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Shadow Economic Contribution of Immigrants to New York Estimated at $40 Billion

Immigrants who work informal jobs provide a major contribution to the vast underground economy of New York. According to a new report by the Fiscal Policy Institute, an influential think tank based in Manhattan, undocumented immigrants inject $40 billion each year to the economy of the Empire State.

 

The Fiscal Policy Institute believes that undocumented immigrants represent five percent of the New York economy, which means that they pay more than one billion dollars each year in taxes that are may not be deducted directly from their wages. In New York City alone, there are more than 570,000 undocumented immigrants working under the table for a total of 817,000 across New York State.

 

According to David Dyssegaard Kallick, a researcher who specializes in immigration policy, the misconception of immigrants who do not pay taxes and who are a public charge to the national economy is overblown by the rhetoric of the Trump administration. Based on figures provided by the United States Census bureau, many undocumented immigrants pay a fair share of taxes often enabled by false documents.

 

Should all undocumented immigrants be legalized at once in New York, the revenue realized from their taxes would increase by four percent. Amazingly, the unemployment rate among undocumented immigrants is considerably lower than the national average.

 

It is important to note that the wages earned by undocumented immigrants tend to be on the lower spectrum. In other words, their contributions to the economy are not necessarily tantamount to quality of life. Opponents to immigration often mention that a substantial portion of income earned by undocumented workers goes abroad and is not fully taxed.

 

The underground cash economy of New York is difficult to measure. In recent years, there have been attempts to quantify the size of this shadow economy by means of Census surveys, but there are still many smaller cash transactions that often go unreported and untaxed. To this effect, it makes little difference if a legal and licensed landscaper in Long Island pockets $40 or if crews of undocumented immigrants do that same job for a little less cash. As long as the transaction goes unreported, it is still part of the shadow economy.

 

 

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