From a macroeconomic perspective, Marks says, the economy as a whole profits from immigrants. High-skilled workers—construction supervisors, translators, pharmaceutical reps, and the like—make the economy more productive and drive down prices, so everyone wins.
Even the less-skilled benefit from immigration by boosting demand for the kinds of goods they produce. It redistributes wealth from those who compete with immigrants to those who use them.
Increased Economic Activity
It’s often said that immigrants take jobs away from native-born Americans and increase the burden on government welfare programs. But the truth is that immigrants pay billions in taxes and boost domestic industry by filling low-wage jobs. They also contribute to the economy by consuming goods and services, generating demand for additional jobs, and revitalizing once-declining communities.
Immigrants move to where the jobs are, speeding up economic growth by relieving bottlenecks and shortages that would otherwise limit expansion. It is a key reason why farmers and manufacturers benefit from increased immigration and why workers in the food and apparel industries have benefited from declining unemployment rates.
Giving unauthorized immigrants legal status also boosts their productivity, as they comply with tax laws and work harder to meet the demands of a market economy. This increase in productivity reflects improved job matches, investments in skills and education, and better health outcomes. These gains in productivity should translate into higher wages for these workers.
Boosted Tax Revenues
Many Americans believe that immigrants steal jobs from American workers, collect an excess of government benefits, and generally represent a fiscal drain. These myths stem from a lack of understanding of the nature of legal immigration Wharton NJ, and the economy.
Immigrant workers create economic jobs by opening businesses and spending their incomes on goods and services. They also pay taxes and increase productivity, capital formation, and demand for products made by U.S. manufacturers and farmers.
Granting legal status to unauthorized immigrants would likely increase their tax compliance rates and take-up of social programs. But estimating their future contributions to federal, state, and local governments requires significant assumptions and data that can take time to come by.
Estimates suggest that, on average, over 75 years, the net fiscal contribution of new immigrants and their children is $259,000. It compares with $1,600 per person for native-born citizens. A large share of this fiscal contribution comes from highly skilled professionals who can fill labor shortages.
Immigrants pay billions in taxes and fill jobs that keep the domestic industry competitive, revitalizing neighborhoods. They also create new businesses, expanding demand for goods and services and increasing productivity. Contrary to popular belief, immigrants do not take jobs from native workers but rather complement them by filling industries and occupations where American-born workers are unqualified or less productive. It increases the overall labor force and raises GDP.
Immigrants often work in occupations that are considered manual and low-skill, such as construction and agriculture. They also work in personal services and sales, complementing higher-skilled workers. Research suggests that the impact on wages is small and that many factors other than immigration levels affect wage growth. Unauthorized immigrants are less likely than natives to use public welfare programs. Studies have shown that the prospect of legalization encourages unauthorized immigrants to improve their language skills and enhance their education.
Immigration is an economic boost, and the United States needs to welcome more immigrants to the workforce. As the baby boom generation retires, fewer workers support older adults, and more low-skilled workers must fill jobs in construction, translation, pharmaceutical sales, and other fields that immigrants often perform.
Immigrants are a net positive for the economy, contributing more in taxes than they use in government benefits. While some studies find adverse wage effects for lower-skilled native workers, most of these costs are offset by the productivity gains of immigration and higher earnings for complementarity workers, including less-skilled domestic laborers and the high-wage earners of the new immigrant population.
In addition, a path to legal status would encourage unauthorized immigrants to improve their skills and become more productive in the long run. Evidence from prior legalizations and other studies suggests that a more secure status would prompt younger immigrants to stay in school longer and boost their wages.