Quick Hit Ellyn Fortino Wednesday March 20th, 2013, 1:57pm

Comprehensive Immigration Reform Would Improve Sluggish U.S. Economy, New Report Shows

A legal status and road map to citizenship for the 11 million undocumented immigrants in the country would have positive impacts on the U.S. economy, and the sooner reform is implemented, the bigger the gains, a new report from the Center for American Progress shows. 

Citizenship for the undocumented brings significant increases in economic growth and earnings as well as tax revenues and jobs, said the report’s co-author Robert Lynch, visiting senior fellow at the Center for American Progress.

“Legal status and citizenship enable the undocumented to produce and earn much more,” he said. “The resulting productivity and wage gains then ripple through the economy because immigrants are not just workers, they are also consumers and tax payers. They will spend their increased earnings on thousands of things.”

The report delves in to three economic-impact scenarios, including what would happen if the 11 million undocumented immigrants in the U.S. were granted citizenship this year; granted legal status now and with the ability to earn citizenship five years later; or awarded legal status now and citizenship 10 years later.

Under the first scenario of granting legal status and citizenship now, the U.S. gross domestic product, or GDP, would grow by an additional $1.4 trillion cumulatively over 10 years, according to the study, “The Economic Effects of Granting Legal Status and Citizenship to Undocumented Immigrants.”

Americans would earn an additional $791 billion in personal income over the same time period and about 203,000 additional jobs would be created per year, the report reads.

Within five years of the reform, immigrants would be earning 25.1 percent more than they currently do, which would result in significantly more federal, state and local taxes.

The second scenario, in which legal status is awarded now and citizenship five years later, would grow the GDP by an additional $1.1 trillion over 10 years and the third option would add $832 billion to the GDP.

“This paper basically shows that if there any burdens, if there are any costs to immigration, these are coming from the lack of legal status of this population, and it’s not because (immigrants) are here ... but because of the lack of legal status,” said Adriana Kugler, professor at the Georgetown Public Policy Institute.

These immigration reform scenarios are currently being discussed in quiet conversations on Capitol Hill, said Angela Kelly, vice president for Immigration Policy and Advocacy at the Center for American Progress.

In the Senate, a group of four Republicans and four Democrats are working to reach a deal on a comprehensive immigration reform bill that would address legal status and citizenship.

A group in the House is also tackling the issue.

“This is a conversation that is reverberating across Washington, across the country and more importantly in the homes of 11 million folks who want nothing more than to belong, to work legally and to be part of the American family,” Kelly said.

Earlier today, Nancy Pelosi, (D-CA) said she believes comprehensive immigration reform is just on the horizon.

“The good news is that we really do think that … on the immigration issue, that we will, before summer, have comprehensive immigration reform,” reportedly Pelosi told the U.S. Hispanic Chamber of Commerce, according to The Hill.

The Center for American Progress study cites a handful of key reasons why legal status and citizenship causes undocumented immigrants to earn and produce more.

First, it gives them legal protection and employment rights that raise their wages and provides greater access to a wide range of higher paying jobs.

Also, studies show immigrants with legal status and citizenship increase their English language skills and invest heavily in education and training, which has a profound impact on their productivity and their earnings, Lynch said.

Legal status and citizenship also make it easier for immigrants to start businesses and create jobs.

“When you attain legal status, many things open up for you,” Lynch said. “You can start doing things like applying for insurance, for credit, loans from a bank, you can get licenses and permits to start a business.”

It’s interesting to note, he added, that despite the legal obstacles that immigrants face in the United States right now, they are more likely to start a business than native-borns.

“Any immigration reform that unleashes this creative potential of immigrant entrepreneurs is going to promote economic growth and higher incomes and job opportunities,” Lynch said.

Heidi Shierholz, an economist at the Economic Policy Institute, said the country’s labor market is in crisis, and it’s projected the unemployment rate will not drop below 6 percent for another four years.

“This is precisely the time that we should provide legal status and a path to citizenship for undocumented workers, because it will actually make things better,” she said. “It will actually improve the economy and generate some jobs, so this is a very good time to do it given the economic context.”


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