Personal Finance
Are immigrants taking jobs from U.S. workers? Here’s what economists say
The first debate between Vice President Kamala Harris and former President Donald Trump is shown on television at the Juventud 2000 migrant shelter in Tijuana, Mexico, on Sept. 10, 2024. Immigration has been a hot topic throughout the presidential campaign.
Carlos Moreno/NurPhoto via Getty Images
The idea that immigration has a negative impact on the U.S. job market is a common theme of former President Donald Trump’s speeches on the presidential campaign trail.
“They’re taking your jobs,” the Republican nominee told supporters on Sept. 21 in Wilmington, North Carolina.
Immigration is also a top issue for Republican voters: 82% of Trump supporters say immigration is “very important” to their vote in the 2024 presidential election, second only to the economy, according to the Pew Research Center. It’s the lowest-priority issue for Democrats, Pew found. Pew polled 9,720 U.S. adults from Aug. 26 through Sept. 2.
However, evidence suggests immigrants help the overall economy. And, at a high level, they aren’t taking jobs from or reducing the wages of U.S.-born (or so-called native) workers, according to economists who study the impact of immigration on the labor market.
“Overall, the consensus is very strong that there are not significant costs to U.S.-born workers from immigration, at least the type of immigration we have historically had in the U.S.,” said Alexander Arnon, director of business tax and economic analysis at the Penn Wharton Budget Model.
Immigrants expected to boost the economy
There are several reasons why immigrants largely benefit the economy and job market, economists said.
For one, the job market isn’t static.
Immigrants take jobs but they also create new ones by spending in local economies and by starting businesses, economists said. One 2020 research paper from the National Bureau of Economic Research found immigrants are 80% more likely to become entrepreneurs than native workers.
A recent “surge” of immigrants to the U.S. is expected to add $8.9 trillion (or 3.2%) to the nation’s GDP over the next decade, according to the Congressional Budget Office, a nonpartisan scorekeeper for Congress.
“That’s enormous,” said Michael Clemens, a professor at George Mason University and an economist whose research examines the economic causes and effects of migration. “That creates jobs, that raises pay, that is an increase in the size and complexity of the U.S. economy.”
Immigrants also aren’t perfect substitutes for U.S. citizens in many job positions; in fact, the two groups often complement each other rather than compete, economists said.
However, some economic research suggests immigration can impact the wages of certain subgroups of U.S.-born workers, especially those with lower levels of educational attainment.
Overall, the consensus is very strong that there are not significant costs to U.S.-born workers from immigration.
Alexander Arnon
director of business tax and economic analysis at the Penn Wharton Budget Model
Some economists contend an influx of immigrants can reduce wages for such Americans in the short term, though other researchers have found that Americans ultimately benefit, partly because those in direct competition with immigrants are able to find higher-paying jobs.
“Not everybody agrees about it,” Clemens said.
A big supply of new labor due to immigration can be “difficult and anxiety-inducing” for American workers who must adjust, he added.
“But people end up in better circumstances,” he said.
Immigration helped cool ‘overheated’ job market
The El Chaparral pedestrian border crossing at the San Ysidro Port of Entry in Tijuana, Mexico, on Jan. 4, 2024.
Carlos Moreno/Bloomberg via Getty Images
Immigrants accounted for about 14% of the U.S. population in 2022, according to Pew, citing most recently available federal data.
Most are in the U.S. legally: Undocumented immigrants represented 3.3% of the total U.S. population and 23% of immigrants in 2022, Pew said. Their number has increased in recent years, to 11 million, but remains below its 2007 peak of more than 12 million.
The number of immigrants coming to the U.S. has “increased sharply in recent years,” the CBO wrote in July.
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Net immigration is expected to be 8.7 million people higher from 2021 to 2026 than would have been extrapolated from pre-Covid migration trends, the CBO said. (Its analysis excludes those with green cards.)
The influx has been beneficial for the pandemic-era economy, economists said.
It “helped cool an overheated labor market” over the past two years, Elior Cohen, an economist at the Federal Reserve Bank of Kansas City, wrote in May.
