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Immigration Has a Positive Effect on U.S. Economy

There are 40 million immigrants currently living in the U.S. with approximately 1.4

million coming in each year. With so many immigrants arriving, concerns about how the influx

of people would affect the citizens live. Worries about future jobs or financial support in

retirement make some individuals scared or hesitant to support an increase of immigrants.

However, these fears do not encompass the whole picture. Immigrants help to improve the

economy by providing new and better opportunities for native-born citizens filling unwanted

jobs, and adding to the total U.S. income.

Critics have many reasons why they believe immigration harms the U.S. economy. They

fear immigrants would bring multiple disasters to the U.S., including mass poverty and fiscal

collapse (Caplan). Others believe the addition of immigrants would lead to a loss of jobs and

fallen wages. Healthcare services require a lot of money to be put in. Immigrants will end up

relying on these services, but there are no guarantees of “repayment.” As there is no assurance

that the immigrants would stay in the area to make up for the deficit (Gaille).

On the other hand, there are multiple benefits to the U.S. economy due to immigration.

During the early decades of the U.S., there was an “open border” mindset. In an open-border

country, there are little to no restrictions on immigrants coming in. During this time, the U.S. had

become the “world’s richest and most powerful nation (Caplan).” It is believed by supporters of

immigration that immigrants would add to the government’s revenues. They also add immigrants

would provide labor when demand is at an all-time high (Pettinger).

There are multiple explanations as to why immigration’s effect on the U.S. economy is

controversial. In recent years, there has been a spike of people, specifically white men without
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college degrees, blaming immigrants for the problems of this economy. This spike occurred

following the Great Recession (Thompson). The Great Recession was from December 2007 to

June 2009. During this time, there was a great decline in economic activity. It was the most

severe in the U.S. since the Great Depression (“The Great Recession”). Political lines have also

been drawn in the controversy. Around 84% of Democrats and those who tend to vote more

liberally believe immigrants strengthen the country. In contrast, only 42% of Republicans and

voters who lean conservatively believe the same thing (Thompson).

One of the main arguments against immigrants is that immigrants take the jobs that

“rightfully” belong to the citizens of the U.S. Immigrants are willing to take lower incomes and

poorer working conditions, so companies, especially big ones, tend to prefer hiring them (Beck).

Universities are almost completely free to hire their staff from anywhere on the entire globe.

Since immigration increased, the number of professors more than students, immigrants have

been “taking” the jobs of native-born Americans for years (Caplan). As immigrants tend to be

exploited by companies there is a fear that Americans working the same jobs are forced to work

in poor working conditions. Many believe these exploits would not happen if the only ones in the

job were native-born (Beck).

Immigrants and Fig. 1 – Pie charts to show the distribution of occupations

native-born Americans in foreign-born and native-born workers (Batalova)

tend to not compete

for the same jobs.

The U.S. born

citizens who are

considered to be

“low-skilled” are

“high-skilled” by global standards. They are able to speak fluent English, are literate, and know

the modern world and technology (Caplan). More native-born Americans are earning college

degrees than ever before. As such, they are less likely to pursue low-wage jobs immigrants often

take, such as housekeepers and agriculture workers (Denton). This is shown in Fig.1.

The decrease in average wages is a bit misleading. While the average would increase

with an influx of blue-collared workers, an individual’s wage doesn’t necessarily go down. Say

the current average income of those living in the U.S. was $52,000. However, taken separately,

native-born Americans make $62,000 while immigrants only make $45,000. The total average

doesn’t truly affect the average native-born American worker (Caplan). The lower wages even

help most consumers. For example, the agriculture worker’s low wages enable buyers to

purchase cheaper produce. It even prevents a product from having inflation occur (Denton).

Immigrants help provide native-born Americans with opportunities to improve the

economy. Eight percent of teachers are made of immigrants from the k-12 schooling systems.

This fraction of immigrants to native-born teachers is slightly less than the fraction of
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immigrants to native-born in the U.S. population as a whole. Taking away 8% of teachers would

be a devastation to the schooling system. Places such as New York, Florida, Texas, and

California, where there is a high percentage of foreign-born teachers, would be even worse off.

The lack of teachers hinders the students’ chance to reach their full potential. They would be

unable to affect the economy in any positive way (Startz).

Immigrants are twice as likely to be entrepreneurs than those who are native-born. For

every 100,000 immigrants, there are 520 who start their own businesses. Only 260 of U.S. born

citizens do the same. In 2016, about 29.5% of the total entrepreneurs in the U.S. were foreign-

born, which is significantly greater than the 13% of the immigrant population. Around 51% of

the companies worth more than $1 billion were started by immigrants. Each of these companies

employed approximately 760 people. Firms owned by Asians and Latino U.S. citizens made

more than $1.012 trillion in 2015 and employed 6.7 million workers with an annual payroll of

$212 billion. In 2007, one of every ten people employed in private U.S. companies was

employed by businesses owned by immigrants (Kosten).

