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The Political Question

Immigration Policy

Immigration and the 2008 Presidential Election

The Economic Question

Economic Impact


The Rise of Smuggling







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Economic Impact

The most important and avidly debated effects of undocumented immigration involve the United States’ economy and labor force.  It is estimated that there are 12 million undocumented immigrants in the United States today, and their impact on the economy can be perceived as positive as well as negative. (28)  The overall effect is unclear, and this page aims to present both sides of the debate.

The main argument in support of undocumented immigration is that migrant workers do jobs that Americans do not want to do.  Given that most Americans do not compete with undocumented workers for jobs, there has not been a significant shift in the wage rate. Who then is hurt by these immigrants doing jobs that “we will not do”?  For instance, those without high school diplomas are the ones who are most affected.  It is estimated that undocumented immigrants' lower wages by approximately 3 to 8 percent for low-skill jobs. Furthermore, Americans who compete with immigrants for these jobs stand to make an additional $25 a week if undocumented immigration were to be severely cut down. (29)

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At the same time, lower wages paid to undocumented workers in low-skill positions cuts the cost of production, which can lead to lower prices for the American consumer in industries such as restaurants, agricultural produce, and construction.  Also, while undocumented workers send a portion of their earnings to their home country in the form of remittances, they still stimulate the U.S. economy by going out and spending much of the money they make.  Undocumented workers also save jobs in some ways.  By providing work at low cost, for instance, undocumented workers keep firms from investing heavily in new, expanding technologies that would make their firms significantly less labor-intensive and more automated. (30)

The other main argument that comes with undocumented immigration is the use of government services.  Most undocumented workers receive their payments in cash, and therefore, are not subject to federal tax deductions.  If they do pay federal taxes, it is because they acquire fraudulent information, and their wages are usually so low that their contributions are insignificant.  Consequently, many people argue that these immigrants are costing our government a substantial amount of money by receiving benefits such as education, health care, food assistance programs, and welfare.  Many of these uses stem from the fact that if an undocumented immigrant has a child born in the United States, that child is an American citizen, and therefore, has the rights to these government services. (31)

The flip side of the government services argument involves contributions to the United States economy.  As mentioned above, much of what undocumented workers earn is cycled back into the economy via their purchases and their low wages, which cut prices for American consumers. 

With all this being said, do undocumented workers have more of a positive or negative impact on the U.S. economy? There is no definitive answer.  The issue is heavily debated, and each study that is done inevitably has some form of bias.  The difficulty in performing a true cost-benefit analysis makes the undocumented immigration situation such a polarized issue, with no clear end in sight.