LEGAL PATHWAYS

If border security is the fence protecting our nation, our legal immigration system establishes the gates. These gates determine who, and how many, we invite inside. Many in Congress feel an increased urgency to update and improve these gates for three reasons. First, many who support a stronger fence did so because of opposition to illegal immigration, not to legal immigration. With the southern border secure, at least for now, they recognize the need for legal immigration reform.

Second, there is widespread agreement that the legal immigration system is outdated, inefficient, and overly complex. Application backlogs for many of the almost 200 visa categories are often decades long and involve multiple agencies. The paperwork is so complex that many employers pay thousands of dollars to attorneys and visa facilitators. Paralyzed by partisanship, Congress has not enacted major changes to the types or numbers of temporary work visas in over 30 years. Much of the system remains paper-based or on woefully outdated computer systems.

The third reason many in Congress feel a growing urgency to refurbish our immigration gates is the unprecedented demographic shift we’re now facing. The US population is aging. To maintain the same ratio of working-age to retirement-age Americans we have today (approximately 3 to 1) over the next decade, we will need 40 million more workers than we’re projected to have without more immigration. Alternative responses have been advanced — increasing native labor force participation, raising the retirement age, accelerating automation and productivity, and supporting higher native birth rates. Others would forgo closing the gap entirely, preferring slower economic growth in the hope that this will lead to tighter labor markets and higher wages for American workers. Most economists and policy analysts conclude that these alternatives, individually or in combination, cannot close a shortfall of this magnitude within the next decade. Without additional immigration, they conclude that it will be challenging to grow the economy and create new jobs. Fewer working-age Americans for each retirement-age American also means painful adjustments to core programs like Social Security and Medicare. The proposals in this section focus on modernizing the system to welcome the workforce we choose, while protecting American workers.

The deep concern about this demographic crunch is driving congressional focus on employment-based temporary visas in particular. Unlike workers who entered the country illegally, those who come here through a work visa program have complied with requirements designed to ensure they will not negatively impact native workers and do not pose a security risk. Their employers are also subject to similarly designed requirements aimed at protecting American workers. 

To ensure that the US brings in only workers who are following the rules and do not present a risk to the country, work visas deploy a three-layer system:

1Pre-Screening — Before a worker can even apply, the government must approve a petition by the US employer that initiates a vetting process of both the employer and employee using government databases.
2Consular Vetting — Workers with approved petitions undergo an in-person interview at a US embassy or consulate. Workers must provide their fingerprints and high-resolution photos. The fingerprints and photos are run against FBI, Interpol, and other databases.
3Port of Entry — When the worker arrives at a US port of entry (airport or official border crossing port), a Customs and Border Protection (CBP) officer makes the final decision on whether to let them in after using facial recognition to ensure the person matches the photo collected by the consulate.

Most visa holders are required to pay federal, state, and local taxes, but they are not eligible for many federal benefits, such as Social Security and Medicare. Each specific temporary work program also has particular features meant to protect American workers. The American worker protections unique to one of the largest temporary work visa programs are described later in this section. 

CommonSense American has played an especially important role in identifying promising reforms for immigration gates leading to temporary work visas. At the request of the co-chairs of Congress’s bipartisan Commonsense Coalition, we organized weekly meetings among the participating congressional offices, several of the country’s leading immigration experts, and a diverse set of over ten crucial interest groups. Meeting participants suggested, discussed, and rated over 70 legal immigration reform ideas. The proposals in this section of the brief focus mostly on those ideas that attracted their broadest support. The Commonsense Coalition co-chairs are eager to hear your views as they consider which proposals, if any, to include in a legislative package.

The participants in the meetings we organized concluded, as most other informed observers have, that it would be very difficult politically to pass reforms right now that would come close to addressing the need for 40 million new workers over the next decade. Only one idea, suggested by two of the nation’s leading immigration economists, was seen as potentially meeting the scale of workers needed and perhaps politically feasible. The co-chairs are interested in the idea and would like your views. 

