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Another Plug for Amnesty Misses the Costs

Posted By Jena McNeill On January 12, 2010 @ 11:50 am In Security | Comments Disabled

Ever since President Barack Obama made a campaign promise to move forward with comprehensive immigration reform early in his presidency, there has been a series of studies aimed at making the economic case for another amnesty. The newest, a study [1] by the Center for American Progress (CAP), claims that legalizing the 11 million illegal immigrants inside the United States would increase GDP by at least $1.5 trillion over 10 years.

Touting amnesty as an economic stimulus is weak on several points. First, these studies almost across the board assume that legalized individuals will contribute more than the taxpayer dollars they receive. The Heritage Foundation, however, has found that illegal immigrants take in $32,138 in immediate benefits and services for every $9,686 in taxes they pay out [2]. This scenario is likely to worsen as these individuals become eligible for government benefits only permitted to legal residents of the United States. This is largely because immigrants are disproportionately low-skilled (even the CAP report recognizes this fact), and low-skilled workers draw more heavily on government welfare and income maintenance services than higher skilled workers.

The report, of course, rests on the idea that these individuals, once legalized will quickly learn English, obtain an education, and move about the economy in a way that will make them, and therefore all taxpayers, significantly better off. This economic story, however, involves in a lot of public outlays. First, it assumes that legalization will lead immigrants to obtain more education, thus improving their earning potential and their contributions to overall economic activity. However, publicly supported adult education is expensive and provides limited improvements in earnings. Second, low-skilled workers do help increase the productivity of higher skilled workers, but demand for these workers is limited by the growth of higher skilled employment and lower skilled workers tend to displace other lower skilled workers. In short, the public investment in low-skilled workers is high and their value is dependent on what happens to the growth in higher skilled employment.

This isn’t to say that immigrants can never make a better life for themselves. And in fact, immigrants do contribute to the economy. But when you subtract the high cost from the likely economic contribution, there is little about this scenario that would be an economic stimulus.

Another issue that these studies often leave out is that history demonstrates that another amnesty will encourage more people to come here illegally. It happened after the 1986 amnesty. In that instance, 3 million people were legalized on the premise that there would be robust immigration enforcement to stop more people from coming. The U.S. failed to provide this promised enforcement, and millions more came here illegally.

A better approach would be to make illegal immigration a less attractive choice, concentrating on enforcement while looking for avenues to bring people here legally that are both market based and don’t encourage more illegal immigration. The report tries to downplay a focus on enforcement as ineffective. But when the Bush Administration started enforcing the law at the border and inside the U.S., people started going home.


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URL to article: http://blog.heritage.org/2010/01/12/another-plug-for-amnesty-misses-the-costs/

URLs in this post:

[1] study: http://www.americanprogress.org/issues/2010/01/raising_the_floor.html

[2] illegal immigrants take in $32,138 in immediate benefits and services for every $9,686 in taxes they pay out: http://www.heritage.org/Research/Welfare/sr12.cfm

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