Executive Summary

‍Immigrants are a driving force in the United States economy, filling critical labor gaps, fostering innovation, and generating billions in revenue. However, restrictive policies and legal barriers limit their full potential and create instability. This brief analyzes the contributions of immigrants to key industries, their impact on economic growth, and the challenges they face due to the current immigration system. Addressing these barriers through comprehensive reform would strengthen both immigrant communities and the broader economy.

Overview

The United States is home to over 45 million immigrants, making up approximately 13.6% of the total population. These individuals play a crucial role in industries such as agriculture, healthcare, technology, and construction, contributing significantly to the labor force and driving economic development. Many immigrants fill labor shortages, drive innovation, and create jobs through entrepreneurship.
Despite these contributions, immigrants face significant legal and systemic obstacles. Restrictive immigration policies and work regulations create instability in the workforce, impacting industries and local economies. Many immigrant workers, particularly those in low-wage sectors, lack access to healthcare, job security, and social services due to their immigration status. These barriers not only hinder personal advancement but also impose broader economic costs, including increased expenses in critical sectors such as agriculture and construction.
A deeper examination of these factors highlights the need for policy reforms that allow immigrants to contribute to the economy fully. By addressing these barriers, the U.S. can better support its immigrant workforce while strengthening overall economic resilience.

Relevance

‍Immigrants make up 17.4% of the American workforce, yet they continue to face disparities in wages and working conditions. In 2023, full-time foreign-born workers earned only 86.6% of what their native-born counterparts earned. According to a survey by KFF and the Los Angeles Times, nearly half of all immigrants reported experiencing civil rights violations in the workplace, including wage theft, workplace harassment, and limited opportunities for advancement.
Despite high employment levels, economic insecurity remains a pressing issue. One-third of immigrants struggle to afford basic needs, underscoring the necessity of immigration reform. Additionally, immigration enforcement policies have direct economic consequences. For example, in Kern County, California, local GDP is projected to decline by 10–20% by the end of 2025 due to a decrease in immigrant workers following ICE raids. These realities highlight the urgent need for policies that provide economic stability and fair labor protections for immigrant workers.

History

‍A. Current Stances

‍Immigrants have long been integral to the U.S. economy. Historically, early immigration policies encouraged labor force expansion, particularly in agriculture and manufacturing. Today, immigrants continue to be key economic contributors, making up 22.6% of entrepreneurs, 23.1% of STEM workers, and 15.6% of nurses. In 2022 alone, they contributed $579.1 billion in tax revenue, funding social programs that many are ineligible to benefit from due to their immigration status.
Policy shifts over time have shaped the immigrant workforce. The Immigration and Nationality Act of 1965 marked a turning point by opening pathways for non-European immigrants, but recent policies have been increasingly restrictive. While programs such as Deferred Action for Childhood Arrivals (DACA) and Temporary Protected Status (TPS) provide temporary relief, they do not offer long-term security. Meanwhile, restrictions on H-1B visas and family-based immigration further limit the economic contributions of immigrants. Addressing these challenges through comprehensive immigration reform would not only benefit immigrant workers but also bolster national economic prosperity.

Policy Problems

A. Stakeholders

‍The most directly affected stakeholders are the immigrants themselves, who play a vital role in sustaining the U.S. workforce and economy. However, businesses also rely on immigrant labor, particularly in industries such as agriculture, construction, and technology, where labor shortages persist. Policies that restrict immigrant labor exacerbate workforce shortages, leading to higher operational costs and reduced productivity.
Policymakers hold the authority to implement reforms that could create a more inclusive and stable environment for immigrant workers. Their decisions directly influence labor market dynamics, economic stability, and the long-term sustainability of immigrant contributions to the workforce.

B. Risks of Indifference

‍Neglecting immigration reform poses severe economic risks. Over the past five years, the U.S. labor force grew by just 479,000 U.S.-born workers, compared to 3.6 million immigrant workers, meaning that immigrants accounted for 88% of overall labor force growth. Without sufficient labor, key industries will experience workforce shortages, leading to declines in productivity and economic output.
A report from the National Foundation for American Policy found that a 30% decline in legal immigration would reduce annual economic growth to just 0.30%. A more dramatic 50% decline could halve the growth rate, resulting in approximately 20 million fewer workers. Restrictive policies could also cost billions in lost tax revenue—undocumented immigrants alone contributed an estimated $96.7 billion in federal, state, and local taxes in 2022. These statistics highlight the economic consequences of failing to implement effective immigration policies.

