New Report Finds Proposed Immigration Reform Beneficial to the Economy

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A new report has found that providing undocumented aliens with a path to legal status is far more beneficial to the economy than a policy focused on heightened enforcement alone.  The findings of the report, set forth by the Cato Institute, are even more noteworthy when considering that the Institute has a well-known ideological lean to the right. 

The prevailing misconception set forth publicly by many talking heads is that providing undocumented aliens with a path to legal status would threaten the jobs of many low-skilled American laborers.  This study debunks that theory, instead asserting that the legalization of the undocumented currently in the U.S. would actually benefit the low-skilled American workforce.  "With increases in low-skilled immigration, the U.S. economy would expand, creating more jobs in higher-skilled areas.  Over time, some U.S. workers now in low-paying jobs would move up the occupational ladder." 

An added benefit of legalization would be an increase in the welfare of the American household.  The Cato Institute report concludes that "allowing low-skilled workers to enter the country legally would boost the welfare of U.S. households by 0.57 percent of the GNP."

Conversely, an increase in border enforcement would not have the presumed effect of creating more low-wage job opportunities for Americans.  Instead, the effect of heightened enforcement would result in making the undocumented aliens remaining in the U.S. a more valuable commodity.  "A principal effect is that it [enforcement] raises the wages of the illegal immigrants who remain in the United States, in effect transferring income from legal residents of the United States to illegal immigrants."

Similarly, the effect of increased enforcement on the American household would be a negative one.  "A policy that reduces the number of low-skilled immigrant workers by 28.6 percent compared to projected levels would reduce U.S. household welfare by 0.5 percent, or $80 billion."

What I find interesting about the Cato Institute's report is that it's release coincides with the Obama administration's recent shift toward increased enforcement over reform.  It seems that an immigration reform program that could substantially increase tax revenue by allowing the estimated 8.3 million undocumented workers a path to legal status would be attractive to the current administration.  Unfortunately, the policy decisions made by the administration thus far have done nothing but continue to enforce the broken immigration laws that have created this issue in the first place.  Hopefully, reports like the one released by the Cato Institute will continue to dispel the notions that immigration reform will harm the economy, and pave the way to reform of the immigration system. 

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This page contains a single entry by Jonathan Portner published on August 18, 2009 2:31 PM.

Immigration Enforcement Toughens While Progress on Reform Remains Stagnant was the previous entry in this blog.

Obama Administration Officials Meet With Interest Groups to Discuss Immigration Reform is the next entry in this blog.

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