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The economic ignorance of immigration restrictionists
Published on Fri, Mar 25, 2011
By Walter Ewing
Prominent immigration restrictionists such as Rep. Lamar Smith (R-Texas) like to pretend that federal and state governments could simply deport their way out of massive budget deficits and high unemployment. By this flawed line of economic reasoning, removing unauthorized immigrants from country would magically free up both jobs and budgets. In reality, removing millions of workers, consumers, and taxpayers would cause national and state economies to contract, resulting in fewer total jobs and less tax revenue. In addition, it would cost hundreds of billions of taxpayer dollars to locate, round up, detain, and deport the 11 million unauthorized men, women, and children now living in the United States.
This is not a recipe for economic recovery; it is a recipe for economic disaster.
Restrictionists who champion the deport-them-all approach to unauthorized immigrants have been relying of late on a deeply flawed 2010 report by the Federation for American Immigration Reform (FAIR), which makes implausible claims about the costs of unauthorized immigrants. The FAIR report and the restrictionists who rely upon it overlook the fact that unauthorized immigrants are not only workers, but consumers as well. Unauthorized workers spend their wages in U.S. businesses — buying food, clothes, appliances, cars, etc. — which sustains the jobs of the workers employed by those businesses. Businesses respond to the presence of new workers and consumers by investing in new restaurants, stores, and production facilities. The end result is more jobs for more workers. For instance, a new report from the Immigration Policy Center (IPC) and the Center for American Progress (CAP) Rising Tide or a Shrinking Pie: The Economic Impact of Legalization Versus Deportation in Arizona estimates that the economic output and consumer spending of unauthorized workers in Arizona sustains 581,000 jobs.
Removing unauthorized immigrants from the U.S. economy means eliminating the jobs they support through their work, their spending, and their tax payments. The Perryman Group estimated in 2008 that extracting the unauthorized population from the country would result in $245 billion in lost Gross Domestic Product (GDP) and 2.8 million lost jobs, even after allowing adequate time for markets to readjust. Plus, there is the cost of actually rounding up and deporting 11 million people. A 2010 CAP study estimates that it would cost $200 billion over five years to apprehend, detain, and deport all unauthorized immigrants now living in the country.
At a time of high unemployment and mounting budget shortfalls, it makes little economic sense to embark upon a costly campaign to remove millions of workers, consumers, and taxpayers from the country. There is a much more sensible alternative: create a program under which unauthorized immigrants — the majority of whom have lived in the United States for more than a decade—can earn legal status. Legal status would increase their wages, which would increase their consumer spending power and their tax payments, which would create new jobs. (It would also improve wages and working conditions for U.S. citizens.) The new IPC/CAP report, for instance, estimates that enabling unauthorized workers in Arizona to earn legal status would add 261,000 jobs to the state’s economy and increase tax revenues by $1.68 billion. Conversely, deporting all of Arizona’s unauthorized workers would cause the state’s economy to shed 581,000 jobs and lose $4.2 billion in tax revenue.
A legalization program for unauthorized immigrants already in the country would act as a much-needed stimulus for the U.S. economy. Trying to deport them all would be economic self-destruction.
Walter Ewing, Ph.D is a Senior Researcher at the Immigration Policy Center.
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