Four Important Ways Immigration Reform Could Benefit America’s Economy

A bipartisan group of senators introduced a comprehensive immigration reform plan today that would reshape the nation’s outdated economic laws by putting 11 million undocumented immigrants on a path to citizenship while boosting border security. The plan would expand the pool of visas for highly-skilled immigrant workers and put young immigrants and undocumented agricultural workers on a faster path to citizenship, elements of reform both parties have supported in the past.

Addressing immigration is a key issue for the American economy, which could see a major boost thanks to comprehensive reforms that will boost wages, job creation, and overall economic growth for the entire country. Here are four areas of the economy that immigration reform will help:

Jobs and growth: Using a model based on the 1986 immigration reform law, UCLA professor Raúl Hinojosa-Ojeda estimated that modern immigration reform that included a path to citizenship would increase the nation’s gross domestic product by $1.5 trillion over the next decade, a total boost of 0.84 percent. Higher earning power from Latinos would lead to between $4.5 billion and $5.4 billion in increased tax revenues, as well as increased consumer spending that would support 750,000 to 900,000 additional jobs in the United States, according to the Center for American Progress.

Wages: Immigration reform would also boost wages for both immigrant and native workers. Newly-legalized, less-skilled workers would see an average wage boost of $4,405 each year, while high-skilled workers would see wage increases of more than $6,100. CAP estimates that wages would also “increase modestly” for native workers, adding to the 0.4 percent wage boost the Economic Policy Institute found that immigration brought to native workers over the period it studied. Other economists have found that immigration boosts wages for native workers by 0.6 percent each year.

New businesses: Nearly a quarter of the businesses started between 2006 and 2012 had at least one immigrant founder, and businesses owned by Latinos and Asians employ 4.7 million workers a year, according to the Immigration Policy Center. High-tech firms have advocated for immigration reform in an effort to boost their labor pool and increase the formation of start-up businesses. Expanding the high-skill visa program would allow more immigrants to become entrepreneurs in the United States.

State economies: Anti-immigration laws passed at the state level have had harmful effects on key industries in those states. In Georgia and Alabama, farmers have reported worker shortages after their states passed such laws, with one farmer estimating that he lost $300,000 in produce in 2011. Meanwhile, a University of Southern California study estimates that legalizing the state’s Latino workers generate $2.2 billion in wage gains and $1.75 billion in direct spending, leading to the creation of 25,000 new jobs and more than $300 million in new tax revenue.