Now that President Biden has proposed legislation that would legalize all undocumented persons who were in the U.S. before Jan 1, 2021, I thought that I should discuss the economic impact of this proposal. The organization New American Economy (NAE) is a bipartisan research and advocacy organization fighting for smart federal, state, and local immigration policies that help grow our economy and create jobs for all Americans. They discuss the reasons why having a large undocumented population is a problem – it undermines law and order, permits a shadow economy that is hard to regulate, and is unfair to those who have had the good fortune to be able to immigrate legally. But they also point out that a large number of the nearly 11 million undocumented immigrants here are working, paying taxes, and starting/running their own business which creates jobs for others. You can find the entire article along with links to the scholarly research that forms the basis for the report here https://www.newamericaneconomy.org/issues/undocumented-immigrants. I am writing this to summarize some of the findings in this report for my readers.
Undocumented immigration is not linked to a spike in U.S. crime rates. NAE points out that between 1990 and 2013, a period when the number of undocumented immigrants more than tripled, the rate of violent crime in the U.S. fell by 48%. Undocumented persons are net contributors to Medicare and Social Security and have a similar positive effect on state and local taxes. In Florida, a state with a large undocumented population, the undocumented pay more in state and local taxes than they use in public resources like education. In 2016, undocumented immigrants contribution $ 543 million in state and local taxes. The same year the business income of undocumented entrepreneurs in Florida was $ 1.4 billion. This has certainly increased substantially since that time.
The New American Economy discusses the costs of deportation. In addition to the more than $ 400 billion that it would cost the U.S. government to remove them, the economic cost would be even greater. They estimate a reduction of U.S. GDP of $ 1.6 trillion and a shrinking of the U.S. economy of 5.7 %. NAE stated, “By even the most conservative estimates, finding, apprehending, detaining, processing, and transporting the undocumented population would deal a Great Recession-like blow to the U.S. economy.”
Some think that deporting undocumented workers would automatically create more jobs for unemployed Americans. But this ignores the reality that we would be shrinking consumers, entrepreneurs, and taxpayers. Also, Native Americans and immigrants often possess different skills and educational levels and many immigrants take jobs that Americans simply don’t want. These would be food processing workers, agricultural workers, grounds maintenance people, construction trade workers among other positions. Alabama enacted a restrictive immigration law and within one year, 70,000 jobs were lost in Alabama. It is estimated that this law cost Alabama $ 10.3 Billion in GDP. Arizona jobs decreased by 2.5 % due to the passage of a strict immigration law.
If Congress provides a path to the legalization of those already here, there would be significant economic benefits. While the new legal status would offer access to a variety of public benefits programs, it would also allow newly documented immigrants to pursue new job opportunities and education, boosting productivity and earnings and the higher earnings would increase consumer spending and tax revenues to federal, state and local governments. The key statistics that are mentioned include $ 68 billion in additional state and local tax revenues within a decade, $ 116 billion in additional federal tax revenues.
Clearly, we must consider the humanitarian issues in our considerations. We have many undocumented people in the U.S. who have lived here for decades, have U.S. Citizen children and grandchildren, who have built businesses and contributed to the wonderful diversity of our country. But if this doesn’t convince you of the need for significant immigration reform please consider the economics of the immigration reform and the positive impact it will have on our economy.
- Refugees, Asylum, and other humanitarian relief. - February 9, 2024
- Florida Anti-Immigrant Legislation - May 30, 2023
- Undocumented Immigrants Pay Taxes—Even Income Taxes. - April 25, 2023
