The Impact of Immigration on Our Economy

Immigrants have a tremendous positive impact on our economy.

Opponents of immigration reform often argue that immigrants don’t contribute to our economy. Nothing could be further from the truth.

Immigrants make tremendous economic contributions as workers, consumers, entrepreneurs and innovators. Immigrants pay taxes, create new jobs by opening businesses, and make scientific discoveries that transform entire industries. For instance, as of 2010, nearly one-fifth (18%) of all Fortune 500 companies had at least one founder who was an immigrant. Collectively, these companies generated $1.7 trillion in annual revenue and employed 3.6 million workers worldwide.

In addition, in 2007 (the last year for which data is available), roughly 18% of all small-business owners in the United States were immigrants. All told, immigrant-owned small businesses employed 4.7 million people and had $776 billion in receipts. And immigrants fuel innovation as well as entrepreneurship. Among people with advanced degrees, immigrants are three times more likely to file patents than native-born U.S. citizens.

Another common misconception is that immigrants take jobs away from Americans. This just isn’t the case.

Immigrants do not compete with the majority of natives for the same jobs because they tend to have different levels of education and work in different occupations. In fact, immigrants actually “complement” the native-born workforce. That increases the productivity, and therefore the wages, of natives.

Immigrants are also more likely to start businesses than the native-born. According to a 2011 report from the Kauffman Foundation, “immigrants were more than twice as likely to start businesses each month than were the native-born in 2010.” Immigrant-owned businesses employ millions of people across the U.S.

Immigrants do in fact pay taxes, debunking another common myth.

Like the rest of us, undocumented immigrants pay taxes on their property and are subject to sales taxes on what they buy. Households headed by undocumented immigrants paid $10.6 billion in state and local taxes in 2010, according to estimates prepared by the Institute on Taxation and Economic Policy (ITEP). Moreover, ITEP estimates that, if provided the opportunity to earn legal status, formerly undocumented immigrants would pay a total of $12.7 billion in state and local taxes each year.

If we make it harder for immigrants to come to the United States, we undermine our own economic competitiveness as a nation.