A Response To CIS's Article, "The High Cost of Cheap Labor Illegal Immigration and the Federal Budget"
The Center for Immigration Studies (CIS), an anti-immigration advocacy group that masquerades as an objective “think tank,” has issued yet another “study” that concludes with the same “findings” and “policy implications” as virtually every other CIS report.
Let’s be clear: CIS was birthed by FAIR, the militant anti-immigration group. The CIS Executive Director moved from FAIR to CIS to head up the organization. Although now independent, the two organizations share the same basic agenda: an American version of what in Europe is called “zero immigration.”
In this particular report, what CIS leaves out is notable. According to Frank Sharry, Executive Director of the National Immigration Forum, “Where is the honest appraisal of how narrow-cast fiscal studies miss the larger and more important contributions that immigrants make to economic growth, competitiveness, and productivity? Where is the acknowledgement that overall immigrants pay more in taxes than they use in services and contribute billions to our national income every year? Where are the estimates of how much the U.S. benefits from the education immigrants receive in their countries of birth? Why don’t they acknowledge what honest studies found: that after the legalization program signed into law by President Reagan wages for immigrant workers increased and English language and jobs skills increased, and productivity increased? And how does CIS square the “findings” of its “studies” that portray immigrants as an economic drain on the U.S. economy with the incontrovertible fact that this nation of immigrants has the strongest economy in the history of the world?”
Immigrant Contributions to Economic Growth and Revenues
CIS chose a narrow ledger sheet approach to measuring the contributions in taxes and services used by undocumented immigrants. This tally, which includes broad assumptions about costs attributable to immigrants, analyzes a specific relationship between taxes paid and services used, but ignores many sources of tax revenue and other economic benefits created by the presence of immigrants.
The more relevant research question is not what are the narrow fiscal effects of a group of low-wage workers, but what are the broad economic effects of their work and consumption. Nothing is said about profits earned by the employers of immigrants, the tax revenues these profits generate, the revenue produced by immigrant businesses, the increased productivity of native-born workers due to services that immigrants provide, and the consumption and economic activity created by immigrants.
In effect, CIS is looking at the issue of the economic impacts and contributions of undocumented immigrants from the wrong end of the telescope. Consequently, they focus on modest fiscal effects and not on the economic growth in the industries that depend on hard working immigrants, from the thriving agricultural sector to the burgeoning service sector in the United States.
Static Measures of Contributions/Costs
The most obvious methodological trick used in this CIS report is to count the costs of the children of immigrants but not their future contributions to the economy as workers and taxpayers. For example, the U.S. citizen children of undocumented immigrants are counted as a cost for the purposes of measuring the services used by households headed by undocumented immigrants. However, the children of undocumented immigrants who head households are ignored when it comes to tax revenues paid currently and in the future. If education is an investment, then the return on that investment should be meaningfully addressed. Interestingly, while CIS wraps itself in the methodology used in the groundbreaking research conducted by the National Research Council of the National Academy of Science, they diverge in their methodology on this critical point.
Focusing on Low Income Undocumented Immigrants Yields Predictable Results
The report’s main finding is a “dog bites man” story: poor people pay less in taxes than rich people. Much of the cost/benefit scoring attributed to lack of immigration status is in fact attributable to the low incomes of vulnerable, recently-arrived, undocumented workers. Even so, at least the report acknowledges that a majority of undocumented immigrants do pay federal taxes and that undocumented workers use services at lower rates than other immigrants and the native-born, both of which are commonly-held myths promoted by most anti-immigration activists.
Past Experience Paints a Different Picture of Legalization
In projecting costs associated with legalizing undocumented immigrants, the CIS study is contradictory. It notes that a much larger share of households headed by undocumented immigrants had at least one person in the labor force when compared to other immigrant households. Yet, they assume that if legalized, these same undocumented households would have the same cost/benefit profile of legal immigrant households. The study does not explain why immigrants with very high labor force participation rates would leave their jobs and/or start using more government benefits just because they were legalized.
According to UCLA researcher Raul Hinojosa Ojeda, just measuring the likely income gain of individual immigrant-led households if a legalization program were offered understates the observable improvements in productivity. Based on research conducted after Ronald Reagan’s 1986 program to provide legal status to undocumented immigrants, incomes rose by 15%. More importantly, newly legalized immigrants, no longer facing the prospects of deportation at a moment’s notice, invested in English skills, education, training, and general economic assimilation, doubling their rate of human capital accumulation. This led to a “win-win” for both workers who enjoyed significant wage increases and employers who benefited from significant productivity increases. This effect of granting legal status appears to be unaccounted for in the CIS analysis of the fiscal impact of a future legalization program.
Unrealistic Policy Conclusions
Not surprisingly, the picture painted by CIS of the immigration reform debate is a narrow one as well: either enforce existing law or grant amnesty. However, there is a growing consensus in both political parties that our immigration system needs to be comprehensively reformed. Our current system of haphazard laws, spotty enforcement, border chaos, and unfair restrictions must be replaced by a regulatory regime that makes immigration safe, legal, and orderly.
Such reforms would include three basic planks:
This is the serious debate. For policy makers and the American people to get it right, rigorous research and honest policy debate is needed. Unfortunately, this CIS report, like so many before, fails on both counts.
Frank Sharry is the Executive Director of the National Immigration Forum. The Forum, based in Washington D.C., is one of the nation’s premier immigration policy organizations, and has a membership of over 250 organizations nationwide. The Forum’s mission is to embrace and uphold America’s tradition as a nation of immigrants.
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