DREAMers Could Actually Boost The U.S. Economy by $300 Billion
While the topic of immigration didn’t make the cut in the first presidential debate, it should have. Immigrants are a necessary and essential part of our economy, and children of immigrants in particular help innovate and drive economic growth. A new report issued by the Center for American Progress finally quantifies this contribution and makes the economic case for passing the DREAM Act.
The DREAM Act– otherwise known as the Development, Relief, and Education for Alien Minors Act, is a bill that provides a pathway to legal status for eligible young people who were bought to this country unlawfully by their parents. For those who have completed high school and some college or military service the DREAM Act promises to allow them to achieve their goals without being penalized for the actions of their parents.
According to the report, there are an estimated 2.1 million youth in this country that would be served by passing the DREAM Act and passage would create 1.4 million new jobs by 2030. Passing the DREAM Act would add $329 billion to the US economy, bringing a much needed revenue bolt to an anemic economic recovery.
CAP explains the benefits and their modeling this way:
First, enacting the law would provide an incentive for their further education because for most of those who would be eligible the legalization provisions can only be attained through completion of high school and some college. Receiving more education opens access to higher-paying jobs, enabling these undocumented youth to become much more productive members of our society. Second, gaining legal status itself translates into higher earnings for these youth since legal status allows DREAMers to apply to a broader range of high-paying jobs rather than having to resort to low-wage jobs from employers who are willing to pay them under the table.
Thus our projections track both the gap in current earnings between unauthorized individuals at various levels of education and their U.S.-born counterparts, as well as the gains in earnings from attaining more education. Overall, our research finds that by 2030 the eligible DREAMer population will earn 19 percent more in earnings than without passage of the DREAM Act, in turn increasing their consumption and contributing more in the way of tax revenue to the federal government.
Study authors note that their modeling looks solely at the economic benefits from passing the DREAM Act but does not consider any ancillary costs incurred with implementation and administration, so those projections could be reduced slightly.
Perhaps more importantly though, authors of the report also refute critics claims that these DREAMers would not produce these economic benefits because they’d merely be displacing American workers.
First, many economists find that immigrants tend to complement the skills of native workers rather than compete with them, especially as immigrants move up the education and skills chain. Increasing the education of immigrant workers would therefore decrease the competition between DREAMers and the native-born.
Second, research shows that an increase in college-educated immigrants directly increases U.S. gross domestic product—the largest measure of economic growth—which correlates to more jobs for American workers. In the 1990s, for example, the increase in college-educated immigrants was found to be responsible for a 1.4 percent to 2.4 percent increase in U.S. GDP. Finally, by giving legal status to DREAMers, fewer employers would be able to pay workers under the table and more would have to abide by a system that is fair to all workers.
Normally the story for passing the DREAM Act is told through inspirational narratives of DREAMers striving to make the best life they can for themselves. As the CAP study shows, now those stories of hope and dedication can be buttressed with some hard data. The question though is will it be enough to break the Tea Party barrier or is compassionate, common sense immigration reform too much to hope for with the current Republican leadership?
Photo from Library of Congress via flickr.