately $1.7 trillion in economic activity.

This figure represents a staggering portion of the national output, derived from a population of roughly 48 million people out of a total of 335 million.

This contribution reflects the “immigration surge” that began in 2021 and continued through the early part of 2025. The Congressional Budget Office projected that this specific surge in population would account for an $8.9 trillion increase in nominal GDP over the 2024–2034 period.

Of this total, $7.8 trillion is directly attributable to the increase in the size of the population. This contradicts claims that the economy, rather than slicing the economic pie into smaller pieces, immigration enlarges the pie, creating new demand, new markets, and new investment opportunities.

The “demand side” of this equation is equally critical. Immigrants are consumers. In 2023, immigrant households held billions in spending power, which circulates through the economy, supporting U.S. businesses from local retail to national housing markets.

Even undocumented immigrants, a group often marginalized in economic data, held $299 billion in spending power in 2023. This consumption supports the employment of native-born workers in logistics, retail, and service sectors.

Tax Contributions

A persistent narrative in 2025 suggests that immigrants, particularly those without permanent legal status, are a net drain on public resources. Tax revenue data show that immigrants are significant contributors to the fiscal health of federal, state, and local governments.

Undocumented Taxpayers

The tax compliance of the undocumented population is a phenomenon often facilitated by the Individual Taxpayer Identification Number (ITIN) system, as well as payroll deductions for workers using non-matching Social Security numbers. In 2022, undocumented immigrants paid an estimated $96.7 billion in taxes.

This equates to approximately $8,889 in tax revenue per undocumented person. To put this in perspective, for every 1 million undocumented immigrants residing in the country, public services receive nearly $9 billion in additional revenue.

Their effective tax rate of 26.1% is nearly identical to the 26.4% rate paid by the median income group of the overall U.S. population. These funds support infrastructure, schools, and emergency services that benefit the entire community.

The Long-Term Fiscal Picture

While some localized costs exist, primarily regarding education for immigrant children, the long-term fiscal view is overwhelmingly positive. A 2025 update by the Manhattan Institute employed a “CBO-like framework” to measure the 30-year fiscal impacts of immigration.

The findings were stark: the “worst” immigration restriction—a complete moratorium on legal immigration, would force the U.S. into an economic contraction of 8% and increase the national debt by $6.6 trillion over 30 years.

Conversely, the “immigration surge” population is projected to pay $788 billion in taxes over the 2024–2034 period, while their consumption of federal mandatory spending programs (plus that of their children) would only total $177 billion. This creates a net federal surplus that helps offset deficits elsewhere in the budget.

Business Formation

Beyond filling existing jobs, immigrants are prolific creators of new ones. The risk-taking propensity required to migrate often translates into entrepreneurial ambition. In 2023, despite comprising only 14% of the population, immigrants founded 19% of all new businesses in the United States.

This entrepreneurial energy is intergenerational. The children of immigrants founded an additional 17% of new businesses. Together, first- and second-generation Americans are responsible for more than one-third of U.S. business formation.

These are not merely subsistence businesses—they are engines of employment. In 2023, 91% of new immigrant-owned businesses hired at least one employee, actively creating jobs for native-born workers.

At the apex of the corporate world, this trend is even more pronounced. An analysis of the 2025 Fortune 500 list revealed that 46.2% of America’s largest companies, generating a combined $8.6 trillion in revenue, were founded by immigrants or their children.

From technology giants to retail behemoths, the corporate landscape of 2025 is fundamentally shaped by the immigrant experience.

Furthermore, academic research underscores the link between immigration and innovation. Immigrants are overrepresented in patenting and high-growth tech startups. Restrictions on visas for foreign-born graduates of U.S. universities effectively export this innovation to competitor nations, a phenomenon that policymakers in 2025 have struggled to reverse despite clear evidence of its economic cost.

The 2025 Policy Shift

The year 2025 has been defined by a radical shift in the legal and regulatory framework governing immigration. Driven by a political mandate for restriction, the administration enacted the “One Big Beautiful Bill Act” (OBBBA) and a series of Executive Orders that have reshaped the landscape of enforcement and benefits.

The “One Big Beautiful Bill Act”

Signed into law on July 4, 2025, the “One Big Beautiful Bill Act” (OBBBA) represents the most significant contraction of immigrant rights and benefits in decades. The legislation targets both the legal and undocumented populations with a focus on deterrence through economic disenfranchisement.

