Why comprehensive immigration reform is good for all of us

Despite the unabashed success that the U.S. has had in building a great union with the help of generation after generation of immigrants, it is fair to say that the U.S. is still in the process of fully understanding the overall economic impact of immigration. Yet, it is without question that, as immigrants build a future for their children and families, they provide labor, create business, buy goods and services, pay taxes and, most importantly, they build their local communities.

Immigrants Provide Labor. Immigrants make up 13 percent of the population and 16 percent of the labor force and their shares are expected to continue growing over the next decades to meet the longer term demand for labor. Importantly, immigrants help to meet the need for very highly educated and less educated but skilled workers.

Immigrants Spur Job Creation. Not only are immigrants more likely to be self-employed and to create their own jobs, but immigrants are twice as likely to start a new business and 13 percent more likely to own a business than non-immigrants. Importantly, these businesses are also more likely to hire employees than non-immigrant businesses. In 2007 alone, small immigrant businesses hired 4.7 million people. Immigrant businesses not only hire more, but they also have higher levels of start-up capital and expand their businesses with their own sources of funding.

Immigrants Boost Consumer Demand. Not only are immigrant businesses 60 percent more likely to export than non-immigrant businesses thus expanding markets abroad, but they also expand domestic demand. In 2010, the potential purchasing power of immigrants stood at $1.1 trillion and this purchasing power is expected to continue growing as more immigrants come in and as immigrants who obtain legal status see their earnings rise. Areas experiencing large inflows of immigrants gain from greater demand in retail and housing, helping the recovery in these sectors.

Immigrants Reduce the Deficit. The non-partisan Congressional Budget Office recently reported that immigration reform would reduce the deficit by close to $200 billion and $700 billion in the following two decades. My own work with colleagues from the Center for American Progress show that legalizing the 11 million undocumented would help the solvency of the social security system, funding 6.5 percent of current retirees and closing the gap between benefits and contributions by about a third over the next ten years. These results are similar to those found by the Social Security Chief Actuary who reports that immigration reform would add over $200 billion to the Social Security Trust Fund over the next decade.

Immigrants Grow the Economy. Immigrant labor force participation, consumption, and investments help to grow the economy in the short-term. In the longer term, immigrant innovation also contributes to growth. The U.S. is at the cutting edge in terms of innovation thanks to an open system that welcomes the most creative minds around the world. In fact, immigrants represent 47 percent of U.S. engineers and 24 percent of U.S. scientists and they are almost twice as likely to patent as non-immigrants. The CBO found that increased participation, investment and productivity due to immigration reform would increase GDP by 3.3 percent by 2023 and by 5.4 percent by 2033.

As the House joins the immigration debate this month, it is essential for its members and all Americans to remember that allowing immigrants to participate fully in our society and economy benefits everyone. Immigration reform has the potential to improve all corners of our economy. This is an opportunity Americans can’t afford to pass up. 

Kugler is professor of public policy at Georgetown University and Senior Fellow at Center for American progress.