WASHINGTON—Discussions are moving forward on comprehensive immigration reform that would provide legal status for the estimated 11 million undocumented immigrants living in the country. Public opinion has moved toward granting some form of legal status for undocumented immigrants, but concerns persist that granting a pathway to legal status or to citizenship will lower wages and raise unemployment.
The Center for American Progress (CAP) released a report on March 20, which concluded that these concerns have no basis.
“The Economic Effects of Granting Legal Status and Citizenship to Undocumented Immigrants,” by Robert Lynch, visiting senior fellow at the Center for American Progress (CAP) and Patrick Oakford, research assistant at the center, looked at various scenarios defined by legal status, citizenship, and the timing of each, to predict changes in the U.S. economy, wages, tax revenues, and number of jobs created.
“As our study demonstrates, legal status and a road map to citizenship for the unauthorized will bring about significant economic gains in terms of growth, earnings, tax revenues, and jobs—all of which will not occur in the absence of immigration reform,” wrote Lynch and Oakford.
The greatest economic benefit to the undocumented and to the nation as a whole would come from full citizenship this year, say the authors, who recognize that no plan is in the works for immediate amnesty for all undocumented immigrants.
More modest economic gains can be expected if reform means granting legal status short of full citizenship, in other words, “a permanent sub-citizen class of residents.” More gains also occur when citizenship becomes possible in 5 or 10 years.
There are a multitude of reasons why legalization and citizenship improves the incomes of immigrants.
Having legal protection increases immigrants’ “bargaining power relative to their employers, which in turn lowers the likelihood of worker exploitation and suppressed wages,” the authors say. Citizenship provides greater protection than legalization; citizens, for example, cannot be deported, which is not true for legal residents, say the authors.
Legal workers and naturalized citizen immigrants are more likely to “invest in their English language skills and other forms of education and training that raise their productivity.”
Unauthorized immigrants can be deported at any moment if they are found, and so, regardless of skills and education, Lynch and Oakford say, “they tend to pursue employment in low-paying occupations, such as farming, child care, cleaning services,” where their legal status is less likely to be detected.
Legal status and citizenship foster entrepreneurship “by providing access to licenses, permits, insurance, and credit to start businesses and create jobs.” It’s a fact that immigrants, whether legal or illegal, are more likely to own a business or start a new business than nonimmigrants.
“Immigration reform that untethers the creative potential of immigrant entrepreneurs therefore promotes economic growth, higher incomes, and more job opportunities,” says the report.
While overall, Americans would benefit from legalization of the undocumented, David Madland and Nick Bunker, who are also associated with CAP, say that some immigrants “may find themselves in more competition with newly legalized workers, and the research suggest that the wages of the former group may suffer.”
Earned Path to Citizenship Favored Now
On March 21, the Public Religion Research Institute (PRRI) in partnership with the Brookings Institution released a new national survey that included queries on immigration reform. It used one of the largest sample sizes ever conducted on the issue of immigration, with nearly 4,500 respondents, which provides a great amount of precision for the estimates.
The survey found a general consensus in the country that persons residing illegally in the United States should be allowed at least legal status. A majority favored citizenship, provided certain conditions are met.
Overall, 63 percent of Americans endorse a path to citizenship for the undocumented. One in seven (14 percent) would permit them to become permanent legal residents but not citizens. One in five (21 percent) of Americans believe that the illegal immigrants should be identified and deported.
Breaking out the percentages by political party, 71 percent of Democrats were in favor of a path to citizenship for the undocumented; 64 percent of Independents agree, and a smaller majority of Republicans (53 percent) “favor an earned path to citizenship,” says the report. Nearly one-third of Republicans (32 percent) favor deportation, compared to 13 percent of Democrats and 21 percent of Independents.
The survey determined that Americans have mixed feelings about immigrants—legal and illegal. While a majority (54 percent) say that the newcomers help “strengthen American society,” a majority are concerned about adverse economic impacts. The survey report said that 56 percent of Americans believe “that illegal immigrants hurt the economy by driving down wages for many Americans.” Lynch and Oakford want to educate the public that these common notions are not borne out by their analysis.
Immigrant Scenario Modeling
Lynch and Oakford’s paper examined several options on the legalization of the undocumented, including granting a pathway to full citizenship for all 11 million, which is favored by President Obama and the senators known as the Gang of Eight. Granting permanent legal status short of full citizenship is another option being considered.
The length of time an undocumented immigrant would have to wait to acquire either legal status or citizenship is another factor that legislators have to determine.
The third option is to do nothing, or else round up the illegal immigrants and deport them, or make life so difficult that the undocumented “self-deport,” as 2012 Republican presidential candidate Mitt Romney once put it.
Lynch and Oakford did econometric regression forecast modeling that looked at various scenarios. In the scenario of granting immediate citizenship, the U.S. economy, as measured by gross domestic product (GDP), would expand by an additional $1.4 trillion over 10 years, 2013–2022. The economy would create an additional 203,000 jobs per year. The formerly undocumented immigrants would earn 25 percent more than they do currently within five years.
Considering another scenario in which the undocumented immigrants are granted only legal status in 2013 and barred from citizenship in the next 10 years, the GDP would rise only $832 billion, the economy would add only 121,000 additional jobs per year, and the income of unauthorized immigrants would be only 15 percent higher within five years. While these economic gains are appreciably less than the immediate citizenship scenario, they show that just legalization without citizenship is better for the economy than doing nothing.
A third scenario of granting legal status in 2013 and delaying citizenship for five years would likely fall in the middle of the other two scenarios, according to the authors.
“These immigration reform scenarios illustrate that unauthorized immigrants are currently earning far less than their potential, paying less in taxes, and contributing significantly less to the U.S. economy than they potentially could,” say the authors.
Significantly, Lynch and Oakford’s findings were consistent with the 1996 Department of Labor study of the nearly 3 million unauthorized immigrants, who were granted legal status and a pathway to citizenship under the Immigration Reform and Control Act of 1986. Here was a natural experiment to see how legalization affects wages. Following legalization, “the average hourly wage of the newly legalized population increased by 15.1 percent after five years, after legalization,” noted the authors.
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