Businesses owned by undocumented immigrants create U.S. jobs, fuel economy

Donald Trump’s administration paints a picture of undocumented immigrants as freeloaders or depraved criminals. The Department of Homeland Security’s recent news releases trumpet a steady stream of headlines about deporting the worst offenders.

In reality, only 5% of those detained by the U.S. Immigration and Customs Enforcement this year had violent criminal convictions, according to a recent Cato Institute report.

Contrary to the president's rhetoric, undocumented immigrants often hold jobs that employers struggle to fill with U.S. workers. The country’s economy relies on essential workers in those industries, including agriculture and food, construction, hospitality, restaurants, caregiving and more.

Lesser known is that undocumented people are also entrepreneurs and business owners. In the U.S. there were 1.1 million undocumented entrepreneurs in 2023, according to the American Immigration Council’s analysis of U.S. Census data. They pay taxes — and sometimes hire employees who are U.S. citizens.

Illinois alone is home to 42,900 undocumented entrepreneurs, according to the American Immigration Council, a Washington, D.C.-based-nonprofit.

It’s not necessary to be a U.S. citizen to own a business, said Shannon Shepherd, a lawyer at Chicago-based Immigration Attorneys. Nor do business owners need to prove their immigration status. An undocumented person can apply for a business license, run a business and pay personal and business taxes with an employee identification number or individual tax identification number.

Shepherd noted that being undocumented doesn’t necessarily mean someone crossed the U.S. border without papers. Someone could have overstayed their visa or unsuccessfully applied for legal status.

"It’s a much broader population than people realize," Shepherd said.

Furthermore, undocumented immigrants are diverse. Shepherd has clients from Europe, as well as other parts of the world.

Some of them "were not trying to skirt the law, but they couldn’t figure out the system," she said. Or they tried to get an employer to sponsor them but it didn’t work. "That’s why they ended up starting their own business."

Deportations don’t just affect undocumented business owners and their families, but also their employees, Shepherd pointed out.

Undocumented entrepreneurs own businesses that contribute to local economies by hiring workers, providing essential services and purchasing goods.

"Deporting these entrepreneurs would mean closing local businesses that are vital to the state’s economy, threatening the jobs of both immigrant and U.S.-born workers," said Steven Hubbard, senior data scientist with the American Immigration Council.

"Mass deportation would worsen Illinois’s labor shortages, especially in industries already struggling to hire, such as construction. Fewer entrepreneurs mean fewer services and higher prices — hurting consumers across the state," Hubbard added.

Removing undocumented entrepreneurs would create losses in sales tax, income tax and property tax revenues and contract Illinois’ tax base.

And the cost of carrying out mass deportations "would be enormous — potentially billions in enforcement and lost productivity across the country," according to the American Immigration Council’s Mass Deportation Report.

About 15% of entrepreneurs in the construction industry are undocumented, according to the council. An estimated 9.1% of entrepreneurs in professional services — such as landscaping, building maintenance and waste management — are undocumented. Undocumented people account for about 8.5% of entrepreneurs in "general services." That category includes barbershops, beauty salons, automotive repair, car washes and other personal services.

Shepherd has seen a lot in more than 20 years of practicing immigration law. What stands out now is the fear among her clients. People with legal immigration status, green cards and even U.S. citizens are also anxious about Trump’s deportation campaign.

"There’s a lot of fear in all immigrant communities," she said. "This is definitely different because of the aggressive way that they’re carrying out raids."

Shepherd observed that raids during the Barack Obama and George W. Bush’s administrations were more contained and "not randomly going to neighborhoods and pulling people out of cars." In contrast, the current raids "are meant to instill fear — and it’s working," she said.

Shepherd's general advice to affected people: Don’t sign anything you don’t understand, and don’t necessarily believe everything immigration agents say. Their goal is to get people to sign documents to get them to leave the U.S. You also have the right to talk to an attorney.

Javier Haro, founder of food incubator and culinary school Food He.ro in the predominately Latino Little Village, noticed the number of undocumented entrepreneurs through his work during the COVID-19 pandemic.

The federal government’s narrative is that undocumented immigrants are unproductive, said Haro. On the contrary, he met people without legal status who have businesses, created jobs and paid taxes. Many have been in the U.S. 15 to 20 years.

"They have homes and children here," said Haro.

In spite of rampant fear, Haro thinks many undocumented immigrants will stay in the Chicago area.

"They have already made this their country."

Now they are looking at other ways to survive and support their families.

"We’re still seeing the entrepreneurial spirit alive, but it’s getting more creative," he said.

Haro also noted the Chicago area's strong community unity in response to the deportations, and U.S. citizens supporting those who are not.

"We’re dealing with all these challenges," he said. "It’s a resilient community."

Amy Yee is a business and economy reporter for the Sun-Times. She is author of “Far From the Rooftop of the World: Travels among Tibetan Refugees on Four Continents,” with a foreword by the Dalai Lama.