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White House Report: The Economic Benefits of Fixing Our Broken Immigration System

Published July 11, 2013

On July 10, 2013, President Barack Obama's National Economic Council, Domestic Policy Council, Office of Management and Budget, and the Council of Economic Advisers released a report on the "range of benefits to the U.S. economy that would be realized from passage of commonsense immigration reform, and the high costs of inaction." Both the Senate and President Obama proposed plans for reform in January 2013.

Highlights from the report, according to the White House blog:

Commonsense immigration reform strengthens the overall economy and grows U.S. GDP. Independent studies affirm that commonsense immigration reform will increase economic growth by adding more high-demand workers to the labor force, increasing capital investment and overall productivity, and leading to greater numbers of entrepreneurs starting companies in the U.S.

  • The nonpartisan Congressional Budget Office (CBO) estimated that enacting the Senate immigration reform bill will increase real GDP relative to current law projections by 3.3 percent in 2023 and 5.4 percent in 2033 – an increase of roughly $700 billion in 2023 and $1.4 trillion in 2033 in today's dollars.
  • The bipartisan Senate bill will increase the labor force by 3.5 percent in 2023 and 5 percent in 2033, according to CBO, which will boost capital investment and lead to increased productivity and higher overall average wages.

Commonsense immigration reform fosters innovation and encourages more job creation and job growth in the U.S. The bipartisan Senate bill makes meaningful improvements to the existing employment-based green card system and strengthens the United States' ability to attract and retain highly-skilled talent from around the world. Recent studies have shown that immigrants promote productivity and innovation, both directly and indirectly through positive spillover effects on American workers.

  • According to the Fiscal Policy Institute, immigrant-owned small businessesgenerated a total of $776 billion in receipts and employed an estimated 4.7 million people in 2007.
  • The Partnership for a New American Economy found that immigrants started 28 percent of all new U.S. businesses, despite accounting for only 13 percent of the U.S. population in 2011. Notably, more than 40 percent of Fortune 500 companies were founded by immigrants or children of immigrants. These American companies represent 7 of the 10 most valuable brands globally, collectively employ more than 10 million people and generate annual revenue of $4.2 trillion.
  • The Senate bill creates a new Startup or INVEST visa that helps foreign entrepreneurs build their businesses in the U.S. by creating a temporary visa and a permanent green card option, as well the potential for permanent resident status for those entrepreneurs whose companies create jobs for American workers.

Commonsense immigration reform increases the productivity of workers and adds new protections for American workers. According to CBO and other independent studies, immigration reform will increase overall U.S. productivity, resulting in higher GDP and higher wages. The bipartisan Senate bill also provides a host of protections for American workers and ensures that new worksite enforcement and border security measures deter future illegal immigration.

  • CBO estimates that real wages will be 0.5 percent higher in 2033 — the equivalent to an additional $250 of income for the median American household — as a result of enacting the Senate bill.
  • The Senate bill raises the "wage floor" for all workers—particularly in industries where large numbers of easily exploited, low-wage, unauthorized immigrants currently work.
  • Studies of the 1986 immigration reform law found that legalizing immigrants saw wage increases of about 10 percent, due in part to increases in workers' productivity that benefited the economy as a whole.

Commonsense immigration reform would reduce the federal deficit, balance out an aging population, and strengthen Social Security. According to CBO, the additional taxes paid by new and legalizing immigrants would much more than offset the estimated costs of the bill-- enacting the bill would actually improve the federal budget outlook in both the short- and long-term. Additional immigration would help balance out an increase in retirees-per-worker as the baby boom generation retires, providing essential financial support for U.S. social insurance programs.

  • CBO found that the enacting the Senate immigration reform bill will reduce the federal budget deficit by nearly $850 billion over the next 20 years.
  • Based on CBO's analysis of the bill's budgetary and economic effects, enacting the Senate bill would reduce the federal debt as a share of the economy by three percentage points in 2023, relative to current law.
  • The independent SSA Actuary estimates that the Senate's immigration reform bill will add nearly $300 billion to the Social Security Trust Fund over the next decade and would improve Social Security's finances over the long run,extending Social Security solvency by two years.

Comprehensive immigration reform will contribute to our housing market recovery and strengthen the technology, agriculture, and tourism industries, among others. In addition to the benefits described above – increasing total economic growth, boosting worker productivity, increasing innovation, and strengthening our fiscal health – the bipartisan Senate bill would bring specific benefits to a range of economic sectors.

  • A recent study from the Americas Society/Council for the Americas and Partnership for a New American Economy found that the 40 million immigrants currently in the U.S. have created $3.7 trillion in housing wealth.
  • According to a USDA simulation of a similar policy, an expanded agriculture temporary-worker program, would increase long-run agricultural output by between 0.2 percent and 2.0 percent, depending on the crop, and wouldincrease agricultural exports by between 0.2 percent and 3.2 percent.
  • Travel and tourism comprise the largest service-export industry in the U.S., setting a record $165.6 billion in exports and supporting 7.8 million jobs in 2012, according to the International Trade Administration. The industries' continued growth depends on America's ability to compete with other countries for international tourists (particularly those from emerging economies), which the Senate bill aims to do through numerous provisions that will facilitate increased travel and tourism to the United States while simultaneously strengthening our national security.

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