We start with this big, new idea, called rotational labor. We then consider ideas for modernizing the legal immigration system. Many of these reforms would not necessarily increase the number of new work visas granted. In fact, some of the ideas would add restrictions to make the US worker protections more rigorous. Other modernizing reforms would include modest increases in the number of temporary work visas seen to be the most helpful to the economy and protective of US workers.

As a reminder, we ask that you consider whether each reform would, on its own, be a meaningful improvement to the current system, without assuming what other reforms may or may not pass.

ROTATIONAL LABOR — A TWO-WAY GATE

The rotational labor proposal would establish a 10-year state opt-in pilot of a new visa for migrant workers. The pilot would be restricted to a subset of US jobs with the most pronounced native worker shortages and modeled on the existing J-1 visa program. The visa to work in these jobs would be valid for up to three years. After a year back in their home country, workers could reapply for another temporary work visa. Rotational labor visa holders would not be permitted to bring family members with them.

10-yr
State opt-in pilot
3-yr
Max visa length
~15
Shortage job types

As the name suggests, the rotational labor gate would be intentionally two-way. The proposal would create two primary mechanisms to ensure that workers return to their home country at the end of their work permits.

Mechanism 1

Country-to-Country Agreements

First, the program would require an agreement between the US and any other nation that wants its people to have access to this visa. The sending country would need to agree to certain conditions, including helping verify that its citizens seeking to come here do not have a criminal record and that they return to their home country at the end of their work permit.

Mechanism 2

Regulated Intermediaries

A second mechanism aimed at ensuring rotational labor works as a two-way gate is the creation of a regulatory framework for organizations that act as intermediaries between foreign workers seeking to come to the US and US employers, similar to the role sponsors play in the current J-1 visa program. The US government would regulate these intermediaries, a core function of which would be to ensure that the workers they place in US jobs return to their home countries at the end of their visas.

The regulatory framework would help foster an ecosystem of organizations serving one or more of four functions in addition to assuring foreign workers return to their home nation:

01

Recruit

Identify eligible foreign workers with no criminal record interested in the specific categories of US jobs eligible for the rotational labor pilot.

02

Prepare

Train the workers for the job they are seeking.

03

Place

Match the trained workers with jobs in US businesses that have made unsuccessful attempts to recruit sufficient US workers.

04

Protect

Ensure that workers are paid and treated in accordance with US labor standards to prevent exploitation. With the help of the sponsoring organization, temporary workers may change employers up to three times to work with other eligible employers in the same job and state.

To be licensed as a rotational visa program sponsor in the pilot, organizations would be responsible for ensuring that workers are adequately skilled and prepared, that the employer and the job are properly vetted, and that workers are reliably returned to their home country.

The legislation for the pilot would identify approximately 15 job types with the most pronounced shortages of US workers eligible for temporary rotational labor permits. The proposal also calls for Congress to evaluate and refine the program twice in the 10-year pilot.

Temporary rotational labor permits would be available only in states that explicitly opt into the pilot. States could also petition for visas for jobs not included on the initial list, provided they demonstrate pronounced shortages of US workers for those jobs in their state.

Workers processing fish on an industrial conveyor line in a modern food factory Focus on safety hygiene and efficiency in food manufacturing and packaging operations.
Chef assembling a fresh burger and golden french fries in a professional kitchen, preparing fast food for customers
Full length portrait of two factory workers moving loads while using crane in workshop, copy space
Housekeeper wearing blue uniform and gloves pushing cleaning trolley
Man worker washing car's alloy wheels on a car wash
Roofers replacing damaged shingles after storm with very high winds came through over night

The federal government would retain its regulatory oversight in all states that opt in. Funded by rotational labor visa fees, the US oversight functions would include confirming that applicants have no criminal record, ensuring that employers have first tried to recruit US workers, enforcing labor standards to protect rotational workers from exploitation, and ensuring they return to their home country at the end of the visa. The rotational labor pilot would function alongside existing temporary work visas.

The Case For

Rotational labor supporters argue that the biggest obstacle to meeting the need for new workers over the next decade is political. No one wants a struggling economy, less job growth for US workers, or significant cuts to core programs like Social Security and Medicare. Labor mobility proponents acknowledge that bringing in the needed foreign workers raises legitimate concerns. They argue that the proposed rotational labor program addresses those concerns in new and effective ways that warrant a pilot.

