In El Paso, Immigration Brings An $8 Billion Economic Boon

A new study shows that in 2019, immigrant households in the borderland city of El Paso contributed $8.6 billion to the area’s GDP, paid half a billion in taxes and saved thousands of local jobs.

(Photo by Robin Kanouse / CC BY-NC 2.0)

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This story was co-published with El Paso Matters as part of our joint Equitable Cities Reporting Fellowship For Borderland Narratives.

Amid ongoing claims that rising immigration threatens the U.S. economy, a new study finds that immigrants are making a major economic impact in Texas. In the borderland city of El Paso, where more than 200,000 immigrants reside, that impact includes contributing more than $8 billion to the local economy.

“El Paso has always been a city of immigrants,” says 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 Texas Association of Business — shows that in 2019, immigrant households in El Paso contributed $8.6 billion to the metro area’s gross domestic product.

The research also shows that local immigrants – over 90% of whom are from Mexico – paid $591.8 million in taxes, with state and local taxing entities receiving about $440.7 million in tax revenue. Immigrant households, whom the analysis found earned about $4.8 billion in income, were left with about $3.8 billion in spending power.

The El Paso economic impact study highlights “why commonsense immigration reforms are crucial to the continued economic success of Texas,” says Chelsie Kramer, Texas state organizer for the American Immigration Council of Texas for Economic Growth.

Tom Fullerton, a professor of economics at the University of Texas at El Paso, says immigration tends to generate economic growth and net benefits for most regions. El Paso is no outlier.

“Local complaints regarding international immigration have tended to increase during periods of high unemployment,” he says. “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, receive hundreds of migrants daily who are trying to enter the United States. Some are being released to the city’s streets as federal holding facilities and nonprofit shelters are beyond capacity.

Texas Gov. Greg Abbott, meanwhile, has upped his anti-immigrant rhetoric, claiming once again that Texas is facing an “invasion” of migrants. This month, Abbott sent letters to the Texas Department of Public Safety, the Texas Military Department and country judges calling for billions of dollars worth of expanded border security measures, 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, does not just look 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 says.

Immigrant workforce

Due to its proximity to the border – Mexico’s Ciudad Juárez is an easy walk from downtown El Paso – immigration is central to El Paso’s story. 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 says. “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,” says Barela.

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.

Immigrants make up nearly 31% of STEM workers in the city. In the construction and manufacturing industries, they comprise 44.5% and 42.7% of those workforces, respectively.

“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 shows. Immigrants 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 says. “In Texas, immigrants contributed even more on average — $334 more per capita contribution each year than was spent on their behalf.”

While undocumented immigrants cannot access these benefits, they also pay into these programs that benefit all Texans, Kramer notes.

In 2019, about 46,200 of El Paso’s immigrants were undocumented. The study shows 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.

“Undocumented migrants pay state and local sales taxes when they make purchases at registered businesses,” Fullerton explains. “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.”

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, Fullerton says.

Entrepreneurship among El Paso’s immigrants is also on the rise, according to the study. About 13,000 had businesses, which in total generated about $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 shows.

Increasingly highly educated

About 1,711 immigrants temporarily made El Paso their home while enrolled in colleges and universities. In total, these student immigrants supported 600 jobs and contributed $46.5 million in spending during the 2020-2021 academic year.

Public perception and debate have focused on low-skilled immigrants. But the Migration Policy Institute has found that almost one in five Mexicans arriving in Texas between 2013-2017 had a college degree. Nationally, that figure is one in six.

Among Texas’ metro areas, the southwestern cities of El Paso, McAllen and San Antonio have the largest percentage of people with college degrees in their Mexican-born population. That, MPI notes, may suggest that educated Mexican professionals are increasingly moving to cities on or near the southwest border.

“As more Mexican immigrants settle in Texas…local economies and communities stand to gain from this increasingly well-educated workforce,” MPI president Andrew Selee says.

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Christian De Jesus Betancourt is Next City and El Paso Matters' joint Equitable Cities Reporting Fellow for Borderland Narratives. He has been a local news reporter since 2012, having worked at the Temple Daily Telegram, Duncan Banner, Lovington Leader and Hobbs News-Sun. He's also worked as a freelance reporter, photographer, restaurant owner and chef. Born and raised in Juarez, El Paso became Betancourt’s home when he moved there in the seventh grade. 

Tags: immigrationel pasoequitable cities reporting fellowship for borderland narratives

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