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By: Dr. Alejandro Díaz-Bautista, Economist and Researcher (PhD).
- Mexicans in the US contribute over $324 billion to the US economy.
- The US economy is surpassing economic expectations with migrant support.
- Migrants aided pandemic recovery and may be crucial for future US needs to remain the world’s economic power.
Increased migration will help propel the US economy by around $7 trillion over the next decade by boosting the workforce and demand, according to estimates from the US Congressional Budget Office.
Population growth drives demand for goods, services, and housing in the US.
Increased migration mainly comes from individuals illegally entering the US and those released by Customs and Border Protection officials with humanitarian parole or a notice to appear before an immigration judge. After a time, many of these migrants join the workforce.
Net migration in the year ending July 1, 2023, reached the highest level since 2017. Foreign-born individuals now represent 18.6% of the workforce, and the Congressional Budget Office, a non-partisan entity, projects immigration to continue over the next 10 years.
International instability, economic crises, wars, and natural disasters have caused a new wave of arrivals that could help close the still-high gap between labor demand and candidates for new jobs in the US.
The Secretary of Foreign Affairs emphasized that there are currently 37.3 million Mexicans living in the United States. The official also highlighted that 7 out of 10 agricultural workers in the United States are of Mexican origin.
“When they tell us they’re going to send them all back, who knows who will work the fields in the United States?” the Secretary of Foreign Affairs said.
Migrants sent around $63 billion in remittances to Mexico in 2023, but this represents only 18.5% of their income, with the rest spent in the United States.
Recognition should be given to the work of the Mexican community in the United States and their empowerment. Mexican networks abroad are very strong in Mexico and the United States.
Migration has a multifaceted impact on the US economy, and available evidence suggests both positive and nuanced effects.
Migration contributes to innovation by bringing diverse perspectives, skills, and knowledge. Immigrant entrepreneurs are 80% more likely to become entrepreneurs compared to native workers.
Migration results in a better-educated workforce, as immigrants often hold highly skilled jobs and contribute to specialized fields.
Migrants often specialize in specific occupations, leading to a more efficient allocation of skills. They can fill gaps in the labor market where native workers may be scarce.
By combining skills with labor demands, migrants improve overall economic productivity.
Migrant entrepreneurs play a crucial role in job creation. They establish companies that hire new workers, creating a positive domino effect on the economy.
Startups founded by migrants significantly contribute to economic growth and job opportunities.
Migration has a net positive effect on combined federal, state, and local budgets. However, not all taxpayers benefit equally. While migrants pay taxes and contribute to economic growth, there are also costs associated with public services and infrastructure.
A growing population through migration can drive economic expansion in the medium and long term.
In summary, migration is a complex social and economic issue with both positive and challenging aspects. It is essential to consider the overall impact on economic growth, innovation, and workforce dynamics while also recognizing the need for thoughtful policies and balanced perspectives in Mexico and the United States.
*Dr. Alejandro Díaz Bautista, International Economist and Research Professor in International Economics at El Colef. Visiting Fellow and Guest Scholar at the Center for U.S.-Mexican Studies based at UC San Diego’s School of Global Policy and Strategy (GPS)