Analysis | Immigrants drive Alabama’s economy despite political rhetoric

In a state where economic challenges frequently dominate headlines, the role of immigrants — particularly undocumented workers — remains a critical yet underappreciated factor in Alabama’s economic equation.

Immigrants make up a modest 4 percent of the state’s population, with undocumented individuals comprising about 1.2 percent. Yet their impact on key industries, public finances, and community well-being far exceeds their numbers. From construction sites to farmlands, their labor fuels Alabama’s economy, underscoring the inextricable link between immigration policy and economic prosperity.

The Backbone of Alabama’s Economy

Immigrants are indispensable to Alabama’s economy, filling crucial roles in industries that are vital to the state’s success. In the construction sector, immigrants account for 9 percent of the workforce, providing the manpower required to complete infrastructure projects and housing developments. Without their contributions, delays in projects ranging from highways to new commercial centers would become routine.

Agriculture, one of Alabama’s economic cornerstones, depends heavily on immigrant labor, particularly for tasks that domestic workers often avoid, such as planting, harvesting, and processing. In 2021, Alabama ranked among the top 20 states in agricultural production, a feat impossible without the labor of immigrants.

The hospitality and food services industries, essential to Alabama’s $17 billion tourism sector, also rely on immigrants to keep operations running. Furthermore, immigrants constitute 7 percent of the workforce in building and grounds maintenance, ensuring public and private spaces across the state remain clean and functional.

The collective absence of immigrant workers would send shockwaves through these industries, leading to unharvested crops, stalled infrastructure projects, and disrupted local economies.

Fiscal Contributions of Undocumented Immigrants

Despite their undocumented status, immigrants are far from economic drains; instead, they actively support Alabama’s public finances.

In 2022, undocumented immigrants contributed an estimated $146 million in state and local taxes, funding public services such as schools, healthcare, and transportation infrastructure. These taxes include sales, property, and income taxes, underscoring their integration into the state’s financial systems.

Nationally, undocumented immigrants pay nearly $12 billion in state and local taxes annually, a figure that highlights their significant contributions even without access to many public benefits. In Alabama, where state revenues often fall short of critical needs, this infusion of funds is particularly crucial.

Immigrants also bring economic diversity and skills to Alabama. Approximately 33 percent of adult immigrants hold a college degree, exceeding the rate of the native-born population. This higher education level bolsters industries requiring specialized skills, from healthcare to technology, complementing the manual labor roles immigrants also fill.

The High Costs of Restrictionist Policies

Enforcing restrictive immigration policies would create severe economic repercussions for Alabama. Labor shortages, already a challenge in agriculture and construction, would escalate into a full-blown crisis. With fewer workers to plant and harvest, crops could rot in fields, causing financial losses for farmers and threatening Alabama’s agricultural output.

The fallout would extend to public finances as well. The removal of undocumented immigrants would result in the loss of $146 million annually in tax revenue, widening budgetary gaps and straining public services. Alabama’s gross domestic product (GDP) would decline, as industries reliant on immigrant labor — such as food processing, manufacturing, and hospitality — struggle to operate efficiently.

Similar scenarios have played out elsewhere. After enacting harsh anti-immigration laws in 2011, Georgia’s agriculture sector faced labor shortages so severe that farmers reported $140 million in unharvested crops. Alabama could face even greater losses given its reliance on immigrant labor across multiple sectors.

A Path Forward: Balancing Enforcement with Economic Reality

While tough-on-immigration rhetoric may appeal to certain political constituencies, it is increasingly at odds with Alabama’s economic needs. Immigrants are not just workers but integral members of the communities they serve, contributing to the state’s fiscal health and social fabric.

Ignoring these realities for short-term political gains risks long-term economic stagnation.

Pragmatic solutions could include creating pathways to legal residency or citizenship for undocumented workers, allowing them to integrate fully into the formal economy. Such measures would stabilize labor markets, secure Alabama’s agricultural and industrial outputs, and ensure businesses have access to the workforce they need to thrive.

Additionally, fostering an inclusive environment would benefit all Alabamians. Reducing fear and uncertainty among immigrant communities can enhance productivity, encourage entrepreneurship, and strengthen social cohesion. States that have adopted such measures have seen economic gains, proving that policies rooted in pragmatism and inclusivity pay dividends.

Immigration as an Economic Opportunity

Alabama stands at a turning point. It can continue pursuing policies that undermine the immigrant workforce and destabilize the state’s economy, or they can embrace solutions that acknowledge immigrants’ indispensable contributions. Immigrants — documented and undocumented alike — play a pivotal role in Alabama’s industries, tax base, and communities. Removing them would create labor shortages, drain public revenues, and harm the sectors that sustain the state.

The future of Alabama’s prosperity depends on crafting policies that balance enforcement with economic realities. Immigration is not merely a challenge to navigate but an opportunity to seize. Recognizing the value of immigrants in shaping Alabama’s economy is not only practical but imperative for a thriving and inclusive future.