Opportunity cost

At first, Alekhya Bhagavathi Yanamandra didn’t want to study in the United States. She’d heard enough about the American immigration system to dread experiencing it firsthand. Australia. Canada. Anywhere else sounded easier. But her father shot down all those other ideas. She desperately needed new opportunities—and a way out.

Her family, Hindus with ties to the prestigious Brahmin caste, resented her growing Christian faith. “Why don’t you stay with your family?” they chided most Sundays as she prepared to attend church. “Is your God asking you to get separated from us?”

The Sunday haranguings never escalated to physical violence. But their verbal jabs grew ever more painful and persistent. It became more than the 21-year-old could take. So when her U.S.-based aunt called and convinced her father to send her to America, Yanamandra buried her earlier hesitations and prepared to tackle the U.S. immigration system head-on.

Yanamandra started her master’s in business analytics at the University of New Haven in Connecticut on an F-1 student visa in 2022. In September 2025, she moved to North Carolina, where she entered the U.S. labor force as a senior financial analyst for Pyxus International Inc., a global agriculture company headquartered in Raleigh, the state’s capital.

As of June 2025, immigrants accounted for roughly 19% of the U.S. workforce. In 2021, more ­foreign-born workers held jobs in science, technology, engineering, and mathematics occupations than U.S.-born workers. Immigrants held roughly 30% of construction jobs in 2020, though in some states that number is closer to 40%. Immigrants not legally authorized to work in the United States fill about 40% of agricultural positions, according to U.S. Department of Agriculture data from 2020–2021.

Some economists and immigration experts call these statistics troubling. But others say they reveal the essential role immigrants like Yanamandra play in maintaining and fueling economic growth.

President Donald Trump’s immigration policy changes and a growing number of high-­profile workplace raids have reignited this decades-long debate about the role immigrants play in the American economy. His circle of advisers is rife with tension between business leaders who believe immigrant laborers complement American workers and create opportunity and those who argue immigrants compete with Americans for jobs and social services and want the president to cut employment-­based immigration.

The generalizations and talking points fly fast and furious. But most economists say the truth is much more complicated than either side wants to admit.

ONE OF YANAMANDRA’S favorite parts about the United States is the Mexican food. In New Haven, she started attending a bilingual church where she worshiped alongside many Hispanic believers. “I love their flavors. I started learning Spanish, and I fell in love with the language,” she said.

But she’s a fan of more traditionally American foods, too. Cornbread. Soups. Salads. “I believe New Haven has the best pizza,” she added.

Yanamandra’s career in the United States depends in large part on a visa lottery her company will enter on her behalf in February 2026. She can start work on an extension of her student visa, but once that expires, Yanamandra will only be able to remain in the country if she receives an H-1B visa, a temporary employment visa granted to highly skilled immigrants working in specialty occupations such as technology and healthcare.

In September, Trump shook up that process by issuing an executive order that requires companies to pay a $100,000 fee for new visa applicants. His administration also announced it will now favor H-1B visa applicants receiving a higher wage to ensure only the most highly skilled employees are selected, though the agency will still allow employers to file the application for all wage levels.

Trump argued Congress created the H-1B program for temporary workers performing “additive, high-skilled functions” for which American workers are unavailable. But companies have exploited the visa to “replace, rather than supplement, American workers,” suppress wages, and fill entry-level positions, Trump said in the order. His announcement isn’t the first time members of his administration have criticized the program. Trump’s supporters split over the visa in early January, when he appointed Indian American Sriram Krishnan, who favors bringing skilled immigrants to the United States, as a senior White House policy adviser. That rift revealed a deeper clash over employment-based immigration among the president’s supporters.

Jason Richwine, a resident scholar with the Center for Immigration Studies, agrees with many of the H-1B program’s critics. “So many of the so-called high-skill immigrants we bring in are really just sort of like average college graduates,” he said, adding that there are a “handful of H-1B recipients who are very successful, but overall they are just essentially substitutes for Americans in a lot of fields.”

