By Global Public Square staff
The latest numbers show slow growth in the United States. That's bad for jobs, income – it's even bad for those worried about the deficit because it means lower tax revenues. And it has prompted a revival of the partisan debate about what to do about it.
Well, there's one idea out there that could have support from both parties. A study out last week suggests there is one very simple way to increase tax revenue, expand GDP, and create jobs – all at the same time. What's more, Congress is already weighing it: it's called immigration reform.
How and why? Well, a new paper from the left-leaning Center for American Progress actually calculates the economic impact of immigration reform. Take a look.
The study outlines three scenarios. In the first, all of America's 11 million undocumented immigrants are granted not just legal status, but also citizenship, right away. What happens? Over the course of ten years, GDP expands by an additional $1.4 trillion dollars; an additional 203,000 jobs are generated on average every year. And tax revenues increase by an additional $184 billion over the course of a decade.
These are huge jumps. Now, granted, there are a number of hurdles towards granting citizenship. So the study highlights a second scenario. Here, undocumented immigrants are granted legal status, but it takes five years to become citizens. Look at the gains – GDP expands by an additional $1.1 trillion over the ten year period. Jobs and tax revenues increase as well.
The third scenario proposes that undocumented immigrants are not granted citizenship during the ten years of the study's projections. Instead, they are only granted legal status. Even here, GDP expands by an additional $832 billion over ten years. An average of 121,000 extra jobs are added every year. And tax revenues grow by an additional $109 billion.
How does this happen? The study’s authors make the case that legalizing undocumented workers brings them into the formal economy. Now they have to pay income taxes, social security, and health care taxes and all those other things you see on your wage stubs. It also gives them access to many more jobs, and at higher wages. These gains then go on to have ripple effects across the economy, boosting GDP growth.
Critics often point out that if illegal immigrants become citizens, they become a burden on the system, impacting Social Security, Medicare, and Medicaid. But these arguments ignore basic economics. Immigrants with legal papers are transformed into contributing members of society. And access to society's services also makes them safer, healthier, and more productive.
This isn't just a left wing argument. On the right, Douglas Holtz-Eakin, director of the Congressional Budget Office under George W. Bush, and John McCain's economic advisor during his presidential campaign, recently pointed out that immigration reform could "raise the pace of economic growth by nearly one percentage point in the near term, and increase GDP per capita by $1,500."
A recent Pew survey found that only 51 percent of Americans think it's essential for the president and Congress to act on immigration reform this year. Compare that with the 70 percent of Americans who say that Congress must pass a deficit reduction deal this year.
The irony is... the two are actually linked. A wealth of data now shows that immigration reform will lead to deficit reduction. And the sooner we act, the greater the gains for the economy.