Conservative media outlets are attacking President Obama's immigration action with myths that the newly protected workers will hurt the economy and the tax system. In reality, immigration increases wages and doesn't hurt employment, and the executive action is likely to boost tax revenue.
Obama Announces Executive Action On Immigration
Obama's Executive Action On Immigration Will Protect Some From Deportation, Expand Work Permits. In a November 20 speech, Obama announced a plan to offer protection from deportation to as many as 5 million undocumented immigrants and allow some high-skilled undocumented workers to gain legal employment. As Obama explained in his speech, immigrants who apply for the protections will have to meet several requirements, including passing a criminal background check and paying taxes:
OBAMA: So we're going to offer the following deal: If you've been in America for more than five years; if you have children who are American citizens or legal residents; if you register, pass a criminal background check, and you're willing to pay your fair share of taxes -- you'll be able to apply to stay in this country temporarily without fear of deportation. You can come out of the shadows and get right with the law. That's what this deal is. [WhiteHouse.gov, 11/20/14]
MYTH: Conservative Media Claim Executive Action Means “Every Job Created Under Obama Could Go To An Illegal Alien”
Fox & Friends: “Every Job Created Under Obama Could Go To An Illegal Alien.” Fox & Friends co-hosts Tucker Carlson and Elisabeth Hasselbeck agreed that the executive action could displace millions of American workers and counteract all the job growth the U.S. economy has seen since Obama's presidency began:
CARLSON: This is a big deal. I mean, this is a vast number. Just to put it in some perspective, the president has just added to the U.S. workforce legally about the same number of people as jobs that have been created during his presidency. That's another way of saying, every job created under Obama could go to an illegal alien. I mean, the numbers match up exactly. And by the way, since the '70s, you know what is the lowest since the '70s? The labor force participation rate. There are fewer Americans working, 63 percent as of today,even looking for a job.
HASSELBECK: Well, and now they have new competition coming their way with these work permits. [Fox News, Fox & Friends, 11/21/14]
Daily Caller: “Obama's Amnesty Will Add As Many Foreign Workers As New Jobs Since 2009.” The Daily Caller claimed that “Obama's unilateral amnesty will quickly add as many foreign workers to the nation's legal labor force as the total number of new jobs created by his economy since 2009” and that immigrants will displace American workers and depress wages:
The surplus of domestic and foreign job-seekers also helps ensure that U.S. median wages have flat-lined since 2000. Economists -- including Obama's top economic adviser -- say that wages stall when the labor supply is larger than the supply of new jobs.
But if the labor market tightens because the number of job-seekers is fewer than than number of new jobs, the wages will rise in the tight labor market. For example, in the late 1990s, even lower-skilled people saw their wages increase because the labor supply grew slower than the Internet-boosted job market.
That relationship, however, is shifted by technology, which creates and eliminates jobs for Americans. [The Daily Caller, 11/20/14]
Drudge Report Promotes Claim That More Foreign Workers Were Legalized Than Jobs Created. The Drudge Report hyped the Daily Caller's claim:
[Drudge Report Archives, 11/21/14]
REALITY: Immigration Actually Boosts American Wages And Productivity
Economic Policy Institute: Immigration Has “Positive Impact On The Wages Of Native-Born Workers.” A February 2010 study by the Economic Policy Institute found that immigration has a “positive impact on the wages of native-born workers overall: although new immigrant workers add to the labor supply, they also consume goods and services, which creates more jobs.” [Economic Policy Institute, 2/4/10]
National Bureau Of Economic Research Paper: Immigrants Have Positive Long-Term Impact On Wages Of Native-Born Workers. A working paper from the National Bureau of Economic Research found that from 1990 to 2006, immigration had a positive long-term effect on the wages of native-born workers. [National Bureau of Economic Research, 7/08]
Brookings Institution: “Many Immigrants Complement The Work Of U.S. Employees And Increase Their Productivity.” The Brookings Institution reported similar findings, that “immigrants and U.S.-born workers generally do not compete for the same jobs; instead many immigrants complement the work of U.S. employees and increase their productivity”:
The most recent academic research suggests that, on average, immigrants raise the overall standard of living of American workers by boosting wages and lowering prices. One reason is that immigrants and U.S.-born workers generally do not compete for the same jobs; instead many immigrants complement the work of U.S. employees and increase their productivity. For example, low-skill immigrant laborers allow U.S.-born farmers, contractors, or craftsmen to expand agricultural production or to build more homes -- thereby expanding employment possibilities and incomes for U.S. workers. [The Brookings Institution, 9/10]
... Studies Show Increased Immigration Is Not Connected To Unemployment ...
