An­a­lysts say end­ing DACA would hurt econ­omy, hir­ing

USA TODAY US Edition - - MONEY - Paul David­son @Pdavid­sonusat USA TO­DAY

The Trump ad­min­is­tra­tion says its de­ci­sion to end a pro­gram that safe­guards young un­doc­u­mented im­mi­grants from de­por­ta­tion will open job op­por­tu­ni­ties for strug­gling U.S. work­ers.

But econ­o­mists on both sides of the po­lit­i­cal spec­trum say the move will deal a body blow to the U.S. econ­omy, re­duc­ing out­put and mak­ing it even tougher to find work­ers in an al­ready tight la­bor mar­ket, with­out aid­ing Amer­i­cans.

That’s be­cause the 800,000 im­mi­grants who came to the U.S. as chil­dren and are pro­tected by the pol­icy — called De­ferred Ac­tion for Child­hood Ar­rivals, or DACA — are more ed­u­cated and more pro­duc­tive than un­doc­u­mented im­mi­grants broadly.

And with un­em­ploy­ment at a low 4.4%, many busi­nesses are strug­gling to find qual­i­fied work­ers, es­pe­cially highly skilled ones. The La­bor Depart­ment re­ported a record 6.2 mil­lion job open­ings in June.

“You’re start­ing to see se­vere (la­bor) short­ages,” says Ike Bran­non, vis­it­ing fel­low at the con­ser­va­tive Cato In­sti­tute. “The last thing you want to do is dis­man­tle a pro­gram that was putting peo­ple” into the work force.

Ninety-one per­cent of the

800,000 im­mi­grants, or about

730,000, are em­ployed, ac­cord­ing to a sur­vey led by the Uni­ver­sity of Cal­i­for­nia-San Diego, the left-lean­ing Cen­ter for Amer­i­can Progress (CAP) and the Na­tional Im­mi­gra­tion Law Cen­ter.

As­sum­ing Congress doesn’t re­new DACA and all the young im­mi­grants are de­ported in the next few years, Moody’s An­a­lyt­ics es­ti­mates the hit to the na­tion’s gross do­mes­tic prod­uct will grad­u­ally rise as a grow­ing num­ber lose their tem­po­rary res­i­dency sta­tus.

That would cul­mi­nate in

$105 bil­lion in re­duced eco­nomic out­put in 2022. That means an econ­omy grow­ing a mod­est 2% an­nu­ally in­stead would ex­pand by 1.8% within a year and 1.5% within five years, Moody’s Chief Econ­o­mist Mark Zandi says.

Such a sce­nario would run counter to Pres­i­dent Trump’s vow to boost eco­nomic growth to a healthy 3% an­nu­ally, a level that hasn’t been reached since be­fore the Great Re­ces­sion of 2007 to 2009.

The econ­omy would shrink mostly be­cause there would be fewer work­ers to churn out prod­ucts and ser­vices. The low supply of work­ers and on­go­ing Baby Boomer re­tire­ments are in­ten­si­fy­ing the crunch. The im­mi­grants pro­tected by DACA also no longer would be around to buy homes, cars and TVs, hurt­ing con­sump­tion, which makes up about 70% of eco­nomic ac­tiv­ity in the U.S.

They’re also more apt to start busi­nesses. Five per­cent of the DACA re­cip­i­ents sur­veyed launched their own en­ter­prises , com­pared with 3.1% of all Amer­i­cans. Start-ups and young firms are big job gen­er­a­tors and more likely to come up with pro­duc­tiv­ity-en­hanc­ing in­no­va­tions.

As a result, some an­a­lysts say there will be a big­ger eco­nomic toll. Bran­non says de­port­ing the im­mi­grants would re­duce eco­nomic growth by

$280 bil­lion over the next decade, or about a half-per­cent­age point a year. CAP says GDP would be whit­tled by $460 bil­lion.

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