How useful are illegal immigrants to America
Executive summary
Undocumented (often called “illegal”) immigrants make measurable fiscal and economic contributions to the United States: they pay billions in federal, state and local taxes, contribute to Social Security and Medicare trust funds despite limited access to those benefits, and fill critical labor gaps in agriculture, construction, hospitality and other sectors [1] [2] [3]. At the same time, scholars and policy groups warn that the full costs and benefits depend on wages, enforcement choices, and legal status reforms that would shift both tax receipts and program eligibility [4] [5].
1. They are significant taxpayers even without legal status
Multiple analyses estimate that undocumented households and workers paid tens of billions of dollars in 2022–2023 to federal, state, and local treasuries—figures in the reporting range from roughly $59.4 billion in federal taxes plus $13.6 billion state/local in 2022 to almost $96.7–$100 billion in total taxes in 2022 depending on methodology—showing a consistent pattern that undocumented people contribute sizable tax revenue despite limited benefit access [2] [6] [1].
2. They shore up Social Security, Medicare and other trust funds
A consistent finding across think tanks and academic centers is that many undocumented workers pay payroll taxes and Social Security contributions that bolster solvency, even though they are generally ineligible for the corresponding benefits; this “unrequited” contribution is documented in ITEP and related analyses and is repeatedly cited as supporting program finances [1] [2] [4].
3. They do indispensable frontline work in specific industries
Undocumented workers are concentrated in sectors with high vacancy rates and essential roles—agriculture, construction, maintenance, hospitality and food production—comprising meaningful shares of those workforces and helping keep prices and supply chains functioning; reports note, for example, that they make up a significant portion of farm labor and maintenance jobs and that their spending power supports local economies [5] [3] [7].
4. They are net consumers and small-business creators, boosting local demand
Beyond labor supply, undocumented households hold and spend hundreds of billions in purchasing power that circulates locally, and many start businesses despite regulatory barriers—claims documented by immigrant advocacy and economic groups that identify both tax and consumer-spending channels as ways undocumented people add to GDP and local tax bases [8] [3] [7].
5. Economic benefits are tempered by wage dynamics and enforcement costs
Academic sources caution that unauthorized immigration can suppress wages in some low-skill niches because workers with precarious status have less bargaining power, and that aggressive deportation or mass enforcement would impose large direct costs and economic disruption; the Economic Policy Institute and related studies argue that reform to legal status would likely raise wages, tax revenue, and benefits access [9] [4] [10].
6. Legalization would likely magnify fiscal contributions—but political agendas shape interpretations
Analyses suggest that granting work authorization or citizenship would increase wages, formal labor-market participation, and tax compliance—projects projecting hundreds of billions more in taxes over a decade and substantial job creation—an outcome frequently advanced by pro-reform organizations [5] [8]. At the same time, some sources have implicit advocacy aims—think tanks, city comptrollers, and immigrant-rights groups emphasize economic upside and social integration, while opponents often emphasize costs to public services; readers should note these institutional perspectives when weighing numbers [11] [12].
7. The bottom line: usefulness is clear but complex
The evidence provided by tax studies, university research, and advocacy analyses converges on the conclusion that undocumented immigrants are economically useful to the U.S.—as taxpayers, laborers, consumers and entrepreneurs—while also creating distributional effects (wage pressure in certain sectors) and posing policy choices about benefits eligibility and enforcement. Given the limits of the sourced reporting, this assessment cannot fully quantify net fiscal balances in every jurisdiction or resolve contested labor-market impacts without additional, localized analyses [1] [6] [4].