Addresses Economic and Jobs Concerns

Proponents argue that the rotational labor system can more effectively address concerns about the effects of foreign workers on US workers and the economy. The economic benefits to American citizens — including job creation — would be enormous, they argue, and the main reason to pass rotational labor legislation. They make three arguments for positive economic effects, each amplified because rotational labor is more focused on US economic needs:

1Creates More Native Jobs — Advocates cite research showing that when businesses hire foreign workers for jobs for which they struggle most to find US workers, they scale up and hire more US workers for other jobs that US workers are more interested in. As economists describe it, the evidence shows that the scaling effect of foreign workers is many times greater than the substitution effect . Because legal, rotational labor directs foreign workers more intentionally and systematically into jobs with the most severe US worker shortages, supporters argue that the scaling effect is especially large and the substitution effect is especially small. They argue that the state opt-in feature further focuses foreign workers where they are most genuinely needed. States that conclude rotational labor would have a negative effect on their native workers can simply not opt in. Supporters argue based on this evidence that the proposed state opt-in rotational labor program would create jobs for US workers far more than it would displace them.
2Does Not Decrease Native Wages— Proponents cite the overwhelming consensus in rigorous economic studies that an increase in immigration has virtually no effect on native wages .
3Produces More in Taxes than What is Used in Services — Supporters argue that this legal gate makes the positive net effect of foreign workers paying more taxes than they cost in services even more positive. Supporters cite the evidence that immigrant workers from the 2021-2026 immigrant surge paid four times more in federal taxes than they cost in federal benefits like Social Security, Medicare, and social welfare programs like SNAP (food stamps). Supporters further argue that much of the net negative effect of services costing more than taxes paid at the state and local levels for 2023, at the peak of the immigrant surge, would be addressed by rotational labor. Because it only brings in immigrants who have already been matched to a US job, a far higher percentage will be paying state and local taxes, and far fewer will need housing and food aid than during the immigration surge. Local governments would not bear educational costs either, because the visas would be offered only to the worker, not the family .

Addresses Security Concerns

Rotational labor supporters argue that it would be more effective at preventing criminals and those who pose national security risks from entering the country than the current system for two reasons:

1Better Screens out Criminals and Security Threats — Supporters argue that while crime rates among all immigrants, including undocumented immigrants, are already significantly lower than among the native-born population , those rates could be even lower with rotational labor because both the sending country and the intermediary organization bringing the workers here would be held responsible for ensuring that those who applied for the visa had no criminal record and posed no national security risk. Then, the US government would fully vet all applicants as usual. Foreign countries and intermediaries that fail to fully vet the applicants would be cut from the program.
2Better Secures the Border — Proponents argue that rotational labor would also reduce the number of individuals requesting asylum or attempting to cross the southern border illegally. History shows, they argue, that a strong fence alone cannot withstand the enormous economic pull of US labor shortages and the powerful push from sending countries with little economic opportunity. Since we are facing a far stronger push and pull of demographics than the US has ever faced before, they argue that the need for legal alternatives to illegal immigration will be even greater than in the past. Rotational labor, supporters argue, would reduce pressure on the border because law-abiding workers will much prefer this legal pathway, freeing border enforcement to focus on cartels’ drug smuggling and human trafficking operations.

Helps Foreign Workers and Their Home Countries

Supporters argue that rotational labor is a win-win-win economically, benefiting the US, foreign workers, and their home countries. Supporters cite research findings showing that the same workers typically earn three to six times more in a developed country like the US than in their home country.

