Immediate Citizenship for Undocumented Immigrants Would Boost Economy

March 22, 2013— -- Granting undocumented immigrants a path to citizenship could help improve the economy.

Authorizing an immediate path to citizenship for the estimated 11 million undocumented immigrants in the United States would add as much as $1.4 trillion to the country's economic growth, create more than 200,000 jobs, and increase tax revenue by more than $180 billion in the next decade, according to a new study from the Center for American Progress, a left-leaning think tank.

See Also: STUDY: DREAMers Could Add $329 Billion to Economy

How would this work?

The study says that undocumented immigrants currently pay less in taxes than they would as citizens, so granting them citizenship would bring in additional revenue. They also earn less, according to the report. Not only would earning more increase the amount of taxes they pay, it would also increase the amount of money they spend.

"They will spend their increased earnings on the purchase of food, clothing, housing, cars, and computers. That spending, in turn, will stimulate demand in the economy for more products and services, which creates jobs and expands the economy."

This theory played out following the Immigration Reform and Control Act in 1986, which granted legal status to about 2.7 million undocumented immigrants. Home ownership went up following IRCA and formerly undocumented immigrants earned more, according to several studies.

The new CAP report favors immediate citizenship instead of the somewhat delayed path being proposed by the Senate Gang of Eight and President Obama.

"The sooner we provide legal status and citizenship, the greater the economic benefits are for the nation," write the authors.

They say that while legal status as opposed to citizenship would boost the economy, the economic benefits would be more limited. The authors estimate that the "cumulative gain in U.S. GDP between 2013 and 2022 would still be a significant—but comparatively more modest—at $832 billion" if undocumented immigrants are granted legal status but remain ineligible for citizenship for at least the next 10 years.

The study points to Census data that indicates that citizens have average incomes that are 40 percent higher than the salaries of both undocumented and documented noncitizen immigrants.

Citizenship would also give immigrants increased legal protection, and lead to more investment in education and training, the study argues. Right now, the jobs undocumented immigrants can apply for are limited, and so they may be less likely to seek new job training if they feel they will not be able to move up the career ladder because they are undocumented. Citizenship would encourage labor mobility and foster entrepreneurship, the study says.

The study's authors also dispute the idea that granting citizenship to undocumented immigrants will somehow hurt citizen workers.

"His outline for immigration reform would ensure that millions of illegal aliens compete for just about every job in America and admit millions more new foreign workers to our labor force, with no realistic prospect that promises about curbing future illegal immigration would ever be kept," reads a recent press release from the Federation for American Immigration Reform, an organization that opposes a path to citizenship and favors reduced immigration levels.

But employers say that's not true. Despite high unemployment, they say they're having trouble hiring workers for certain jobs that immigrants have typically held.

"Even with high unemployment," U.S. Chamber of Commerce President and CEO Thomas J. Donohue said in January, "we have millions of job openings that go unfilled. Either the workers come here to fill them or those jobs go somewhere else."

"The nation as a whole would benefit from a sizable increase in GDP and income and a modest increase in jobs," write the authors. "It is also clear that legalization and a road map to citizenship bestow greater gains on the American people and the U.S. economy than legalization alone."