The economics of immigration reform

Immigration reform is an economic issue: immigrants are drawn to the United States in pursuit of jobs, of financial opportunity – a piece of the American dream. In turn, our economy relies heavily on immigrant labor – documented and not. Business should therefore be at the forefront of reform efforts, protecting their interests.

But can business agree on a reform plan?

A contributor to last week’s dialogue on this website, attorney Jeff Joseph, referenced one report measuring the impact of undocumented labor on the Colorado economy and the degree to which the state’s businesses are invested in this labor pool:

– Unauthorized immigrants comprised 5.4% of the state’s workforce (or 150,000 workers) in 2008, according to a report by the Pew Hispanic Center. (Mike Gilsdorf’s column in today’s Update suggests the number has grown significantly the past two years.)

– If all unauthorized immigrants were removed from Colorado, the state would lose $8.0 billion in expenditures, $3.6 billion in economic output, and approximately 39,738 jobs, even accounting for adequate market adjustment time, according to a report by the Perryman Group.

The report also outlines how reliant state revenues have become on immigrant labor, namely that “unauthorized immigrants in Colorado paid between $159 million and $194 million in state and local taxes in 2005,” according to a study by the Bell Policy Center, which includes:

• $24 million to $30 million in state income taxes.
• $10 million to $13 million in property taxes.
• $125 million to $151 million in sales taxes

Whether you choose to believe the numbers, it’s difficult to deny the economic impact of immigrant labor and the challenge we now face to solve the problem of “unauthorized” workers, to borrow Bell’s euphemism.

The question is what now? Arizona chose one path. It’s not, however, the only path, as some are suggesting.

I would argue that “gridlock’ is as much a calculated position as not. Some elected officials have decided that opposing immigration reform is the preferred political approach. It wins votes.

Of course the central, controversial component in any reform discussion is the concept of providing a reasonable path for undocumented aliens to earn citizenship without leaving the country. It is, to many, amnesty, and as such, opposed at all costs by some lawmakers.

But the costs of holding up the reform discussion are real. Is it realistic to assume we can deport hundreds of thousands of undocumented workers in Colorado without a significant hit on the state’s economy? I’ve not yet read a practical road map that accounts for a loss of this magnitude.

If you have, send it to me, or make the case. Again, please disclose who you are and who you work. We’ll publish your thoughts.

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