Trump promises to disrupt immigration. These charts show how that could shake up the US economy.
During the 2024 presidential campaign, Donald Trump said he would carry out “the largest deportation in the history of our country.” Prior to Monday’s inauguration, the New York Times reported that Immigration and Customs Enforcement plans to conduct immigration raids in the days after Trump takes office again.
Deportation at scale could have significant effects on the US economy and labor market.
“A very direct impact of the policies of Trump is: How is that really going to affect the labor markets?” Dany Bahar, a senior fellow at the Center for Global Development, told Yahoo Finance. “Because a lot of the people are coming to actually fill a lot of the positions that are open. And whether we like the term ‘illegal immigration’ or not, if these people are actually filling jobs that are needed for the US economy, that is good for the US economy.”
As of 2023, according to estimates by the nonpartisan Economic Policy Institute (EPI), foreign-born labor accounted for record-high 18.6% of the US workforce. That same year, according to EPI, the US labor force grew by 12.6% — a number that drops to just 0.5% when removing immigrants.
Currently, the US has about 8.1 million job openings and roughly 7 million unemployed Americans.
As Trump begins a second term, here’s a detailed look at the relationship between immigration and the US economy.
‘The US doesn’t have a border crisis — it has a labor market crisis’
Immigrants to the US include naturalized citizens, lawful permanent residents, temporary lawful residents, and undocumented immigrants. There were 47.8 million immigrants in the US as of 2023, roughly half of which were naturalized citizens and an estimated 11 million of which were undocumented.
People moving to America have varying degrees of education: While advanced degrees are represented at a higher rate among immigrants than native-born citizens in the US, there is also a higher percentage of immigrants without a high school degree.
The latter aspect is why many end up in jobs that American citizens see as “less desirable.”
“We have always taken the jobs that nobody else wanted, to be very honest,” Ramiro Cavazos, president and CEO for the US Hispanic Chamber of Commerce, told Yahoo Finance. “Right now, no one in this nation is raising their child to be a person that works in the fields or to be a farm worker or to be someone that is doing landscaping work. We have high-tech all the way to low-tech jobs in this country where immigrants are filling those positions, whether they’re documented or not.”
Most undocumented immigrants in the US come through ports of entry, such as airports and shipping locations, or are people who overstayed expired tourism or work visas.
This was especially evident during the COVID pandemic when the job market saw a record number of openings while migrant crossings surged at the southwest border.
In June 2024, President Biden issued an executive order suspending entry for migrants who crossed the border illegally. The order can be discontinued if fewer than an average of 1,500 people per day cross the border in a week but go back into effect if it reaches a specific threshold.
“To understand the impact of the policies that are ultimately going to try to enforce what’s happening at the border and going even one step further and trying to deport people, it’s important to understand the diagnosis of what the problem is,” Bahar said. “The border is a symptom of something, and my research shows that it’s a symptom of something very specific that the US is going through now, which is a very odd labor market. Essentially, what I’m trying to say is the US doesn’t have a border crisis — it has a labor market crisis.”
Research by Bahar found a significant correlation between the strength of the US labor market and the number of migrants trying to enter the US at the southwest border from 2000 to 2023. Essentially, migration goes up when the labor market is strong and down when it weakens.
Bahar noted that during the Biden administration years of 2022 and 2023, over 12 million people crossed the border while something else significant was also happening in the US economy: “The labor markets were as hot as they’ve ever been for at least 25 years.”
If that flow is stopped, Bahar continued, “then your immediate effects are that you’re going to be deepening the problem of labor shortages, which were very lively during COVID. If you remember walking anywhere in this country, everywhere you would see on the street in every single store or establishment was a ‘help wanted’ sign. So that, to me, is the main channel through which migration, or the Trump policies on immigration, will impact the economy.”
The magnitude of H-1B
Undocumented immigrants aren’t the only ones at risk under Trump’s immigration policies. Highly educated immigrants also face some uncertainty in the new Trump administration.
During his 2016 campaign, Trump described the H-1B visa program — which grants highly skilled immigrants the authority to work legally in the US — as “very bad for workers” and called for an end to the program.