Demand for workers hit historic highs as the U.S. economy started to reopen in 2021. Wages rose sharply — at their fastest pace in decades — as businesses competed for workers, putting upward pressure on high inflation.
Immigrant labor alleviated “severe staffing shortages,” especially in industries like leisure and hospitality, helping dilute those inflationary wage pressures, Cohen wrote.
In this sense, immigrants weren’t competing with U.S. citizens for jobs but instead taking a surplus of available jobs, said Giovanni Peri, an economics professor and director of the Global Migration Center at the University of California, Davis.
In fact, a long-term net decline in the number of non-college-educated immigrants to the U.S. from 2010 to 2021 likely contributed to those recent labor shortages, he said.
“If there is a time when low-skilled immigration isn’t competing with natives and helping fill shortages, it’s been the last two years,” Peri said.
‘Little evidence’ of employment impact
Even before the Covid-19 pandemic, economists from varying sides of the debate published a “consensus” viewpoint in 2017 on the job market effect of immigration, Clemens said.
The panel of economists found “little evidence that immigration significantly affects” overall employment levels among Americans, they wrote for the National Academies of Sciences, Engineering, and Medicine.
“I’d say the consensus has gotten [even] stronger” since then, said Arnon of the Penn Wharton Budget Model, who authored a separate 2016 analysis of existing research on immigration’s economic impact.
To the extent there’s job competition from new immigrants, it tends to fall mostly on prior immigrants rather than native U.S. workers, according to the National Academies paper.
Prior immigrants are most likely to experience “negative wage effects,” it said.
However, native-born high school dropouts may experience that effect, as well, since they “share job qualifications similar to the large share of low-skilled [immigrant] workers,” the National Academies paper said.
Immigrants without a high school degree account for the largest share of foreign-born workers, followed by those with graduate or professional degrees, according to the Penn Wharton analysis.
A heated debate on low-skilled workers
A boat arrives in Key West, Florida with Cuban refugees in April 1980 from Mariel Harbor after crossing the Florida Straits.
Tim Chapman | Miami Herald | Getty Images
One influential — and controversial — paper by Harvard economist George Borjas echoes that finding about high school dropouts.
Borjas — who was among the more than three dozen economists who authored the National Academies consensus paper — studied the Mariel boatlift, a mass emigration of 125,000 Cuban refugees to South Florida from April to October 1980.
At least 60% of these “Marielitos” were high school dropouts, he said. Borjas found that the large boost in labor supply caused the wages of high school dropouts in Miami to drop “dramatically,” by 10% to 30%.
Stephen Miller, a senior policy adviser during the Trump administration, cited the paper in 2017 as a justification for a new proposal to curtail legal immigration, particularly among lower-skilled workers.
Asked to comment on Trump’s campaign statements about immigration and jobs, Anna Kelly, a spokeswoman for the Republican National Committee, said in an emailed statement that the former president “has never wavered in his promise to put America First, including workers born in the USA and incentivizing companies to keep jobs at home.”
Borjas’ finding was in contrast with earlier work by economist and Nobel laureate David Card, who had found the Mariel boatlift didn’t increase unemployment or negatively affect wages of “less-skilled” non-Cuban or Cuban workers.
Some economists, including Clemens, dispute Borjas’ findings. Borjas didn’t return a request for comment.
“Sudden surges of immigration obviously affect the ability of native workers to find and take jobs on a given afternoon,” Clemens said.
But immigrants “also create jobs,” Clemens said. “A large preponderance of evidence is the job creation effect overwhelms the competition effect, even in the short term.”
Effect may depend on the economic environment
Migrant workers pick strawberries during harvest south of San Francisco.
Joe Sohm/Visions Of America | Universal Images Group | Getty Images
Native U.S. workers and immigrants, even those with similar educational backgrounds, tend to complement each other via their skills, making each other more productive and in essence jointly creating each other’s jobs, Clemens said.
