Later On

In an email from the Center for American Progress:

Last week, the Center for American Progress joined with the American Immigration Council to release a study by University of California at Los Angeles professor Raúl Hinojosa-Ojeda that showed that comprehensive immigration reform with a path to legalization for the nation’s undocumented immigrants could generate a cumulative $1.5 trillion in added U.S. gross domestic product (GDP) over 10 years. The report predicts the costs and benefits of three different scenarios: the mass expulsion of undocumented workers, a temporary worker program without legalization, and comprehensive immigration reform that includes a legalization program and a legal flow of future workers. Of the three policy options, Hinojosa asserts that immigration reform is the only approach that would both generate a gain in GDP and boost the wages of all categories of workers. President Obama’s current focus is, understandably, "jobs, jobs, jobs." However, Hinojosa’s findings show that the issues of immigration and the economy are far from mutually exclusive. While anti-immigrant groups use anecdotal evidence to erroneously claim that legalization would be disastrous for the American worker, passing comprehensive immigration reform would not only strengthen the labor market, it would promote needed economic growth. Polling released yesterday additionally shows that 66 percent of voters support a program that requires undocumented immigrants to register, meet certain requirements, and become legal taxpayers on their way to becoming full U.S. citizens.

RAISING THE FLOOR: Hinojosa bases his findings on a simulation model that uses the positive economic effects of the 1986 Immigration Reform and Control Act (IRCA), which granted legal status to 1.7 million undocumented immigrants, as a starting point.  Research has long established that retaining a large population of unauthorized workers has a debilitating effect on wages and working conditions in several key industries. IRCA increased the hourly wages of legalized immigrants an average of 15.1 percent by 1992, thereby raising the floor for all workers. Legalization also significantly increased incentives for these immigrants to "invest in themselves and their communities" and removed "artificial barriers to upward socioeconomic mobility." Though Hinojosa uses IRCA’s legalization program as the basis of his economic model, he acknowledges that the bill failed to "create flexible legal limits on immigration that were capable of responding to ups and downs in future U.S. labor demand." From there, Hinojosa predicts that if immigration reform does include mechanisms that ensure a legal future flow of immigrants, in addition to a path to legalization, it would yield a cumulative total of $1.5 trillion in added GDP over 10 years. According to Hinojosa, this approach would also bring substantial economic gains during the first three years following legalization: unauthorized workers would be granted full labor rights which, in turn, would boost worker productivity, produce $4.5 to $5.4 billion in new net tax revenue, and generate enough consumer spending to support 750,000 to 900,000 jobs. It’s also worth noting that Congress passed IRCA during an economic recession.

SUPPORTING RESEARCH: The libertarian Cato Institute recently took a look at what legalization would specifically mean for U.S. workers and found that legalizing undocumented immigrants and creating future legal channels could increase household income by a total of approximately $180 billion in the 10th year, or a welfare gain of 1.27 percent. The Hinojosa study reaches a remarkably similar conclusion, finding that the addition to GDP in the 10th year following comprehensive immigration reform would total $189 billion. Furthermore, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimated that the Comprehensive Immigration Reform Act of 2006 would have generated $66 billion over a 10-year period in new revenue alone from income and payroll taxes and administrative fees. Another study by Giovanni Peri, Associate Professor of Economics at the University of California-Davis, further illustrated that immigrants usually "complement" the native-born workforce, thereby boosting the productivity and wages of native-born workers in a way that’s reflected in Hinojosa’s simulation. Studies have also confirmed the positive economic benefits of IRCA. Research by the Migration Policy Institute has shown that immigrants "legalized" under IRCA demonstrated steady upward job mobility by 1992. Other studies have also dismissed the claims of restrictionists who view immigration as a zero-sum game. "The notion that unemployed natives could simply be ‘swapped’ for employed unauthorized immigrants is not valid economically," writes the Immigration Policy Center. "In reality, native workers and immigrants workers are not easily interchangeable."

COSTLY ALTERNATIVES: Anti-immigrant groups and many right-wing politicians have relentlessly advocated for an "attrition through enforcement" approach that would effectively translate into deporting as many immigrants as possible and making the lives of undocumented immigrants so miserable that those not caught willingly leave on their own. However, Hinojosa points out that, any enforcement-only approach that leads to the removal of four million immigrant workers and their dependents would amount to a cumulative $2.6 trillion in lost GDP over 10 years, not including the estimated $206 to $230 billion it would cost just to physically deport undocumented immigrants over a five-year period. Some moderate Republicans have also expressed a single-minded emphasis on promoting an expansion of temporary immigrant worker programs and have already indicated they won’t support an immigration reform bill that doesn’t include such provisions. Hinojosa warns that if immigration reform were to solely consist of a temporary worker program, GDP would increase by a comparatively meager cumulative $729 billion over 10 years and result in a wage decline for both native-born and temporary immigrant workers. He concludes that we need to legalize the current population and then we need to create legal channels for a diminished number of future immigrant workers. Meanwhile, some Republicans are clinging to restrictionist policies. Last week for instance, Rep. Gresham Barrett (R-SC) announced his intention to update and reintroduce legislation that would "secure America" by banning and deporting immigrants from "countries designated as State Sponsors of Terrorism." Department of Homeland Security Secretary Janet Napolitano pointed out that "we will never have fully effective law enforcement or national security as long as so many millions remain in the shadows."