Restriction of Health and Nutrition Aid: The bill strips many lawfully present immigrants of access to federal health insurance subsidies and nutrition assistance (SNAP). This shifts the burden of care to state and local emergency rooms, which are legally mandated to provide stabilization services but are the most expensive and least efficient delivery mechanisms for healthcare.

Denial of Child Tax Credits: Millions of children, many of whom are U.S. citizens born to immigrant parents, have been barred from receiving the Child Tax Credit. This effectively raises taxes on low-income immigrant families, reducing their disposable income and, by extension, their consumption in local economies.

Enforcement Funding: The bill authorizes unprecedented funding levels for detention centers and deportation forces, while simultaneously stripping “guardrails” that previously ensured due process and humanitarian standards.

Executive Orders

Beyond legislation, the executive branch utilized its authority to fundamentally alter the rules of entry and residence in 2025.

The Birthright Citizenship Order: In a move that challenged over a century of legal precedent, an Executive Order issued early in the year mandated that for children born on or after February 19, 2025, automatic citizenship would only be granted if at least one parent was a U.S. citizen or a Lawful Permanent Resident (Green Card holder).

This policy instantly created a legal quagmire. Children born to parents on temporary visas (H-1B, L-1, etc.) or undocumented parents are now potentially stateless or dependent on their parents’ precarious visa status.

The Asylum Pause: Following a security incident in late 2025 involving an Afghan national, the administration implemented an indefinite pause on immigration applications from 19 “high-risk” countries and placed an “adjudicative hold” on all asylum applications regardless of nationality.

The immediate economic consequence was the restriction of work permits. USCIS reduced the validity period of work permits for asylum seekers from five years to just 18 months.

This policy change introduced immense instability into the labor market. Employers, facing the prospect of their employees losing work authorization in just over a year, became reluctant to hire or train asylum seekers, exacerbating labor shortages in industries like food service and logistics.

The Deportation Economic Impact

Throughout 2025, the administration pursued a policy of “mass deportation.” Economic analyses of these proposals paint a grim picture of the potential fallout.

The Peterson Institute for International Economics estimated that if 8.3 million undocumented immigrants were deported, U.S. GDP would be 7.4% lower by 2028 compared to the baseline.

This contraction would be driven by a massive supply shock in the labor market. With fewer workers available, businesses would be forced to cut production. Simultaneously, the scarcity of labor would drive up wages for the remaining low-skilled positions, feeding into a wage-price spiral that could push inflation significantly higher, prices were projected to rise by an additional 9.1% by 2028.

American families would feel this directly. Estimates suggest that the combined effects of these immigration policies would cost the average American family an additional $2,150 annually in higher prices for goods and services.

Sectoral Analysis

The abstract numbers of GDP and fiscal policy manifest in the physical economy, on farms, construction sites, and hospital wards. In these sectors, the “complementarity” of immigrant labor is not a theory but an operational necessity.

Immigrants tend to fill roles that native-born workers, who are generally older and more educated, are less willing to accept. When this labor supply is disrupted, as seen in 2025, the consequences are immediate and severe.

Agriculture Crisis

No sector is more dependent on immigrant labor than agriculture. By late 2025, the U.S. agricultural sector faced a crisis of existential proportions, driven by the aggressive enforcement policies and the chilling effect of the mass deportation rhetoric.

The Rotting Crops Problem: Farms producing “Fruit, Vegetable, and Horticultural” (FVH) products rely almost exclusively on manual labor for harvesting. These are tasks that cannot be easily mechanized and for which the domestic labor supply is effectively non-existent.

In 2025, as fears of ICE raids permeated rural communities, farmers in states like California reported that up to 70% of their workforce failed to show up for the harvest.

The result was crops rotting in the fields. A sixth-generation farmer noted, “If 70% of your workforce doesn’t show up, 70% of your crop doesn’t get picked and can go bad in one day.”

This supply shock leads directly to higher food prices for consumers and forces the U.S. to rely more heavily on imported food, paradoxically increasing the trade deficit that the administration sought to close.

The H-2A Visa Gap: While the H-2A visa program for temporary agricultural workers has expanded, certifying around 385,000 positions in FY 2024, it remains structurally inadequate for the industry’s needs. It’s expensive, bureaucratically cumbersome, and seasonal, making it ill-suited for year-round sectors like dairy farming.

