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How Undocumented Immigrants Contribute to the American Economy

Would you notice a day without Latinos? Most definitely.
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Protests outside the Wisconsin Capital in Madison. (Photo: MacIver Institute)

Protests outside the Wisconsin Capital in Madison. (Photo: MacIver Institute)

Protestors flooded the streets of Madison, Wisconsin, yesterday, as an estimated 20,0000 people came out to oppose bills aimed against undocumented immigrants, including legislation that would fine any city for preventing public officials from asking people about their immigration status. Proponents of the proposed bills argue they help keep cities safer; critics say they create a climate of racism and fear, the Milwaukee Fox-affiliate reports.

Just as attention-grabbing as the story itself is the name the protestors have cleverly given to their demonstration: "A Day Without Latinos and Immigrants," a reference to the fact that protestors didn't show up to work yesterday. (In fact, immigrants unable to attend the protest were also encouraged not to work yesterday, and some businesses closed for the day, out of solidarity.) The message of the protest was this: Latinos and immigrants contribute a lot to Wisconsin's economy. You would notice if we were gone.

There's plenty of research to support that message. Here are a few highlights:

  • Everybody would certainly notice if undocumented immigrants suddenly disappeared from the workforce. They make up about one in 20 American workers. In Wisconsin, an estimated 55,000 workers are undocumented. The industries that would miss unauthorized workers the most include farming, fishing, and forestry, where more than one in four employees is undocumented. Notably, in Wisconsin, the Dairy Business Association opposes the anti-immigrant bills.
  • If undocumented workers disappeared tomorrow, would that actually mean more jobs for native-born Americans? It's important to remember that an economy doesn't contain a set number of jobs that are shared among the population. Having a different mix of people may create or vanish jobs. Studies don't agree about what the presence of undocumented immigrants does to the American job market, however. By keeping the cost of labor low, undocumented workers improve companies' bottom lines and create more jobs, one recent computer model found. On the other hand, a panel of economists recently agreed that "illegal immigration to the United States in recent decades has tended to depress both wages and employment rates for low-skilled American citizens," although the panelists couldn't agree on whether the effect was "modest" or "significant."
  • How do undocumented immigrants affect the country's bottom line? Do they pay more in taxes to the American economy, or do they take more in benefits like health care and public schooling? As a group, immigrants pay in more than they take out, studies agree. At the same time, many studies have found that undocumented immigrants cost more than they pay in certain states and localities. That said, they generally don't cost much: "In most of the estimates ... spending for unauthorized immigrants accounted for less than 5 percent of total state and local spending for those services," the Congressional Budget Office reports.
  • Either way, it's not a growing issue. Illegal immigration to the U.S. is tapering off, according to data from the Pew Research Center. Wisconsin is one of 43 states where the undocumented immigrant population hasn't changed in recent years.

One last point: You'll notice "A Day Without Latinos" brings together both documented and undocumented immigrants in common cause. That may be in part because policies allowing police to ask individuals about their legal status would affect everyone. It's also a reflection of the fact that those who first drew the hard line between "legal" and "illegal" immigrants didn't always have the most honorable intentions in mind. Native-born Americans have long discriminated against immigrants, no matter their documentation status.

The fight back requires solidarity.