The Economics of Comprehensive Immigration Policy Reform

TitusIf the Republicans could cease hyperventilation over the ACA rollout, and the media could find time to address problems associated with more than 3-5% of the American population — then we might want to consider Comprehensive Immigration Reform.   Two Nevada Representatives seem to be on target.  Representative Dina Titus (D-NV1) expressed her opinion on the subject:

“Now is the time for the House to take up the mantle of reform and make it law,” Titus said. “Comprehensive reform is a moral imperative and an economic necessity that we must get done so the 11 million people who live, work, and raise their families in our country, including over 190,000 people right here in Nevada, can finally come out of the shadows and pursue their American Dream.”

Aside from the moral imperative — Representative Titus is correct: Reform is an economic necessity.  Consider the following numbers.  If we enact comprehensive immigration policy reform we can reasonably expect to add $1.5 trillion (yes, that’s Trillion) to our GDP over the next decade.  If we adopt the deportation only option we can reasonably expect to lose $2.6 trillion.  [CAPcip pdf] Now, which would we prefer? Another $1.5 trillion added to the GDP or the loss of $2.6 trillion in economic activity.

Representative Stephen Horsford (D-NV4) expressed his frustration with the machinations of the House as prospects for the passage of H.R. 15 fade:

“It only takes 15 minutes to pass a bill once they decide to bring it for a vote,” he said. “There is bipartisan support for many bills, but right now we have a Speaker who is choosing to only govern based on what a faction of his caucus supports, rather than a majority of the body.” [NP via Hill]

Evidently, Tea Party squeamishness over immigration trumps economic necessity.   House leadership seems to have more excuses for inaction on the subject than a junior high student propounding rationalizations for unfinished homework.

For Speaker Boehner the immigration policy is essentially stall ball, chopping the issues into component parts, passing some leaving others to wither on the vine, and generally leaving us with another patchwork policy insufficient to improve our economy:

Despite saying last month that House lawmakers need to address some form of immigration reform, Speaker John Boehner (R-OH) told reporters Wednesday that taking up a Senate-passed bill that includes a path to citizenship was a non-starter.  Boehner announced his Slice and Dice strategy:

“We have no intention of ever going to conference on the Senate bill,” Boehner said at a weekly briefing in Washington.  Instead, the speaker voiced his preference for a “step-by-step,” “common sense” solution to address the nation’s broken immigration system.”

Precisely why piecemeal is “common sense” is left in a gulf of widely varying interpretations.

House Majority leader Eric Cantor’s (R-VA) excuse is a classic instance of Pretzel Logic ratiocination.  Witness this exchange between Congressman Cantor and Representative Hoyer (D-MD) on the subject:

“HOYER: Bring it to the floor and see if the House thinks it’s a bad bill. See if the House believes that it’s a bill that is not worthy to be considered and passed as a fixing of a broken immigration system … He has the power to bring that bill to the floor.

CANTOR: We don’t want a repeat of what’s going on now with Obamacare. That bill, constructed as it is by the Senate, last-minute-ditch effort to get it across the finish line … let’s be mindful, Madam Speaker, of what happens when you put together a bill like Obamacare and the real consequences to millions of Americans right now, scared that they’re not going to even have health care insurance that they have today come January 1. […]” [TP]

In other words, by Cantor’s lights we can’t have comprehensive immigration reform because there are glitches in the implementation of the Affordable Care Act.  Really?  First, the glitches are in only one segment of the ACA (enrollment of individual who presently have non-compliant individual policies), and secondly the notion that one House of Congress shouldn’t work with its counterpart because a previous bill had burps and hiccups is patently  ridiculous.   This is, essentially, an argument for doing absolutely nothing about anything at anytime.

Meanwhile back in Reality Land.  Enacting comprehensive immigration policy reform would help bring down that deficit the GOP constantly frets about: “The higher earning power of newly legalized workers would mean increased tax revenues of $4.5 billion to $5.4 billion in the first three years.”  [CAPcip pdf]

Remember all that talk about Aggregate Demand in these posts?  There’s a benefit from comprehensive immigration policy reform there as well: “Higher personal income would also generate increased consumer spending—enough to support 750,000 to 900,000 jobs in the United States.”  [CAPcip pdf]  If the Speaker wants to apply common sense to the issue try this — (1) lower and middle income earners SPEND more.

“As in previous time periods, the lowest income quintile allocated larger shares to food and housing than the other quintiles. The  highest income group allocated a larger share to personal insurance and pensions (including payments for life insurance, other nonhealth insurance, pensions, and Social Security) than any other group.” [BLS 2013]

Who is more likely to spend income on food, housing, apparel, etc. thus creating jobs? Lower and middle income wage earners.  This leads us to (2) More spending creates more Demand.  And, obviously (3) more Demand creates more jobs because of the First Law of Human Resources — There is NO rational incentive to hire anyone to do anything unless the current staffing levels are inadequate to meet customer demands for goods and services.

For more “common sense” economic results from enacting comprehensive immigration reform see “The Economic Benefits of Comprehensive Immigration Reform,”  American Immigration Council January 14, 2010 [pdf]

190,000 people in the state of Nevada could be making a greater contribution to our economy, and if the moral imperative cited by Representative Titus isn’t enough incentive for passing a CIR bill, then at least we ought to give serious consideration to acting in our own best interests.  For every petty political reason for ignoring the immigration policy issue (perhaps in hopes it will quietly go away) there are 1.5 Trillion reason$  for enacting a comprehensive solution.

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