IMMIGRATIONHow Does Immigration Affect the U.S. Economy?
Immigrants have long played a critical role in the U.S. economy, filling labor gaps, driving innovation, and exercising consumer spending power. But political debate over their economic contributions has ramped up under the second Trump administration.
Immigration has historically driven U.S. growth and filled labor shortages in various sectors, but it has also remained one of the most politically divisive issues. In the modern era, successive administrations have agreed on the need to reform the asylum system and bolster border security, while differing sharply on how to manage immigration more broadly.
Since returning to office in 2025, President Donald Trump has reversed many of his predecessor’s policies and followed through on a campaign promise to crack down on both legal and unauthorized immigration. This has reignited the debate over the economic role of immigrants in the U.S. labor market.
Do Immigrants Contribute to U.S. Economic Growth?
Immigrants—totaling almost 48 million out of a population of roughly 335 million people—generated about $1.7 trillion in economic activity in 2023, according to an American Immigration Council analysis of the U.S. Census Bureau’s American Community Survey that year. They also paid roughly $652 billion in local, state, and federal taxes.
Undocumented immigrants, meanwhile, held $299 billion in spending power in 2023, and undocumented households had a combined income of nearly $389 billion—paying close to $90 billion in taxes. Still, proponents of immigration restriction have argued that undocumented immigrants in particular are a net drain, especially on state and local budgets, which bear a large portion of the costs such as education and health-care costs for a larger population.
Most economists say that immigration is good for the U.S. economy because it helps grow the size of the labor force, boost tax revenue, and increase consumer demand. There is some debate about the effect of immigration on wages, however. Some researchers, such as Harvard University’s George Borjas, have raised concerns about its negative impact on the low-skilled labor pool. Others, such as economist Giovanni Peri, have found [PDF] that immigration has only a minimal effect on the wages of U.S.-born workers.
How Many Immigrants Work in the United States?
Nearly thirty-one million immigrants worked in the United States in 2024, accounting for 19.2 percent [PDF] of the U.S. civilian workforce, per the Bureau of Labor Statistics (BLS). The U.S. foreign-born population had a labor force participation rate of nearly 67 percent, compared to roughly 62 percent for the U.S.-born workforce. (The BLS definition of foreign-born includes legally admitted immigrants, refugees, temporary residents, and undocumented immigrants.)
