Why California's surge in immigration is lifting our economy

Don Lee
Wed, July 31, 2024

Migrants gather in a makeshift camp, awaiting transport from Border Patrol after crossing through rocky, mountainous terrain. (Robert Gauthier / Los Angeles Times)


Kamala Harris had no sooner replaced Joe Biden as the presumptive Democratic presidential nominee than Donald Trump began bashing her over the number of immigrants coming into the United States, declaring that they had driven countless American workers from their jobs.

But the data on U.S. employment and the economy overwhelmingly suggest a reality far more beneficial when it comes to immigration than the nightmarish vision the former president has put forth.

The surge of international migrants since 2021 — including refugees, asylum-seekers and others entering legally and illegally — has lifted the U.S. and California economies by filling otherwise vacant jobs, helping to keep job creation strong, growing businesses and pumping millions of tax dollars into state, local and federal coffers.


Payroll taxes on immigrant workers have even helped relieve pressure on the nation's embattled Social Security system.

People seeking asylum are detained by Border Patrol after crossing the U.S.-Mexico border. (Robert Gauthier / Los Angeles Times)

There are, of course, short-term public costs associated with acclimating so many new arrivals, plus government expenditures on education and health services for immigrants and their families, along with the political and social challenges. Many agree that the current immigration system is flawed and chaotic.

But from a budgetary perspective, the additional federal spending on immigrants is projected to pale next to the increase in revenues from the millions more people working, paying taxes and buying goods and services, according to the Congressional Budget Office.

And more than a few economists say that, by easing the shortage of American workers as the U.S. population grows older and birth rates decline — particularly in California — immigrants have played a large and positive role in maintaining a healthy, growing economy.

“This is the hottest labor market that has existed in two generations,” said Michael Clemens, an economist at George Mason University who specializes in international migration. “That means there have never been as many opportunities for immigrants and natives to mutually benefit each other through economic interaction in the last half century.”

Without immigration, California’s workforce would have fallen well short of its needs, especially since the high cost of living, soaring home prices and other factors have fueled a notable outflow of population from the state.

From 2021 to 2023, the population of U.S. citizens ages 16 and older living in California fell by 625,000, according to data from the U.S. Bureau of Labor Statistics, while employment increased by 725,000.

Over that period, however, the unemployment rates for native-born and foreign-born Californians fell by similar levels — an indication that immigrants are not taking away American jobs.

Moreover, the recent waves of migrants are filling lower-paying, more physically demanding positions that do not attract as many native-born Americans, at least not at the wages that are offered.
An important source of labor

“Immigrants are a really important source of the labor force for California, in the high end as well as in a lot of jobs that don’t pay as well,” said Hans Johnson, a demographer at the Public Policy Institute of California.

Separate employers’ data from the Bureau of Labor Statistics show that more than 70% of the nearly 400,000 payroll jobs added in California between June 2022 and June 2024 have been in just two industries: social assistance, such as health services for the elderly and child care; and leisure and hospitality, primarily hotels and restaurants.

Both sectors are heavily dependent on immigrant workers.

Employers in construction, another industry reliant on immigrant labor, also added thousands of jobs in that period.

“A lot of what we do is physical — you get on your knees. And Americans don’t do that,” said Tom Straus, owner of Straus Carpets. He’s been in the flooring business in the San Francisco Bay Area for almost half a century and has regularly hired Latino immigrants. “The work is excellent and strenuous,” he said.

Angie, 28, her husband and their 6-year-old son arrived in Los Angeles last October from a village in Ocaña, Colombia, about 375 miles north of Bogota. They flew from Bogota to Cancun, Mexico, and from there to Tijuana. Then the family walked across the border checkpoint into San Diego, receiving provisional entry as migrants seeking asylum.

Asylum-seekers from Ecuador, Guatemala and Colombia prepare to be detained by Border Patrol after crossing the border from Mexico to the United States. (Robert Gauthier / Los Angeles Times)

“It was expensive,” Angie said of the travel costs, money they borrowed from relatives. Given her uncertain status, she didn’t want to provide her last name.

At the border, Angie got a "notice to appear" at immigration court in May 2025, and she can stay in the U.S. legally until at least then. But migrants have to wait 150 days after they formally apply for asylum before they can receive employment authorization.

Angie began working almost immediately upon arrival, first at a clothing business. More recently she found work in housekeeping at a hotel in Los Angeles. Her husband remodels houses.

“I feel like I’ve been blessed greatly,” she said.

Angie and her family were among some 3.3 million immigrants who arrived in the U.S. last year, after net immigration of 2.6 million in 2022, according to estimates by the Congressional Budget Office. Those numbers are roughly triple the annual average in the prior decade. A similarly large number is expected this year, although immigration over the long haul is likely to return to around 1 million a year, experts say.

No one knows how many immigrants who arrive in California decide to stay here. Over the years, increasing opportunities in other states and California’s high cost of living have made it less attractive as a final destination. The latest Census Bureau figures, for 2022, show that 27% of California residents are foreign-born, about double the U.S. share.

