Post written by Dr Sandra Portocarrero, Assistant Professor of Management at the London School of Economics, and Dr Daniel Fisher, Assistant Professor of Management at the University of Sussex Business School.
If Trump has his way with immigration, it might lose a valuable group of people who positively … [+]
Cris Mercado is now the successful CEO of a data, strategy, and product consulting firm. But he was once an immigrant to the U.S. without any papers.
He says that growing his business gave him what his immigrant status had taken away: financial security and “a sense that my talent was treasured”. “Being paperless doesn’t mean you’re powerless,” he says.
The electorate voted for Trump out of concerns for immigration and the economy. If Trump has his way with immigration, it might lose a valuable group of people, like Cris, who positively contribute to the economy to the benefit of everyone in the USA. Two key concerns were in the minds of the U.S. electorate when voting for Donald Trump – the U.S. economic situation and the issue of immigration.
According to Gallup, U.S. voters specifically cited these two issues as key concerns when casting their votes. Following Trump’s win, there has been a great deal of speculation around what his immigration plans will be. Some commentators have suggested that there will be large scale mass deportation efforts, mandatory detentions and even the possibility of a hotline to report on undocumented immigrants.
Combined with Trump’s misleading rhetoric about undocumented immigrants and immigrants that some portray as undocumented but who actually entered the country in a legal way (e.g., asylum seekers), an important chunk of the U.S. public seems to buy into a series of myths about both the economy and immigration. These myths were reinforced during his inaugural speech on January 20th, 2025. As management professors who conduct research on the experiences of workers, labor, and migration, we suggest that these myths mask the fact that immigrants (both undocumented and documented) are good for the economy – and that should Trump’s more extreme plans be realized – the United States would be far from becoming great again.
Undocumented immigrants create jobs for U.S. citizens and residents
We know immigrants are a powerful economic force. For example, there are approximately 1.5 million Latino immigrant entrepreneurs and many of the companies they establish create jobs, employing more than a million people. In fact, they are more entrepreneurial than U.S. born citizens, bringing in $110 billion into the U.S. economy.
But a lesser discussed group are undocumented immigrants and the contributions they make to job creation. Through the establishment of their ventures, undocumented entrepreneurs create jobs for Americans. While it is illegal for undocumented people to have formal, paid employment, it is legal for them to establish their businesses and pay federal, state, and city taxes through an individual taxpayer identification number (ITIN) provided by the U.S. Internal Revenue Service (IRS) and through this system they contribute a great deal to the economy. In a study with undocumented entrepreneurs in California, Portocarrero and her co-authors, Wang and Tareque find that all immigrant entrepreneurs in their sample of 50 are part of the formal economy, with legally established businesses in the technology, service, health, and even winemaking sectors. In this way, undocumented immigrants contribute to the formal U.S. economy.
Undocumented immigrants pay more into public finances than they take out
For every 1 million undocumented immigrants who reside in the country, public services receive $8.9 billion in additional tax revenue.
Research shows that undocumented immigrants help prop up the U.S. economy. Undocumented workers account for 25% of farm workers, 19% of maintenance workers, 17% of construction workers, and 12% of food and prep workers. This important group of laborers in the U.S. economy means they play a crucial part in the success of the economic landscape.
In 2022, undocumented immigrants paid federal, state, and local taxes of $8,889 per person. In total, they brought in $96.7 billion in tax revenue for the U.S. government that year. The taxes help fund benefits most don’t even have access to, such as social security, Medicare and unemployment insurance. Often, because undocumented migrants fear deportation, they do not receive tax credits they are fiscally entitled to. Income tax returns are rare, despite their often-hard-earned pay checks. In this way, this economic work force is both highly exploited by employers, but also, subsidizes important public services.
Undocumented immigrant’s offending rate is lower than U.S. born citizens
By now, most U.S. citizens and residents will be familiar with Trump’s violent language towards immigrants. This rhetoric has no doubt fueled the increased concerns by the U.S. electorate about the ostensible “dangers” of immigration. The evidence, however, reveals a very different picture than the violent world Trump has painted for his audiences. A study funded by the National Institute of Justice examining data from the Texas Department of Public Safety, estimated the rate at which undocumented immigrants are arrested for committing crimes. The study found that undocumented immigrants are arrested at less than half the rate of native-born U.S. citizens for violent and drug crimes and a quarter the rate of native-born citizens for property crimes.
Research suggests that the relationship between crime and immigration is hugely misunderstood. For example, a large study that draws on immigration statistics, FBI crime data and U.S. census community surveys found that immigration has no impact on crime. In fact, the data suggests immigration might even reduce crime. To add to this, research also shows undocumented immigration has no association with terrorism, radicalization or terrorist prosecutions. Despite the evidence, many Americans still fall for an age-old trope of villainizing immigrants.
When considering the falsehoods that support these myths, it’s perhaps apt to point out that if mass deportations occur, they will lead to higher inflation. As the economist Paul Krugman suggests, if this crucial workforce disappears into a vast network of detention centers and mass deportations – it will create a labor shortage and trigger economic ripples that will affect inflation – U.S. grocery bills will simply get higher.
The irony of this moment in U.S. history is that while U.S citizens view immigration and the economy as their most pressing issues – carrying out anti-immigration plans will stall and harm the U.S. economy, and in turn, reduce quality of life.
Policy recommendations
To strengthen the economy and quality of life of Americans, we suggest the incoming administration harness the potential of undocumented immigrants. Rather than focusing on deportations efforts, the incoming administration should consider investing in this group through incubator programs, accelerators and potentiate this demographic in the interest of the average U.S. voter. One such example is the Immigrant Rising Entrepreneurship Fund that supports undocumented entrepreneurs interested in promoting social changes. Investing in these group of people will no doubt support U.S. interests whereas the alternative currently on offer by the Trump administration will result a diminished United States – where the quality of life for the average family will be harder than it already is.
While undocumented migrants already contribute a great deal to public finances – they could contribute even more should their status be more protected and legal. For example, if undocumented immigrants were given legal status, they would add an additional 159,000 jobs to the U.S. economy, bringing in billions more in tax revenue. Such trends have already been observed in studies of highly skilled immigrant labor – which can add an additional 6% in entrepreneurial activity to a city within three years.
Finally, given that so many Americans may buy into these myths, it’s crucial that we educate and inform ourselves on the evidence around both immigration and economics, to de-stigmatize undocumented immigration, but also to open our eyes to the realities of our economy. Emerging research suggests that misinformation harms the economy and can lead to lower productivity and unemployment. It is our individual responsibilities to do this if we want the U.S. to be a more fair and just society – as one of the founders, Benjamin Franklin said, “A nation of well-informed people who have been taught to know and prize the rights which God has given them cannot be enslaved. It is in the region of ignorance that tyranny begins”. The tyranny immigrants experience should end, their economic potential harnessed and the ignorance that pervades attitudes about immigration should be snuffed out. Only then can the United States start rebuilding to be great again.
Dr Sandra Portocarrero is an Assistant Professor of Management at the London School of Economics. She is a (formerly undocumented) Latina U.S. citizen. She is now an immigrant living in London.
Dr Daniel Fisher is Assistant Professor of Management at the University of Sussex Business School and researches frontline work. He is also a U.S. citizen and immigrant to the U.K.
