Want to get rich? Embrace foreign workers
Economic boost they give us is more than their cost in public support
Underneath the latest headlines about DACA and sanctuary cities, the Trump administration is quietly implementing major changes throughout the legal system, making it much harder to obtain visas to live and work in the United States. Yet immigrants as a whole — from housekeepers to biochemists — are net job creators, grow the economy and pay into the public treasury far more than they take out. To make the average American richer, we should encourage immigration across the board.
Some background is in order. President Trump said in his first address to Congress, “According to the National Academy of Sciences, our current immigration system costs American taxpayers many billions of dollars a year.” That’s true, in the sense that our current education system costs American taxpayers many billions of dollars a year, too. Are all those schoolkids also moochers?
As every small business owner in America knows, you don’t measure failure just by how much money is going out the door, any more than you measure success just by how much money is coming in. It’s the net amount that tells you if you’re succeeding. And when it comes to immigration, the net benefits are extraordinary.
There are a few more conclusions from that National Academy study that the president didn’t mention: On average, during our working years,
everyone pays more in taxes than they receive in public resources. Immigrants don’t replenish the national treasury quite as much as the nativeborn do … until retirement age, when the native-born consume far more public benefits than do immigrants. Then the children of immigrants pay in much more than they take out, compared with their
parents and their native-born peers, largely because of their greater educational attainment and earnings.
Bottom line: Today’s immigrant families are projected to deliver as much as $259 billion in net present value as taxpayers, including federal, state and local taxes combined. That works out to $800 in avoided taxes (or deficits) for every man, woman and child in the United States.
Texas is no exception. Immigrants in the state employ over 420,000 people, pay nearly $10 billion in taxes to Texas state and local government coffers, and pay another $22.5 billion in federal taxes.
Yet the Trump administration is reportedly considering a policy that would punish immigrants for taking advantage of public benefits that they and their U.S.-citizen children are legally entitled to, such as food stamps and earned income tax credits. Such a policy doesn’t account for the taxes that immigrants pay into the system.
Consider Abosede Akingbade Thomas, a Nigerian immigrant who took advantage of government nutrition programs for a few months while she was pregnant with her first child. Over the course of her career in the United States as a tax-paying nurse, she did her part to improve the nation’s fiscal health — and that’s before factoring in the career of her child, Omolara, who is now a pediatrician after earning her medical degree at age 22. Or consider Ukrainian immigrant Jan Koum, who received food stamps and housing support as a teenager before going on to create WhatsApp, which now employs 100 people and enables 1.2 billion people to communicate with their friends and loved ones for free.
Given immigrants’ return on investment for the average American, we shouldn’t just be pocketing the economic benefits of our current immigration system — we should be doubling down. Just five years ago, it looked like comprehensive immigration reform was finally coming to fruition (even Sean Hannity endorsed the idea). The Senate passed a bipartisan overhaul that would have increased legal immigration across the board, including a path to citizenship for Dreamers. The nonpartisan Congressional Budget Office projected that it would reduce the federal budget deficit by nearly $850 billion over 20 years. That’s another $2,600 of avoided fiscal burden for every American.
The House of Representatives failed to even debate this bill, effectively turning its back on a gigantic windfall. (Did I mention that these reforms would have also increased GDP by $1.4 trillion over the same period? That’s dramatically more economic growth than even the rosiest estimates of what the recent tax bill will deliver.)
Perhaps there is one glimmer of hope: The Trump administration recently announced (via tweet) that immigrants can now apply for U.S. citizenship online, skipping the mass of paper documents that was previously required. This isn’t just good news for individual immigrants, who tend to increase their earning power after becoming Americans. It’s good news for the average current American. More citizenship means more tax revenue for the U.S. Treasury, more funds to prop up Social Security and more economic growth. If half of the nearly nine million eligible immigrants in the United States became citizens, their increased earnings and demand could boost GDP by up to $52 billion per year.
As any business owner will tell you, growth is hard. It requires smart investments and a clear-eyed understanding of what will ultimately boost the bottom line. When the best evidence indicates that taking a certain action will generate revenue far in excess of costs, you do it. For the benefit of all Americans, we must encourage immigrants’ continued contributions to our nation’s fiscal health and economic growth.