Immigrants and the Economy

The economic consequences of not approving a new comprehensive immigration policy were never a major part of the national debate on this issue. The fact that important segments of the American economy may collapse (agriculture, construction, services, etc.) in the 21st century without a continuous influx of immigrants was barely discussed.” Sergio Bendixen, 2007

As the momentum for immigration reform builds it is crucial that lawmakers and the public are able to access information on the importance of immigrant workers to our economy. The issue of immigration is an essential element to our commitment to building a robust economic future for America. We cannot build a strong economic system on the back of a broken immigration system.

This page will highlight the latest research and news items on immigrants and the economy to make sure the hard facts are available in the midst of a debate that can be filled with intense rhetoric.

Click here for Talking points on Immigration Reform and the Economy.

Click here to read “Building Washington’s Future: Immigrant Workers’ Contributions to Our State’s Economy” (OneAmerica, April 2008)

Economic Benefits of Immigration Reform

“Raising the Floor for American Workers: The Economic Benefits of Comprehensive Immigration Reform” recently concluded that comprehensive immigration reform that includes a legalization program for unauthorized immigrants and enables a future flow of legal workers would result in $1.5 trillion in added U.S. gross domestic product over 10 years. Reversely, a deportation-only policy would result in a loss of $2.6 trillion in GDP over 10 years. The report finds that wages would rise for immigrant and native workers.

The report uses a computable general equilibrium model based on the historical experience of 1986 IRCA, which legalized approximately 3 million people during a recession. This historical experience provides strong examples of how the economy would react to legalization during a recession. Studies from IRCA show that immigrants went on to earn higher wages and move on to better jobs. Additionally, IRCA spurred investments in education, home, and small business investments. These investments are not included in the 1.5 trillion dollar estimate, which is actually a conservative baseline estimate.

“Principles for an Immigration Policy to Strengthen & Expand the American Middle Class,” released in December 2009 by the Drum Major Institute acknowledges the contributions immigrants make to our economy and  considers how immigration policy can be used to expand the middle class to more working people. Immigration policy that keeps immigrants in the shadows and exploits immigrant workers hurts the ability of low income workers to join the middle class. The report considers how the fear of deportation of immigrant workers affects unionization and contributes to the disempowerment of all workers. The authors state, “In the same way that education and tax policies are integral to the size and strength of our nation’s middle class, immigration policy is also critical.”

"Restriction or Legalization? Measuring the Economic Benefits of Immigration Reform," released in August 2009 by the Cato Institute, looked at the economic impact of seven different immigration reform scenarios, including increased enforcement at the border and in the workplace and different legalization options. The report found that immigration reform scenarios with legalization options for low-skilled immigrants have significant economic benefits for U.S. households and that increased enforcement and reductions in low-skilled immigrants were detrimental to the same households. In addition, the study finds that immigrants of all skill levels create more jobs than the take.

 Immigrants’ Contributions to the Economy

“Immigrants and the Economy: Contributions of Immigrant Workers to the Country’s 25 Largest Metropolitan Areas” was recently released by New York’s Fiscal Policy Institute. FPI’s report provides analysis of immigrant workers crucial economic contributions to the U.S. and to their local economies. Immigrants are likely to be of prime working age, work in occupations across the economic spectrum, and contribute robustly to economic growth in each of the 25 metropolitan areas studied and in the United States as a whole. FPI found that immigration and economic growth of metro areas go hand in hand and that immigrants contribute to the economy in proportion to their share of the economy. Seattle specific data is included.

“Assessing the Economic Impact of Immigration at the State and Local Level” is a survey of 15 state studies, including OneAmerica’s, that find that immigrants contribute to the economy. States found that immigrants put more into state coffers than they take out and that undocumented immigrants add significantly to state and local economies.  The report also addresses the faulty reasoning with some studies that find that immigrants are “drains” to the economy.

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