Author: William Stock on 08/27/2014
Jeffrey Dorfman’s recent opinion piece in Forbes purporting to make the economic case against comprehensive immigration reform doesn’t stand up once his underlying data and unstated premise are examined. With regard to the data, his piece relies almost entirely on a Heritage Foundation report released last year which attempted to assess the possible fiscal costs that might come from legalizing 11 million undocumented immigrants living in the United States. The report (a retread of a 2007 study by the same authors), was widely rejected by conservatives for shoddy methodology.
Both reports rely on faulty assumptions to inflate apparent costs, including unrealistic projections of how many immigrants could become legalized; double counting categories of immigrants (counting temporary workers as immigrants when they arrive, for example, and then again when they are allowed to stay permanently); and assuming that nearly all immigrants would bring extended family to the United States. The study also fails to account for the economic benefits of a growing, legal workforce, highlighted by both the Congressional Budget Office and conservative writers.
The Congressional Budget Office looked at the economic benefits of immigration reform in a comprehensive way and you know what they found? That the benefits of an increase in legal residents from immigration legislation (S. 744) – which includes a pathway to citizenship – would far outweigh the costs. The findings in their report give proof that implementing smart immigration reform will strengthen the U.S economy. Creating an immigration system that puts immigrants on a path to citizenship will not only boost wages and entrepreneurship, but will also bring more tax contributions and spending in local economies. The report estimates that in the first decade after enactment, the immigration bill’s net effect of adding millions of additional taxpayers would decrease the federal budget deficit by $197 billion, even with higher spending on border security and government benefits. Over the next decade, the report found, the deficit reduction would be even greater – an estimated $700 billion, from 2024 to 2033.
So much for the data. But what about the unstated premise of Dorfman’s argument? Assuming the data is correct that anyone in the United States – from illegal immigrant to US citizens—receives more in government transfer payments than in taxes they pay, he argues that immigrants who are already here should not be granted a path to legal status. If his argument is correct, however, why stop there? If US citizens are a drain on government coffers if they lack a college degree, should they be removed as well? And why stop at individuals? According to a study from the Federal Reserve Bank of San Francisco, Mississippi, West Virginia and North Dakota all receive more per person from the federal government than they pay per person in taxes, so perhaps Dorfman would prefer that those states be removed from the Union?
Dorfman’s argument against legalizing lower-skilled immigrants ignores the important role that those immigrants play by increasing the productivity of the economy as a whole. These immigrants work in more strenuous occupations than Americans, on average. The ability of college-educated Americans to subcontract the work of food preparation, domestic chores and child-rearing to Americans and immigrants without a college degree is a win-win: complementing each other’s skills makes both groups more productive. And finally, as Dorfman himself said in another context, “this win-win idea is not just in terms of income. In a capitalist society, people get rich by making somebody else better off.” The economy will prosper when we make our currently-illegal workforce better off by legalizing their status, allowing them to raise the price of their labor in the market, thereby increasing the share of taxes they pay and their purchasing power.
Dorfman frames the choice on comprehensive immigration reform as being a “balance of compassion versus cost.” Legalizing immigrants may be compassionate, but Dorfman ignores the substantial evidence that it will be an economic benefit as well.
Written by Bill Stock, AILA First Vice President