Deporting Undocumented Immigrants Carries High Economic Costs

A recent poll by Monmouth University found that 61 percent of Americans view illegal immigration as a very serious issue, a jump of more than a third in just the last few years. The Trump administration has identified mass deportation as the most effective strategy to manage this issue. Still, experts say it would come at an enormous cost to taxpayers and the U.S. economy. The American Immigration Council, for instance, estimates that a one-time mass deportation process will conservatively cost around $315 billion, which does not account for the economic impact on individuals, businesses, and government revenues.

Undocumented Immigrants

Undocumented immigrants: When people hear that term, they often imagine recently arrived Latinos taking jobs from Americans all across the country, illegally collecting government benefits, and committing crimes. This point of view is usually tied to the belief that the undocumented population, especially the Latino segment, is growing rapidly and out of control. But the data say differently.

The American Immigration Council finds that undocumented immigrants are less likely to commit crimes than those born in the U.S. The undocumented population is typically young, employed, and often entrepreneurial, having resided in this country for over five years. Over one million undocumented individuals are entrepreneurs, and around 90% are of working age. Most of them work and pay taxes, contributing significantly to their communities and the nation’s economy.

According to the U.S. Census Bureau’s American Community Survey, undocumented immigrants are most likely working in low-wage jobs, including those in construction, agriculture, and food service. They also significantly contribute to federal, state, and local taxes. In 2022, they paid $59.4 billion in federal taxes and $13.6 billion in state and local taxes. Additionally, they contributed nearly $26 billion to Social Security, just over $6 billion to Medicare, and almost $2 billion to unemployment insurance—all programs for which they are ineligible.

Approximately 14% of the U.S. population are immigrants, while undocumented immigrants account for about 23% of the foreign-born population. Around 11 million individuals, roughly 3% of the country’s population, live here without legal status, with the largest numbers concentrated in six states: California, Florida, Illinois, New Jersey, New York, and Texas.

In one interview, a Latino undocumented immigrant, who declined to give his name for privacy reasons, said, “Why do so many people think I want to take things from them? I came here for my children. I want to work, buy a house, and watch my children get educated. I don’t want to take anything from anybody.”

Undocumented Latino Immigrants

While the majority of undocumented immigrants are Latino, according to the Pew Research Center, the number and percentage of non-Latino undocumented immigrants from other countries (e.g., India) have been steadily increasing. As recently as 2017, the majority of undocumented immigrants were from Mexico, but that is no longer the case. According to the Migration Policy Institute’s most recent estimates, 45% of undocumented immigrants are from Mexico, down from 64% in 2007.

Undocumented Latino Immigrants in the Labor Force

The importance of undocumented Latino immigrants to the labor force cannot be overstated. The Center for Migration Studies of New York reports that 78% of undocumented Latino immigrants participate in the labor force, compared to 68% of U.S.-born Latinos and 63% of the U.S.-born population. Approximately two-thirds of the undocumented Latino population work in service, natural resources, construction, or maintenance jobs. In other words, a large portion of undocumented Latino immigrants work in low-wage jobs that do not require a high level of education but are deemed essential.

In five states with the highest number of undocumented Latinos- New York, Texas, Florida, California, and Illinois- they represent a greater share of the essential workforce than their overall population percentage. For example, in Texas, undocumented Latinos make up nearly 7% of the state’s population but account for almost 8% of essential workers.

When analyzing labor force participation by gender, the findings indicate that undocumented Latinos are more likely to participate in the labor force than U.S.-born men. In contrast, the labor force participation of undocumented Latinas is roughly equivalent to that of U.S.-born women. However, undocumented Latinas play a significant role in filling jobs that face chronic labor shortages, such as those in leisure and hospitality.

Undocumented Latinos, like all undocumented immigrants, have a higher rate of starting businesses than those born in the U.S. Those businesses create jobs for Americans and contribute billions of dollars to the economic success of American companies.

One Latino, who declined to give his name for privacy reasons, came to this country without papers but is now a U.S. citizen said, “Before I became a citizen, I started a small business. I hired people born in Mexico but also people born in the U.S. I will give anybody who wants to work a job. I buy supplies from Americans. I hire American accountants. My business is good for me and my family but also for a lot of Americans and their families.”

Moving Forward

There is no debate that the U.S., like all nations, has the right and responsibility to control its borders. An immigration system must address the socioeconomic needs of the country, its communities, and its residents. Any public actions taken regarding immigration, especially those aimed at undocumented immigrants, should be grounded in economic reality.

According to the Peterson Institute for International Economics, deporting just 1.3 million undocumented immigrants will trigger a 1.2% decrease in GDP and a 1.1% drop in employment by 2028. The loss of agricultural, construction, and other low-wage workers will lead to job losses and higher costs for everyone.

Our economy crucially depends on undocumented immigrants. Elected officials must consider the economic consequences associated with mass deportation proposals. Rather than a policy priority of deportation, elected officials might do better to structure a set of policies that fully integrate undocumented immigrants into the socioeconomic fabric of the U.S. and allow them to continue to make vital contributions. An immigration policy that recognizes the contributions of undocumented immigrants, particularly Latinos, and aims to keep them in the U.S. will benefit the overall economy.