The Impact of Illegal Immigration on the U.S. Economy and Society
Illegal immigration is reshaping the American economy, labor market, and public services, creating both economic opportunities and financial burdens. While increased immigration contributes to economic growth and federal revenue, it also places significant strain on state and local governments, affecting jobs, wages, and social stability.
Key Takeaways
- Illegal immigration will impact federal budget projections from 2024 to 2034.
- The U.S. GDP is expected to grow by $1.3 trillion by 2034 due to increased labor supply and consumer demand.
- Federal tax revenues are projected to increase by $1.2 trillion, but additional government spending on services and debt interest could add $0.3 trillion in costs.
- Federal deficits may decrease by $0.9 trillion, yet state and local budgets are likely to suffer from increased costs related to education, healthcare, and public services.
Economic Consequences of Illegal Immigration
The influx of illegal immigrants has long-term implications for the U.S. economy. Federal agencies, including the Congressional Budget Office (CBO), predict that increased immigration will drive economic activity, boost tax revenues, and expand residential investments. The CBO estimates that immigration-driven labor growth could increase federal revenues by $1.2 trillion while adding $1.3 trillion to GDP by 2034.
However, state and local governments are struggling to keep up. While the federal government benefits from increased tax collection, states must bear the burden of funding education, healthcare, and social services for non-citizens. These growing financial obligations risk crowding out essential services for American taxpayers.
— JoshMyGosh (@JoshingAiround) February 16, 2025
Labor Market and Wage Impact
Illegal immigration is reshaping the American labor market. Since 2020, immigrants have accounted for nearly 90% of job growth, taking positions across multiple industries. With declining birth rates among U.S.-born citizens, many employers rely on immigrant labor.
While the CBO projects long-term wage growth due to increased productivity, the reality is more complex. Low-skilled American workers face stagnating wages and job displacement, particularly in industries that have traditionally provided upward mobility. Employers often prefer immigrant labor because it is more abundant and less likely to demand higher wages, further limiting opportunities for U.S. workers.
Societal Strains and Rising Costs
Beyond economic concerns, illegal immigration creates significant societal challenges. As states struggle to provide housing, healthcare, and schooling for a growing immigrant population, public services are stretched thin. Local governments—especially in border states and major urban areas—face unprecedented budget shortfalls while federal funding remains inadequate.
Additionally, there are serious concerns about the safety and well-being of immigrant children. Reports indicate that 300,000 unaccompanied minors have gone missing, raising alarms about human trafficking and child exploitation. Weak enforcement policies and overwhelmed social services have only exacerbated these risks.
Former ICE Director Tom Homan has warned that the U.S. government must take action to prevent further humanitarian crises, stating:
“When we fail to enforce immigration laws, we create opportunities for exploitation, trafficking, and crime.”
Crime and Security Concerns
Illegal immigration also brings security challenges, with reports of rising drug smuggling, gang activity, and human trafficking across the southern border. While not all immigrants engage in criminal activity, weak border enforcement allows bad actors to exploit the system. Cartels, for example, have taken advantage of lax policies to increase fentanyl trafficking, contributing to the opioid crisis devastating American communities.
The Need for Stronger Immigration Policies
Despite claims of economic benefits, the long-term consequences of illegal immigration demand urgent action. Without meaningful reform, American taxpayers will continue to foot the bill while working-class citizens struggle with wage suppression and job competition. States and local governments must receive federal support to offset the rising costs, and border security must be strengthened to prevent further strain on public services.
The immigration debate remains one of the most pressing issues in U.S. policy, and leaders must prioritize the interests of American citizens while addressing the challenges posed by illegal immigration.
