ANN ARBOR – For decades, America’s retirement system has depended on a simple equation: workers pay in, retirees draw out.

But new data suggests that equation may be more fragile—and more politically charged—than most Americans realize.

In 2022 alone, undocumented immigrants contributed an estimated $22.6 billion to Social Security and $5.7 billion to Medicare, according to new research from the Mendoza Law Firm. The catch? They are largely barred from ever collecting those benefits.

That means billions flowing into the system from workers who may never receive a dollar back—quietly helping sustain a retirement safety net that more than 70 million Americans rely on every month.

Now, as policymakers debate immigration enforcement and workforce reductions, economists warn that removing these workers could accelerate a financial crisis already closing in.

A System Under Strain

The latest projections from the Social Security Administration show the trust fund could be depleted by 2033, triggering an automatic 19% cut in benefits if Congress fails to act.

That timeline is being driven by a demographic squeeze:

  • In the 1970s: 100 workers supported 20 retirees
  • Today: 100 workers support 34 retirees
  • Every day: 10,000 Americans retire

“This isn’t a distant policy debate—it’s a math problem that is already unfolding,” said Gabriel Ehrlich, an economist at the University of Michigan. “If you reduce the number of workers paying into the system without reducing the number of beneficiaries, you accelerate insolvency. It’s that simple.”

The Workforce America Isn’t Talking About

The report highlights a critical—and often overlooked—fact:

Foreign-born workers have driven 70% of U.S. labor force growth since 2010.

Without them, the workforce would already be shrinking.

At the same time:

  • U.S. fertility fell to 1.6 in 2025
  • Replacement level is 2.1
  • Within five years, deaths are projected to outpace births
  • By 2040, immigration becomes the only source of population growth

That means the future of Social Security depends heavily on a workforce that is politically contested.

Michigan’s Reality: Labor Shortages Are Already Here

In Michigan, this isn’t theoretical—it’s visible on factory floors, farms, and restaurant kitchens.

At an auto supplier outside Detroit, executives say hiring has become one of their biggest constraints. Skilled and semi-skilled labor shortages are slowing production timelines just as electric vehicle demand ramps up.

In West Michigan, fruit growers face a similar challenge. Seasonal immigrant labor is critical during harvest months. Without it, crops risk going unpicked—translating into direct economic losses.

And in the restaurant industry, operators from Ann Arbor to Grand Rapids say chronic understaffing is forcing reduced hours, slower service, and rising wages.

“These aren’t abstract workforce numbers,” Ehrlich added. “These are real production constraints. When businesses can’t find workers, output drops—and so do tax contributions that fund programs like Social Security.”

The Paradox: Paying More, Getting Nothing

Despite their status, many undocumented workers pay payroll taxes using ITINs or borrowed Social Security numbers.

The result is a striking imbalance:

They contribute billions into federal systems—often at higher effective tax rates than major corporations like Tesla and ExxonMobil—yet are excluded from collecting benefits.

From a financial standpoint, that makes them a net positive contributor to Social Security.

Remove them, and the system loses revenue without reducing future obligations.

Policy Meets Political Reality

This is where the story intersects directly with the 2026 midterm elections.

Immigration enforcement is expected to be a defining issue, with candidates across the country proposing stricter policies, expanded removals, or reduced legal immigration pathways.

But those positions now collide with a less visible consequence:

  • Fewer workers = less payroll tax revenue
  • Less revenue = faster trust fund depletion
  • Faster depletion = benefit cuts for retirees

The Congressional Budget Office has repeatedly warned that workforce growth is a key variable in long-term fiscal stability.

That puts voters—and policymakers—in a difficult position.

Protect the labor force that helps fund retirement programs?
Or reduce it in pursuit of enforcement goals?

“You can’t separate immigration policy from economic outcomes anymore,” Ehrlich said. “The labor force is the tax base. And the tax base is what keeps Social Security afloat.”

A System at a Crossroads

At its core, the U.S. retirement system is facing three converging pressures:

  • An aging population
  • Declining birth rates
  • A shrinking domestic workforce

Undocumented workers, and immigrant labor more broadly, are currently helping offset those pressures.

But if that workforce declines, the timeline toward insolvency accelerates.

And the consequences won’t be abstract.

They will show up in smaller monthly checks for retirees who spent decades paying into the system.

America’s retirement system is increasingly dependent on a workforce that many political debates overlook.

Right now, undocumented workers are helping buy time—contributing billions into a system they may never benefit from.

But as the 2026 midterms approach, one reality is becoming harder to ignore:

The future of Social Security may hinge not just on taxes or retirement age—but on who is allowed to work in the United States at all.