Do immigrants hurt the US economy? Here's what the data really shows.

Source: AP
Source: AP

When Republican presidential nominee Donald Trump says illegal immigration is "hurting us economically," he is not necessarily expressing a minority view: 61% of U.S. respondents in one March poll, in fact, said they think all immigration "jeopardizes the United States."

Among millennials polled, 55% agreed.

There may be truth to the claim that undocumented immigrants strain social services and compete for low-skilled jobs — at least in certain geographic pockets of the United States. This is part of what Trump is talking about when he makes the claim that "illegal immigration costs our country more than $113 billion dollars a year."

But examples of costs in specific areas — like southern Texas — do not represent the big picture.

When you step back and look at the United States as a whole, both legal and undocumented immigrants benefit the economy by a wide margin. That's "not controversial," Heidi Shierholz, an economist at the Economic Policy Institute, told the New York Times. 

Here are a few key data points that show how immigrants really affect the U.S. economy.

Do undocumented immigrants pay taxes?

Yes. Undocumented immigrants contribute about $12 billion a year in state and local taxes alone.

Undocumented immigrants also subsidize Social Security: Through payroll taxes, undocumented workers add another $12 billion a year toward supporting Americans in old age.

Over a decade, those two figures would add up to about $740 extra for every American, based on the current U.S. population.

Republican presidential nominee Donald Trump thinks undocumented immigrants hurt the economy, but in fact they likely help.
Source: 
Ralph Freso/Getty Images

Because undocumented immigrants put so much cash into our Social Security system — 10% of the total by one measure — kicking them out of the country could very well exacerbate our already disastrous retirement crisis

Do immigrants take American jobs, or lower wages?

The biggest — and perhaps most legitimate — objection to undocumented immigrants is that they take jobs from and reduce wages for unskilled workers: One study suggests that undocumented workers crowding low-wage jobs may have accounted for half of an 11 percentage-point drop in wages for high-school dropouts between 1980 and 1995.

But plenty of economists disagree with this stance. They argue that undocumented workers may actually improve wages for native U.S. workers and boost employment — even for unskilled workers — by contributing to the U.S. economy.

One study from researchers from the Public Policy Institute of California and the University of California, Berkeley, suggests that after Arizona reduced the state's population of undocumented immigrants — by about 40% — the move may have actually backfired by increasing overall unemployment.

Arizona's controversial crackdown on undocumented immigrants may have raised unemployment.
Source: 
Ross D. Franklin/AP

And other data suggests low-skill undocumented immigrants help skilled U.S. workers in particular — by raising their wages and freeing them to do more high-value work

Finally, skilled, documented immigrants seem to have the biggest positive effect on wages: One study found that increasing the population of skilled immigrants by 10% increases wages for natives by 2.6%

How many Fortune 500 companies were founded by immigrants?

When you look at documented immigrants, it becomes even clearer that immigration is a boon to the U.S. economy.

Take the latest Forbes ranking of U.S. billionaires, which provides ample anecdotal evidence that immigrants contribute mightily as entrepreneurs. 

Of the 400 richest people in the country, 42 were born overseas — a little more than 10%. And unlike Trump, virtually all of them are self-made.

Google co-founder Sergei Brin is the richest immigrant in the U.S.
Source: 
Jeff Chiu/AP

Overall, 40% of Fortune 500 companies were founded by immigrants or the children of immigrants, according to the Partnership for a New American Economy.

And immigrant entrepreneurs are a diverse group in other ways: More than 40% of them are women

How do immigrants help create jobs?

Fun fact: Most job creation over the last three decades has come from businesses that are less than 5 years old, according to a report from the Partnership for a New American Economy.

That same paper reports that 28% of small businesses launched in 2011 were founded by immigrants — and immigrants are more than twice as likely as native-born Americans to start a business.

Finally, data from the National Foundation for American Policy shows that more than half of U.S. startups with valuations of $1 billion or higher have at least one immigrant founder.

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James Dennin

James is a staff writer covering money and millennials. Send your tips and your money problems to jdennin@mic.com.

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