Published on:

The Real Score on the Economic Benefits of Immigration

businessman-598033_640-300x204It’s no secret that the Trump administration has been on an aggressive campaign against immigration, cracking down on undocumented immigrants by adding more enforcers and increasing the number of deportations. President Trump has made immigration a centerpiece of his campaign, promising action against undocumented immigrants benefiting from social welfare, committing crimes, and “stealing” jobs.

While this narrative has been one of the deciding factors in Trump winning the White House, there’s much more to immigration and its supposed negative effects, particularly on the economy.

Economic Impact of Immigration

According to research by the Center for American Progress, a progressive think tank, the mass deportation of undocumented immigrants would reduce the national GDP by 1.4 percent, as it would place farmers and other employers in the difficult position of finding replacement workers. The result? They would have to cut production to compensate for the labor shortage.

And even conservative-leaning think tanks like the Cato Institute believe the cost of deporting the more than 750,000 immigrants under the Deferred Action for Childhood Arrivals (DACA) program would be too high, leading to a “$280 billion reduction in economic growth” should DACA be scrapped.

Immigrants Behind Successful Companies

Immigrants have a rich history of starting companies that wind up becoming pinnacles of success. Studies done by the National Foundation for American Policy show that 40 percent of Fortune 500 companies and over 50 percent of “unicorns” (startups now valued at over $1 billion) are immigrant-initiated. These unicorns are not only sources of income for over 700 employees in each company, they’re also collectively worth around $168 billion.

Furthermore, the National Academies of Sciences, Engineering, and Medicine (NASEM) found that immigrants have been, in fact, “integral to the nation’s economic growth” by “reducing the prices of some goods and services, which benefits consumers.” Immigrants have also made a significant impact on the economy by generating demand for things like housing and by “equalizing wage growth geographically, making labor markets more efficient and reducing slack.”

Another study, this time by National Venture Capital Association, found that among the companies the organization backed between 2006 to 2012, around a third were either founded or co-founded by a US immigrant.

Downsides of Immigration

But while the benefits of immigration certainly outweigh the cons, there is some truth to the negative image of undocumented immigration. For starters, unemployed and undocumented immigrants staying in the U.S. for extended periods would be eligible for government benefits despite not having much to return to the government in the way of taxes.

Indeed, the same NASEM study found that immigrants account for $43 billion and $300 billion more in benefits and government support, respectively in 2012. In addition, Harvard Kennedy School economics and social policy professor George Borjas found that immigration impacts native wages by competing with local wage rates, costing around $402 billion in reduced wages.

If anything, these findings show that the immigration issue is a lot more nuanced than people think. Immigration will continue to be a hot topic of research, debate, and policy-making, amplifying the urgency of being informed and updated to the truth of things.

For more immigration news and updates, be sure to follow this blog. If you are facing an immigration case and would like to know your rights, talk to the legal team of the Lyttle Law Firm. Contact our offices to speak with Austin immigration attorney Daniella Lyttle.



Contact Information