For example, in a restaurant, a native worker with better command of spoken English might be a waiter, while an immigrant might do kitchen-prep work or wash dishes, tasks that don’t require such language dexterity. On farms, native workers might be supervisors or run high-tech equipment while immigrants handpick crops, Clemens said.
Research by Peri and Alessandro Caiumi of the University of California, Davis, finds that factors like “occupational upgrading” generally lead native workers who initially compete with immigrants for jobs to earn higher wages in the future.
For example, from 2000 to 2019, such factors helped boost wages for less-educated native workers by a “significant” 1.7% to 2.6%, and there was also “no significant wage effect on college educated natives,” Peri and Caiumi wrote. Similarly, from 2019 to 2022, estimates suggest “small positive effects” on wages.
Ultimately, “what might have happened in Florida during the Mariel boatlift in the 1980s may be different than what happens in Arizona in the 2010s,” said Michael Strain, director of economic policy studies at the American Enterprise Institute, a right-leaning think tank.
“From a policy perspective, you have to figure out which of the studies are most relevant to the current economic environment you’re considering,” Strain said.
The Federal Reserve held interest rates steady at the conclusion of its policy meeting on Wednesday.
In what could be Jerome Powell’s last as chair before President Donald Trump’s yet-to-be-confirmed nominee Kevin Warsh takes the helm, central bankers maintained the federal funds rate in a target range of 3.5% to 3.75%.
Inflation has surged since the war with Iran began, leaving policymakers with limited room to act, according to Sean Snaith, the director of the University of Central Florida’s Institute for Economic Forecasting. “We’re in a kind of suspended animation — between Iran and the Fed transition,” Snaith said.
Before the oil shock, inflation was holding above the Fed’s 2% target but not worsening. Now the jump in energy costs could have longer-term inflationary effects, economists say.
For Americans struggling in the face of higher gas prices and overall affordability challenges, the central bank’s decision to keep interest rates unchanged does little to ease budgetary pressures. “The cavalry isn’t coming anytime soon,” Snaith said.
How the Fed decision impacts you
The Fed’s benchmark sets what banks charge each other for overnight lending, but also has a trickle-down effect on many consumer borrowing and savings rates.
Short-term rates are more closely pegged to the prime rate, which is typically 3 percentage points above the federal funds rate. Longer-term rates, such as home loans, are more influenced by inflation and other economic factors.
Credit cards
Most credit cards have a short-term rate, so they track the Fed’s benchmark.
After the Fed cut rates three times in the second half of 2025, the average annual percentage rate has stayed just under 20%, according to Bankrate.
“Without Fed rate cuts, there’s not much reason to expect meaningful declines anytime soon, so carrying a balance will remain very expensive,” said Matt Schulz, chief credit analyst at LendingTree.
Mortgage rates
Fixed mortgage rates, on the other hand, don’t directly track the Fed but typically follow the lead of long-term Treasury rates.
Concerns about how the Iran war will impact the U.S. economy have already pushed the average rate for a 30-year, fixed-rate mortgage up to 6.38% as of Tuesday, from 5.99% at the end of February, according to Mortgage News Daily.
That leaves homeowners with existing low mortgage rates “feeling stuck,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. “Mortgages, more than any other credit type, work on a churn,” she said, referring to how a dip in rates can boost borrowing activity.
Student loans
Federal student loan rates are also fixed and based in part on the 10-year Treasury note, so most borrowers are somewhat shielded from Fed moves and recent economic uncertainty.
Current interest rates on undergraduate federal student loans made through June 30 are 6.39%, according to the U.S. Department of Education. Interest rates for the upcoming school year will be based in part on the May auction of the 10-year note.
Car loans
Auto loan rates are tied to several factors, including the Fed’s benchmark. Because financing costs remain elevated, new car buyers are taking on longer loans to keep their monthly payments manageable, according to the latest data from Edmunds.
Even so, with the rate on a five-year new car loan near 7%, the average monthly payment on a new car rose to $773 in the first quarter of 2026, an all-time high.
“Car buyers are in a tough spot right now because they’re getting squeezed from both ends: high sticker prices and high interest rates, with neither showing any signs of letting up,” said Joseph Yoon, consumer insights analyst at Edmunds.
