People who have entered a country outside of the normal means are often excluded from much of normal society and are forced to live in the shadows for fear of detection and deportation by the authorities. New research from Rice University highlights how harmful this is both for the individuals themselves and also the states that exclude them.
The research finds that immigrants have been a largely overlooked driver of the economy for decades, and by limiting their economic options, the United States is missing out on considerable growth in its economy, with this especially important giving the aging population.
“These residents are fully engaged in economic activities that produce wealth and contribute to the well-being of American society. They play an especially vital role in the construction and agriculture sectors of the U.S. economy, as well as the entertainment, arts, recreation, accommodation and food service industries,” the researchers say. “Undocumented immigrants are also frequently business owners, and nearly all are taxpayers, paying income and sales taxes to the local, state and federal governments.”
Public service provision
The authors highlight how so much of the debate around immigration focuses on the cost of providing basic public services, but it overlooks the significant benefits immigrants provide to the community and to the economy. This is despite numerous studies illustrating that immigrants generate far more than they cost for the economy, and therefore that deporting them would be harmful to the economy as a whole.
“For example, a major ceiling on the economic potential of undocumented immigrants is their lack of access to the banking system to obtain credit and mortgages,” the authors continue. “Having access to credit would provide them with financial stability to further their own wealth as well as that of the country, since they could make financial plans to buy homes and vehicles or pay for their children’s higher education. Tapping into these resources would result in a further expansion of the U.S. economy and boost economic growth in the mid- and long-terms.”
The research shows that when immigrants are given not only access to financial services but also citizenship, healthcare, and home ownership, it can help to generate nearly $250 billion for the US economy, which represents around 1.15% of total GDP. These gains include additional local, state, and federal tax revenue of $26 billion, which would boost coffers by nearly 1%.
“There is a double urgency to calculating these impacts,” the researchers say. “First, there is a crucial need for a more informed political debate over the fate of the 10.7 million undocumented immigrants living in the United States. Second, given that the United States is faced with an increasingly older workforce and stagnating population growth, the country will need immigrants to stay and work in the U.S. and may even need to increase immigration in the future.”
In other words, the deportation of undocumented workers, who are often young and economically active taxpayers, is a wholly counterproductive measure. Of course, logic seldom seems to enter such debates, but it nonetheless warrants repeating.
