Immigration System Costs Economy $30 Billion Per Year, Says Study

A center-right group says immigration reform should cut red tape.

ByABC News
April 4, 2013, 12:55 PM

April 4, 2013— -- The nation's complex system of immigration laws costs the economy tens of billions of dollars per year, according to a new study released Thursday.

As Congress prepares to take up a major immigration overhaul, the center-right think tank American Action Forum argues that policymakers should consider eliminating or streamlining the long list of regulations that are required to navigate the immigration system.

The group's study highlighted 150 immigration-related regulations across seven cabinet agencies. Individuals and businesses to spend 98.8 paperwork hours annually complying with those rules, and the cost of dealing with the system totals $30 billion per year, according to researchers. The study was first reported by The Wall Street Journal.

"Few doubt that our current immigration system is in need of reform. Thankfully, many agree that our regulatory state needs an overhaul as well," writes the study's author, Sam Batkins, director of regulatory policy at American Action Forum. "With seven different agencies administering 234 forms, and imposing $30 billion in economic burdens on immigrants, the costs of neglecting regulatory immigration reform are already too high."

The results of the study could provide yet another impetus for small-government conservatives in Congress, who may have opposed immigration reform in the past, to change their tune.

The list of potential areas to cut down on regulatory costs is long. The Department of Homeland Security alone, which houses the agency which oversees immigration to the U.S., has 116 separate immigration forms, which took 81.1 million total hours to complete and process during the past year.

For example, the commonly-used "Application for Naturalization" takes approximately six hours to complete and costs $680 in fees and other associated expenditures, such as attorneys fees, for an immigrant to file. Companies seeking to bring in highly-skilled immigrants using the H1-B visa face high costs, according to the report. If a worker eventually wants to seek citizenship, a worker and employer must cumulatively spend approximately 18 hours filling out 16 forms, which cost $2,500 in fees and other expenses.

It's not just immigrants who are impacted by the system. All workers in the U.S. must complete an I-9 form. In total, workers and employers spent 40.6 million hours filling out the forms during the past year. The study estimates that the opportunity of lost work time devoted to filling out all types of immigration paperwork totals $5.9 billion per year.

Although the report points out plenty of areas where regulations could be cut within the immigration system, whether reform bills being drafted in Congress will do so remains unclear.

The framework put forth by a bipartisan group of senators seeks to streamline the nation's immigration system, which theoretically could eliminate several regulations identified by the report.

But the forthcoming bill will also add new rules and regulations. For example, it would make it mandatory for employers to use the E-Verify system to check the immigration status of potential employers. It would also create a new bureau within U.S. Citizenship and Immigration Services that would calculate the amount of low-skilled worker visas available to businesses every year.

"I think the general hope is, from a regulatory perspective, that they don't keep on adding without realizing ... there are obviously opportunities for streamlining and reducing," Batkins told ABC/Univision. "Adding more of that without making it a little bit easier on other ends is only going to make this report larger next year."