Many Americans don’t want them here. But we might miss them if they’re gone.
The surge of migrants entering the United States during part of Joe Biden’s presidency has played to Donald Trump’s signature issue. Trump launched his first campaign for president in 2015 with an anti-immigrant rant, and the issue has worked for him ever since. So Trump, in his third campaign for president, has raised his bid on the issue, promising the “mass deportation” of up to 20 million people if he wins a second term.
Careful what you wish for, America-firsters. If Trump accomplished even part of this plan, it would leave many industries short of workers, raise costs for businesses and consumers, and dent federal tax revenue. That’s not a defense of illegal immigration. Instead, it’s an acknowledgment of the key role migrants play in the US economy despite many Americans’ legitimate concerns about a broken immigration system that generates chaos.
Migration is poorly understood, so first, some basics. Around 1 million people migrate legally to the United States each year, and another million or some come as temporary “guest workers” needed to fill a variety of jobs in agriculture, technology, and other sectors. Aside from the COVID years, those numbers are fairly steady and not especially controversial.
Migrants sneaking into the United States illegally and others who get temporary asylum status are the ones Trump and his followers get fired up about. The number of migrants showing up to seek asylum hit a record high last December — but has since plunged by 57%. In June, President Biden changed US policy, making it much harder to qualify for asylum. At the same time, the United States has been working with Mexico to prevent Latin American migrants from getting to the US border in the first place. If these policies had been in place for Biden’s entire presidency, the surge in 2022 and 2023 wouldn’t have happened and the issue would probably be far less explosive today.
The latest Pew Research data shows that at the beginning of 2022, there were about 11 million undocumented migrants in the United States. Some snuck in. Others overstayed work visas that expired, or failed to show up for hearings meant to determine if their asylum claims were valid. The number is probably higher now, though it’s obviously hard to count people who don’t want to be counted.
Collectively, undocumented migrants are a potent economic force. New research by the Institute on Taxation and Economic Policy finds that undocumented migrants paid $96.7 billion in federal, state, and local taxes in 2022, so the figure would presumably be higher now if there are, in fact, more such migrants in the country. Of that amount, $60 billion went to the federal government, mostly as income and payroll taxes, while the rest went to states and cities.
Many undocumented workers get paid in cash, untaxed. But some choose to get a taxpayer ID number from the government, or even use a fake or outdated Social Security number, to pay taxes because some employers require it and paying taxes can help make the case for citizenship later on. And everybody pays sales tax when they buy something at normal retail outlets.
Contrary to much internet propaganda, undocumented migrants generally can’t join safety net programs such as Social Security, though they do support such programs when they pay taxes. That makes migrants one of the few groups that pay more into the system than they get back in benefits. The Congressional Budget Office recently found that higher migration levels of the last two years will help reduce federal deficits by $900 billion through 2034, or about $90 billion per year, and boost GDP growth by about two-tenths of a percentage point.
Earlier this year, researchers at the Brookings Institution found that “the unexpectedly high level of immigration explains some of the surprising strength in consumer spending and overall economic growth since 2022.” Since the COVID pandemic wound down in 2021, employment and GDP growth have routinely come in higher than economists’ forecasts, and one explanation now seems to be the larger workforce of migrants, which is hard to define numerically. That would fit with the general economic principle that migration into a healthy economy boosts demand and output because more workers generate more income and buy more stuff.
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Some Americans argue that migrants willing to work for less than native-born Americans undercut wages and living standards. There may be some truth to that among unskilled workers. But it’s also true that a larger pool of migrants helps keep labor costs down, which in turn keeps retail prices for ordinary consumers lower than they’d otherwise be.
Besides, the number of job openings in the US economy hit record levels in 2022 and is still well above historical norms, even though it’s coming down. Research earlier this year by the Center for Global Development looked at immigration patterns since 2000 and found that migration to the United States goes up when there are more job openings and goes down when there are fewer. Though they may not read the Wall Street Journal, migrants get word when American employers need workers, and they show up on cue — and vice versa.
Pew estimates that 8.3 million undocumented migrants were working or looking for work back in 2022. So, again, the number is probably higher now. (Those not looking for work are mostly children and dependents.) While it’s hard to measure exactly where undocumented migrants work, industries with the highest levels of foreign-born workers include education, healthcare, construction, restaurants, and agriculture. Most of those industries have dealt with a shortage of workers during the post-COVID economy. As one example, migrant laborers account for an estimated one-half of all dairy workers in the country.
Trump’s first presidential term showed that he promises draconian measures — on trade, for example — then pursues about half of what he promised. So, his “mass deportation” might not be “mass.” But it would certainly be disruptive.
Again, this is not an argument for open borders or for the continuation of an overtaxed, underfunded, and outmoded immigration system. But undoing the economy as it is — including the gray-and-black-market portions of it — will entail costs that will affect most Americans.
Deporting large numbers of migrant workers will shrink the workforce, drive up labor costs, and make food and many other products more expensive. Growth will suffer a little, tax revenues will drop a bit, and budget deficits will be higher. If you think that’s all worth it, then explain the cost-benefit analysis and what the offsetting gain will be.
And if you can’t do that, find a better way to deal with the migration problem.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on X at @rickjnewman.
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