That same earnings reality, supporters argue, is also why respect for immigrants cuts differently than immigration advocates who oppose rotational labor claim. These opponents and proponents share an underlying value — the welfare and dignity of foreign workers — but reach opposite conclusions about what serves it. Proponents emphasize that any rotational labor program must ensure that foreign workers are protected by the same labor standards as US workers, with effective safeguards against exploitation. With those protections in place, the question becomes whose judgment about what best serves their interests should govern: ours or theirs. Foreign workers willing to come here for several years to multiply their earnings — even without the prospect of permanent status — are making a considered choice for their own futures and that of their families. There is also, supporters argue, a hard practical reality that opponents seldom confront. Significant expansion of permanent Green Cards is politically impossible in Congress. Proponents suggest that the realistic choice isn’t between rotational labor and Green Cards but between rotational labor and nothing. That choice falls hardest on the very workers immigration advocates seek to champion.

Supporters emphasize that the economic benefits extend beyond the workers themselves. Many foreign workers send money home to substantially improve their families’ quality of life. For many poor countries, these remittances are a major source of economic development. They also argue that rotational labor can fuel economic development in poorer countries by enabling temporary workers to return with capital and skills to start successful businesses. One study found that if rich and poor countries together engaged in as much rotational labor as there is demand for, it would create 10 times more economic development than all global poverty reduction programs combined.

Economic Gains Create Resources and Incentives for Everyone to Benefit

Advocates argue that the combined economic benefits to the US, foreign workers and their families, and the sending countries generate the resources and incentives needed to make the program work as intended. Supporters acknowledge that there are challenges and costs to implementing the program effectively. They argue, however, that the enormous economic value it can generate provides enough resources to implement it effectively. They observe that other countries have charged fees that have more than covered the costs of administering rotational labor programs. They argue that the economic gains can readily fund:

  • A several-fold increase in pay for foreign workers
  • The costs of the needed increase in US regulatory capacity through visa fees
  • The costs to the sending country for its responsibilities
  • Profit to incentivize intermediaries to operate in responsible ways

Success in Other Developed Countries

Rotational labor supporters cite the successful elements of other developed countries that have already implemented rotational labor to address aging populations. For example, they cite New Zealand’s, South Korea’s, and Germany’s recent experiences.

Advocates acknowledge that many rotational labor programs in other developed countries have faced implementation challenges but argue the proposed US program draws on the lessons of these experiences, with two rounds of review and revision during the 10-year pilot to learn from US experience as well. Additionally, advocates point out that the current US system has significant flaws. They contend that even some imperfect rotational labor programs in other countries would be a substantial improvement over the status quo here.

The Case Against

Rotational labor is opposed by those who reject the idea outright and by those who think it’s a sound concept but are skeptical it can be implemented effectively.

Outright Opponents

Outright opposition to rotational labor is often split between those who oppose significant increases in immigration and those who support immigration generally.

Immigration Supporters

Many outright opponents of rotational labor who support immigration generally reject rotational and other temporary worker programs on moral grounds. By design, it would create a category of people who work in America, pay taxes here, and contribute to our communities, but are barred from a path to permanent status. To these opponents, that is not a more orderly version of immigration but its inversion — the deliberate development of a permanent underclass of disenfranchised workers. From their perspective, exploitation is not an implementation flaw but a design feature. When a worker’s right to stay depends on an employer’s continued sponsorship, complaints about wage theft or dangerous conditions are filed at the cost of the worker’s livelihood and lawful presence. They argue this can make working conditions worse for all workers, US and foreign alike. That power asymmetry has produced documented patterns of abuse in temporary worker programs at home and abroad. Sponsoring intermediaries and limited employee mobility mitigate the harm but do not remove the underlying coercion, they argue.

Labor advocates and unions also argue that immigration programs that purport to address labor US shortages are basically means by which employers can avoid providing wages and working conditions that would attract sufficient US workers to these jobs . While they support immigrants who have access to full protections as Green Card holders, they especially decry temporary visa programs that can undercut collective bargaining by US workers.

