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10 Reasons Why Immigration Reform Is Important to Our Fiscal Health

Congressional Super Committee Needs to Consider These Facts

SOURCE: AP/Al Behrman

The Procter & Gamble Co. headquarters building is shown, Monday, August 2, 2010, in Cincinnati. In 2010, $4.2 trillion in revenue was generated by Fortune 500 companies founded by immigrants and their children, such as Procter & Gamble. These companies represent 40 percent of all Fortune 500 companies.

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All eyes in Washington these days are on the new congressional super committee. The 12 members from both parties in both chambers of Congress have been assigned the task of developing a plan to reduce the federal deficit by $1.5 trillion over the next decade or risk setting off deficit-cutting triggers that will force sharp cuts to both defense and domestic spending.

There are many ways the members of this committee can reach the $1.5 trillion target between now and their Thanksgiving week deadline. We at the Center for American Progress understand that comprehensive immigration reform is not among the deficit reduction options on the table but want to urge the super committee to consider it. Comprehensive immigration reform is one key to boosting economic growth and thus helping to solve our nation’s fiscal problems.

Here are the top 10 reasons why immigration reform, or the lack thereof, affects our economy.

Additions to the U.S. economy

1. $1.5 trillion—The amount of money that would be added to America’s cumulative gross domestic product—the largest measure of economic growth—over 10 years with a comprehensive immigration reform plan that includes legalization for all undocumented immigrants currently living in the United States.

2. 3.4 percent—The potential GDP growth rate over the past two years if comprehensive immigration reform had gone into effect two years ago, in mid-2009. (see Figure 1)

figure 1

3. 309,000—The number of jobs that would have been gained if comprehensive immigration reform had gone into effect two years ago, in mid-2009. A GDP growth rate of 0.2 percent above the actual growth rate translates into, based on the relationship between economic growth and unemployment, a decrease in unemployment by 0.1 percent, or 154,400 jobs, per year.

4. $4.5 billion to $5.4 billion—The amount of additional net tax revenue that would accrue to the federal government over three years if all undocumented immigrants currently living in the United States were legalized.

Revenue generated by immigrants

5. $4.2 trillion—The amount of revenue generated by Fortune 500 companies founded by immigrants and their children, representing 40 percent of all Fortune 500 companies.

6. $67 billion—The amount of money that immigrant business owners generated in the 2000 census, 12 percent of all business income. In addition, engineering and technology companies with at least one key immigrant founder generated $52 billion between 1995 and 2005 and created roughly 450,000 jobs.

Taxes generated by immigrants

7. $11.2 billion—The amount of tax revenue that states alone collected from undocumented immigrants in 2010.

Negative consequences of mass deportation

8. $2.6 trillion—The amount of money that would evaporate from cumulative U.S. GDP over 10 years if all undocumented immigrants in the country were deported.

9. 618,000—The number of jobs that would have been lost had a program of mass deportation gone into effect two years ago, in mid-2009. A mass deportation program would have caused GDP to decrease by 0.5 percent per year, which, based on the relationship between economic growth and unemployment, translates to an increase in unemployment by 0.2 percent, or 309,000 jobs, per year.

10. $285 billion—The amount of money it would cost to deport all undocumented immigrants in the United States over five years.

The upshot

Most Americans and their elected representatives in Congress would be pleasantly surprised to learn about the substantial benefits of comprehensive immigration reform to our nation’s broad-based economic growth and prosperity, and thus our ability to reduce our federal budget deficit over the next 10 years. Given how difficult a challenge the super committee faces, we cannot afford to ignore any viable options for strengthening our economy. We hope the super committee takes these top 10 economic reasons into account as they move forward with their deliberations.

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Angela M. Kelley is Vice President for Immigration Policy and Advocacy and Philip E. Wolgin is Immigration Policy Analyst at the Center for American Progress. The authors would like to thank Adam Hersh, Economist at the Center for American Progress, for his help in calculating the economic projections.

To speak with our experts on this topic, please contact:

Print: Allison Preiss (economy, education, poverty)
202.478.6331 or apreiss@americanprogress.org

Print: Tom Caiazza (foreign policy, health care, energy and environment, LGBT issues, gun-violence prevention)
202.481.7141 or tcaiazza@americanprogress.org

Print: Chelsea Kiene (women's issues, Legal Progress, Half in Ten Education Fund)
202.478.5328 or ckiene@americanprogress.org

Spanish-language and ethnic media: Tanya Arditi (immigration, race and ethnicity)
202.741.6258 or tarditi@americanprogress.org

TV: Rachel Rosen
202.483.2675 or rrosen@americanprogress.org

Radio: Chelsea Kiene
202.478.5328 or ckiene@americanprogress.org