In a move to reform America’s broken immigration system, President Obama last week decided to use his executive authority to provide relief from deportation to approximately 5 million undocumented immigrants while granting them temporary legal status and the opportunity to secure work authorization. The impact of the President’s actions, given this large group of potential beneficiaries, could very well ripple across the U.S. economy, but it’s too early to say exactly how. As the Congressional Budget Office noted when it analyzed the economic implications of last summer’s stalled immigration bill, “ascertaining the effects of immigration policies on the economy and the federal budget is complicated and highly uncertain.”
To begin with, it’s uncertain how many undocumented immigrants will take advantage of Obama’s order, given the temporary nature of that relief. Only Congress can grant a way for undocumented immigrants to obtain permanent legal status. As an example, only 55% of the 1.2 million youth who qualified for Obama’s 2012 temporary deportation relief program, Deferred Action for Childhood Arrivals, actually applied.
This suggests that without comprehensive reform that leads to a pathway toward permanent legal status, not everyone who qualifies for deportation relief will seek it. That’s partly because many fear the potential consequences of stepping out of the shadows and into the protective light of a discretionarily-granted, and thus revocable, status.
But let’s assume that a large portion of those who qualify do apply for relief against deportation under the options created by the president’s Nov. 20th executive actions. It’s impossible to estimate how many of those granted the status will also be successful in finding jobs.
In looking at the impacts of Obama’s executive actions, economists have been evaluating the 1986 Regan-era Immigration Reform and Control Act. The problem is the two programs aren’t analogous for a range of reasons, not the least of which is the fact that the Immigration Reform and Control Act did provide a path for achieving permanent, legal immigration status.
Despite all of this uncertainty, analysts are already making plenty of predictions – some dire, and some positive. Some analysts are concerned that more immigrants entering the labor force and the actions’ potential to increase mobility for immigrants to higher-wage jobs will introduce competition, limiting job availability or depressing wages in some sectors. Other analysts posit that financially including immigrants and facilitating the establishment of credit could increase entrepreneurship and spending on higher-end goods like homes and cars. Those shifts could have positive impacts on the job market and the overall economy. Others, still, note that the president’s executive actions could potentially help stop the “reverse brain-drain” of skilled workers who come to the U.S. for school or on other temporary visas and then return to their home countries to enterprise or innovate.
What’s more, undocumented immigrants aren’t simply workers and consumers—they’re also taxpayers. The White House’s Council of Economic Advisors estimates that the president’s executive actions could lead to a cut of $25 billion in the federal deficits in 2024 due, in large part, to real GDP growth over the course of the next decade.
The Center for American Progress, too, has published an analysis of the fiscal benefits that may result from executive action. And, finally, some industry-specific reports give insight into the economic potential of increasing the United States’ labor force in key sectors such as agriculture, where a dearth of labor at critical moments in the agricultural cycle has resulted in the inability of growers to capitalize on an increased market interest in U.S.-grown fruits and vegetables.
The bottom line is that we won’t know, for a while, what the new bottom line will look like. The precise impact of President Obama’s executive actions on presently-documented U.S. workers and businesses remains to be seen, as much depends on the number of individuals who will avail themselves of this immigration relief and on how many will enter into or move within the labor market.
What we do know is that the president’s executive actions will have a tremendous impact on immigrants who choose to come forward, many for whom supporting their U.S.-born children has been a precarious and at times dangerous enterprise.