But Richwine believes the issue runs deeper than any one visa program. His organization advocates for lower employment-based immigration across the board, and Richwine proposed winnowing employment-based visas down to roughly 10,000 “Einstein visas” for extraordinarily intelligent and accomplished applicants. Immigrants, both legal and illegal, filling low-skilled positions in fields such as construction and agriculture, also push Americans to the sidelines, Richwine argued. In many cases, some combination of U.S.-born workers and automation could easily fill these positions, he said.

“The idea that we could never get any houses built, or we could never get landscaping done, or never get crops picked without immigrants doesn’t make sense,” he added. “It’s not a sound understanding of how an economy actually works.”

JARED PINCIN, an associate professor of economics, isn’t surprised by the latest round of pushback against employment-based immigration. The debate over immigration’s economic burdens engulfed the Cedarville University professor’s hometown of Springfield, Ohio, last fall. As many as 20,000 Haitians settled in the small city of about 60,000, many of them on programs allowing them to live and work in the country temporarily.

“Under the Biden administration, the reality is they didn’t do much immigration enforcement,” he noted. Conservative estimates peg the number of new arrivals under former President Joe Biden at around 8 million, and more than two-thirds of them entered illegally. Such a massive immigration wave will have lasting economic implications, Pincin said, and available economic literature analyzing the costs and benefits of past immigration surges “shows a mixed picture.”

By and large, data shows that a large number of immigrants, regardless of their legal status, infuse the economy with new ideas, he said. First-generation immigrants tend to be more entrepreneurial than even second- or third-generation immigrants. There’s also plenty of evidence that a growing population drives economic growth in a well-functioning, free-market system, said Charles Steele, the director of the Center for Commerce and Freedom at Hillsdale College in Michigan. “​A growing population is a net benefit. It is accumulating human capital: useful skills, useful knowledge, and practices,” he said.

Most developed economies are struggling to reverse below-­replacement-level fertility rates. One reason the United States has so far avoided the worst effects of this demographic crisis is because we have a “fairly robust immigration system,” Steele pointed out.

But not all immigration is created equal. It matters who’s doing the immigrating, Steele added.

Both Steele and Pincin agree that more data points to the benefits of high-skilled immigrants who assimilate into the culture and become net contributors to economic growth. A massive number of low-skilled immigrants flooding lower-­paying industries doesn’t necessarily have the same effect.

Low-skilled immigrants are more likely to suppress wages for low-skilled native workers, Pincin said, pointing to research by Harvard economist George Borjas. Borjas noted that an increase in low-skilled immigration benefits employers who can pay less for the same positions since more workers are available overall. It also frees up high-skilled native workers to focus more of their time on activities that will increase their wages.

“Immigration will tend to have laser-focused effects on comparable native workers,” Borjas wrote. And some groups will certainly lose.

Large numbers of low-skilled immigrants, especially those without legal status, are also more likely to become a net drain on the economy, both Steele and Pincin noted. Their economic contributions may not offset their use of public resources like the local school system and, in certain cases, government healthcare and welfare programs.

FROM A FISCAL PERSPECTIVE—one narrowly focused on taxes and government spending instead of the broader economy—immigration benefits the federal government, said Alan Viard, a senior fellow emeritus at the American Enterprise Institute. Viard and a group of AEI scholars recently conducted an analysis of past studies evaluating immigration’s fiscal effects.

Data shows “the federal government is making money off immigrants, both legal and illegal,” Viard said. That’s because immigrants as a whole pay more in taxes than the cost they impose on federal programs. And when the government admits an immigrant, it also grants entrance to their future children and grandchildren, a whole host of potential taxpayers, he noted.

Strangely, illegal immigrants provide greater fiscal benefits than those who reside in the United States legally. Both sets of immigrants tend to pay income, payroll, and sales taxes, Viard said, but illegal immigrants are ineligible for most federal benefits and are often reluctant to step forward to claim those they do qualify for because they don’t want to expose themselves to the government.

While some illegal immigrants do work off the books, it isn’t as common as people think, Viard said. Most employers comply with existing I-9 laws requiring workers to provide a Social Security number. So claims that illegal immigrants aren’t paying into Social Security and Medicare don’t hold much water, Viard said. It’s just that most of them use fake or stolen numbers. As of September 2024, almost $2.3 million in wages had been reported to the Social Security Earnings Suspense File, which keeps track of taxes that don’t match a genuine Social Security number—almost entirely money paid into the system by illegal workers.

