Facts about Immigration and the Economy

The above video addresses five facts about immigration reform and the American economy. Here are some addition facts from the Center from American Progress:

  • Immigration reform will decrease the deficit by hundreds of billions of dollars. The nonpartisan Congressional Budget Office, or CBO, found that S. 744—the Border Security, Economic Opportunity, and Immigration Modernization Act, as passed by the Senate—will reduce the budget deficit by $158 billion in the first decade after the bill’s passage and by an additional $685 billion in the second decade.

  • Permitting undocumented immigrants to gain legal status will significantly expand economic growth. If the 11 million undocumented immigrants in our nation are granted legal status in 2013, the 10-year cumulative increase in U.S. gross domestic product, or GDP, will be $832 billion.

  • Granting legal status to undocumented immigrants will create jobs and increase tax revenues. If undocumented immigrants acquire legal immigration status in 2013, the economy will add an average of 121,000 new jobs per year, and formerly unauthorized workers will pay an additional $109 billion in federal, state, and local taxes over a 10-year period.

  • Immigration reform will increase the earnings of all Americans.Immigration reform that includes a path to citizenship for undocumented immigrants, such as S. 744, will increase the earnings of all American workers by $470 billion over the next decade.

  • Legalization and naturalization of undocumented immigrants will bolster their wages. The annual income of unauthorized immigrants will be 15.1 percent higher within five years if they are granted legal status starting in 2013. In addition, if undocumented immigrants earn their citizenship, their wages will be an additional 10 percent higher.

  • Undocumented immigrants pay billions of dollars in taxes annually.Households headed by unauthorized immigrants paid $10.6 billion in state and local taxes in 2010. This includes $1.2 billion in personal income taxes, $1.2 billion in property taxes, and more than $8 billion paid in sales and excise taxes. Immigrants—even legal immigrants—are barred from most social services, meaning that they pay to support benefits they cannot even receive.

  • Research shows that immigrants complement, rather than compete with, native-born American workers—even less-skilled workers and less-skilled African American workers. Research by renowned economists such as David Card, Gianmarco Ottaviano, Giovanni Peri, and Heidi Shierholz continually shows that American workers are not harmed by—and may even benefit from—immigration because immigrants tend to be complementary workers, helping Americans be more productive.

  • The unemployment rates of native-born Americans will be unaffected by immigration reform. The CBO estimates that during the five-year period following passage of immigration reform, unemployment will increase by 0.1 percent. This small increase falls entirely upon the undocumented and is the short-term effect of growth in the labor force and of the labor market adjusting to undocumented workers positioning themselves to be productive for decades to come.

  • State tax revenue will get a boost from immigration reform. The CBO’s estimated increase in payroll taxes indicates that state tax revenue would increase by about $748 billion by 2033 under S. 744. While state spending on things such as education and Medicare will also rise, the $748 billion in additional revenues will more than cover any rising costs.

  • Taxes paid by legalized immigrants more than offset any use of social programs. The CBO found that increases in costs to social programs are modest and will be more than paid for by the tax contributions of immigrants. The increase in spending in Social Security and Medicare from 2024 through 2033, for example, will be $65 billion—just 4.4 percent of the total increase in tax revenues.

  • Immigrants will pay substantially more into Social Security than they will take out, and their contributions will be essential in supporting retiring Baby Boomers. Assuming that 85 percent of undocumented immigrants gain legal status and citizenship, immigrants will provide a net $606.4 billion contribution to Social Security over the next 36 years—the very same time period when retiring Baby Boomers will place the greatest strain on the system.

  • As Baby Boomers retire en masse over the next 20 years, immigrants will be crucial to fill job openings and promote growth in the labor market. More than two-thirds of new entrants into the labor market will replace retiring workers. But while we will need 58.6 million new workers to fill these retirements, only 51.3 million native-born people are projected to enter the workforce, meaning that immigrants and their children will be crucial in filling the additional 7.3 million openings while also furthering growth in the labor market.

  • Passing the DREAM Act will inject billions of dollars into the American economy while creating more than a million jobs. The DREAM Act would provide a pathway to legal status for eligible young people who complete high school and some college or military service. At least $329 billion and 1.4 million jobs will be added to the American economy over the next two decades if the DREAM Act becomes law.

1 reply »

  1. I have been trying to decide on what my stance is when it comes to immigration and found your fact about the Baby Boomers quite interesting. I had no idea that immigrants are expected to fill the job openings when the time comes to do so. What area of the labor market are you talking about, though?

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