April 17, 2009

Study finds legalizing undocumented workers would increase taxes, help economy

By Heather Lockwood
Scripps Howard Foundation Wire

WASHINGTON — A new report says legalizing undocumented workers would help, not hurt, the U.S. economy.

The Immigration Policy Center released a review of academic and government data Monday that analyzed how granting amnesty to undocumented workers would affect the economy.

During the Immigration Policy Center’s teleconference Monday, Angela Kelley, director of the Immigration Policy Center, called immigration reform “low-hanging fruit” for Congress to “pluck” as it considers steps toward economic recovery.

The center is the research arm of the American Immigration Law Foundation, which seeks to provide information about the economic and societal effects of immigration.

The report, “The Economics of Immigration Reform: What Legalizing Undocumented Immigrants Would Mean for the U.S. Economy,” found that legalizing undocumented workers would improve wages and working conditions and increase tax revenues.

There are an estimated 12 million undocumented workers in the U.S., about 5 percent of the labor force, the largest number in the nation’s history, Kelley said.

“Reform and recovery go hand-in-hand” for three reasons, she said - it would stimulate the economy, help American workers and reward honest employers.

President Obama has said he wants to push immigration reform this year.

Brendan Daly, spokesman for House Speaker Nancy Pelosi, said the need is urgent but timing of a bill is uncertain. It’s going to take real leadership,” he said. “We have to work together.”

Kelley said a Congressional Budget Office review of the 2006 Senate immigration bill found it would raise $66 billion in federal, state and local taxes over 10 years.

With an 8.5 percent unemployment rate and 13.5 million Americans out of jobs, the economic climate is an “inconvenient backdrop to justify amnesty,” said Bob Dane, spokesman for the Federation for American Immigration Reform. “It’s really going to be a very tough pawn for this administration to try to get amnesty passed.”

Dane said the “overwhelming majority” of undocumented immigrants are “poorly educated,” “lowly skilled” and “heavily government dependent,” and granting them amnesty would not stimulate the economy.

FAIR is a national nonprofit organization that believes immigration policies must be reformed to serve the national interest.

Undocumented workers are “suspended at the edge of hope,” said Esther López, director of civil rights and community action at the United Food and Commercial Workers international union.

UFCW represents 1.3 million workers in the U.S. and Canada, including 250,000 workers in the meat-packing and food-processing industry.

“We cannot enforce our way to a workable immigration system,” she said.

The report found that enforcement-only policies are expensive and ineffective, and legalization increases immigra-tion’s economic benefits.

The Center for American Progress estimates it would cost at least $206 billion over five years to deport 10 million undocumented workers.

David Dyssegaard Kallick, senior fellow and director of immigration research at the Fiscal Policy Institute, said the “wishful thinking” of “driving out” all undocumented immigrants would be “terrible for the economy.”

The group is a nonprofit that studies the fairness of taxes and public services, primarily in New York.

“Sure, U.S. born workers would get some of the jobs that might be vacated, but it’s also very likely there would be fewer jobs to go around because businesses would be terribly disrupted at a very precarious time,” Kallick said.

Another reason for amnesty, according to the report, is that immigrant-owned businesses create jobs.

“One of the questions we need to ask of a program that legalizes undocumented workers and brings them into the fold, puts them in the above-ground economy is, ‘Does this grow the American economy pie?’” asked Dan Siciliano, executive director of the Stanford Law School Program in Law, Economics & Business.

Hispanic-owned firms employed 1.5 million people with receipts of $222 billion, and Asian-owned firms employed 2.2 million, with receipts of $326.4 billion, according to the 2002 Economic Census, as quoted in the study.

“What does immigrant-owned businesses creating jobs have to do with justifying illegal immigration?” Dane countered. “Any way you slice it the, IPC argument is entirely full of holes. ... It’s just patently ridiculous.”

Job creation is an important way of stabilizing the middle class, Siciliano said.

“We know that allowing people to enter into the above-ground economy, to come into the fold, helps boost the middle class for all,” he said.

Immigration reform would also ease the burden on taxpayers, Kallick said.

“The cost of the underground economy to taxpayers is pretty substantial” and the economy would benefit if undocumented workers paid taxes and received benefits from their employers, he said.

“The amnesty advocates have, for a long time, been arguing that illegal aliens pay taxes and they pay far more than they receive in benefits. ... If illegal aliens are already paying taxes, how will granting them amnesty help the U.S. economy?” said Dane. “They were either wrong then or they’re wrong now.”

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