Immigration has been a contentious topic of debate in the US, with recent questions emerging about its impact on the US economy. Recent events in the US, including President Donald Trump’s return to office, have sparked significant interest in immigration, revealing adverse effects on the economy. The negative effects of immigration on the US economy are wage suppression among low-skilled workers, fiscal distress on state and local governments, and heightened competition for jobs.

Immigration causes a surge in competition for jobs, affecting the employment rates among native workers. The increase in labor supply for immigrants creates significant pressure on the availability of jobs for natives looking for low-skill work (Albert 47). Additional research highlights that low-skilled undocumented immigration also negatively impacts legal immigrants. Albert highlights that most illegal immigrants have low levels of educational attainment, with 39.5 – 42% of undocumented not attending high school while 26.2-28.8% having a high school certification as their highest education level (59-60). These increases in low-skilled laborers, both documented and undocumented, increase the competition for employment, which results in increased unemployment rates. Increased unemployment further affects the US economy because of lowered spending and economic investment among the unemployed. 

The US economy also experiences adverse effects because of immigration due to lowered wages. Turner explains that a 10% increase in foreign-born, low-skilled labor in the US results in a 1% decrease in wages among workers in other skill groups (4). An increase of immigrants in the US has a negative impact on the wage elasticity for natives. Foreign labor leads to a reduction in wages for natives because of favoritism towards foreign workers who willingly accept lower wages (Albert 52). This affects the native workforce in the United States, especially for low-skill jobs, which further affects the economy because it lowers the public’s purchasing power, resulting in lower spending and economic investment. Also, the lowered wages affect the economy by lowering the ability of individuals to invest in having quality lives, resulting in lower tax returns in areas such as housing (Römer 72). Ultimately, this disrupts the wage elasticity in the US labor market, which has rippling effects on the stability of the US economy due to increased financial constraints.

Also, immigration affects the US economy by causing significant strain on local and state resources because of the effects on labor and financial stability in the general public. The increase in unemployment and lower wages lowers the public’s financial flexibility, forcing the government to provide financial support and requisite resources for quality living (Römer 72). Research indicated that immigration causes drastic wage losses in both technical and non-technical jobs with an estimated 4 to 12% wage loss in Science, Technology, Engineering, and Mathematics (STEM) jobs relative to non-STEM jobs between 1990 and 2010 in the US (Turner 1, 4). The government becomes responsible for filling the public’s financial gap, mainly through resources targeting health, education, and housing assistance. Also, the government is forced to provide more social and unemployment benefits and pensions for the unemployed natives who lose their jobs due to competition from immigrant labor (Römer 71). The education sector also records adverse impacts due to immigration, with the government spending more to educate the children of immigrants. The government also invests in health for unemployed individuals and their families, which strains federal resources (Römer 71). These are a significant financial burden on the government because the immigrants make minimal tax contributions to the United States. 

  Supporting an increase in immigration into the US is a catalyst for economic disaster in the country because immigration negatively impacts the economy. Wage suppression, especially among low-skilled workers, is a significant effect of immigration. Also, increased job competition among different skill levels is an adverse effect of immigration. Ultimately, these effects affect local and federal resources by forcing the government to increase spending on housing, education, and healthcare due to the unemployment surge and lowered financial freedom due to immigration. 

Works Cited

Albert, Christoph. “The Labor Market Impact of Immigration: Job Creation versus Job Competition.” American Economic Journal: Macroeconomics, vol. 13, no. 1, 2021, pp. 35-78.

Römer, Friederike. “How immigration affects the welfare state in the short and long run: Differences between social spending and policy generosity.” European Policy Analysis 9.1 (2023): 69-90.

Turner, Patrick S. “High‐Skilled Immigration and the Labor Market: Evidence from the H‐1B Visa Program.” Journal of Policy Analysis and Management, vol. 41, no. 1, 2022, pp. 92-130.