C. Nonpartisan Reasoning

‍Immigration is not just a political issue—it is an economic and social imperative that affects the entire nation. Addressing immigration challenges with practical, nonpartisan solutions can lead to significant economic growth and a thriving immigrant community. The benefits of comprehensive immigration reform include, but are not limited to, the following:

1. Immigrants are a fundamental part of the U.S. labor market, particularly in industries experiencing worker shortages, such as agriculture, healthcare, and construction. A UCLA study found that expanding pathways to citizenship for immigrants would increase U.S. GDP by up to $1.7 trillion over the next decade. Additionally, research from MIT indicates that immigrants are 80% more likely to start a business than native-born citizens and are responsible for 42% more new jobs. Providing more opportunities for immigrants to gain legal status is not only a means of fostering inclusivity but also a strategic economic move. Their entrepreneurial drive and workforce participation contribute to job creation, industry growth, and long-term national prosperity.
2. Labor shortages in industries such as healthcare and construction highlight the need for a more stable workforce. Immigrants provide a readily available labor pool, often filling critical skill gaps that would otherwise go unaddressed. Expanding legal employment opportunities is essential to enhancing the stability of the U.S. labor market. The ongoing labor shortage, which has persisted since 2018 and was exacerbated by the COVID-19 pandemic, has placed additional strain on businesses and essential industries. By offering more opportunities to immigrants, industries can maintain a steady supply of skilled workers, ensuring both economic and social stability.
3. Beyond economic benefits, immigration reform has far-reaching effects on social equity and community well-being. Immigrants introduce diverse traditions and cultures, fostering a multicultural society that thrives on the exchange of ideas and customs. One notable example is Worthington, Minnesota, where an influx of immigrants revitalized the local economy and strengthened the community. Over the past three censuses, the town’s population has grown by approximately 10% in each cycle, demonstrating how immigration can drive both economic and social revitalization.

Tried Policy

‍One policy that sought to address immigration challenges while fostering economic growth was the DACA program, introduced in 2012 under the Obama administration. DACA was designed to provide temporary relief from deportation and work authorization for undocumented immigrants brought to the U.S. as children. The program aimed to integrate these individuals into the workforce, allowing them to contribute legally and more fully to the economy.
While DACA has benefited over 800,000 recipients, allowing them to pursue higher education, secure employment, and pay taxes, it has faced legal and political challenges. The policy does not provide a direct path to citizenship, leaving recipients in uncertainty. Additionally, the program has been subject to repeated legal battles, with courts ruling on its legality. In 2017, the Trump administration attempted to rescind DACA, arguing it was an overreach of executive authority. Additionally, DACA also fails to address undocumented workers in essential industries. Without a long-term solution, recipients live under the threat of policy reversals, which undermines workforce stability and economic contributions.

Policy Options

1. Pathways to Citizenship for Undocumented Immigrants
A significant challenge for undocumented immigrants is the lack of legal procedures to secure work authorization and long-term stability. Without a clear pathway to citizenship, millions of workers remain vulnerable to exploitation, unable to fully contribute to the economy or access essential services. By implementing a structured and transparent pathway to legal status, the U.S. can integrate undocumented workers into the workforce, ensuring their economic contributions are maximized. This policy could involve expanding existing programs such as DACA and TPS or introducing a new legislative measure that provides permanent residency for long-term, law-abiding immigrants. A well-regulated pathway to citizenship would not only provide stability for immigrant workers but also increase tax revenue and economic output.
2. Expansion of Work Visa Programs
Many industries experiencing labor shortages depend heavily on immigrant labor. However, restrictive visa policies and quotas prevent businesses from hiring the workers they need. The current annual cap on an H-1B visa is set at 65,000, with an additional 20,000 for those with advanced degrees from U.S. institutions, which is often insufficient to meet the demand from companies seeking skilled foreign workers. It also uses a lottery system that leaves many qualified applicants and employers without opportunities.
Therefore, expanding work visa programs, such as increasing H-1B visa caps and improving accessibility for seasonal and essential workers, would allow industries to meet labor demands while providing legal employment opportunities for immigrants. This would reduce the risk of undocumented labor, improve job security, and enhance workforce productivity.
3. Strong Labor Protections for Immigrant Workers and Adaptation Programs
Many immigrants, particularly those in low-wage jobs, face workplace exploitation, wage theft, and unsafe working conditions. Around 13.4% of immigrant workers in the U.S. earn less than their native-born counterparts. However, due to their legal status or fear of retaliation, many workers do not report labor violations. Implementing stronger labor protections, such as enforcing anti-discrimination laws, increasing penalties for wage theft, and improving oversight of working conditions, would help create a fairer labor market. Additionally, granting work authorization to immigrants awaiting legal status would allow them to report labor abuses without fear of deportation. To support immigrants, local and state governments should develop targeted programs that provide English language classes and legal assistance. These programs ensure that immigrants can maximize their potential. As a result, cities and states are more diverse and will foster further economic growth.

