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Despite ongoing claims that rising immigration threatens the U.S. economy, a new study finds that immigrants are making a positive economic impact in Texas, including contributing more than $8 billion to El Paso’s economy.
“El Paso has always been a city of immigrants,” said Jon Barela, CEO of the Borderplex Alliance. “It’s part of our history and our DNA. Today, immigrants are contributing to our economy in a big way.”
The recently released American Immigration Council study — published in partnership with Texans for Economic Growth, the Borderplex Alliance and the Texas Association of Business — shows that in 2019, immigrant households in El Paso contributed $8.6 billion to the gross domestic product while local immigrants earned $4.8 billion in income.
These figures were derived based on immigrants’ share of wage income and self-employment income reported in the five-year American Community Survey sample from 2019 and statistics on GDP from the U.S. Bureau of Economic Analysis.
The study also showed that local immigrants paid $591.8 million in taxes, with state and local taxing entities receiving about $440.7 million in tax revenue.
The El Paso economic impact study is one in a series that will be released with partners along the Texas-Mexico Border “to offer business leaders an opportunity to discuss the border and immigration in full context rather than just political sound bites,” said Chelsie Kramer, Texas state organizer for the American Immigration Council of Texas for Economic Growth.
Reports on Brownsville, Laredo, McAllen and the Middle Rio Grande Valley will be released in the coming months.
University of Texas at El Paso Professor of Economics Tom Fullerton said immigration tends to generate economic growth and net benefits for most regions, El Paso included.
“Local complaints regarding international immigration have tended to increase during periods of high unemployment,” he said. “Local policymakers have also complained, at least episodically, that international migrants also make it difficult to improve regional labor force quality because a relatively high percentage of the undocumented migrants have not graduated from high school.”
The economic impact study was released as Texas, and the city of El Paso, are receiving hundreds of migrants daily who are trying to enter the United States. Some of the migrants are being released to the streets of El Paso, as federal holding facilities and nonprofit shelters are beyond capacity.
Texas Gov. Greg Abbott, meanwhile, has upped his anti-immigrant rhetoric, claiming this month that Texas is being “invaded” by migrants. Abbott sent letters to the Texas Department of Public Safety, the Texas Military Department, and country judges calling for expanded border security measures, costing more than $4 billion, as well as legal immunity for Texas troopers and soldiers preventing illegal entry.
The El Paso Border Patrol Sector has averaged more than 1,650 migrant encounters daily and has about 3,660 migrants held at its Central Processing Center and overflow area, El Paso Matters previously reported.
The new economic impact study, however, looks not just at migrants who have recently crossed the U.S.-Mexico border. American Immigration Council researchers analyzed the economic contributions of immigrants more broadly — a category which the study defined as anyone born outside the country to noncitizen parents living in the U.S.
“This includes naturalized citizens, green card holders, individuals with temporary immigration status, refugees, asylees and undocumented immigrants, among others,” Kramer said.
Due to its proximity to the border, immigration is central to El Paso’s story. Glenn Hammer, president and CEO of the Texas Association of Business, notes that immigrants make up nearly a quarter of the overall population and have contributed $8.6 billion to Texas’ GDP. “Immigrants are vital not only to El Paso’s continued success but to the entire state’s success,” he said.
Kramer said the study aimed to inform the public, particularly local business leaders, about immigrants’ contribution to the economy.
“The partnership … offered the opportunity to assist the Texas business community in explaining why commonsense immigration reforms are crucial to the continued economic success of Texas.”
The workforce in El Paso — primarily composed of the migrant population — drives the economy of El Paso, according to Barela.
“They are our teachers, our doctors, our lawyers, and our business owners,” he said. “They are an integral part of our city and our economy. The Borderplex region is home to some of the largest and most successful companies in the world.”
Companies come to the area not only because of the location and quality of life that El Paso offers, but also its large workforce of immigrants. “They are a net positive to our city, our state and our nation,” Barela said.
Kramer said El Paso is a striking example of the immigrant’s positive impact on communities across Texas.
“In addition to their sizable contributions in taxes and spending power, immigrants in El Paso make up nearly 31% of STEM workers,” she said. “They are integral to several industries like construction and manufacturing, where they make up 44.5% and 42.7% of those workforces, respectively.”
In the El Paso metro area, immigrants make up 24.1% of the overall population but hold 29.2% of the spending power and make up 27.6% of the employed labor force, according to the study.
“Robust consumer spending by immigrant households supports small businesses and keeps local economic corridors vibrant,” the study said. “It is estimated that, by 2019, immigrants living in the El Paso metro area helped create or preserve 9,300 local manufacturing jobs that would have otherwise vanished or moved elsewhere.”
Social services and immigrants
About 30.4% of immigrants received Medicare or Medicaid in 2019, while 31.9% of their U.S.-born counterparts utilized the programs, the study showed.
