Turning the Corner: Comprehensive Immigration Reform and the Economy

By Attorneys Robert L.  Reeves and Jeremiah Johnson

Comprehensive immigration reform and the economy – you can’t discuss one without discussing the other.  Over the past couple of weeks there has been a lot of talk not only about the economy, but also about the possibility of comprehensive immigration reform.  Although President Obama has recently indicated that he may begin the dialogue required for the passage of comprehensive immigration reform, it is unlikely that any comprehensive law will pass Congress in 2009.  Not this year, not in this economy.  Nevertheless, the current administration remains committed to comprehensive immigration reform, citing it as a top priority.  Indeed, President Obama made a promise to “pursue genuine solutions day-in and day-out [including] immigration reform that will secure our borders, and punish employers who exploit immigrant labor; reform that finally brings the 12 million people who are here illegally out of the shadows by requiring them to take steps to become legal citizens.”  As previously discussed in past articles, President Obama will first need to tackle the current economic crisis, including the unemployment rate facing America before a comprehensive immigration reform package becomes politically viable.  However, there is indication from public policy groups and organizations that America is turning the corner and may be ready to address immigration in the context of this economy. 

One such organization, the Immigration Policy Center, recently released a report that found that the legalization of undocumented immigrants would actually increase government revenues by bringing more workers into the tax system.  The report also noted that “enforcement only” policies are expensive and ineffective, and legalization would increase the already established economic benefits of immigration.  This report is especially relevant given the current economic stimulus plan is based in part on government spending which necessarily requires revenue.  For example, the “underground” construction industry alone denied an estimated $272 million in revenue because employers did not pay payroll taxes and another $70 million in lost personal income taxes.  Although comprehensive immigration reform including a legalization program would not recover this loss revenue completely, it is a step in the right direction. 

Moreover, the report found that workers with legal status historically earn and spend more, thereby contributing to the economic recovery and ongoing health of the United States.  Specifically, after the 1986 Immigration Reform and Control Act, workers experienced an average hourly wage increase of 15% after four to five years.  Furthermore, legal status allowed workers to move into higher paying jobs, leading to an increase in not only federal and state income taxes but also providing immigrants the ability to buy more goods and services.  Such an increase creates additional jobs and generates even more revenue from sales and business taxes. 

Another organization, the Pew Hispanic Center, released a comprehensive report entitled “A Portrait of Unauthorized Immigrants in the United States.”  The report estimates that of the approximately 11.9 million unauthorized immigrants who live in the United States, 8.3 million work without authorization.  These unauthorized workers make up over 5% of the overall labor force, and are almost 10% of California’s labor force!  Allowing these workers to obtain legal status would necessarily add to the overall strength of the economy.  In fact, a Congressional Budget Office study found that legalizing the millions of unauthorized workers and their families would add tens of billions to the U.S. Treasury.  The study also noted that the increased revenue would not only come through more taxes paid, but also through fees and fines that are likely to be included in any legalization program. 

President Obama’s approach to immigration reform includes such a legalization program, a change within the immigration bureaucracy and an increase in the number of visas available for immigrants to keep families together and meet the demand for jobs that employers cannot fill.  This increase of visa numbers will be particularly welcomed in communities where visa backlogs can span 10 to 20 years, as in the case of the Philippines and Mexico.  As for undocumented immigrants already in the United States, President Obama supports a legalization program that allows these immigrants, who are in good standing, to pay a fine, learn English and eventually become citizens. 

The President can not reform the immigration system in a vacuum.  While comprehensive immigration reform may no longer be the administration’s number one priority amid these economic times – these economic times are changing.  For sure there were still be significant obstacles to comprehensive immigration reform to come.  However, everyday there are more and more groups and organizations; friends and family; neighbors and co-workers who think comprehensive immigration reform is a good idea.  Just last week, two national federations of labor, the AFL-CIO and Change to Win, have jointly endorsed a proposal for such a reform. 

Over the past year, immigrants and their families have seen hard times – both economically and by the way of an increase in immigration raids in their communities.  Yet in the past, politicians have failed to deliver promised reform.  As such, the American electorate embraced change, and they voted for change.  If recent reports are any indication of times ahead, then immigrants and their families can also expect much needed change, but first we must get though this year of hard economic times.  Reeves & Associates continues its commitment to providing its clients with accurate and reliable immigration advice not only during the difficult times, but also during the changing times ahead.