The article is devoted to the study of the problems of illegal migration and the use of migrant labor in the shadow sector of the economy. The author’s division of all labor migrants into three groups is given, according to income level, social status and specifics of the performed works. A large list of different sources consisting of statistical data, analytical reviews, scientific texts and journal articles has been studied. The dependence of poor sectors of the economy on cheap labor provided by labor migrants and, at the same time, the gradual and steady displacement of indigenous local residents by foreign workers in the labor market is shown. The authors come to the conclusion that it is impossible to build an economically developed state and a humane civilized society without solving the problems of illegal migration and its attendant shadow economy.