They also reject rotational labor because of what it would say about America itself. The US has historically welcomed immigrants as future fellow citizens — workers who come, contribute, raise children who are Americans, and become Americans themselves. Rotational labor inverts this. They argue that it accepts the labor but refuses membership and forbids workers from bringing their families, even temporarily. If the US needs workers in these jobs, opponents argue, it should welcome them as immigrants — with Green Cards and the dignity of belonging, not as labor admitted without membership.
vs
 Opponents of More Immigration

Many opponents of rotational labor who oppose increasing immigration reject the proposal at a fundamental level. They challenge the premise that the demographic shift requires international workers, especially at the scale advocates contemplate. They argue the demographic gap could be substantially addressed without large-scale immigration. These opponents cite calculations showing that returning the percentage of working-age Americans who participate in the labor market to its 2000 level would contribute as much to the worker share of the population as decades of high immigration. They also argue that even a one-year increase in the retirement age would affect the worker-to-retiree ratio as much as tens of millions of immigrants. Closing the gap entirely, or even significantly, through immigration, they argue, would require admitting historically unprecedented numbers of foreign workers. From this starting point, opponents make two reinforcing arguments — one economic and one about national identity. 

Economically, they assert that decades of abundant foreign labor have been a primary driver of stagnant wages and degraded working conditions in lower-paid occupations . Continuously supplied with workers willing to accept low pay, they argue employers face little pressure to raise wages, improve workplaces, or invest in productivity-enhancing automation. Rotational labor would extend this pattern in the targeted occupations. Some opponents acknowledge that restricting foreign labor would mean slower economic growth, but they argue the trade-off is worth it. They assert that a tighter labor market would deliver higher wages for working-class Americans , less income inequality, more dignified work, and stronger incentives for technology investment. They suggest that proponents’ framing — mass labor importation or economic decline — conceals the real choice: between a larger economy that benefits employers and capital owners and a smaller, fairer economy that benefits American workers. 

The identity argument holds that America can absorb meaningful immigration only at a manageable pace. The scale needed to fill the demographic gap would exceed what communities and civic institutions can absorb, even when workers are temporary. The objection is not about any particular population of immigrants but about scale and pace. And they fear “temporary” workers will not stay temporary. Just as with the millions already here without status, opponents expect immigrant advocates will eventually seek to grant them permanent legal status. Opponents observe that immigration advocates will be backed by powerful business allies who want to keep their cheap labor force. 
vs
Implementation Critics

Opponents who are simply skeptical that it can be implemented effectively argue that rotational labor requires many hard things to work simultaneously, several of which have never been attempted at this scale in the US. They observe that when tried elsewhere, the vast majority have failed. They note that Japan’s and Australia’s experiences are particularly instructive. The requirements pose real risks on their own, critics argue, and those risks compound when stacked together.

  1. Sending Countries—Critics observe that the nations likely to send rotational workers have limited or unreliable infrastructure for the records and information required. Opponents note that the US already struggles to obtain timely and complete criminal-history information from many nations in other immigration contexts. They suggest the records and monitoring limitations would likely apply to verifying a rotational worker returned.
  2. Intermediaries—The idea of intermediaries who can be more readily regulated because they have a financial interest in complying with the requirements to remain eligible sounds nice, but critics observe that the experience in many other countries that have tried it shows the challenges in practice. These opponents note that the US has experienced similar problems with immigration agents who act as intermediaries between US employers and foreign workers coming on existing temporary work visas like H-2A and H-2B. They observe that a pilot would tend to either be too small to foster the needed intermediary ecosystem of organizations, or become too big too fast, opening the door for unscrupulous intermediaries.
  3. US—Critics note that the US already has a complicated immigration system whose information, oversight, and enforcement are problematic at many levels. A rotational labor program would add new complexities. They suggest that the ‘too little or too big’ problem for the pilot also applies to US regulators. If it’s too small, it may not generate sufficient fees and will be hard to justify developing the necessary enforcement and oversight capabilities for something that may turn out to be temporary. If it gets big enough to justify building out those capabilities within the ten-year pilot, they suggest that it will likely be too big, too fast, for the US regulatory function to keep up with. Critics are particularly concerned that inadequate regulatory oversight in the too big, too fast case would result in placing foreign workers with employers who haven’t genuinely tried to recruit US workers and exposing them to exploitation.