Conclusions

‍In this paper, I have explored the essential role that immigrants play in the U.S. economy, the systemic barriers they face, and the policy options that can help unlock their full potential. Immigrants have been and will continue to be essential to the U.S. economy. From filling labor shortages in key industries to the billions in tax revenue they contribute, it is clear that immigration reform is not only a matter of social equity but also an economic necessity. Of the policy options discussed, the most practical and impactful would be the strong labor protections for immigrant workers and the addition of adaptation programs to ensure their fair treatment in the workforce and successful integration into society.
With that said, immigration reform is a complex issue that requires a multifaceted approach. Ensuring that immigrant workers have legal protections, pathways to citizenship, and access to workforce opportunities is crucial to fostering a more inclusive and prosperous society. While challenges remain, they can be overcome by implementing structured policy changes, reducing bureaucratic obstacles, and prioritizing solutions that benefit both immigrant communities and the broader U.S. economy. By addressing these issues through strategic reform, the U.S. can build a future where immigrants thrive and continue to contribute meaningfully to national development.

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References

[1] USAFacts. "How Many Immigrants Are in the American Workforce?" Retrieved from: http://usafacts.org/articles/how-many-immigrants-are-in-the-american-workforce/

[2] Urban Institute. "Immigrant Families Faced Multiple Barriers to Safety Net Programs in 2021." November 2022. Retrieved from: https://www.urban.org/sites/default/files/2022-11/Immigrant%20Families%20Faced%20Multiple%20Barriers%20to%20Safety%20Net%20Programs%20in%202021.pdf

[3] Public Policy Institute of California. "Immigrants and the Labor Market." Retrieved from: https://www.ppic.org/publication/immigrants-and-the-labor-market/

[4] American Immigration Council. "Immigration Map." Retrieved from: https://map.americanimmigrationcouncil.org/locations/national/

[5] National Foundation for American Policy. "Legal Immigration: A Driver of Economic Growth." February 2020. Retrieved from: https://nfap.com/wp-content/uploads/2020/02/Legal-Immigration.NFAP-Policy-Brief.February-2020.pdf

[6] National Foundation for American Policy. "New NFAP Policy Brief: Immigrants and America’s Labor Force Growth." Retrieved from: https://nfap.com/research/new-nfap-policy-brief-immigrants-and-americas-labor-force-growth/

[7] UCLA Newsroom. "New UCLA Study: Citizenship for Unauthorized Immigrants Would Boost U.S. Economy." Retrieved from: https://newsroom.ucla.edu/releases/citizenship-unauthorized-immigrants-us-economy

[8] MIT News. "Study Finds Immigrants More Likely to Start Firms and Create Jobs." May 9, 2022. Retrieved from: https://news.mit.edu/2022/study-immigrants-more-likely-start-firms-create-jobs-0509

[9] National Bureau of Economic Research. "The Impact of H-1B Visa Caps on Employment." Retrieved from: https://www.nber.org/digest/dec17/fewer-h-1b-visas-did-not-mean-more-employment-natives

[10] American Council on Education. "Trump Administration Ends DACA." Retrieved from: https://www.acenet.edu/News-Room/Pages/Trump-Administration-Ends-DACA.aspx

[11] Institute on Taxation and Economic Policy. "Undocumented Immigrants & Taxes 2024." Retrieved from: https://itep.org/undocumented-immigrants-taxes-2024/

[12] Bloomberg. "Undocumented Immigrants in U.S. Paid Nearly $100 Billion in Taxes." July 30, 2024. Retrieved from: https://www.bloomberg.com/news/articles/2024-07-30/undocumented-immigrants-in-us-paid-nearly-100-billion-in-taxes

[13] Kaiser Family Foundation. "Understanding the U.S. Immigrant Experience: The 2023 KFF/LA Times Survey of Immigrants Findings." 2023. Retrieved from: https://www.kff.org/report-section/understanding-the-u-s-immigrant-experience-the-2023-kff-la-times-survey-of-immigrants-findings

[14] Associated Press. "Worthington, Minnesota, and the Impact of Immigration." Retrieved from: https://apnews.com/article/2024-election-immigration-policy-integration-minnesota-education-economy-019135a73205346a310eb1595da88d86