4 numbers tell the story of U.S. immigration reform

U.S. immigration reform protest

Just behind the rhetoric of the debate, the numbers show what a massive undertaking immigration reform is.

With the budget and debt ceiling having been dealt with already this year, immigration reform is the biggest issue on the U.S. Congress’s plate right now. The debate has been slowly and steadily moving along for over a year, and the U.S. Senate passed a massive bill last summer.

The question now is how much of the Senate’s bill can pass the House of Representatives. The implications of any law are huge for the U.S. economy. Not only is a path to citizenship for undocumented workers on the table, but also major reforms to guest worker and highly-skilled visas. As a condition for those reforms, border security is to be strengthened and receive additional funding.

The personalities—and their idiosyncrasies— leading the debate, who include Democratic President Obama, Senate Majority Leader Harry Reid, Republicans Speaker of the House John Boehner and Senator Marco Rubio, will exert great influence on the final bill. Much of the news coverage will focus on these characters, but the story of immigration reform comes down to the numbers. Here are four numbers that are crucial to understanding U.S. immigration reform.

11 Million

There are currently about 11 million undocumented workers in the U.S., or 3.5 percent of the total population. Put another way, that is as large as the entire population of Belgium. Of those, a majority are Mexican nationals. When combined with other Latin American nationalities, 71 percent of the undocumented workers are Hispanic.

About 1.4 million of that total is the so-called DREAMers, teenagers and young adults who came illegally to the U.S. with their parents. Having lived in the U.S. nearly their whole lives, extending citizenship to DREAMers is less controversial than for all undocumented workers, but is still contentious. The DREAM Act, which remains in Congress’ limbo, would have done this as well as provide additional funding for college tuition. Although illegal immigrants technically do not qualify for discounted in-state tuition rates, twelve states now offer it to these students anyway. This is not without controversy and has prompted legal challenges.

3.3 percent

The Congressional Budget Office (CBO) estimated last summer that the Senate’s immigration reform bill would boost U.S. real GDP by 3.3 percent between now and 2023, and by 5.4 percent by 2033. That is a little more than the 3.2 percent annualized rate that the U.S. economy grew in the last quarter of 2013, meaning that a path to citizenship could add an entire year’s growth to the economy.

The CBO also estimates that comprehensive immigration reform would cause average wages to fall slightly over the next decade, primarily because the pool of new residents would be less educated than average, so their newly reported wages would be lower than average.

Capital investment, however, is projected to rise over the next decade. With a larger labor force, capital will be relatively scarcer and the return on investment will rise. The CBO estimates that the bill would lead to a 2 percent increase above baseline in capital investment by 2023. After the capital-labor ratio evens out in the early 2020s, the surge in investment will mellow back to its baseline.

85,000

The U.S. has a hard cap on the number of work visas it can issue to highly skilled workers, which currently sits at 85,000. Why it is 85,000 is unclear, but it has been that way since 1992, with the exception of a short bonus period that ended in 2003. Since that number has remained static for so long, demand has far outstripped the supply of these highly sought-after visas. In 2013 it took just four days for more than 85,000 applications to show up at the U.S. Immigration and Customs Enforcement office.

Analysis of the impact of the highly skilled work visa has shown that spillover effects on the U.S. economy are highly positive. Each visa creates 1.8 additional jobs in the U.S. and may even increase wages for low-paying jobs as well.

The Senate bill would increase highly skilled visas to at least 110,000 per year, with a cap of up to 180,000 depending on demand by employers.

38

Texas has 38 electoral votes. It also has 1.68 million illegal immigrants. For President Obama and the Democrats, the benefits of comprehensive immigration reform do not stop at social justice and economic growth. There is also a political element that cannot be ignored: A massive 71 percent of Hispanic voters voted for President Obama in 2012. The more Hispanic votes there are in Texas, the less of a safe-Republican state it will be.

It may not fall out of the Republicans’ basket for a decade, but the demographic changes in the state favor the Democrats. Citizenship for undocumented workers would simply speed up changes to the Texas electorate. If Texas voted Democratic in a presidential election, or even just became a swing state, it would be realistic for Democrats to keep the White House for twenty years.

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Categories: North America, Politics

Author:Alex Christensen

Alex Christensen focuses on the impact policymaking has on the economy. He previously was an economic policy analyst at Minnesota 2020, a non-partisan think tank based in St. Paul, Minnesota. As the Hirsch Undergraduate Fellow at the Center for New Institutional Social Sciences, he analyzed how political institutions impact the development of wind power across the OECD countries. Alex is currently studying for his MSc in Economics at the London School of Economics, where his thesis examines the connection between monetary policy and equity prices. Previously, he graduated magna cum laude from Washington University in St. Louis with a degree in economics and political science.

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