Immigration Policy Center: “There Is Little Apparent Relationship Between Recent Immigration And Unemployment Rates.” The Immigration Policy Center found that immigration has no apparent correlation with unemployment statistics (emphasis original):
- If immigrants really “took” jobs away from large numbers of native-born workers, especially during economic hard times, then one would expect to find high unemployment rates in those parts of the country with large numbers of immigrants -- especially immigrants who have come to the United States recently and, presumably, are more willing to work for lower wages and under worse conditions than either long-term immigrants or native-born workers. Yet there is little apparent relationship between recent immigration and unemployment rates at the regional, state, or county level.
- An IPC analysis of 2011 data from the American Community Survey found that, at the county level, there is no statistically significant relationship between the unemployment rate and the presence of recent immigrants who arrived in 2000 or later. [Immigration Policy Center, 6/12/13]
Immigration Policy Center: “Immigrants Are Not The Cause Of High Unemployment And Low Wages Among Minority Workers.” In a study conducted for the Immigration Policy Center, Rob Paral and Associates found “no correlation between the size of the foreign-born population and the African-American unemployment rate in U.S. metropolitan areas.” [Immigration Policy Center, 3/1/11]
Foreign-Born And Native-Born Workers Generally Do Not Compete For The Same Jobs. According to the American Immigration Council, “native-born and immigrant workers fill different kinds of jobs” (emphasis original):
Immigrants and native-born workers fill different kinds of jobs that require different skills. Even among less-educated workers, immigrants and native-born workers tend to work in different occupations and industries. If they do work in the same occupation or industry -- or even the same business -- they usually specialize in different tasks, with native-born workers taking higher-paid jobs that require better English-language skills than many immigrant workers possess. In other words, immigrants and native-born workers usually complement each other rather than compete. [Immigration Policy Center, 6/12/13]
MYTH: Conservative Media Suggest Affected Immigrants Will Be A Drain On The Tax System
National Review Online: “Most Legalized Illegals Will Have No Net Income-Tax Liabilities.” In a November 20 post, National Review Online's Avik Roy disputed the fact that the immigrants who gain protection from deportation under the new executive action will have to “pay their fair share of taxes” by arguing that “the vast majority of undocumented aliens don't make enough in income to have a net income-tax liability.” Roy claimed that, instead of contributing taxes, “it is likely that the undocumented workers will end up receiving rather than paying the Treasury money” since many would benefit from the Earned Income Tax Credit, which provides refunds to low-income taxpayers. [National Review Online,11/20/14]
Fox's Tucker Carlson: Undocumented Immigrants Are “Going To Get A Lot More Money Back From The Government Than They're Paying In.” On the November 21 edition of Fox & Friends, co-host Tucker Carlson suggested that undocumented immigrants who will begin paying taxes will “get a lot more money back from the government than they're paying in.” Fox Business host Stuart Varney agreed:
CARLSON: The president says they're going to pay taxes, but most of the families don't make enough to pay income taxes. In fact, they get money back on the Earned Income TaxCredit. So in fact, they're going to get a lot more government money than they're paying in, no?
VARNEY: I think the taxes that he's referring to are Social Security taxes, which you would, in fact, pay as soon as you go on the books. But you're right. The income of many of the people who are allowed to stay is so low that they don't meet the threshold for state or federal income taxes and probably get a check in the mail in January from the Earned IncomeTax Credit.