“Until the rate picture shifts, buyers will keep stretching loan terms to make payments work, which only adds to the total cost of ownership down the road,” Yoon said.
Savings rates
While the Fed has no direct influence on deposit rates, the yields tend to be correlated with changes in the target federal funds rate. So, although rates on certificates of deposit and high-yield savings accounts have fallen from recent highs, they are holding above the annual rate of inflation.
For now, top-yielding online savings accounts and one-year CD rates pay around 4%, according to Bankrate.
“Yields on high-yield savings accounts and certificates of deposit are down from their peaks of a few years ago, but they’re still strong compared to what we’ve seen for most of the past decade,” Schulz said.
Milan Markovic | E+ | Getty Images
The average tax refund is 11.2% higher this season, compared with about the same period in 2025, according to the latest IRS filing data.
As of April 10, the average refund amount for individual filers was $3,397, up from $3,055 about one year ago, the IRS reported on Friday.
The IRS data reflects about 114 million individual returns received, out of about 164 million expected through Tax Day. Next week’s filing update is expected to include data through the April 15 deadline.
President Donald Trump‘s 2025 legislation, rebranded to the “working families tax cuts,” was a key talking point for Republicans on Tax Day.
With the November midterm elections approaching and Republicans defending slim majorities in Congress, many GOP lawmakers have highlighted Trump’s tax breaks and higher average refunds.
Meanwhile, affordability has been top of mind for many Americans amid rising costs of gas, electricity, food and other living expenses.
For filers who expected a refund this season, nearly one-quarter, or 23%, planned to use the funds to pay down credit card debt, and the same share said they would save the payment, according to the CNBC and SurveyMonkey Quarterly Money Survey, released in April. It polled 3,494 U.S. adults at the end of March.
Who benefited from Trump’s ‘big beautiful bill’
“It’s been a great tax season for the American people,” many of whom have benefited from Trump’s tax breaks, Treasury Secretary Scott Bessent said during a White House press briefing on Wednesday.
More than 53 million filers claimed at least one of Trump’s “signature new tax cuts” — the deductions for tip income, overtime earnings, seniors and auto loan interest — the Department of the Treasury also announced on Wednesday.
Those filers, who claimed the deductions on Schedule 1-A, have seen an average tax cut of over $800, according to the Treasury. Tax cuts can trigger a higher refund or reduce taxes owed, depending on the filer’s situation.
Some filers who itemize tax breaks have also seen benefits from the bigger federal deduction limit for state and local taxes, known as SALT. Trump’s legislation raised that cap to $40,000, up from $10,000, for 2025.
The latest SALT deduction limit change is expected to primarily benefit higher earners, according to a May 2025 analysis of various proposals from the Tax Foundation.
The Treasury has not released data on how many filers have claimed the SALT deduction during the 2026 filing season.
Traders work at the New York Stock Exchange on April 16, 2026.
NYSE
U.S. stocks climbed to record highs on Thursday against a backdrop of war, an oil supply shock and economic forecasts warning of stunted growth amid a protracted conflict.
Many investors may be thinking: Why?
Largely, it’s because the stock market is a barometer of what investors think will happen in the future, rather than an assessment of the present day, according to economists and market analysts.
Investors are essentially shrugging off the Middle East conflict as a blip that will be resolved relatively quickly, they said.
“The stock market isn’t trying to price what’s happening today,” said Joe Seydl, a senior markets economist at J.P. Morgan Private Bank. “The stock market is always trying to price what the world is going to look like six to 12 months from now.”
Why stocks have been ‘resilient’
The S&P 500, a U.S. stock index, fell about 8% in the initial weeks of the Iran war, from the start of the conflict on Feb. 28 to a recent low on March 30.
But stocks have rebounded since then, erasing all losses since the beginning of the war. The S&P 500 closed at an all-time high on Thursday — about 11% higher than its nadir at the end of March. That followed a record close on Wednesday.
“The market has remained very resilient in the face of the war and has rallied strongly on the prospect that it will be resolved,” said Mark Zandi, chief economist at Moody’s.