Viard acknowledged the fiscal picture is more nuanced at the state and local level, where immigrants still pay a large amount in state and local taxes but receive more government benefits.

It also matters where immigrants move once they arrive in the United States, Cedarville University’s Jared Pincin noted. Thousands of immigrants moving into a small city like Springfield will put a far greater strain on social services and the local economy than a large, diverse urban center like New York City.

INDUSTRY LEADERS WORRY the Trump administration’s noisy deportation push could severely incapacitate agriculture, construction, and other service-based industries, causing prices to skyrocket. Bryan Little, senior director for policy advocacy at the California Farm Bureau, said that while 40% to 50% of agricultural workers acknowledge in the National Agricultural Workers Survey that they do not have authorization to work, the real number is probably much higher.

So far, the Trump administration has not dramatically increased workforce raids on farms in the Golden State, but ICE raids targeting specific immigrants who already have final orders of removal or law enforcement efforts shutting down illegal marijuana-growing operations have sent shudders through the state’s farming communities. In Bakersfield, Calif., citrus fruit remained unpicked as word of ICE raids circulated in early 2025.

“We’ve had members who have lost production because their employees see this on social media,” Little said. “And they’ve decided not to come to work.”

Little refused to connect me with any of the bureau’s member farmers. He worries their workers won’t show up if their farm’s name appears in an article that could come to the attention of ICE. The bureau is urging the Trump administration to tone down its enforcement rhetoric and instead expand existing legal pathways, including making the seasonal H-2A visa program for agricultural workers available year-round.

In October, the U.S. Department of Labor raised its own concerns about potential agricultural labor shortages in a relatively obscure notice posted in the Federal Register about upcoming changes to how H-2A wage rates are calculated. The agency noted that the illegal immigration standstill at the U.S.-Mexico border and Trump’s efforts to increase enforcement within the U.S. interior could significantly disrupt domestic food production and prices.

“Much of this illegal inflow artificially boosted the supply of labor at relatively lower costs compared to the labor costs associated with a legal workforce,” the notice warned. The department argued it does not believe there are enough American workers who will make themselves readily available to replace the immigrants no longer entering the country and those choosing to leave or being deported.

Brian Turmail, the vice president of public affairs and workforce for Associated General Contractors of America, has similar concerns. He worries the administration’s push to end Temporary Protected Status and humanitarian parole programs for hundreds of thousands of immigrants will further shrink the available labor force. Turmail argued immigration will continue to be essential for the construction industry until the federal government invests more funding into programs that will incentivize more American workers to enter the field. “Eighty percent of our members tell us they are having a hard time finding qualified workers to hire,” Turmail said.

But Pincin questioned what has become a common defense of welcoming more low-skilled immigrants: Americans simply don’t want to work in industries such as agriculture, construction, or hospitality.

“There might be Americans who won’t do that job for that wage,” he countered. “If there are fewer laborers, well, the wage is going to go up. And so that is going to encourage more workers to come into that industry. The question is, how fast can that occur?”

Hillsdale’s Charles Steele agreed, but he noted that without simultaneous welfare reform, that adjustment might be rocky. One startling statistic indicates nearly 7 million able-bodied American men between the prime working ages of 25 and 54 have left the labor force and aren’t looking for new jobs. “We have unskilled workers coming in, sometimes illegally, and people say we need them. We’re not getting Americans to do these jobs,” Steele said. “But Americans are being subsidized by welfare programs.”

YANAMANDRA TOLD ME she’ll earn a starting salary of $90,000 per year as a senior financial analyst for Pyxus International in Raleigh. She hopes to remain in the United States for years to come to grow her career—and strengthen her faith. “I see a great amount of work over here,” she said. “It’s much more free over here than back home.”

But she knows her plans could change in an instant if she doesn’t win the H-1B visa lottery in February. “It’s not only scary, but also confusing,” she said, referring to Trump’s new rules. “Because we don’t know what’s going to happen next.” Yanamandra and many of her international student friends bear the additional burden of paying off education loans they took out in India to finance their studies abroad. Still, she told me she expected the uncertainty and is trusting God to guide her one step at a time.

“The Lord provides,” she said. “Wherever He takes me.”