“Undocumented immigrants cannot access these benefits, but as shown (on the study), they do pay into these programs that benefit all Texans,” said Kramer.
Immigrants, the study showed, contributed $437.6 million to social security and $108.3 million to Medicare.
“The Council’s research also shows that between 2012 and 2018, nationally, immigrants contributed an average of $165 more per capita annually to the Medicare Trust Fund than was spent on their behalf — as immigrants tend to be younger and active in the workforce,” Kramer said. “In Texas, immigrants contributed even more on average — $334 more per capita contribution each year than was spent on their behalf.”
Debate on how undocumented immigrants contribute to taxes has widely existed due to misinformation on the subject.
“Undocumented migrants pay state and local sales taxes when they make purchases at registered businesses,” Fullerton said. “Undocumented migrants pay local property taxes either directly to the Central Appraisal District when they own housing units, or indirectly when making rental payments to landlords that own rental properties.”
When it comes to the federal government, Fullerton said that those who have their social security numbers registered with the Internal Revenue Service as either employees or business owners have to pay social security and federal income taxes.
Ethnic composition and entrepreneurship
The immigrant population of El Paso is made up of about 202,200 immigrants, according to the study that highlighted the majority come from Mexico at almost 91%, with those of Filipino and German nationalities accounting for about 1%, respectively.
Entrepreneurship among immigrants was also on the rise, according to the study that showed 13,000 immigrants had businesses that generated $285 million in income.
Immigrants made up 44% of all entrepreneurs and were 109.7% more likely to be entrepreneurs than their U.S.-born counterparts, the study showed.
In 2019, about 46,200 were undocumented immigrants. The study showed this segment of the population earned about $757.4 million, with $35.2 million going to federal taxes and $37.5 to state and local taxes, according to the study.
About 62.5% of immigrant households owned their homes in the El Paso metro area with a property value of $7.4 billion.
Immigrants and education
Another area impacted by immigrants, according to the study, was higher education, with 1,711 temporary residents making El Paso their home who supported 600 jobs and contributed $46.5 million in spending during the 2020-2021 academic year.
Mexican immigrants comprised the fourth largest group of college-educated immigrants in the U.S. after those from India, China and the Philippines, according to a May 2019 fact sheet from the Migration Policy Institute (MPI).
“The number of Mexican immigrants with a bachelor’s degree or higher grew from 269,000 in 2000 to 678,000 in 2017 — an increase that is primarily explained by higher college attainment among recent arrivals,” according to MPI. “Nearly one in six Mexicans arriving between 2013-17 had a college degree, compared to slightly more than one in 20 for those entering during the 1996-2000 period.”
The fact sheet offers a profile of degree-holding Mexicans in Texas — where 27% of all Mexican immigrants currently reside. The cities of Houston, Dallas, El Paso, McAllen and San Antonio were highlighted in the profile.
“Houston and Dallas are home to the largest numbers of college-educated Mexican immigrants in Texas, but highly skilled individuals made up larger shares of Mexicans in San Antonio, McAllen, and El Paso — metro areas closer to the U.S.-Mexico border,” MPI states in its fact sheet. “Naturalized citizens made up the largest share of Mexican college graduates, but unauthorized immigrants and green-card holders are also well represented. Temporary visa holders were a much smaller share of the total population, though they were the group most likely to hold a degree.”
Low-skilled perception of immigrants
Public perception and debate have focused on low-skilled immigrants, although MPI states that almost one in five Mexicans arriving in Texas between 2013-2017 and one in six in the U.S. had a college degree.
“Still, highly skilled Mexicans comprise just a fraction of the overall Mexican foreign-born population, at 7% in Texas and 8% nationally, unsurprising considering the decline in overall Mexican migration to the United States and size of the earlier-arriving cohort,” according to an MPI news release. “Among Texas metro areas, Dallas and Houston have the largest numbers of highly skilled Mexican immigrants, but El Paso, McAllen, and San Antonio have the largest percentage of those with college degrees in their Mexican-born population, potentially indicating movement of Mexican professionals to cities on or near the southwest border.”
The five metro areas studied account for almost three-quarters of all highly skilled Mexicans in Texas, with Houston and the Woodlands-Sugar Land area having 39,000 of all the state’s 185,000 degree-holders from Mexico.
Following were Dallas-Fort Worth-Arlington, with 33,000; El Paso, 24,000; McAllen-Edinburg-Mission, 21,000; and San Antonio-New Braunfels, 18,000, the release said.
“As more Mexican immigrants settle in Texas, especially in its metro areas, and around the United States, local economies and communities stand to gain from this increasingly well-educated workforce,” Selee said. “Knowing the profile of highly skilled Mexican immigrants can inform policy decisions and service provision to reduce under-employment and make the most of their potential contributions.
This story was co-published with Next City as part of our joint Equitable Cities Reporting Fellowship For Borderland Narratives.