Furthermore, 2025 saw proposals to cut the wages of H-2A workers to lower costs for farmers. However, the Economic Policy Institute warned that this would reduce the total annual wages of farmworkers by about $3 billion, effectively sucking purchasing power out of rural economies.

Pennsylvania farmers, even in deep-red districts, expressed frustration that the administration’s policies were dismantling their workforce without providing a viable legal alternative.

Construction and Housing

The United States faces a chronic housing shortage, yet the policies of 2025 have systematically targeted the very workforce needed to build new homes. Immigrants comprise approximately 25% of the construction workforce, with even higher concentrations in trades such as drywall installation, roofing, and flooring.

By mid-2025, the Associated General Contractors of America reported that immigration enforcement was a leading cause of project delays, affecting nearly one-third of all construction firms.

The mechanism is simple: when a framing crew loses half its members to deportation or fear, the entire project timeline slides.

This creates a paradox in housing policy. The government aims to lower housing costs by increasing supply, but its immigration policies restrict the labor capacity required to build that supply.

The loss of immigrant construction workers inevitably leads to higher construction costs, which are passed on to homebuyers and renters, exacerbating the affordability crisis.

Healthcare and Care Work

As the Baby Boomer generation enters advanced age, the demand for healthcare and direct care services has exploded. By late 2024, there were nearly 1.4 million job openings in the healthcare and social assistance sector.

Immigrants are the backbone of this care economy.

Physicians and Nurses: In states like Michigan, Ohio, and Pennsylvania, over 25% of physicians are immigrants. Nationally, 15.6% of nurses are foreign-born.

Direct Care Workers: Immigrants make up 27.7% of home health aides.

The Surgeon General has highlighted that the shortage of low-wage healthcare workers is expected to reach 3 million by 2027. Restrictive immigration policies don’t result in native-born workers flocking to these demanding, low-wage roles.

Instead, they result in a “care gap,” where elderly Americans are left without necessary support, placing an immense emotional and financial burden on their families.

STEM and Tech

The U.S. technology sector relies heavily on high-skilled immigrants to drive innovation. Nearly half of all international students in the U.S. are enrolled in STEM programs. These students represent the future of American leadership in artificial intelligence, biotechnology, and engineering.

Research from the Federal Reserve Bank of Richmond (2024) utilized the H-1B visa lottery as a natural experiment to study the impact of skilled immigrants. The study found that firms who “won” the lottery and hired skilled immigrants subsequently increased their hiring of college-educated native-born workers.

This suggests a strong complementarity: skilled immigrants help companies grow, creating new opportunities for American workers. The visa pauses and “adjudicative holds” of 2025 threaten to sever this pipeline, forcing talent to relocate to countries with more welcoming policies, such as Canada or the UK.

Regional Revitalization

While the national media often focuses on the border crisis or the politics of sanctuary cities in coastal hubs, a quieter, profound transformation is occurring in the American Rust Belt and rural heartland. In these regions, immigrants are often the primary force reversing decades of population decline and economic stagnation.

Rust Belt Revival

Cities in Ohio, New York, and Pennsylvania have struggled since the deindustrialization of the 1970s. For them, immigration is a strategy for survival.

Dayton, Ohio: Dayton had lost nearly half its population from its 1960s peak. Recognizing that population loss creates a downward spiral of tax revenue and services, the city launched “Welcome Dayton” in 2011 to actively court immigrants. By 2019, the immigrant population had grown by 25%.

In 2025, the fruits of this long-term strategy are visible. Immigrants have revitalized neighborhoods by purchasing and renovating vacant homes. They have opened businesses, like the El Gaban restaurant in nearby Trotwood, that bring life back to commercial corridors. This influx has stabilized the tax base, allowing the city to maintain infrastructure and services that benefit long-time residents.

Utica, New York: Utica was once the poster child for Rust Belt decline, exacerbated by the departure of major employers like General Electric. However, the resettlement of over 17,000 refugees transformed the city. Today, immigrants make up 22% of the population.

The “Utica Model” demonstrates how immigrants can save a housing market. Refugees, often pooling resources, purchased dilapidated homes that were slated for demolition, restoring them through sweat equity. This stabilized property values across the city.

Furthermore, they provided the reliable workforce needed for local manufacturing and service industries to remain in the area, preventing further capital flight.

Rural America

In rural America, where the “brain drain” of young native-born residents moving to cities is acute, immigrants are often the only source of demographic stability.

