Immigration Reform 2013: Conservative Economists Say It Would Boost Economy

Just days after the Senate Judiciary Committee voted 13 to 5 to support the Gang of Eight’s Border Security, Economic Opportunity and Immigration Modernization Act of 2013, over 100 distinguished conservative economists signed a letter to congressional leaders stating that immigration reform will lead to “more rapid economic growth.” This seems to be the latest strategy to convince debt-conscious Republicans to hop on board.

The letter suggests that immigration reform will lead to population growth and labor-force growth, which will in turn boost various markets and thereby increase economic growth. To investigate this claim, we need to examine both the effects of increased high-skilled and low-skilled workers. 

The overall benefits of an increased high-skill labor force are largely undisputed. An abundance of studies show that high-skilled immigrants not only fill the void in STEM (science, technology, engineering, and mathematics) fields but also create more jobs for U.S. citizens. Analyses from an American Enterprise Institute study show that “from 2000 to 2007, an additional 100 foreign-born workers in STEM fields with advanced degrees from U.S. universities is associated with an additional 262 jobs among U.S. natives.” 

The controversy arises when evaluating the consequences of an influx of low-skill workers. While it may be counterintuitive, extensive research done by the Brookings Institute concluded that these workers do not affect “wages or employment of U.S.-born citizens at the local level” and have very little effect on the national level as well. The logic is that “immigrant specialization in [labor intensive] occupations has filled a void and, in fact, has encouraged U.S.-born citizens to take on more skill-intensive occupations.”

Overall, the economists’ claims seem to coincide with findings by the CATO Institute, which predicted that immigration reform will yield at least $1.5 trillion, or a 0.84% increase in GDP, over 10 years. Even if skeptics doubt these numbers, as the letter points out, the room for error is large. Even a 0.1 percent increase in economic growth will, “over a 10-year period, reduce the federal deficit by over $300 billion.”

Will this be enough to convince legislators on Capitol Hill? The answer is yes and no. The most outspoken opponents of the bill, such as Sen. Jeff Sessions (R-Ala.) and Sen. Ted Cruz (R-Texas), will surely continue with their objections. However, on-the-fence senators (both Republican and Democratic) may be swayed by this new development. The letter can be particularly powerful if it gains momentum from the American public. Sen. Orrin Hatch (R-Utah) and Sen. John Cornyn (R-Texas) are particularly sought-out votes, and they can certainly appreciate the cover created by these conservative economists if they do choose to support the bill.