Study finds Immigration Reform Would Add $1.5 Trillion to US Economy

The Immigrant Policy Center and the Center for American Progress issued a  report on the economic impact of immigration reform.  The report, Raising the Floor for American Workers: The Economic Benefits of Comprehensive Immigration Reform,” was written by Dr. Raul Hinojosa-Ojeda of UCLA.  He found that comprehensive immigration reform that includes a legalization program for unauthorized immigrants and enables a future flow of legal workers would add $1.5 trillion to the U.S. gross domestic product over 10 years. In stark contrast, a deportation-only policy would result in a loss of $2.6 trillion in GDP over 10 years.

Change in Gross Domestic Product from Immigration Reform

The report made several key findings, including:

Comprehensive immigration reform with a legalization program for undocumented immigrants would stimulate the U.S. economy.

  • Immigration reform would increase U.S. GDP by at least 0.84 percent or $1.5 trillion over 10 years.  This economic benefit includes approximately $1.2 trillion in additional consumption and $256 billion in added investment.
  • The benefits of additional GDP growth would be spread broadly throughout the U.S. economy.  Immigrant-heavy sectors such as textiles, electronic equipment, and construction would see particularly large increases.
  • The higher earning power of newly legalized workers would mean increased tax revenues of $4.5 to $5.4 billion in the first three years, thereby reducing the federal deficit.
  • Higher personal income would also generate increased consumer spending—enough to support between 750,000 and 900,000 jobs in the United States.
  • Experience shows that legalized workers open bank accounts, buy homes, and start businesses, further stimulating the U.S. economy.

Comprehensive immigration reform increases all workers’ wages.

  • The real wages of less-skilled newly legalized workers would increase by roughly $4,405 per year, while higher-skilled workers would see their income increase $6,185 per year. The wages of native-born high skill and low skill U.S. workers also increase modestly under comprehensive immigration reform because the “wage floor” rises for all workers..
  • Legalized workers invest more in their human capital, including education, job training, and English-language skills, making them even more productive workers and higher earners.

Mass deportation is costly, lowers wages, and harms the U.S. economy.

  • Mass deportation would reduce U.S. GDP by 1.46 percent, amounting to a cumulative $2.6 trillion loss in GDP over 10 years.  This does not include the actual costs of deportation, which the Center for American Progress estimates would cost $206 billion to $230 billion over five years.
  • Wages would rise for less-skilled native-born workers under a mass deportation scenario, but higher-skilled natives’ wages would decrease, and there would be widespread job loss.

This study confirms that immigration reform is not only the right thing to do for moral and human rights purposes, it is also in our country’s vital self interest.  Call your Senator or Congress person today and urge them to support comprehensive immigration reform!


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