- A policy of mass deportation would immediately reduce the nation’s GDP by 1.4 percent, and ultimately by 2.6 percent, and reduce cumulative GDP over 10 years by $4.7 trillion. Because capital will adjust downward to a reduction in labor—for example, farmers will scrap or sell excess equipment per remaining worker—the long-run effects are larger and amount to two-thirds of the decline experienced during the Great Recession. Removing 7 million unauthorized workers would reduce national employment by an amount similar to that experienced during the Great Recession.
- Mass deportation would cost the federal government nearly $900 billion in lost revenue over 10 years. Federal government revenues are roughly proportional to GDP, while federal spending is less responsive. A conservative estimate suggests that annual revenue losses would start at $50 billion and accumulate to $860 billion over a 10-year period. With associated increases in interest payments, removal* would thus raise the federal debt by $982 billion by 2026 and increase the debt-to-GDP ratio, a common measure of fiscal sustainability, by 6 percentage points over the same time period. Unsustainably high levels of the debt-to-GDP ratio may ultimately raise interest rates and choke off economic growth.
- Hard-hit industries would see double-digit reductions in their workforces. Unauthorized workers are unevenly spread across industries, with the highest concentrations employed in agriculture, construction, and leisure and hospitality. Those three industries would be hit hardest by a removal policy, experiencing workforce reductions of 10 percent to 18 percent, or more. Other industries would also experience reductions in output due to a mass deportation policy.
- The largest declines in GDP would occur in the largest industries, not in immigrant-heavy industries. Because industries also vary in size, the losses in value added to the national GDP stemming from removal occur across many industries that are not usually associated with unauthorized labor. The three largest U.S. industries in terms of value added are financial activities, manufacturing, and wholesale and retail trade. Annual long-run GDP losses in those industries would reach $54.3 billion, $73.8 billion, and $64.9 billion, respectively, the three largest effects among the 12 private-sector industries.
- States with the most unauthorized workers will experience the largest declines in state GDP. We estimate that GDP in California, for example, will ultimately fall by $103 billion annually—or roughly a 5 percent drop—if mass deportation occurs. Large declines will also occur in other states such as Texas, New York, and New Jersey, with the effects spread across industries.
Join us tomorrow on November 9th to demand a clean #DreamActNOW
Rally at 11:30am, Thursday, November 9, at 221 W. 6th Street, Austin, Texas
This is our home and we are here to stay!
Here is the Facebook event link:
See you tomorrow, I hope!
Angela Valenzuela
A New Threat to DACA Could Cost States Billions of Dollars
Over the course of its five-year history, Deferred Action for Childhood Arrivals (DACA), has changed the lives of nearly 800,000 young people who have lived in the United States since their childhood. By providing the opportunity for individuals to come forward, pass rigorous background checks, and obtain permission to live and work in the United States lawfully, DACA has helped its recipients achieve milestones typically associated with the American dream, such as pursuing higher education, earning better wages to support their families, and buying homes. Nearly 8 in 10 voters support allowing DREAMers to remain permanently in the country, including almost three-quarters of Trump voters, and only 14 percent believe they should be forced to leave.
But despite the benefits of the popular program, DACA is now facing a dangerous new attack. In late June, officials from 10 states led by Texas Attorney General Ken Paxton issued an ultimatum to the Trump administration and Attorney General Jeff Sessions: End the DACA program by September 5 or face a lawsuit in front of the same federal judge who halted a separate initiative that would have provided similar temporary protections to the parents of U.S. citizens and lawful permanent residents. If DACA ends—whether because the administration accedes to the demands of DACA opponents or the initiative is enjoined by a federal court—hundreds of thousands of young people will be forced out of the workforce, upending their lives and the lives of their families, creating tremendous disruption for businesses, and sending shockwaves through the economies of most states.
According to the U.S. Citizenship and Immigration Services (USCIS), 787,580 people received DACA through March 2017. The data presented in this column update previous columns from November 2016 and January 2017, accounting for the additional DACA applicants that were approved since their publications.
Using data from two Center for American Progress publications—a report that estimates the gross domestic product (GDP) declines that would accompany removing all unauthorized workers from the country and a survey that estimates the share of DACA recipients who are employed—CAP estimates that ending DACA would result in a loss of $460.3 billion from the national GDP over the next decade. Ending DACA would remove an estimated 685,000 workers from the nation’s economy.
Altogether, the 10 states demanding that the Trump administration end DACA—Alabama, Arkansas, Idaho, Kansas, Louisiana, Nebraska, Tennessee, Texas, South Carolina, and West Virginia—stand to lose more than $8 billion annually in state GDP if they get their wish.
Methodology
This column uses the same methodology employed in CAP’s November 2016 and January 2017 estimates of the cost of ending DACA.
The USCIS publishes quarterly data on DACA applicants and recipients since the program’s beginning in 2012. In addition to national numbers, the USCIS also provides state-level data.
An October 2016 survey of DACA recipients—conducted by political scientist Tom K. Wong, United We Dream, the National Immigration Law Center, and CAP—estimated that nationally, 87 percent of DACA recipients were employed. The survey does not provide employment rates for individual states. Thus, this column uses the 87 percent benchmark for employment levels in each state.
The number of DACA recipients working in each state is a combination of the latest USCIS data and the survey findings.
A 2016 CAP report authored by Ryan Edwards and Francesc Ortega estimated the national and state-by-state GDP loss that would result from removing unauthorized workers from the workforce, both annually and over the next decade. This column uses the GDP loss and number of unauthorized workers by each state to identify the contributions of each unauthorized worker to the state GDP. By both assuming that the skill distribution of the workforce with DACA reflects that of the broader unauthorized workforce and expressing data in 2013 dollars, this analysis reflects a conservative estimate.
The GDP losses associated with ending DACA for each state are derived by multiplying the number of employed DACA recipients with the losses associated with each unauthorized worker.
Nicole Prchal Svajlenka is a senior policy analyst for the Immigration Policy team at the Center for American Progress. Tom Jawetz is vice president for Immigration Policy at the Center. Angie Bautista-Chavez is an intern for the Immigration Policy team at the Center.
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