A new study finds 1.6 million undocumented workers created 1.25 million jobs and produced 5% of the state’s GDP.

By Mark Kreidler, Capital & Main

This story is produced by the award-winning journalism nonprofit Capital & Main and co-published here with permission.

The conversation around undocumented immigrants in California is inherently political, tied up in dogma and imagery. And because the state has more undocumented people than any other, it often functions as a surrogate for the national debate.

To some researchers studying it, that’s too bad — not because the human and political components of the discussion should be ignored, but because there’s a bigger picture at play in California: The state simply wouldn’t function without the work of undocumented immigrants.

Quietly, in the spaces beyond rhetoric, a host of different industries understand that truth. Their profits depend on it.
 
“It is absolutely ridiculous to hear people say, ‘We’re going to deport them.’ Deport what, your workforce?” said Jamshid Damooei, executive director of the Center for Economics of Social Issues at California Lutheran University. “We got down this rabbit hole because of the politics around the issue.”

The numbers tell the story. According to 2019 data analyzed by Damooei and the center, undocumented immigrants are the source of more than half a trillion dollars of products in the state, either by direct, indirect or induced production levels. Their work adds up to nearly 5% of the state’s gross domestic product, or GDP.

Almost half of California’s agricultural workforce (46%) is undocumented, the report found — but corporate and family farming are only a couple of the industries deeply dependent upon such labor. In Los Angeles County, 28.7% of the construction workforce is undocumented, along with 17.5% in manufacturing, 16% in wholesale trade and more than 15% in retail trade.

“In my county, Ventura, 70% of farm workers are undocumented. In Santa Barbara it’s closer to 80%,” Damooei said. “And that’s just one industry. There is construction, manufacturing, transportation — look, this is just incredibly powerful.”

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The Cal Lutheran report analyzes U.S. Census data that was mined by two primary entities, the Migration Policy Institute and USC’s Center for the Study of Immigrant Integration. The Census work from 2019, Damooei said, is the most recent available.

The information includes both economic and demographic details. Among them:

• About 2.7 million undocumented immigrants live in California, a far higher number than the widely circulated 1.8 million figure estimated by the Pew Research Center.
• More than half have lived in California for 15 years or longer, and 1.9 million – 70% — have lived here for at least a decade.
• Slightly more than 17% of all children in California live with one or more undocumented immigrants. That figure soars to 29% among Latino households. Among Asian households, it’s 13.3%.
• Nearly half of the undocumented immigrants in the state have at least a high-school diploma or equivalent. Some 15% have a bachelor’s, graduate or professional degree.
• Far more undocumented immigrants work in the retail trade than in the state’s agricultural industry.

Cal Lutheran’s analysis found that undocumented immigrants contribute more than $151 billion to California’s economy, which comes to 4.9% of the state’s GDP. In addition, the production of the estimated 1.6 million undocumented workers creates an additional 1.25 million jobs, Damooei said.

They pay taxes, too, generating more than $77 billion in tax revenue in 2019. Some $9 billion of that came in the form of Social Security taxes paid by undocumented workers (via false ID) and their employers. Many workers also paid payroll taxes through an Individual Tax Identification Number, or ITIN.

In other words, many undocumented workers pay for Social Security and other government services that they will never be allowed to use. “They are makers, not takers,” Damooei said. “They are subsidizing our Social Security, they are paying taxes, and they get nothing for it.”

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That dynamic isn’t likely to end soon. Absent a path to citizenship, the best hope for most undocumented immigrants is for California to recognize their importance to the economy — if nothing else — and find ways to integrate them into the equation.

Gov. Gavin Newsom’s administration has moved aggressively on one front, piecing together legislation that now offers health insurance to all residents regardless of their immigration status, assuming they meet the income restrictions to use Medi-Cal, the state’s version of Medicaid.

In other ways, undocumented workers continue to be widely exploited. Damooei said that USC’s research indicated the median wage for an undocumented worker was $13 per hour — half the rate for other workers in the state.

Partly as a result, about a quarter of those living in California without legal immigration status are below the poverty line, and 11% are in abject poverty, which is described as being 50% or more below the line. Absent advocacy, and with about half not speaking English well, there are not many paths out — and the threat of deportation always looms.

That stands in stark contrast to undocumented immigrants’ critical importance to the state’s economy. “They’re here, they are educated, they work, and they are exploited,” Damooei said. “Ask the companies making hundreds of millions of dollars — they know that their fortunes depend on these workers. We’ve got to start integrating them instead of threatening them.”

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