In recent years, study after study has demonstrated a simple yet economically powerful truth about broad-based immigration reform: workers with legal status earn more than workers who are unauthorized—and these extra earnings generate more tax revenue, as well as more consumer spending, which creates more jobs. As a new report from the Center for American Progress (CAP) points out, this fact implies that states with appreciable unauthorized populations stand to gain economically from immigration reform that includes a legalization program for the unauthorized. Moreover, a new open letter to Congressional leaders released by the conservative American Action Forum illustrates that it is not only liberal advocacy groups like CAP which recognize the economic potential of immigration reform.
The CAP study begins by quantifying the immense economic gains to the nation as a whole that would flow from a new legalization program:
“If the 11.1 million undocumented immigrants currently living in the United States were provided legal status, then the 10-year cumulative increase in the gross domestic product, or GDP, of the United States would be $832 billion. Similarly, the cumulative increase in the personal income of all Americans over 10 years would be $470 billion. On average over 10 years, immigration reform would create 121,000 new jobs each year. Undocumented immigrants would also benefit and contribute more to the U.S. economy. Over the 10-year period they would earn $392 billion more and pay an additional $109 billion in taxes—$69 billion to the federal government and $40 billion to state and local governments. After 10 years, when the undocumented immigrants start earning citizenship, they will experience additional increases in their income on the order of 10 percent, which will in turn further boost our economy.”
The study then calculates the economic gains from legalization over the course of 10 years for 24 states where 88 percent of all unauthorized immigrants live. Among these are:
Arizona: Legalization would yield a cumulative increase in Gross State Product (GSP) of $23.1 billion; $1.5 billion in additional taxes paid by formerly unauthorized immigrants; and an average of 3,400 new jobs created annually.
Florida: Legalization would yield a cumulative increase in GSP of $55.3 billion; $3.1 billion in additional taxes paid by formerly unauthorized immigrants; and an average of 8,000 new jobs created annually.
Pennsylvania: Legalization would yield a cumulative increase in GSP of $14.8 billion; $810 million in additional taxes paid by formerly unauthorized immigrants, and an average of 2,100 new jobs created annually.
Virginia: Legalization would yield a cumulative increase in GSP of $16.3 billion; $670 million in additional taxes paid by formerly unauthorized immigrants, and an average of 2,400 new jobs created annually.
The study rightly points out that “the sooner we grant legal status and provide a pathway to citizenship to undocumented immigrants, the sooner all Americans will be able to reap these benefits.”
Lest pro-reform views be portrayed as the exclusive domain of political liberals, the May 23 American Action Forum letter to Congressional leaders was signed by 111 conservative economists, including American Action Forum President Douglas Holtz-Eakin, a former Director of the Congressional Budget Office; Arthur B. Laffer, former Chief Economist at the Office of Management and Budget; and R. Glenn Hubbard and Edward Lazear, former Chairmen of the White House Council of Economic Advisers. The letter acknowledges that “immigration reform’s positive impact on population growth, labor force growth, housing and other markets will lead to more rapid economic growth. This, in turn, translates into a positive impact on the federal budget.” Therefore, the signatories urge Congressional leaders “to pass a broad-based immigration reform bill that includes a U.S. visa system more attuned to economic policy objectives. We believe a reformed and efficient immigration system can promote economic growth and ease the challenge of reforming unsustainable federal health and retirement programs.”
Both the CAP report and the American Action Forum letter are signs that numerous experts from across the political spectrum recognize the economic power and potential of immigration reform. Done right, immigration reform legislation could serve as a significant stimulus for the U.S. economy. The dysfunctional status quo, on the other hand, serves no one’s best interests.