Implementation Challenges in Other Developed Countries

Rotational labor critics and opponents of all kinds cite numerous instances in which rotational labor programs in other developed countries have faced important challenges in enforcing labor standards and combating fraud. For example, they cite Japan’s, Australia’s, and Singapore’s recent experiences.
Read More — Foreign Rotational Labor Case Studies
Click here to read a thorough CommonSense American analysis of other rotational labor programs in other countries, including a subjective ranking of how well each performed.

What the Evidence Says—Crime

The best available research finds that, on average, undocumented immigrants are far less likely to commit crimes than US-born citizens. Using data from Texas, the only state to track the immigration status of every person arrested in the state, researchers find that undocumented immigrants are 50% less likely than US-born citizens to be arrested for violent crimes, 60% less likely for drug crimes, and 75% less likely to be arrested for property crimes. Other nationwide evidence demonstrates that immigrants of all kinds have had lower incarceration rates than those born in the US for the last 150 years. Researchers suggest that a likely reason for lower crime rates specifically among the undocumented is that most come here for work, and do not want to risk arrest and deportation by committing a crime.

What the Evidence Says—Jobs and the Economy

Credible research indicates that immigrant workers can sometimes take the place of some native workers, which economists call the substitution effect. These substitution effects tend to concentrate among US workers with whom immigrants share similar skills, such as lower-skill minorities and prior immigrants, although the size of the effects on minorities is contested. Evidence also shows that when businesses can’t hire temporary workers in jobs for which it’s especially hard to find native-born workers, the businesses shrink and hire fewer native workers too. In the opposite scenario, reputable studies also confirm that when businesses are able to hire immigrant workers into hard-to-fill jobs, they expand more and hire more native workers in other jobs needed at that business, which economists call the scale effect. A growing body of research suggests that the scale effects are much larger than the substitution effects, meaning that hiring immigrants generally has no broad negative effect or creates more jobs for native workers, not fewer. Studies consistently find that immigrants are about 50% more likely to start new businesses than natives, from small businesses to industrial giants. Because entrepreneurs on average create jobs, a workforce with relatively more immigrants creates jobs for native workers more than a workforce with relatively fewer immigrants. According to the best available evidence the net effect of immigrant workers is to stimulate the creation of more jobs for native workers and significantly grow the economy, but evidence is less conclusive on the impacts for concentrated groups of US workers who may compete more directly with new immigrants. While some claim that higher numbers of undocumented immigrants in an industry can lead to worse working conditions, and negatively impact US workers as a result, there is little evidence indicating that these spillover effects are common or related to the presence of undocumented workers. While a greater supply of undocumented labor puts downward pressure on the wages of natives who remain in directly competing roles, it puts upward pressure on the wages of natives who shift into complementary tasks. In the best evidence we have, these effects roughly balance for workers at the same firm, with a negligible positive effect on the wages of native coworkers. Studies suggest that undocumented workers themselves face lower wages and are not compensated as much when working in dangerous conditions. The evidence suggests that unscrupulous employers may take advantage of workers’ lack of legal status to cut corners on wage and safety laws, since undocumented workers are less likely to file complaints out of fear of deportation. It’s clear that undocumented workers themselves are the most disadvantaged by their lack of legal status, and evidence indicates that overall impacts on US workers are not substantial.