Recently, however, he appeared to support his adviser and Tesla CEO Elon Musk’s stance on expanding the program. (The South African-born Musk, who became a US citizen in 2002, previously held a H-1B visa and relies on the program for employees at companies he oversees.)
“I’ve always liked the visas, I have always been in favor of the visas — that’s why we have them,” Trump told the New York Post. “I have many H-1B visas on my properties. I’ve been a believer in H-1B. I have used it many times. It’s a great program.”
The cap on new H-1B visas issued per year — 65,000 plus an additional 20,000 for foreign professionals with a master’s degree — has remained unchanged since 2006, even as immigration numbers have skyrocketed. In 2023, the number of H-1B applications hit a new high at more than 780,000.
Morgan Bailey, attorney at the law firm Mayer Brown and a former senior official at the Department of Homeland Security, explained to Yahoo Finance that the system is “very controlled in terms of the number of employment-based cases that can be approved each year. And there could be more flexibility in terms of the types of workers that the United States wants to attract, as well as those numbers being able to be increased or decreased depending upon the needs of the country.”
Tech companies typically account for most H-1B visa holders, though this may be due to the sheer number of applicants in the specific field.
“It’s basically a lottery, so it doesn’t have any consideration really in terms of the occupation that the individual is working in,” Bailey added, “whereas there could be some aspects of changing that system so that there’s a priority for STEM fields, medical fields, whatever the country feels like there’s a priority for at the moment — and that it wouldn’t be stagnant in terms of every year being that same group that has the priority, but maybe changing that depending upon what the needs are at a given time.”
In any case, there is high demand for H-1B visas within American companies driving global innovation.
Between 2022 and 2024, some of the largest companies in the US — including Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Tesla (TSLA), Meta (META), and Google (GOOG) — sponsored a relatively high number of approved H-1B visas.
In 2024, 46% of all Fortune 500 companies — including all 10 of the most valuable public companies in the US — were either founded by immigrants or the children of immigrants or employed an immigrant CEO.
‘We’re going to have to do something with them’
The legal status of roughly 530,000 DACA recipients, otherwise known as “Dreamers,” has become a case study when it comes to Trump’s immigration policies.
President Barack Obama put the DACA — Deferred Action for Childhood Arrivals — immigration policy into place in 2012. DACA shields undocumented individuals who were brought into the country as children from deportation while allowing them to obtain work authorization (and subsequently pay income taxes).
On his first day in office in 2017, Trump ended the program. A federal judge ruled to keep the program in place in 2018 — but a different judge ruled against the program in 2023, deeming it “unlawful” but keeping protections in place for current recipients. The matter is still being litigated and is expected to make its way to the Supreme Court.
There have been some political developments in recent years as well. In a December 2024 “Meet the Press” interview, Trump appeared to soften his stance on creating a pathway to citizenship.
“The Dreamers, we’re talking many years ago they were brought into this country,” Trump said. “Many years ago. Some of them are no longer young people. And in many cases, they’ve become successful. They have great jobs. In some cases, they have small businesses. Some cases, they might have large businesses. And we’re going to have to do something with them. … I think we can work with the Democrats and work something out.”
Data from FWD.us, a bipartisan organization that advocates for immigration reform, found that DACA recipients contribute roughly $11.7 billion to the US economy each year. This includes roughly $566.9 million in mortgage payments, $2.3 billion in rental payments, and $3.1 billion in state and local taxes on an annual basis, according to the Center for American Progress.
In a way, the case of the Dreamers shows how immigration fuels the growing US economy — and how immigration policies can affect those dynamics.
“The bottom line is this: The workforce needs of this nation, they keep growing with the economy that we have, which is booming,” Cavazos said. “25% of the global economy is the US economy. We have about 60% of the Fortune 500 global companies located here. We need to make sure that we don’t become another Germany, another Japan — great economies but basically stagnant economies because they don’t have a strong immigration program.”
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Adriana Belmonte is a reporter and editor covering politics and healthcare policy for Yahoo Finance. You can follow her on X @adrianambells and reach her at adriana@yahoofinance.com.
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