A ship waits to pass through the Strait of Hormuz following the two-week temporary ceasefire between the US and Iran, which is conditional on the opening of the strait, in Oman on April 8, 2026.
Shady Alassar | Anadolu | Getty Images
And while investors cheered the possibility of a diplomatic off-ramp to the conflict, the temporary ceasefire has appeared tenuous, with the U.S. and Iran each accusing the other of breaking the agreement.
Nations haven’t been able to reach a peace deal ahead of the ceasefire’s end. Vice President JD Vance said U.S. officials left peace talks in Pakistan over the weekend after the Iranian delegation refused to agree to American demands not to develop a nuclear weapon.
The markets ‘have memory’
Ultimately, the stock market is signaling a collective belief that tensions will ratchet down, the war will end in the near term and oil flows through the Strait of Hormuz will normalize, economists said.
That’s largely because investors have been conditioned to believe that President Donald Trump will back off if the economic pain becomes too intense, economists said — the so-called “TACO” trade, shorthand for “Trump always chickens out.”
“Investors strongly believe — and have been conditioned to believe — he’s going to stand down, find a way to pivot, declare victory and move on,” Zandi said.
Trump has pushed back on the notion of backing down, framing his brinkmanship as a savvy negotiating tactic.
Economists pointed to a recent example of this dynamic: in April 2025 during so-called liberation day, when the Trump administration levied a host of tariffs on U.S. trading partners.
Within days — after the stock market had cratered more than 12% — Trump announced a 90-day pause on those tariffs. Stocks then saw one of their biggest daily rallies in history following Trump’s reversal.
Investors remember that Trump often de-escalates geopolitical shocks — which is why they’ve seized on positive headlines that hint at progress in peace talks, for example, Seydl said.
“The markets have memory,” Seydl said.
AI stocks and the ‘tech boom’
Traders celebrating at the New York Stock Exchange on April 15, 2026, as the S&P 500 closed above the 7,000 level for the first time.
NYSE
There are other factors underpinning market resilience during wartime, economists said.
One is the investors’ enthusiasm for artificial intelligence and technology stocks, which account for almost half of the S&P 500’s market capitalization, Zandi said.
“Those stocks run on their own dynamic independent of anything, including the war in Iran,” Zandi said. “I think we would have been down a lot more and it would have been harder for us to recover had it not been for the very, very optimistic perspectives on AI.”
We’re in the middle of a “tech boom” — and investors are likely to remain optimistic until they think the tech cycle has run its course, Seydl said.
More broadly, stock investors are essentially making a bet on the future earnings growth of a company — and the earnings backdrop has been “pretty solid,” Seydl said.
Consumer spending appears to be stable, for example, economists said. And companies are getting a boost to their after-tax earnings from the GOP’s so-called “big beautiful bill,” which, among other things, made it easier to write off investments upfront and therefore reduce their tax liability, Zandi said.
Going forward
Experts said there will be an economic hit from the Iran war, though.
“Despite the recent news of a temporary ceasefire, some damage is already done, and the downside risks remain elevated,” Pierre-Olivier Gourinchas, director of research at the International Monetary Fund, wrote Tuesday.
A protracted conflict risks deep and global economic pain, he wrote.
Even if the conflict is short-lived — as the broad market expects — stocks are unlikely to march much higher until it’s clear the U.S. is on the other side of the war and its economic fallout, Zandi said.
If investors are incorrect, and President Trump doesn’t back down or quickly extricate the U.S. from the war, the stock market may see a “full-blown correction” or worse, Zandi said. A stock market correction is a decline of at least 10% from recent highs.
“Everyone thinks they know what the script is,” Zandi said. “Now they just need to follow the script. If they don’t, the market will have some real problems.”
The uncertainty provides yet another example of why the average investor with a long time horizon should stick to their investment plan and ignore the noise, experts said.
“Trying to time the market is very difficult if not impossible for the average investor,” Seydl said. “It’s better to take a long-term perspective and ride out bouts of volatility.”
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