According to the World Bank, immigrants in the U.S. sent more than $65 billion in remittances in 2024. This steady flow of funds not only supports the economies of their home countries but also reflects a fraction of the economic value immigrants generate daily in the U.S.
Introduction: The Unquestionable Economic Contribution of Immigrants
As immigration policies and the role of immigrants remain hotly debated topics, the economic reality shows that immigrants are essential to U.S. growth. Recent political promises to deport millions of immigrant workers overlook the critical role they play in the country’s economy. Removing these workers would impact not only their families, both in the U.S. and in their home countries, but also could lead to an economic downturn for the U.S.
Quantifying the economic impact of immigration, especially of undocumented workers, presents a challenge. Although we lack exact records of all immigrant incomes, we can gain important insights by looking at the remittances they send to their families abroad.
The Reality around Remittances
Remittances are an essential source of income for the recipient countries and serve as an indirect measure of the income levels of immigrants in the U.S. According to World Bank estimates, these remittances make up around 17.5% of the total income of those who send them. Based on this figure, the net income of immigrants who sent remittances in 2022 was over $466 billion.
This flow of remittances helps illustrate the economic impact of immigrants in the U.S. Taking into account the productivity percentage these incomes represent in the overall economy, estimates suggest that immigrants added approximately $2.2 trillion to the U.S. GDP in 2022. This amounts to about 8% of the United States’ Gross Domestic Product and is comparable to Canada’s GDP, which ranks ninth globally.
Why Is This Impact Often Underestimated?
The economic value of immigrants in the U.S. economy goes far beyond the remittances they send back to their home countries. There are several reasons why the contributions of immigrants are often underestimated or misunderstood.
First, the World Bank’s estimate on remittances may be conservative, as some immigrants send money through informal channels, such as cash hand-delivered by people traveling to their home countries. Additionally, many immigrants, especially those who have lived in the U.S. for decades, do not send remittances as frequently. Among them are white-collar professionals, such as those in finance, science, technology, and education. Unlike many undocumented workers, immigrants with professional visas often bring their families with them, reducing their need to send money abroad.
Secondly, these figures do not include the economic impact of immigrants who spend their earnings in the U.S., creating demand for goods and services. From food to housing, these expenditures help maintain local and national economic activity. Moreover, some immigrants start their own businesses, generating even more jobs for other immigrants and American workers.
Immigrants: An Economic Growth Force
Numerous studies have shown that immigrants often fill jobs that are challenging to staff with local workers, particularly in industries such as agriculture, construction, and food service. Their work not only contributes directly to the GDP but is also essential for the operation of many businesses and for keeping prices of goods and services at accessible levels.
In addition, the economic impact of immigrants is not exclusive to the private sector. They also contribute to public finances through tax payments at both local and federal levels. In fact, the Fiscal Policy Institute estimates that immigrants, including those without documentation, pay billions of dollars in taxes each year. These tax revenues are crucial for funding public services like education, security, and infrastructure.
Beyond Remittances: The Real Economic Impact of Migration
A study by the Center for Latin American and Latino Studies found that Salvadoran immigrants and their descendants alone contributed roughly $223 billion to the U.S. economy in 2023, which represents about 1% of the country’s total GDP. This figure, though significant, represents only a small portion of the impact immigrants from other countries also have on the economy.
The contributions of immigrants stimulate economic growth and help stabilize the economy, especially during times of crisis. During the COVID-19 pandemic, many immigrants continued working in essential jobs that kept the country running. In fact, studies suggest that the U.S. economy critically depends on immigration, particularly given the aging native population and the labor shortages in certain sectors.
Conclusion: An Indispensable Pillar for the Future of the U.S.
The U.S. economy not only benefits from immigrants but also relies on them. Immigrants contribute to economic growth, create jobs, and strengthen public finances through tax payments. Although some argue that they represent a burden on public services, studies indicate that, in reality, immigrants' net economic contribution is positive.
As the immigration debate continues, it is essential to remember that the presence of immigrants strengthens the U.S. economy and society. Ignoring or underestimating their value is not only unfair to immigrants but also represents a missed opportunity to strengthen the economy and improve the lives of all Americans. With well-informed immigration policies, the U.S. could further harness the potential of this vital workforce.