BTN News: Undocumented immigrants in the United States are often the subject of heated debates, yet a recent study by the Institute on Taxation and Economic Policy (ITEP) sheds light on a less-discussed aspect of their presence: their significant contribution to the economy. This nonpartisan organization based in Washington, D.C., estimates that the nearly 10.9 million undocumented individuals currently in the U.S. provide a substantial boost to public coffers through taxes. In fact, for every million undocumented immigrants, the U.S. government receives approximately $8.9 billion in taxes, a figure that highlights the substantial economic impact of these workers who predominantly fill low-paying, unstable jobs in sectors like construction and agriculture.
These jobs, often deemed undesirable by U.S. citizens and legal residents, are essential to the economy, yet they are overwhelmingly filled by undocumented immigrants. Agustina Berguersi, a researcher at the Ayn Rand Institute, emphasizes that immigration restrictions not only impact immigrants but also U.S. employers, who face significant hurdles in hiring legal workers due to bureaucratic red tape and lengthy legal processes. This situation has led to widespread calls from employers for more streamlined immigration policies that would allow them to hire the necessary labor legally and efficiently.
The economic contributions of undocumented immigrants are particularly evident in states like California, Texas, New York, Florida, Illinois, and New Jersey, where each state collects over $1 billion annually in taxes from this group. The potential economic benefits could be even greater if these immigrants were granted work authorization. According to ITEP, such a change could increase tax contributions by an additional $40.2 billion, bringing the total to $136 billion.
Berguersi points out that immigration restrictions have a detrimental effect not just on immigrants but on the U.S. economy as a whole, particularly in sectors that rely heavily on manual labor. Employers in industries like agriculture have long argued that their businesses are hamstrung by the inability to legally hire the workers they need. Chalmers Carr, owner of Titan Farms in South Carolina, illustrates this point, explaining that the decline in the American labor force has made it increasingly difficult to find workers willing to take on agricultural jobs, forcing many employers into a difficult position.
Contrary to popular belief, however, the agricultural sector does not employ the majority of undocumented workers. A report from the U.S. House Committee on Education and Labor reveals that only about 1% of the entire U.S. workforce is employed in agriculture, making it impossible for farmworkers to constitute a large portion of undocumented immigrants. Studies from the Center for Immigration Studies and the Pew Research Center support this finding, showing that while undocumented immigrants do make up a significant part of the workforce in agriculture, they represent a much smaller percentage of the overall undocumented population.
Instead, undocumented workers are more commonly found in industries such as cleaning, food service, and construction. These sectors have some of the highest concentrations of undocumented workers, and their contributions extend far beyond the labor they provide. According to ITEP, more than a third of the taxes paid by undocumented immigrants go toward Social Security and healthcare, benefits that these workers often cannot access themselves.
The economic impact of undocumented immigrants is a crucial part of the broader contribution of the Latino population to the U.S. economy. Latinos, including both documented and undocumented individuals, now constitute a significant economic force. The Latino Gross Domestic Product (GDP) in the U.S. has reached an astounding $3.2 trillion, according to the 2023 Latino Donor Collaborative (LDC) report. This figure represents a 14% year-on-year growth, a testament to the dynamic and rapidly expanding role of Latinos in the U.S. economy.
This growth is not only large in scale but also high in quality, driven by increased access to higher education among second and third-generation Latinos. As more young Latinos graduate from college, particularly in fields like engineering, they are securing higher-paying jobs, buying homes, and starting businesses, all of which contribute to the overall growth and vitality of the U.S. economy.
Ana Valdés, the general director of LDC, underscores the importance of recognizing where this growth is coming from, noting that the Latino community continues to expand at two to three times the rate of the general population. This demographic shift is not just a statistic but a vital piece of information for anyone looking to understand the future of the U.S. economy.
The impact of Latino economic growth is not lost on financial institutions either. Patty Juárez, who oversees Hispanic affairs at Wells Fargo, attributes much of this success to the community’s increasing educational attainment. This, in turn, has led to greater economic contributions, with Latinos playing an increasingly significant role in driving the U.S. economy forward.
In conclusion, the economic contributions of undocumented immigrants, and the Latino community as a whole, are undeniable. These groups represent a vital part of the U.S. labor force, tax base, and consumer market. As the debate over immigration continues, it is essential to recognize the substantial and positive impact that undocumented workers have on the U.S. economy. Their contributions, both in terms of labor and taxes, help sustain critical sectors and fuel the growth of the U.S. economy, benefiting all Americans.
