As lawmakers negotiate the contours of an immigration reform bill, they should keep in mind that the granting of legal status to undocumented immigrants would be a boon for the U.S. economy—and allowing undocumented immigrants to eventually become U.S. citizens would be an even bigger boon. Such is the finding of a report from the Center for American Progress (CAP), entitled The Economic Effects of Granting Legal Status and Citizenship to Undocumented Immigrants. The report was authored by Robert Lynch, a Visiting Senior Fellow at CAP and the Everett E. Nuttle professor and chair of the Department of Economics at Washington College, and Patrick Oakford, a Research Assistant at CAP. The authors explain succinctly why legalized immigrants and newly minted U.S. citizens are so economically valuable:
“…legal status and citizenship enable undocumented immigrants to produce and earn significantly more than they do when they are on the economic sidelines. The resulting productivity and wage gains ripple through the economy because immigrants are not just workers—they are also consumers and taxpayers. They will spend their increased earnings on the purchase of food, clothing, housing, cars, and computers. That spending, in turn, will stimulate demand in the economy for more products and services, which creates jobs and expands the economy.”
The report runs the numbers on these economic benefits under three different scenarios.
- The first, admittedly unrealistic scenario supposes that undocumented immigrants are granted legal status and citizenship in 2013. In this scenario, U.S. gross domestic product, or GDP, “would grow by an additional $1.4 trillion cumulatively over the 10 years between 2013 and 2022. What’s more, Americans would earn an additional $791 billion in personal income over the same time period—and the economy would create, on average, an additional 203,000 jobs per year.” In addition, “over 10 years, that additional tax revenue would sum to $184 billion—$116 billion to the federal government and $68 billion to state and local governments.”
- The second scenario presumes that “undocumented immigrants are granted legal status in 2013 and citizenship five years thereafter.” Under this scenario, “the 10-year cumulative increase in U.S. GDP would be $1.1 trillion, and the annual increases in the incomes of Americans would sum to $603 billion.” This “would create 159,000 jobs per year,” and the additional tax revenue generated over the 10-year period would amount to $144 billion—$91 billion in federal taxes and $53 billion in state and local taxes.
- The third scenario is premised on undocumented immigrants being granted legal status starting in 2013, but receiving no eligibility for U.S. citizenship. In this scenario, “the cumulative gain in U.S. GDP between 2013 and 2022 would still be a significant—but comparatively more modest—$832 billion.” In addition, the “annual increases in the incomes of Americans would sum to $470 billion over the 10-year period, and the economy would add an average of 121,000 more jobs per year.” Formerly “undocumented immigrants would pay an additional $109 billion in taxes over the 10-year period—$69 billion to the federal government and $40 billion to state and local governments.”
In short, “the sooner that legal status and citizenship are granted to the unauthorized, the greater the gains will be for the U.S. economy.” Ironically, lawmakers who want undocumented immigrants to receive a legal status in which there is no possibility of citizenship are shortchanging the U.S. economy given that U.S. citizens are able to make the greatest economic contributions. This is because U.S. citizens have the best job opportunities and the highest labor-market returns on their job skills. As a result:
“…legal status and a road map to citizenship for the unauthorized will bring about significant economic gains in terms of growth, earnings, tax revenues, and jobs—all of which will not occur in the absence of immigration reform or with reform that creates a permanent sub-citizen class of residents.”
The CAP report is the latest in a growing collection of studies which demonstrate the economic gains to be had from legalization of the 11 million undocumented immigrants now living in the United States—and from the creation of a pathway to U.S. citizenship for them. Conversely, allowing the status quo to persist, or fancifully attempting to rid the country of all undocumented immigrants, is an economic dead-end.
Photo by Sammers05.