Not only do immigrants provide more job opportunities, but they can also help revitalize

neighborhoods. They revitalize neighborhoods so well that places like Detroit, Michigan and

Iowa State University are trying to attract and integrate more immigrants into their own

economies. Immigrants own 28% of what is known as “Main Street” businesses. “Main Street”

businesses include retail, accommodation, and food services. These businesses make

neighborhoods more attractive, or places people in which want to live and work. This increase

sparks a desire for more economic activity (Kosten).

The economic laws of supply and demand ensure that native-born workers lose when
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foreign-born are in the picture. Immigrants who sell identical goods as native-born cause harm to

said native-born. Consumers’ money would be split between native workers and immigrants,

thus decreasing wages. Others add that foreign-born also could harm the consumers. Increasing

the demand for a good would encourage sellers to increase the price (Caplan). Milton Friedman,

who won a Nobel Prize in economics, once said, “You cannot simultaneously have free

imagination and a welfare state.” He strongly believed that immigrants would and do harm the

economy (Caldwell).

Immigrants apply the laws of demand and supply in various ways. An increase in

population, such as immigrants migrating to the U.S. leads to an increase in demand. The

increased demand for construction work because of the increased need for houses and office

buildings to accommodate the influx of population. Immigrants also add to demand through the

use of their wages to buy phones, food, haircuts, etc. Foreign-born migration to the U.S. also

increases the supply of labor. As the supply increases, prices stay low and affordable. Because

most immigrants do agriculture, things such as grocery prices stay low (Caplan). Since

immigrants increase supply, economic theories imply that wages go down. While true, as time

passes, firms tend to invest more to restore the amount of capital per worker. This restores the

wages. The capital-labor ratio prevents the average productivity of a worker, and thus their

wages, from declining in the long run (“The Effects of Immigration…”).

Foreign-born citizens of the U.S. contribute a lot to the economy, especially when

considering how many there are compared to those who are native-born. As of 2011, the total

wage, salary and business income were $5,042,277,015,987. Native-born citizens made 85.3% of

that total while immigrants made 14.7%. While seemingly small, immigrants only make up 13%
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of the total population. Immigrants are more than pulling their weight (Costa). Around 16% of

the workforce is made up of immigrants, because they, more often than not, have a higher

concentration of people of prime working ages than native-born. The number of immigrants

studying in the U.S. universities grew to 18% between 2011-212 (The Effects of

Immigration…”).

Regions with large populations of lower-educated or low-income immigrants suffer.

Native-born residents bear significant net costs as immigrants use a lot of public services, such as

education. Low-income immigrants tend to have a lot of children who are in kindergarten to

twelfth grade. Since the children may not speak English well, the cost of education may be

substantially higher than for those who are native-born. In California, there is a high number of

immigrants who are less educated and have low-income. The contribution to the state and local

revenue is smaller than the consumption of public services (“The Effects of Immigration…”).

Some people believe immigrants would be a big burden to the native-born due to rival spending.

Rival spending, which contributes to Welfare, Medicaid, Social Security, Medicare, public

education and college subsidies, would no longer go to the poor. At least a trillion’s worth of

money would instead be given to incoming immigrants (Caplan).

The average age of immigrants is older than that of native-born people in the U.S. The

average is 45.7 years for immigrants, while for native-born it is 36.5 years. About 78% of

immigrants are between the ages of 18-64, compared to the 59% of the native-born (Batalova).

Many of the immigrants do not rely heavily on the government’s money since they often are

relatively young and healthy and do not depend on healthcare. Most of the rival spending does

not go to the poor. Two-thirds go to the very young and the very old. About $1.4 trillion goes to
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Social Security and Medicare while $1 trillion for public education, pre-k through twelfth, and

college subsidies (Caplan).

In the long run, immigrants generally contribute positively to the federal budget. Most

immigrants, especially those who have recently arrived, are generally of working age, and thus

tend to not rely too much on Medicare. Immigrants help to pay for the military, but do not

generate any additional costs for the military (“The Effects of Immigration…”). The taxpayers’

dollars go only to the children of the immigrants, not the whole family as it would for a native-

born family. However, as children get older, most make up for the deficit through their taxes.

The Net Present Value (NPV) is higher among the immigrants who arrive when they are less

than 25 years old. The NPV for those who arrive and earn a high school diploma is $239,000 and

those who do not earn a high school diploma have an NPV of $35,000. These gains make up for

any money that would be lost when considering immigrants arriving at an age of 65 or older

(Caplan).

Relating to the economy, immigrants help to take undesired work, create possibilities that

are new and better for native-borns, and contribute positively to the income of the U.S.