What the Evidence Says—Native Workers’ Wages

The effect of immigrants on native workers’ wages is among the biggest concerns expressed in Congress and among Americans, and as a result economists have rigorously studied this topic. The best economic analyses consistently show that the long-run, total impact of increased immigration on Americans’ average wages is nearly zero (NAS 2017, Peri 2014, BPC 2014). One of the best analyses of 27 different economic studies finds that in 19 of these 27 studies, a 1% increase in immigrants’ share of the labor force predicted changes to native workers’ wages narrowly ranging between -0.1 and 0.1 percent. Applied to today’s economy, these findings indicate the median American family could see their income change, rising or falling, by about $63 a year if 1.67 million more immigrants enter the workforce. The best studies may show a negative impact or a positive one, but the size of these impacts is consistently very small. There may be few issues in all of economics on which there is stronger consensus. Because many immigrants arrive in the US with lower levels of formal education, there is special concern among policymakers about the impacts of immigration on Americans whose highest educational level is a high school degree or lower. Under a strict series of economic assumptions (primarily about the degree to which different US and immigrant workers act as substitutes to each other in the labor market) some economic studies find a larger negative effect of immigration on wages for Americans without a high school degree. Using these same assumptions, the effects on the wages of those with a high school degree are positive and outweigh any total negative wage effects from immigration. Under equally plausible economic assumptions, research has even found positive effects on the wages of Americans with less than a high school degree. Using real-world data from a massive influx of Cuban immigrants into Miami in 1980, economists found a near-zero impact of the rapid increase in immigrants on the wages of native workers, even on those with only high school degrees. While there is mixed evidence regarding the impacts of immigration on the relatively small number of Americans with less than a high school degree, economic evidence consistently demonstrates that other factors have been far more responsible for declining wages among the much larger group of those with a high school degree or less. Between 1979 and 2019, these Americans saw their median real (inflation adjusted) wages decrease by 13.7% while wages for Americans with a bachelor’s and advanced degree increased by 9.2% and 27.2% respectively. The best economic studies attribute these relative wage losses mostly to technological shifts (two studies here and here) and somewhat to changes in international trade (especially with China). These studies generally conclude that immigration was not an important factor in the relative wage losses of Americans with high school degrees. Finally, evidence indicates that the effects of immigration policy choices depend on other policy decisions by the government. For example, the small labor market effects of immigration on the least-skilled natives are most benign in states that have adopted the strongest labor-market protections for all workers, native and immigrant alike.

What the Evidence Says—Taxes vs. Government Services

The best available research on whether undocumented workers pay more in taxes than they cost in government services finds the opposite at the federal versus the state and local levels.

  • Federal Level: Undocumented Immigrants Pay More than They Use—Results vary depending on technical accounting choices like whether you count the US-citizen children of undocumented immigrants, or if you assume national defense will cost more with a larger country. Reputable estimates that include US-citizen children of undocumented immigrants tend to estimate net losses to the federal government, while evidence focusing on undocumented immigrants alone indicates that undocumented immigrants contribute more to the federal government than they receive in benefits. The primary reason is because undocumented immigrants pay taxes at similar rates to the median US income group, but are barred from receiving many benefits that they contribute towards like Social Security.
    • Using recent data from massive inflows of many immigrants, not just undocumented ones, the Congressional Budget Office (CBO) estimated that the additional surge of arrivals from 2021 to 2026 generated about four times as much federal revenue through the taxes they paid ($788 billion) and economic activity they created ($412 billion) as they cost in federal government services ($177 billion) and net interest on the debt ($133 billion). Consequently, CBO projected the federal deficit would be reduced by $0.9 trillion through 2034 due to those arrivals.
    • The CBO finding of a large positive federal fiscal effect of recent undocumented immigrants does not contradict studies estimating that undocumented immigrants individually pay less in taxes than the public expenditures they benefit from. The CBO estimates account for immigrants' ripple effects on the economy, such as additional tax revenue from corporate income tax or capital gains by the shareholders of immigrants' employers. Methods that account only for fiscal flows to and from immigrants themselves omit such ripple effects. A low-wage immigrant worker as an individual might pay somewhat less in income taxes, sales taxes, and property taxes than the costs of public schooling and road maintenance they benefit from, even as tax revenue from the industries sustained by immigrants' labor and consumption more than make up for the difference - as the CBO finds.
  • State and Local Level: Undocumented Immigrants Use More than They Pay—Estimates at the local level tend to find negative net impacts of all immigration from lower tax revenues and higher costs to governments providing services like public education. The CBO found in a 2007 report that undocumented immigrants in particular paid modestly less in state and local taxes than they cost. Another CBO study found that state and local governments spent $9.2 billion more on government services in 2023 at the peak of the surge for the additional immigrants (undocumented and other foreign national arrivals) than they paid in state and local taxes. The estimated negative fiscal impact of immigrants on state and local budgets is roughly one tenth the size of the positive impact at the federal level. The highest cost at the state and local level is mostly for K-12 public education. States are legally required to educate all children regardless of immigration status.