Storm Lake, Iowa: Storm Lake is a testament to the symbiotic relationship between rural industry and immigration. The town of 14,000 boasts 30 different nationalities, largely drawn by employment at Tyson Foods. Without this non-white population growth, the surrounding Buena Vista County would have shrunk by 12%.

The integration of this diverse population has been facilitated by enlightened local leadership. Police Chief Mark Prosser (retired) championed a community policing model that refused to act as a deportation force, building trust that kept the community safe and cohesive.

Clarkston, Georgia: Known as the “most diverse square mile in America,” Clarkston has embraced its identity as a refugee resettlement hub. In 2025, the city received the National Planning Award for Advancing Diversity and Social Change, recognizing its multilingual outreach and community-rooted engagement strategies.

Clarkston demonstrates that even in the Deep South, a model of inclusive growth is not only possible but award-winning.

Housing Market Stabilization

Data from 2024 and 2025 clarifies the role of immigrants in the housing market. While critics argue that immigrants drive up housing costs, the reality is nuanced geographically.

In the Sun Belt, where demand is already high, they contribute to growth. However, in the Rust Belt cities like Detroit, Toledo, and Cleveland, immigrants are a “barrier against even greater declines.”

By creating demand in markets with excess supply, they prevent the collapse of home values, protecting the primary financial asset of native-born residents.

Integration Infrastructure

Bringing immigrants into the country is only the first step. The data suggests that the economic return on immigration is maximized when the government invests in integration infrastructure—specifically legal representation and language access.

Legal Representation ROI

Navigating the complex U.S. immigration system without an attorney is nearly impossible, yet there’s no right to government-appointed counsel in immigration court. Investment in legal aid programs has proven to be incredibly cost-effective.

When immigrants have counsel, they’re more likely to secure work authorization and less likely to be ordered deported in absentia. This allows them to move from the cash economy to the formal economy, increasing their wages and their tax contributions.

In New York City, a report found that providing legal services to asylum seekers could unlock over $470 million in earnings, boosting the city’s economy.

Furthermore, representation streamlines the court process, reducing the backlog and the immense costs associated with detention.

Language Access

English language proficiency is the single greatest predictor of economic mobility for immigrants.

Human Capital: Many immigrants arrive with skills—engineering, nursing, teaching—that they cannot utilize due to language barriers. Investing in adult English instruction unlocks this “brain waste,” allowing a foreign-trained engineer to work as an engineer rather than a taxi driver.

Economic Incentives: Learning English is highly valued by immigrants themselves. In 2025, states like Colorado, Michigan, and New York innovated their workforce development systems to integrate language learning, recognizing it as a key driver of state economic competitiveness.

The Demographic Future

Looking beyond the immediate political cycle, the United States faces a demographic “cliff” that makes immigration a mathematical necessity for the preservation of its social safety net.

Social Security Solvency

The U.S. population is aging rapidly. As the large Baby Boomer cohort retires, the ratio of active workers paying into Social Security to retirees drawing benefits is shrinking.

The Solvency Gap: The 2025 Social Security Trustees Report indicates that the trust fund reserves are on track for depletion by approximately 2033–2035.

Immigrant Contribution: Immigrants are generally younger than the native-born population. They enter the workforce at high rates and pay payroll taxes for decades before claiming benefits. The American Academy of Actuaries confirmed in 2025 that immigrants “favorably affect the financial condition of Social Security.”

The Cost of Restriction: A moratorium on immigration would accelerate the insolvency of these funds. Without the infusion of young immigrant workers, the U.S. would face the choice of massive tax hikes on native-born workers or severe benefit cuts for retirees.

The Fertility Challenge

The U.S. fertility rate has fallen below the replacement level of 2.1 children per woman. Without immigration, the U.S. population would eventually begin to shrink, leading to a scenario similar to Japan’s: a contracting economy, a labor shortage, and a stagnation of innovation.

Immigrants accounted for 50% of U.S. household growth between 2010 and 2015. In the 2024–2025 period, the “immigration surge” was the primary driver of labor force growth, shielding the U.S. from the worst effects of demographic decline.

Maintaining a robust flow of immigrants is the only viable lever available to policymakers to maintain demographic stability and economic dynamism in the mid-21st century.

The integration of immigrants is not an act of charity but an investment in the nation’s future solvency. From the fields of California to the tech hubs of Austin, and from the revitalized neighborhoods of Dayton to the federal treasury in Washington, the immigrant contribution is woven into the very fabric of American success.

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