Federal reform will expand immigrants’ economic contributions at the state level

Added August 19th, 2015 by Seema Singh | Email This Entry Email This Entry
Seema Singh

Despite ongoing political rhetoric designed to raise fear and animosity surrounding immigration, immigrants, including undocumented immigrants, contribute a great deal to Michigan’s economy. There are many reasons why federal immigration reform through expansion of Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) and Deferred Action for Childhood Arrivals (DACA) makes economic sense for Michigan as a whole.

The Center for American Progress did a state by state analysis of the economic impact of DACA and DAPA expansion policies. For Michigan it estimates that these expansions would result in a $1.86 billion increase in cumulative Gross Domestic Product and create 230 new jobs. Another recent study by the Institute on Taxation and Economic Policy (ITEP) shows undocumented immigrants pay a greater proportion of their income through sales and property taxes as well as income taxes.

About 75% of undocumented immigrants still file income taxes annually, and undocumented immigrants paid about $11.8 billion around the country in state and local taxes in 2012. The ITEP report focused on the impact of federal reform of DAPA and DACA that would allow undocumented immigrants meeting certain criteria to stay in the U.S. temporarily without fear of deportation.

According to the report’s findings, granting undocumented immigrants lawful permanent residence will:

    • Raise the taxes that they pay on average from 8-8.7% based on an increase in earnings;
    • Will lift state and local tax collections by about $2.2 billion a year.

Undocumented immigrants grow up and attend school in Michigan, but face significant challenges due to their status when it comes time to go to college or enter the workforce. In 2013, many Michigan universities changed policies to offer in-state tuition to undocumented youth; however, these students still do not qualify for state aid, and many young undocumented students are still unaware that college is even an option. Many of these students would qualify for deferred action under DACA, broadening their educational and professional horizons while helping Michigan keep up with the demand for health and other college-educated professions.

Meanwhile, many politicians have recently been outspoken about “sanctuary cities,” which have become an unwarranted scapegoat for an unfortunate crime. Sanctuary cities are communities that provide some protection for undocumented immigrants, where local police generally do not enforce federal immigration laws, varying with each locality. These policies are meant to enhance trust between communities and police and decrease use of courts and jails for nonviolent offenders. Arizona-style immigration legislation was recently introduced in Michigan. This knee-jerk legislation is bad policy, and as Arizona showed, the potential cost of this type of legislation is already quite clear — including expensive litigation, business losses and high training costs.

At a time when Michigan seeks to attract and keep young skilled workers in the state, and become a global hub for innovation, it is important that the contributions of undocumented immigrants are not overlooked. Reforms like DAPA and DACA could add a much needed economic boost to the economy, resulting in more jobs, greater individual earnings, and ultimately more state revenue that is needed to fund vital services like transportation and schools for the entire state.

—  Seema Singh


2 Responses to “Federal reform will expand immigrants’ economic contributions at the state level”

  1. […] and Lawful Permanent Residents (DAPA) and Deferred Action for Childhood Arrivals (DACA) were positive steps taken to address the large number of immigrants stuck in limbo in Michigan and around the […]

  2. […] and DACA make economic sense and make our communities safer, and give these youth an opportunity to contribute taxes and support […]

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