Study Predicts $1.5 Trillion Increase in GDP if Undocumented Immigrants Are Legalized

A new study by University of California at Los Angeles professor Raúl Hinojosa-Ojeda suggests that comprehensive immigration reform, which includes an earned path to legalization for undocumented immigrants, could generate at least $1.5 trillion in added U.S. gross domestic product over 10 years. Hinojosa explains the data behind his immense calculation:

All immigrant workers in this scenario have full labor rights, which results in higher wages — and higher worker productivity—for all workers in industries where large numbers of immigrants are employed. As wage and productivity levels rise, the U.S. economy’s demand for new immigrant workers actually declines over time as the market shrinks for easily exploited, low-wage, low-productivity workers. [...]

The higher earning power of newly legalized workers translates into an increase in net personal income of $30 to $36 billion, which would generate $4.5 to $5.4 billion in additional net tax revenue. Moreover, an increase in personal income of this scale would generate consumer spending sufficient to support 750,000 to 900,000 jobs…

According to Hinojosa, a mass deportation program often cited by right-wing enforcement-only advocates would actually result in a loss of $2.6 trillion over ten years while a solution that only consists of a temporary worker program that labor unions vehemently oppose andsome moderate Republicans support would only yield $792 billion increase in GDP and also lead to a decrease in wages.

More at the Wonk Room.