What Is the Economic Impact of Immigration in the U.S.?

by Mark Albright

Overview

Image of Ellis Island

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The economic impact of immigration in the United States has generated considerable debate both in the halls of Congress and among average citizens. Many thousands of Americans today are able to trace their ancestry back to Europeans and others who emigrated to America in past generations.
The "Competition" Question

The main question is whether immigrants compete with citizens for jobs or whether, by willingness to accept lower-paying jobs, they depress the wages of U.S. citizens in the workforce.

Reform Will Add to the Economy

The advocacy groups Center for American Progress and Immigration Policy Center predicted that immigration reform would add $1.5 trillion to U.S. gross domestic product over the next decade in their report, "Raising the Floor for American Workers," according to the Miami Herald. ``
Status in the Workforce

Immigrants are disproportionately represented in low-wage employment, holding 20 percent of such jobs, but they comprise higher proportions of certain higher-skill occupations and sectors of the economy.
Recent Research

A recent CATO Institute study found government policies reducing low-skilled immigrant workers by 28.6 percent compared to projected levels could reduce U.S. household welfare by about 0.5 percent, or $80 billion, while legalizing low-skilled immigrant workers would yield significant income gains for American workers and households.
Realizing Gains from Legalization

The CATO Institute study mentioned above, "Restriction or Legalization? Measuring the Economic Benefits of Immigration Reform," argues that legalizing low-wage workers would eliminate smugglers' fees and other costs faced by illegal immigrants, and encourage guest workers to increase productivity, thereby creating "a surplus gain for the economy by raising the value of immigrant labor relative to the wage necessary to attract it."