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Immigrants play an important role in the US labor force, offsetting the declining birth rate in the country. Many economists argue that immigrants contribute to overall economic growth not only by expanding the labor force but also through increased consumer spending. They also start new businesses at a rate higher than the US born. More than 40 percent of Fortune 500 companies were started by immigrants

 

How many immigrants are in the U.S. civilian labor force?

 

In 2022, immigrants constituted 17 percent (28.6 million people) of the 166.9 million people in the U.S. civilian labor force (this includes both the employed and the unemployed looking for work).

The immigrant share of the U.S. labor force has more than tripled since 1970, when they accounted for approximately 5 percent of the civilian labor force.

The median household income for immigrants in 2022 was approximately $75,500, slightly higher than that of U.S.-born households, $74,600.

Yet immigrants are somewhat more likely to be in poverty than their U.S.-born counterparts (14 percent versus 12 percent). (According to the US Census Bureau (for 2022), poverty is defined as having an income below $29,700 for a family of four.)

 

Where are Immigrants in the labor force?

 

Of the approximately 28 million employed foreign-born workers ages 16 and older in 2022, the largest share (37 percent) worked in management, professional, and related occupations. But immigrants are spread across many critical areas of the economy: for example, construction, agriculture, food preparation and service work, maids and housekeeping, home and personal care aids, landscaping and janitorial services. This table offers a broad idea of the distribution across the labor sector of immigrant workers as compared with US born workers.

Labor Sector	Immigrant Workers	US Born Workers
Management, Business, Science, and Arts Occupations	37%	44%
Service Occupations	21%	15%
Sales and Office Occupations	15%	21%
Natural Resources, Construction and Maintenance Occupations	12%	8%
Production, Transportation and Material Moving Occupations	15%	13%

 

Do Immigrants have Health Insurance Coverage

 

Approximately 57 percent of immigrants had private health insurance in 2022 (compared to 69 percent of the U.S. born), and 32 percent had public health insurance coverage (compared to 38 percent for the native born).

Approximately 18 percent carried no health insurance (compared to 7 percent of the U.S. born).

The Affordable Care Act of 2014 has changed the healthcare landscape for both immigrants and the US born; in 2013, 32 percent of immigrants were uninsured (compared to 12 percent of the native born), a number that fell to 20 percent in 2017 (and 7 percent of the native born).

Do undocumented immigrants pay taxes?

According to a recent study by the Institute on Taxation and Economic Policy (ITEP), undocumented immigrants play a crucial role in the U.S. economy, not only through their labor but also through substantial tax contributions that support public services and government programs. Among the critical findings of this study are the following:

• Undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022. Most of that amount ($59.4 billion) was paid to the federal government while the remaining $37.3 billion was paid to state and local governments.
• Undocumented immigrants paid federal, state, and local taxes of $8,889 per person in 2022. Another way of looking at this is to note that for every 1 million undocumented immigrants who reside in the country, public services receive $8.9 billion in additional tax revenue.
• More than a third of the tax dollars paid by undocumented immigrants go toward payroll taxes dedicated to funding programs that these workers are barred from accessing. Undocumented immigrants paid $25.7 billion in Social Security taxes, $6.4 billion in Medicare taxes, and $1.8 billion in unemployment insurance taxes in 2022.
• At the state and local levels, slightly less than half (46 percent, or $15.1 billion) of the tax payments made by undocumented immigrants are through sales and excise taxes levied on their purchases. Most other payments are made through property taxes, such as those levied on homeowners and renters (31 percent, or $10.4 billion), or through personal and business income taxes (21 percent, or $7.0 billion).
• Six states raised more than $1 billion each in tax revenue from undocumented immigrants living within their borders. Those states are California ($8.5 billion), Texas ($4.9 billion), New York ($3.1 billion), Florida ($1.8 billion), Illinois ($1.5 billion), and New Jersey ($1.3 billion).
• In a large majority of states (40), undocumented immigrants pay higher state and local tax rates than the top 1 percent of households living within their borders.
• Undocumented immigrants are often barred from receiving meaningful tax credits and sometimes do not claim refunds they are owed due to lack of awareness, concern about their immigration status, or insufficient access to tax preparation assistance.
• Providing access to work authorization for undocumented immigrants would increase their tax contributions both because their wages would rise and because their rates of tax compliance would increase. Under a scenario where work authorization is provided to all current undocumented immigrants, their tax contributions would rise by $40.2 billion per year to $136.9 billion. Most of the new revenue raised in this scenario ($33.1 billion) would flow to the federal government while the remainder ($7.1 billion) would flow to states and localities.

Source: https://itep.org/undocumented-immigrants-taxes-2024/; see this link for impact state by state, including Texas

Impact of Immigrants on Social Security 

In 2022, unauthorized immigrants contributed $25.7 billion in Social Security taxes, typically by working under borrowed or fraudulent Social Security numbers.

Unauthorized immigrants cannot claim Social Security benefits.

Immigration is critical to offset the declining birth rate in the United States and immigrants certainly help to sustain the financial health of the Social Security system

For a study of the impact of immigration on social security see: https://bipartisanpolicy.org/explainer/immigration-social-security-solvency/

Further Resources and More Details

For profiles by state see https://www.migrationpolicy.org/programs/data-hub/state-immigration-data-profiles

For Texas profile see: https://www.migrationpolicy.org/data/state-profiles/state/workforce/TX

For debates on the issues surrounding the economic contributions and costs of immigrant workers see the following websites:

https://www.cfr.org/in-brief/how-does-immigration-affect-us-economy#:~:text=Yes.,United%20States

https://www.fwd.us/news/americans-and-immigration/

https://theconversation.com/proof-that-immigrants-fuel-the-us-economy-is-found-in-the-billions-they-send-back-home-227542#:~:text=Assuming%20their%20take%2Dhome%20wages,$2.2

https://www.americanimmigrationcouncil.org/news/new-data-immigrants-driving-prosperity-in-united-states-2022

https://www.migrationpolicy.org/content/explainer-immigrants-and-us-economy

https://www.nationalacademies.org/news/2016/09/new-report-assesses-the-economic-and-fiscal-consequences-of-immigration

https://www.fwd.us/news/immigration-facts-the-positive-economic-impact-of-immigration/