CARLSON: So we're sending more checks to more people who aren't even here legally?
VARNEY: That will probably happen. [Fox News, Fox & Friends, 11/21/14]
Daily Caller: “Illegal Immigrants Will Receive Huge Payments From American Taxpayers.” A Daily Caller article claimed that "[i]llegal immigrants will receive huge payments from American taxpayers under rules now being imposed by President Barack Obama's unilateral amnesty" because, in part, “once illegal immigrants are enrolled in the tax system, they would be entitled to EITC payments.” The article said that "[m]ost households of illegals have very low income" and that “payments may be huge, and will rise each year.” [The Daily Caller, 11/20/14]
REALITY: Immigrants Are Predicted To Pay More In Taxes Than They Receive In Benefits
Politico: Immigrants' Tax Contributions Will “More Than Make Up For” Federal Tax Credits They Receive. Politico noted that while some of the immigrants affected will likely qualify for tax credits that benefit the working poor, their overall tax contributions will “more than make up for the credits the government pays to them.” Politico also cited economics professor Madeline Zavodny, who noted that immigrants' wages typically rise when they are able to work legally, which she said “would also mean more taxes”:
But the 5 million will also pay a modest amount of new taxes to Uncle Sam that experts said will more than make up for the credits the government pays to them -- potentially even creating a small plus-up for the Treasury.
“You would see a gain in earnings, in tax compliance, and some gain in the claim of tax credits -- and the net of all that would almost surely be positive,” said David Kallick, a senior fellow at the immigration research initiative at the Fiscal Policy Institute.
Indeed, the Congressional Budget Office scored the Senate's landmark 2013 immigration overhaul as reducing the deficit by nearly $200 billion over a decade -- in part because of nearly $460 billion in projected new tax revenue.
But that was based on a comprehensive immigration reform package that would have given legal status to 8 million of the current undocumented population and increased permanent residents in the U.S. by more than 10 million over a decade.
Obama's plan will be a fraction of that, and under much different circumstances.
The left-leaning Institute on Taxation and Economic Policy in 2013 released a report showing a $2 billion gain in state revenue from immigration reform -- even after tax credits were taken into consideration.
Matt Gardner, ITEP executive director, said the new program's effects won't be quite as big, but it will still be a net gain. That's because immigrants already pay a bunch of state and local tax. [Politico, 11/20/14]
Center For American Progress: Tax Revenue Would Increase If Immigrants Who Have Been In The U.S. For More Than 5 Years Worked Legally. A recent report from the Center for American Progress (CAP) found that making undocumented immigrants eligible for work permits would increase tax revenue by $6.1 billion in payroll taxes in the next year and would contribute a total of $45 billion over five years. Obama's plan acts similarly, though it does not expand protections to all undocumented immigrants who have been in the U.S. for that length of time. From CAP (emphasis original):
· Expanding the Deferred Action program would immediately yield billions of dollars in tax revenues, while increasing wages and job security for all Americans. Allowing low-priority unauthorized immigrants who have been in the country for five years to apply for deferred action -- a temporary work permit and deferral of deportation -- would mean that they could earn higher average wages and protection from exploitation. This would have a significant impact on the U.S. economy, yielding $6.1 billion in payroll tax revenue in the first year and increasing gains of up to $45 billion over the next five years. [Center for American Progress, 10/23/14]
Center For American Progress: Failing To Offer Protections “Is Not Revenue Neutral.” CAP further noted that decreasing deportations would carry economic benefits and lower government spending (emphasis original):
· Maintaining the status quo is not revenue neutral. With only one-third of unauthorized immigrants working in the formal economy and contributing about $12 billion in payroll taxes each year, the United States loses around $20 billion in payroll tax revenue annually. This lost revenue would go a long way toward funding the retirement of Americans across the country.
· The United States spends more on immigration and border enforcement annually than the annual gross domestic product of 80 countries. In fact, the United States now spends $3.5 billion more on immigration and border enforcement -- a total of nearly $18 billion per year -- than it does on all other federal law enforcement combined.
