The “Cost” Of Immigration


Recently, The Heritage Foundation published a report saying that immigration reform would cost us $6.3 trillion.  I’m posting late on this but it’s been in my stack for awhile.  The report struck me wrong because I’ve never considered immigration to be a financial transaction.  It’s always been a primal “yawlp”.  America is less a physical location than it is a “way of living”.

Beyond that, I couldn’t get over the numbers.  And then CATO helped me out:

The Heritage Foundation has released a study claiming an immigration amnesty will cost the U.S. Treasury $6.3 trillion. Many other free-marketeers — of which I am one — decry that report’s methodology as ignoring the economic growth effects and resulting tax revenues of open immigration.

I’ve always thought that immigration brought the folks most willing to work for a better life.  And not those who simply want to live at the government’s expense.

So, how do immigrants that are willing to work and work hard help the new nation?

A 2009 study prepared for the Cato Institute employed a dynamic economic model called USAGE to estimate the economic change caused by immigration reform. It found that a bill similar to that proposed in the Senate added $180 billion to U.S. household income a year.

Another paper commissioned by Cato employed a similar analysis using a model called the GMig2. The study found that immigration reform would increase U.S. GDP by $1.5 trillion in 10 years.

That model also ran a simulation in which all unauthorized immigrants were removed from the U.S. economy — a policy favored by Heritage’s study. The result was a $2.6 trillion decrease in estimated GDP growth over the same decade, confirming the commonsense observation that removing workers, consumers, investors, and entrepreneurs from America’s economy will make us poorer.

The Cato studies provide dynamic tools that count the unambiguous economic gains from increased immigration as part of any reform. The consensus among economists is that immigration is good for the vast majority of Americans and the immigrants themselves, and makes both the U.S. and world economies larger and more productive.

A Reagan-era amnesty confirms that legalized immigrants experienced wage increases of up to 15 percent just by working legally. Those higher wages are a result of more productive workers who then pay higher taxes. But employers, shareholders, consumers, real estate owners, and most workers also see their incomes and productivity increase from immigration.

Not only is more open and freer immigration consistent with Liberty lovers, it makes financial sense.

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