How Would Removing Undocumented Workers Affect You Financially?

Much of the discussion about removing undocumented workers focuses on punishment for violation of our immigration laws. These violations would include entering the U.S. without inspection, staying longer than authorized, or working without permission. Few of us consider the financial effect of mass deportation on U.S. citizens. In discussing controversial issues, I always like to appeal to enlightened self-interest. The economic impact of mass deportation to U.S. citizens is an aspect of the immigration debate which most people do not consider. Most do not even imagine that this would have a negative impact on their lives and finances. We often hear that foreign workers take jobs from Americans, they depress wages, they are a drain on the economy, they don’t pay taxes, etc.

There is some evidence that foreign nationals who entered the U.S. illegally may have slightly depressed the wages of native-born high school dropouts, but there is no credible evidence of adverse financial effects on other workers. Rather, the research has shown that immigration (legal and otherwise) has resulted in new businesses that create jobs, a revitalization of our workforce, and an economic revitalization of areas struggling with population decline and declines in housing prices.

The Center for American Progress (CAP) conducted an extensive economic analysis which was posted on 9/3/2016. The study – The Economic Impacts of Removing Unauthorized Immigrant Workers – included an Industry, State and Country Analysis. The study pointed to estimates that there are 11.3 million unauthorized immigrants in the U.S. (3.5 % of the 2015 U.S. population.) Of these 11.3 million CAP estimated that 7 million are workers. Many of the others are children.

The major findings of the CAP report are as follows:

  1. A policy of mass deportation would immediately reduce the Nation’s GDP by 1.4 %, and ultimately by 2.6 %, and reduce cumulative GDP over 10 years by $4.7 trillion … Removing 7 million unauthorized workers would reduce national employment by an amount similar to that experienced during the Great Recession
  1. Mass deportation would cost the federal government nearly $900 billion in lost revenue over 10 years.
  1. Hard-hit industries would see double-digit reductions in their workforces.
  1. The largest declines in GDP would occur in the largest industries, not in immigrant-heavy industries … The three largest U.S. industries in terms of value added are financial activities, manufacturing, and wholesale and retail trade. Annual long-run GDP losses in those industries would reach $ 54.3 billion, $73.8 billion and $64.9 billion, respectively.
  1. States with the most unauthorized workers will experience the largest declines in state GDP. We estimate that GDP in California, for example, will ultimately fall by $103 billion annually-or roughly a 5% drop – if mass deportation occurs.

It is important to note that the economic study posted on 9/3/2016 focused only on the economic effects of removing 7 million unauthorized workers.  It did not estimate the cost of removing more than 11 million consumers of goods and service. It also did not consider the direct cost to the U.S. government of physically deporting 11.3 million people but in a previous report the CAP estimated this cost to be $114 billion. The report also did not consider the harmful noneconomic costs to communities and families. It should be pointed out that many of the undocumented are business owners who employ U.S. workers, are long term valued employees of U.S. businesses, community leaders and/or homeowners with mortgages.

So, in forming your opinions about what the U.S. should do about the 11.3 million undocumented people in the country, it is important to not just react in an emotional way but to seriously consider what it would do to the economy of the U.S., our businesses, our communities and to you.

Linda M Kaplan
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