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Economic implications of immigration reform

Rep. Jeff Flake and Sen. John McCain. Photo by Connor Radnovich, Cronkite News

Rep. Jeff Flake and Sen. John McCain. Photo by Connor Radnovich, Cronkite News

The political rhetoric and debates about undocumented immigrants has changed drastically since the U.S. Senate’s “Gang of Eight” – two of whom are Arizonans (Sen. John McCain and Rep. Jeff Flake) – started piecing together comprehensive immigration reform legislation. Where once unauthorized immigrants were referred to as “invaders” and “potential terrorists,” they are now being referred to as “hard-working people” and “boosts to the nation’s economy.” 

“There has been a huge shift in the conversation about undocumented immigrants, from terrorists to law-abiding U.S. citizens,” said Joseph Garcia, a former journalist and now the director of the Morrison Institute Latino Policy Center, during a panel on April 17 titled “U.S. Citizenship: The Economic Pathway.”

Garcia tempered the conversation with a dose of reality about the final product of the piecemeal draft bill revealed on April 15 – ironic timing consider that day was also the deadline for tax filing.

“I don’t think anyone would call this Frankenstein monster of a bill sexy,” he said. “But it’s a first step. It’s anything but ‘instant amnesty.’ And it focuses on workers.”

A new study unveiled during the panel discussion at ASU’s Cronkite School of Journalism asserts that legal status and a path to citizenship for the nation’s 11 million undocumented immigrants and Arizona’s approximately 160,000 unauthorized workers could mean substantial boosts to the country’s and the state’s economies in the near future. 

Reading between the lines of the study, it reveals the economic arguments that immigrant advocates have been making: unauthorized immigrants are currently earning far less than their potential, paying much less in taxes, and contributing significantly less to the U.S. economy than they potentially could.

The Morrison study examined two immigration reform scenarios: immediate legal status and a path to citizenship within 13 years, and “non-citizenship legalization, which gives immediate legal status that after eight to 10 years can lead to permanent residency status, but provides no path to citizenship.”

The first scenario that promises immediate citizenship, would provide the biggest economic boost, adding from $174 million to $246 million in additional individual income a year in Arizona. These income increases would go primarily to low-income families, making them more financially stable. The additional income spent in Arizona would have a multiplier effect on the state’s  economy, which could mean an overall economic impact of about $200 to $300 million per year. 

The above economic benefits would not result from a legalization program without citizenship, the study says. 

Another point made was that, once these workers were legalized, their employers potentially could invest more in their training, leading to better positions; there would be more jobs created, more small businesses created, and more growth for our state’s economy.

Therefore, the study explains, a path to citizenship means increased earnings and a more skilled workforce. There is also evidence that the legalization of parents will benefit their children, too. Children from economically stable and legal families perform better in school. A more stable education could lead the younger generation to stay in school and aspire to higher education more often, becoming higher-skilled workers. 

“There’s going to be a labor shortage [in the U.S. and in Arizona],” Garcia said, adding that a path to citizenship and a guest-worker program being considered as part of the immigration reform bill would help ease a national and state labor shortage that could possibly result in an economic recession.

A copy of the Morrison Institute Latino Policy Center study can be downloaded at Morrisoninstitute.asu.edu/Latinos

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This Article appears on the May 2013 issue of LPM under LP Journal

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