Why Immigration is Vital for The US Economy

Migrants give important and positive contributors in almost every sector of the US economy. It is in large measure because of the influx of migrants that the US economy sustains and grows, new jobs are created, innovation occurs, and local demand grows.

Migrant mechanic


In 2017 remittance outflows from the US exceeded $148.5 billion. Top recipients were Mexico, China, India, the Philippines, and Vietnam. Remittances are most commonly sent by migrants to support their families back home. When sending money to family members in countries like the Philippines, using an international money transfer comparison site can help you find the best exchange rates in real time.

According to the Migration Policy Institute the US had a migrant population of 44.7 million in 2018. The largest proportion came from Mexico, accounting for 25% of the total immigrant population. Immigrants from China and India comprised 6%, the Philippines, 5%, and El Salvador, 3%. Some regions in the country have extraordinary concentrations of migrants. These are California, New York, and Texas. Together these regions account for nearly half of all migrants in the US.


Most migrants who come to the US bring with them at least a bachelor’s level qualification. Exceptions to this are migrants arriving from Mexico, Central America, and the Caribbean. College educated migrants in the US are at the forefront of ingenuity and innovation. They add substantive value to the US economy in a multitude of ways.

Labor market participation

Immigrants comprise an important percentage of the total labor market supply in the US. Cost-effective manpower is the essential impetus for many large industries to remain competitive and to grow.

Manufacturing, automotive, energy, mining, and shipping are some of the notable sectors in this regard. These mega industries provide important contributions to the country’s annual GDP. Without immigrant workers they would simply cease to be profitable.

Stimulus to local demand

Foreign workers send a staggering amount of money out of the US via remittance channels. Despite this, the majority of immigrant workers’ wages are spent within US borders. For example, Mexican immigrants in the US send money to Mexico to the tune of $30 billion annually. However, they collectively spend almost double of that amount inside the US.

The same applies to other nationalities. The daily expenses of living in a developed nation are substantial. Immigrant workers’ collective purchasing power greatly stimulates local demand in the states and cities they live.

Talent and innovation

Immigrants are much more likely to file patents. Nearly 40% of all patent applications in the US are made by immigrants, who constitute less than a fourth of the population. Patents guarantee the protection of intellectual property. This stimulates entrepreneurship and job creation.

Another domain where migrants regularly outshine locals is academic excellence. Foreign-born students in the US annually obtain a disproportionately large number of the advanced degrees in science, technology, engineering, and mathematics (STEM) categories. With their innovations these professionals go on to create disruptive businesses. These businesses bring about much of the country’s economic growth.

Tax contribution

Migrants pay taxes in the US. They pay for their medical care and social security. These important contributions add to the federal budget, and improve the lives of all Americans. Migrant business owners contribute even more to the US economy. Tax income from migrants is an important enabler for government expenditures toward infrastructure.

Moreover, migrants are much less likely than US-born citizens to be involved in violent crimes. This is because migrants’ priority is to earn money, which they can send to their dependent families back home. A felony on record would mean a swift end to the livelihood.


Longitudinal studies show that immigrants living in the US for several years are more likely to start their own businesses, as opposed to working for someone else. A survey conducted in 2011 showed that nearly half of the 50 highest valued companies in the US had an immigrant founder. One good example of the success of the ingenuity of migrants is Ria Money Transfer. This company was founded in 1987 by a Cuban migrant. From humble beginnings in New York City Ria has spread to 144 countries. It now serves millions of customers worldwide.

Effects on dependency ratio

The US population is gradually aging. US-born population aged 65 and above will more than double by 2040. People above 85 years of age will quadruple. The demand for personal care and elderly care will explode. Migrants in the US improve the age-dependency ratio. The median age of migrants is markedly lower than that of the US-born population. It is also migrants who will fill most of the caregiver jobs.


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