Immigrants do not compete for the same jobs as native-born Americans, and employ about ten

percent of the hired workers in private firms. While foreign-born citizens make up thirteen

percent of the total U.S. population, they contribute more than fourteen percent of the total wage,

salary, and business propriety. Immigrants who migrate while in or below working age bring a

positive NPV with or without a high school diploma. While there are some disadvantages to

immigration to the U.S. economy, it is far outweighed by all the benefits immigration brings.
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Works Cited

Batalova, Jeanne, et al. “Frequently Requested Statistics on Immigrants and Immigration in the

United States.” Migration Policy Institute. 14 February 2020. migrationpolicy.org. Web.

Beck, Roy. “The Case Against Immigration.” Basic Books. 1996. washingtonpost.com. Web.

Budiman, Abby. “Key Findings About U.S. Immigrants.” Pew Research Center. 20 August

2020. pewresearch.org. Web.

Caldwell, Bruce J. “Milton Friedman.” Encyclopedia Britannica, Inc. 12 November 2020.

britannica.com. Web.

Caplan, Bryan Douglas and Zach Weinersmith. Open Borders: The Science and Ethics of

Immigration. New York, New York: Roaring Brook Press, 2019. Print.

Costa, Daniel, et al. “Facts About Immigration and the U.S. Economy.” Economic Policy

Institute. 2 August 2014. epi.org. We.

Denton, Michelle. Immigration Issues in America. New York: Lucent Press, 2018. Print.

“The Effects of Immigration on the United States’ Economy.” University of Pennsylvania. 27

June 2016. n.a. budgetmodelwharton.upenn.edu. Web.

Gaille, Louise. “21 Big Pros and Cons of Immigration.” Vittana. 23 June 2018. vittana.org. Web.

“Great Recession, The.” Dotdash. 23 October 2020. investopeidia.com. Web.

Kosten, Dan. “Immigrants as Economic Contributors: Immigrants Entrepreneurs.” National

Immigration Forum. 11 July 2018. immigrationforum.org. Web.

Pettinger, Tejvan. “Pros and Cons of Immigration.” Economics Help. 14 November 2019.

economicshelp.org. Web.

Startz, Dick. “Immigrant Teachers Play a Critical Role in American Schools.” Brown Center
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Chalkboard. 16 March 2017. brookings.edu. Web.

Thompson, Derek. “How Immigration Became So Controversial.” The Atlantic. 2 February

2018. theatlantic.com. Web.

Bibliography

Amadeo, Kimberly. “How Immigration Effects the Economy and You.” The Balance. n. d.

thebalance.com. Web.

Batalova, Jeanne, et al. “Frequently Requested Statistics on Immigrants and Immigration in the

United States.” Migration Policy Institute. 14 February 2020. migrationpolicy.org. Web.

Beck, Roy. “The Case Against Immigration.” Basic Books. 1996. washingtonpost.com. Web.

Budiman, Abby. “Key Findings About U.S. Immigrants.” Pew Research Center. 20 August

2020. pewresearch.org. Web.

Caldwell, Bruce J. “Milton Friedman.” Encyclopedia Britannica, Inc. 12 November 2020.

britannica.com. Web.

Caplan, Bryan Douglas and Zach Weinersmith. Open Borders: The Science and Ethics of

Immigration. New York, New York: Roaring Brook Press, 2019. Print.

Cole, Johnathon R. “Why American Universities Need Immigrants.” The Atlantic. 7 March

2017. theatlantic.com. Web.

Costa, Daniel, et al. “Facts About Immigration and the U.S. Economy.” Economic Policy

Institute. 2 August 2014. epi.org. We.

Denton, Michelle. Immigration Issues in America. New York: Lucent Press, 2018. Print.

“The Effects of Immigration on the United States’ Economy.” University of Pennsylvania. 27

June 2016. n.a. budgetmodelwharton.upenn.edu. Web.

Gaille, Louise. “21 Big Pros and Cons of Immigration.” Vittana. 23 June 2018. vittana.org. Web.

“Great Recession, The.” Dotdash. 23 October 2020. investopeidia.com. Web.

“How Does Immigration Affect the U.S Economy?” National Academy of Sciences. 2020.
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thesciencebehindit.org. Web.

Kosten, Dan. “Immigrants as Economic Contributors: Immigrants Entrepreneurs.” National

Immigration Forum. 11 July 2018. immigrationforum.org. Web.

Pettinger, Tejvan. “Pros and Cons of Immigration.” Economics Help. 14 November 2019.

economicshelp.org. Web.

Sherman, Arloc, et al. “Immigration Contribute Greatly to U.S. Economy, Despite

Administrations ‘Public Charge’ Rule Rationale.” Center on Budget and Policy Priorities.

2015. cbpp.org. Web.

Startz, Dick. “Immigrant Teachers Play a Critical Role in American Schools.” Brown Center

Chalkboard. 16 March 2017. brookings.edu. Web.

Thompson, Derek. “How Immigration Became So Controversial.” The Atlantic. 2 February

2018. theatlantic.com. Web.