· A self-deportation regime would cost our economy trillions of dollars. If all undocumented immigrants in the country were deported or “self-deported” -- meaning they choose to leave the country because life is too difficult -- the United States' cumulative GDP would suffer a hit of $2.6 trillion over 10 years.
· Mass deportation of the undocumented immigrant population would cost billions of dollars. Deporting the entire undocumented population would cost $285 billion over a five-year period, including continued border and interior enforcement efforts. For that price, we could hire more than 1 million new public high school teachers and pay their salaries for five years.
· It costs taxpayers more than $20,000 to carry out the deportation of a single individual. Apprehending, detaining, processing, and transporting one individual in the deportation process cost $23,482 in fiscal year 2008. [Center for American Progress, 10/23/14]
MYTH: Conservatives Charge That Immigration Action Will “Destroy Opportunities For Millions Of Black People”
Breitbart.com: Immigration Action Will “Detrimentally Impact Black Workers.” In a November 20 post, Breitbart.com claimed that “granting illegal immigrants work permits will detrimentally impact black workers.” [Breitbart.com, 11/20/14]
Laura Ingraham: Immigration Action “Will Destroy Opportunities For Millions Of Black People Across This Country.” Conservative radio host Laura Ingraham argued that Obama's executive action will undermine black Americans' job prospects:
INGRAHAM: All of the people who are considering protesting in Ferguson because of the Michael Brown shooting, you might want to think about protesting this. You might want to think about protesting something that will destroy opportunities for millions of black people across this country. I know it kind of conflicts with what you think about Barack Obama, and part of you loves Barack Obama because he represents so much to you, and I get that. But for our African-American listeners, and we have a lot -- think about what this says and does to you. And not just of course to black Americans, to anyone here legally or a citizen. [Courtside Entertainment Group, The Laura Ingraham Show, 11/21/14]
REALITY: Latino Immigrants Boost African American Employment And Wages, Lower Poverty
Immigration Policy Center: “Latino Immigration Boost African American Employment And Wages.” A 2013 analysis from the American Immigration Council's Immigration Policy Center debunked the “common myth that African Americans are negatively impacted by the immigration of less-skilled workers from Mexico and elsewhere in Latin America.” It found that “Latino immigrants and African Americans fill complementary roles in the labor market” and that cities are actually “rejuvenated by an inflow of Latino immigrants,” leading to higher wages, lower poverty, and lower unemployment in local African American populations:
The evidence shows that cities with greater immigration from Latin America experience:
1. Higher wages for African Americans. For every 1% increase in a city's share of Latinos, African median and mean wages increase by 3%. This relationship is large. Consider St. Louis, which has 1.5% of its population from Latin America. If St. Louis were to have a Latino population share as large as other large metropolitan areas, African American wages would be approximately 30% higher.
2. Lower shares of African Americans in poverty (less than $20,000) and greater shares of African Americans who are well-off (incomes exceeding $60,000). For every 1% increase in a city's share of Latinos, the city experiences a 1.6% increase in relatively well-off African Americans and fall in poor African Americans.
3. Less poverty across different African American age groups. A 1% increase in a city's young (ages 18-24), middle aged (25-34) and more mature Latinos (35-64) yields approximately 1.1-2.3% fewer African Americans in poverty in the same age cohorts. At the same time, more young, middle-aged, and older Latinos lead to more African Americans of similar cohorts with incomes exceeding $60,000.
4. Lower African American unemployment. This finding is significant at the 99% level across different age cohorts. For instance, cities with a 1% increase in Latinos ages 20-24 leads to a .26% decrease in unemployment rates among African Americans ages 20-24; a rise in Latinos ages 25-34 implies even greater declines in African Americans unemployment with ages 25-34.
5. More jobs among all African American age cohorts. A 1% rise in Latino immigration contributes to a 1.4% increase in employment rates among African Americans, and increases in young Latinos (20-24) contribute to 0.5% increase in employment among young African Americans. [Immigration Policy Center, 6/12/13]