Mexican Immigrants Drive Majority of McAllen's Entrepreneurial Success, New Study Reveals

While immigrants are often stereotyped as burdens on taxpayers and sources of societal issues, a recent study by the American Immigration Council paints a vastly different picture—one of immense economic contribution and enrichment, especially in the McAllen, Texas.

Far from being a drain on resources, immigrants in McAllen are driving local business growth, creating jobs, and significantly boosting the economy. Though immigrants made up just 26.8% of the metro area's population in 2019, they accounted for an impressive 61.3% of all entrepreneurs, showcasing their key role in the region's economic vitality.

Immigrant entrepreneurship in McAllen

The study revealed that 28,300 immigrant entrepreneurs in McAllen generated over $541.7 million in business income in 2019. Immigrants were also nearly three times more likely to own businesses than their U.S.-born counterparts, with 24.4% of immigrants running their own businesses compared to just 8.5% of native-born residents.

Immigrant entrepreneurs are particularly active in industries such as professional services, construction, general services, retail trade, and hospitality. Their enterprises are essential to job creation, helping preserve or create 10,500 local manufacturing jobs that might have otherwise moved out of the region.

Beyond entrepreneurship, the study also detailed the broader economic impact of McAllen's immigrant community. In 2019, immigrant households earned $4.6 billion, contributing $534.8 million in federal taxes and $422.9 million in state and local taxes. After taxes, these households had $3.6 billion in spending power, accounting for 34% of the metro area's total spending power.

Immigrants in the workforce

Immigrants' presence in the workforce is equally significant. Immigrants made up 34.9% of McAllen's working-age population and 35.4% of its employed labor force in 2019, contributing $7.2 billion to the area's GDP. They are active in essential sectors like agriculture, construction, wholesale trade, and manufacturing, further reinforcing their importance to the local economy.

Economic impact of undocumented immigrants

The study also highlighted the contributions of undocumented immigrants, who comprised 42.1% of McAllen's immigrant population. In 2019, approximately 96,400 undocumented immigrants lived in the area. Despite their undocumented status, these households contributed $65.8 million in state and local taxes and $52.1 million in federal taxes. Their total earnings amounted to $1.3 billion, leaving $1.2 billion in spending power after taxes.
Undocumented immigrants are particularly prominent in sectors like construction, general services, professional services, retail trade, and hospitality, with construction employing the highest number at 17.3%. The vast majority—95.8%—of undocumented immigrants in McAllen are of Mexican origin.

Immigrant housing contributions

The study also pointed out housing contributions, with immigrant households paying $191.6 million in rent in 2019 and owning property valued at $6.8 billion. However, many immigrants face challenges, particularly regarding healthcare, as 53% of immigrants in McAllen were uninsured in 2019.