The Economic Effects of Immigration A Brief Overview

The immigration debate is heating up again, as the current administration has voiced support for relaxing immigration laws to allow immigrants to take in-demand jobs not currently filled. But what are the economic effects of immigration? This blog post will briefly examine some of the critical points.

Immigration: A Hot-Button Issue

Since the early days of our country, immigration has been a hot-button issue. And in recent years, it seems to be only getting more heated. Unfortunately, the debate will only continue with the current administration’s relaxed stance on immigration. In addition, the COVID-19 pandemic has permeated many aspects of our lives for the past couple of years, and it’s no surprise that it has impacted immigration as well. 

In 2020, immigration to the United States fell to its lowest level in more than a decade, partly due to restrictions in immigration laws by the Trump administration and fears associated with COVID-19. Some of the most recent statistics confirm that visa issuance from April to June of 2020 plummeted below 50,000, down from 713,000 in January of that year.

The United States has always been a country of immigrants, and immigration has played a vital role in our country’s growth and development. In recent years, though, immigration has become a controversial topic. Some argue that immigration is essential to our country’s economic growth and development, while others say that immigration is a burden on our economy. So, what are the economic effects of immigration?

How Immigration Affects the Economy

With immigration continuing to be a massive national concern, it’s important to pinpoint how it affects the economy using recently collected data and assess it. In 2017, the National Academies of Sciences, Engineering, and Medicine reported that immigration positively affects the economy. Conversely, many people in favor of stricter immigration laws state that the negative impacts of immigration on the economy cost Americans billions of taxpayers’ dollars.

However, according to this report, the negative impacts of immigration are limited to high school dropouts and first-generation immigrants. Often, this argument is cited as a reason to restrict immigrants crossing the border; in this case, it holds some truth. Furthermore, data surveyed from 1994 to 2013 support the idea that first-generation immigrants are impacted by increased immigration to the United States. However, data that consider the fiscal impact of first-generation immigrants on federal, state, and local taxes are less favorable than native-born citizens. Moreover, after age 60, this situation changes completely, and native-born citizens are more expensive to the economy than first-generation immigrants because of Social Security.

Children from the same timeframe also had a more favorable impact on government revenue than first-generation immigrants or the rest of the native-born population. Generally, this more significant positive impact is due to higher education and better-paying jobs causing them to pay more taxes than either population. Finally, a study observed data from the 1920s describing immigration quotas. During this time, there were restrictions on immigration, but according to U.S. census data, restricting immigration did not lead to higher wages for native-born workers.

Why the Economy Could Benefit From Relaxed Immigration

Unfortunately, the Biden-Harris administration has acted in a contradictory manner when it comes to enforcing immigration policies. For instance, in 2021, the highest recorded number of migrants attempted to cross the southern border into the United States. This trend is likely to continue past 2022 as inflation continues, but these migrants mostly come from countries like Guatemala, Honduras, and El Salvador.

Migrants from these countries are desperate to enter the labor force in the states because they are fleeing poor economic conditions strained by violence, COVID-19, and instability. The Biden-Harris administration has invested in Central America, including Mexico, while telling migrants from these areas to “stay away.” Many consider the flow of immigrants to solve the labor shortages in many industries. Immigrants are a natural solution to this problem because:

• Quick Hire – Occupations that need more workers are occupations where immigrants can start quickly. Generally, industries suffering supply chain issues require thousands of dock workers and truck drivers.
• Immigrants won’t take away jobs – Many native-born citizens are concerned that immigrants will be “substituted” for native-born workers. However, this is not a problem considering the current epidemic of labor shortages.
• The investment will remove any negatives – Businesses continuously invest capital towards growth, and increased immigration will drive wages downward rather than upward. This implies that there isn’t any business capital investment, and we know that to be false. The current administration’s 1.2 Billion dollar infrastructure plan will assuage any immigration-related concerns.

In short, immigration could provide many benefits to the U.S. economy if the current administration would allow it; this means that legal immigration should be increased in any way, shape, or form to combat our existing supply chain issues. In addition, immigrants are often willing to do the jobs that many native-born citizens are not, providing a net positive fiscal impact over their lifetimes.

So what does all this mean for policymakers? Well, immigration has both positive and negative effects on the economy. So as policymakers weigh the pros and cons of immigration, they should keep these economic effects in mind.

Not Everyone Agrees With Increased Immigration

Despite the present data that is publicly available, some disagree with the idea of increased immigration, whether it be for economic or social reasons. For example, some people are concerned that immigration will lead to lower wages for native-born workers, more unemployment, and an influx of people who may not share the same values.

These are valid concerns that policymakers should address. However, the data does not show that immigration harms the economy. Even still, immigrants will likely receive increased scrutiny and face more challenges.  The reality is that immigration has always been a controversial topic. But as our economy continues to change and evolve, immigration will continue to be a hot-button issue. At some point, you may need the help of a team of dedicated immigration attorneys.

At Davis & Associates, we have 30 years of experience in immigration law and immigration policy analysis. As a result, our immigration attorneys have the knowledge and expertise to help you navigate these complex issues. In addition, we understand the immigration process firsthand, as many of our staff have gone through the process with our families and loved ones. 

We are dedicated to helping you reach your immigration goals. Contact us today to schedule a consultation. We look forward to speaking with you.