2009 was the year of health care reform.  Although that process is far from over, I’m hopeful that 2010 will be the year of comprehensive immigration reform.  Last week two organizations from opposite sides of the political spectrum released studies on the issue.  Interestingly, they both concluded basically the same thing – comprehensive immigration reform would be a huge boost to the U.S. economy.  As we gear up for the intense debate that is likely to come later this year, these two studies dispel many of the economic arguments of those who seek to maintain the status quo or institute an enforcement-only approach.

This is an issue both of foreign and domestic policy.   The ease with which illegal immigration takes place, provides another entry point for terrorist elements.

There is the opportunity for a bipartisan approach to immigration reform.  Senators Kennedy and McCain laid the blueprint for that approach in 2005.   However, that effort and several later iterations died in Congress.  Today, Kennedy is no longer with us and McCain’s quest to attain the Republican presidential nomination led him to reject the compromises that he had previously supported.   The issue has been quite divisive, but also has the potential to bring people together – as long as we get the facts straight.  Unfortunately, in some instances, the facts have been overtaken by raw emotions.  These two studies from opposite sides of the political spectrum will hopefully bring some more reasonable dialogue into the process.

A study released by the CATO Institute, a libertarian think-thank, uses an economic prediction model that examines a variety of scenarios including increased enforcement at the border and in the workplace, and several different legalization options such as a visa program that allows more low-skilled workers to enter the U.S. workforce legally.  The study concludes that the enforcement-only option may result in somewhat lower public expenditure on services such as education and health care.  However, at the same time there would be huge drop in economic output and job opportunities.  The net effect: a 28.6 percent reduction in immigrant workers is associated with an $80 billion/yr loss to household welfare.

Alternatively, a program of increased legal immigration would promote higher productivity and increase openings for other Americans in higher-skilled occupation, leading to an increase in GDP of $180 billion/yr.  While low-wage jobs are taken up by immigrants, there would be an increase in higher wage jobs available to other American workers.

Another study released by the left-leaning Center for American Progress estimated that a move away from the current enforcement-only approach to a more comprehensive system of legal immigration would add $1.5 trillion to the U.S. economy over 10 years.  Alternatively, the option proposed by some extremist groups – send them all home – would result in a $2.6 trillion loss to GDP over 10 years.  Such a comprehensive approach would allow a path to legal status for currently undocumented workers and enact more flexible legal limits on temporary immigration that respond to changes in U.S. labor demand.

The model used in this study is based on data gained from the 1986 legalization program that granted legal status to over three million undocumented workers.  Under a comprehensive legal immigration policy, all workers benefit from increased wages at a variety of skill levels.

It’s important to remember that both of these studies look at the economy as a whole.  It will always be possible to find examples of those who link their own job losses to lower cost immigrant labor.  However, when looking at the overall effect, it seems that there would be tremendous net benefits to the United States economy and its workers.

It’s time to move away from the heated rhetoric and examine the real costs and benefits of comprehensive immigration reform.  Over the next year some may argue that with the current state of the economy, we simply cannot afford to enact comprehensive immigration reform.  My response:  can we afford not to?

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