President-Elect Donald Trump is on his way into the White House with promises of mass deportations and a renewed crackdown on illegal immigration on tap. He has said that undocumented immigrants hurt our economy — from taking U.S. jobs to flooding the housing market, to draining government programs.
But, undocumented immigrants actually have a significant impact on our state’s economy, according to Kacey Douglas. And without them we will likely see some prices actually go up, Douglas says.
Kacey Douglas, who holds a doctorate in economics and is an associate professor in ASU’s Department of Economics, joined The Show to talk more about it — beginning with just how much of Arizona’s workforce is made up of undocumented immigrants.
Interview highlights
KACEY DOUGLAS: About 5% of the workforce right now is undocumented, and that is spread across different industries. So in some industries it's a lot higher of a percentage. Other industries it's a lot lower.
What industries are the most impacted here?
DOUGLAS: So the big ones across the country are construction,, agriculture and services.
In Arizona, 5% of the workforce being undocumented, is that a lot, a little? How do we compare to the rest of the country?
DOUGLAS: Well, 5% is actually what the national average is, too. So it's comparative. It is a little bit less than 200,000 workers.
Talk about the broad impact that this group has on Arizona's economy. We hear a lot about trade with Mexico and the impact on that front heading into a tariff-ridden Trump administration. But if we're looking at mass deportations and a lot of those unauthorized immigrants being deported, what would happen to our state's economy?
DOUGLAS: So those industries where there's really high percentages of undocumented workers, you're going to see a shortage. So you would see a shortage in new construction. You would see a shortage in agricultural products. You would see a shortage in things like house-cleaning services, landscaping services, those kinds of things.
There are certain industries where it would be really impactful. What about broadly? Would we see a hit to the overall economy in Arizona?
DOUGLAS: The thing that you would probably notice is that prices would go up in certain areas — so agricultural products, things at the grocery store, you're going to see prices go up. For those that are employing people to do their landscaping or house cleaners, you know, they're going to see the prices of those things go up. The fact that 5% is not a huge number, there's not going to be an overall shock to the economy. I mean, you're not going ... wake up tomorrow and the city's not working or the state's not working anymore, that's not going to happen.
So let's dig into some specifics and some misconceptions. Do undocumented immigrants pay taxes?
DOUGLAS: Yeah, so about half of undocumented workers pay taxes. And they also pay taxes through things like sales tax. So anytime anybody's buying anything, you're paying a sales tax. If they are on payroll, which they can be, they will pay payroll taxes, or they'll get deductions straight from payroll. If they own property, they'll pay property taxes. And then there's a good amount of undocumented workers that are actually paying federal and state taxes the same way that we do, like on income taxes. They get something called a tax ID number and you are not required to show your legal status, but you can still pay your taxes that way.
So this sounds like it's a lot less "under the table" than people might think.
DOUGLAS: Yeah, it is. It is less under the table than people might think. These unauthorized immigrants, for the most part, are trying to show that they are being sort of upstanding citizens so that when it comes time — if there is a pathway to citizenship — it will help their case.
What about when it comes to social services — Medicare, health care programs, public programs, SNAP, things like that. There's always criticism that undocumented immigrants are taking from those programs but not paying into them. Is that true?
DOUGLAS: Well, first of all, they are paying into them. So when you pay your income taxes you pay Social Security tax, you pay unemployment tax. So they are paying into those services, and they will not get those. That may be a misconception yhat unauthorized immigrants aren't really able to get a lot of public services. So they don't get access to Medicare, Medicaid, they don't get access to any health insurance actually. They don't get access to Social Security payouts. So the main public services they're using are education. So under the Department of Education, any child regardless of legal status, is able to go to a public school. That's for K-12.
So they, they're using public schools and then to some extent using health care services. So they're not getting health care insurance, by and large. There's some states that have implemented health care insurance, state funded. Not in Arizona, so far as I know. But they're using healthcare clinics and in some cases emergency room services.
When it comes to jobs, this is another big one and there's always this narrative that immigrants are taking American jobs. Is that the case?
DOUGLAS: You know, that's not what people are finding that are doing the research on this. So when they're looking at actual data, we just don't find a lot of evidence of that. And what the way I kind of try to explain it is that immigrants — unauthorized and legal immigrants — they're sort of plugging up gaps in the workforce. So there's a lot of gaps that have been left by things like an aging workforce, so people aging out of the workforce. COVID left a lot of shortages. And then there's something that is called "stoop labor," which is named after physical, manual labor, things like that. But I generalize it to mean things that are kind of like unglamorous jobs that Americans don't, by and large, want to do. And I'm sure you've probably heard of that. So they're coming in and they're filling those gaps. And so they're really ... keeping the labor force moving and working, which is what keeps prices low.
