Setting aside political biases against immigration reform and notwithstanding the politically-motivated temporary hold on President Obama’s Immigration Executive Actions, the economic benefits of deferred action (DACA and DAPA) are impossible to ignore. While economic implications are at the center of the controversies, economists and public policy researchers have been able to make a strong case for the predicted long-term positive impact of both comprehensive immigration reform and the President’s executive actions.
According to a thorough analysis by the President’s Council of Economic Advisers (CEA), the President’s executive actions on immigration would boost our economy, reduce the federal deficit, and help all workers by increasing worker productivity, creating more jobs, and improving wages of all workers, all without having any appreciable impact on native-born employment. Importantly, the CEA predicted that the country’s Gross Domestic Product (GDP) would increase significantly, with predicted increases to the amount of $210 billion by 2024.
At present, it is hypothesized that two-thirds of the individuals potentially eligible for deferred action under Obama’s executive actions do not pay taxes today although many are already in the workforce. The new programs will expand the country’s tax base by millions of people and billions of dollars through mandating contributions to federal, state, and local taxes. The Center for American Progress (CAP) estimated $2.9 billion in tax revenues can be accrued during the next year if 4.7 million undocumented immigrants with a minor child received temporary stay and work authorization. The payroll tax revenue could increase further in the next five years to $21.2 billion, according to CAP.
Professor Raul Hinojosa-Ojeda, Ph.D. of UCLA wrote a paper for the Cato Institute, a renowned public policy research organization and political think tank, in which he employed a dynamic model called the GMig2 to study comprehensive immigration reform’s impact on the United States economy. He found that a full legalization of unlawful immigrants will increase U.S. GDP by about $700 billion dollars over the next ten years, primarily by allowing the legalized workers to be more productive. Although impact on the GDP would be smaller under an executive order, Dr. Hinojosa-Ojeda concluded that it would still produce somewhere around $100 billion of more GDP within ten years, which will boost our economy considerably.
According to the Fiscal Policy Institute in New York State, the executive actions are likely to result in nearly $100 million in added state and local revenues, per year. According to CAP, other states would likewise experience tax gains as unauthorized immigrants begin to work legally and file taxes for either the first time or on slightly higher wages.
At the Shulman Law Group, LLC, we are delighted to discuss the research on the economic benefits of President Obama’s executive actions as well as to discuss the positive financial consequences of comprehensive immigration reform. We take particular pride in the fact that many of the clients whom we have helped to legalize their status in the United States have become entrepreneurs and innovators, contributing greatly to the economy of the United States. With the implementation of the new executive actions, we look forward to seeing our clients realize their financial potential in the United States and to playing an important role in boosting our local and national economies.