Most of the immigration increase in recent years has been driven by foreign nationals entering illegally, asylum-seekers and hundreds of thousands of people from Ukraine, Venezuela, Haiti and other countries who entered under humanitarian programs and can apply for work authorization.

Since 2021, U.S. border officers have seen a surge of migrants from Mexico, Colombia, Ecuador and Peru — but also from countries such as China and India, whose citizens in the past had rarely sought to come through the southwest border, Department of Homeland Security statistics show.

Over the last few years, about 6 in 10 people crossing unlawfully have been turned away, according to an analysis of DHS data by Clemens, the George Mason professor. Most of those who are detained and not expelled are released in the U.S., many because they have shown credible evidence of fear and a desire to apply for asylum.

Then there’s another large group of people who enter unlawfully and are never encountered by border patrol.

What's behind the surge at the border?

These migrants are part of an unprecedented international movement of people to the U.S. and other rich countries. Although some are fleeing political and economic crises, the relocation is actually less a result of bad conditions at home than of successful development — which brings better health, greater awareness of international options and more income for travel. That enables people to pursue opportunities for better lives in the more prosperous countries such as the U.S., experts say.

And technological advancements in many parts of the world have made the journeys more possible. Mobile phones and social media give almost anyone anywhere the basic information needed to migrate.

During his recent trip to southern China researching international migration, UCLA professor Raul Hinojosa-Ojeda met with people in Yunan province who were preparing to immigrate to the U.S. by entering through Tijuana.

“They saw it on TikTok, how to do it,” Hinojosa-Ojeda said.

Chinese migrant Zhen Jiang is photographed by a Border Patrol agent hours after crossing the border through rocky, mountainous terrain. (Robert Gauthier/Los Angeles Times)

The primary magnet attracting record numbers to the U.S. is jobs. Though unemployment has edged up recently as a result of government efforts to curb inflation, there are still 10 job openings for every eight unemployed workers in the U.S., according to government data. For most of the last 2½ years the U.S. jobless rate has been at or just above 3.5%, the lowest since the late 1960s.

Although the labor market isn’t as tight in California, at 5.2% in June, the unemployment rate isn’t far off historical lows for the state. And employers are still adding thousands of jobs a month, with some positions going to workers without legal status.

“They’re getting a worker. The only downside is if they get in trouble for it — and that doesn’t often happen,” said Jamie Wipf, refugee operations manager at the International Institute of Los Angeles, a 110-year-old organization that helps refugees and other immigrants.

The nonprofit's job placement records show many new arrivals are employed as drivers, security guards, caregivers and warehouse workers. The vast majority earn minimum wage to about $20 an hour.
Where California immigrants work

Many employers in California are reluctant to talk about immigration because of the sensitivities surrounding the politically charged issue, especially in this election year. The California Chamber of Commerce and other industry groups declined to comment for this article.

Yet their member companies depend heavily on immigrants. Foreign-born Californians account for one-third of all workers at restaurants and warehouses; about 40% in home healthcare and child day care; almost 50% at trucking and lodging businesses; and 60% at services for landscaping and cleaning buildings, according to a Times analysis of 2022 Census Bureau data.

Are their large numbers holding back wage gains?

Economists say there is some truth to the claim that a surge of working-class immigrant labor could put downward pressure on certain jobs, such as meatpacking and gardening. But studies have shown that immigration has had no significant negative effect on wages for American workers overall.

Giovanni Peri, an economics professor at UC Davis, said large-scale immigration actually boosts productivity and demand for services, which in turn helps companies to grow and create jobs that are more likely to be taken by native-born workers, such as those in sales and management.

People seeking asylum are detained by authorities after crossing over the border to the United States. (Robert Gauthier/Los Angeles Times)

It’s also well documented that immigrants have higher rates of self-employment, whether that means working as an Uber driver, pushing a street food cart or launching an ambitious tech business.

Yaroslav Uchkin and his girlfriend, Ukrainian refugees, moved to Los Angeles in February after several months in the Bay Area, where they had stayed with a host family. They both have work permits. Uchkin has found part-time work as a fitness instructor; his partner works as a food server.

“I have some vision,” Uchkin said of a business he’s looking to start, making sports nutrition products. “Why I’m here in L.A.? I love the place for energy. People love sports, they want to look better.”

Uchkin and his girlfriend recently leased a one-bedroom apartment in Marina del Rey. The arrival of many new immigrants has helped reverse or, in L.A.’s case, stanch the population loss in cities that saw a pandemic-related exodus of residents, according to a study by Brookings Institution demographer William Frey.

“There’s no doubt the economy is better off because of immigration,” said Christopher Thornberg, founding partner at Beacon Economics, a research and consulting firm in Los Angeles.

“At one level, I understand people are nervous about folks coming here in an uncontrolled way,” he said, noting that he fears the anti-immigrant drumbeat is getting louder and louder.

“But our nation desperately needs people,” he said. “People have stopped having babies, and so many are going into retirement. And here we really have an opportunity to help our economy in the long run, and we are turning away from it.”