MARCH 3, 2018



Immigrants Are Huge Contributors...(cont.)

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Facts show immigrants are vital to U.S. Economy

Fact: Immigrants’ tax contributions are huge. Studies show that immigrants pay more in taxes over a lifetime than they consume in government services. Immigrants pay income taxes, sales taxes, state and county taxes, property taxes, and social security. These taxes collected help to underwrite transportation, health care, education and other government services for themselves and other Americans.

Immigrants contributed $105 billion in state and local taxes and nearly $224

billion in federal taxes in 2014, according to the Partnership for a New American Economy.

In Hawaii, immigrant-led households paid $1.2 billion in federal taxes and $668.5 million in state and local taxes in 2014.

The American Immigration Council estimates that undocumented immigrants in Hawaii paid an estimated $32.3 million in state and local taxes in 2014.

Fact: Immigrants help to grow the economy and are vital to our workforce. Immigrants are a sizeable chunk of the overall workforce and help to grow the nation’s GDP. Immigrants make up 13 percent of the U.S. population, but they contribute nearly 15 percent of the country’s economic output, according to the Economic Policy Institute.

Immigration economist George Borjas says “immigrants help to grow the economy by 11% larger ($1.6 trillion) each year.”

As baby boomers have begun moving into retirement, experts say a continual inflow of immigrants are needed (not cutting legal immigration) to stabilize the economy. If the rate of new immigrants is cut by half, experts estimate it would reduce U.S. economic growth by 12.5%.

In Hawaii, there are 150,000 adult immigrant workers, comprising 21.2 percent of the labor force, according to the American Immigration Council.

Where do immigrants work? The Council reports that Hawaii immigrant workers were found most often in the following occupation groups: building and grounds cleaning and maintenance (25,600), sales and related (22,453), food preparation and serving-¬related (18,034), office and administrative support (16,833), and management (13,279).

Fact: immigrants are huge consumers. Immigrants earned $1.3 trillion annually and their wages go toward purchasing homes, food, electronics, and all kinds of goods and services that expand the domestic economy. In turn, their spending helps to create more jobs.

After taxes are paid, Hawaii immigrants wield a whopping $5 billion in spending power, according to the American Immigration Council.

Fact: immigrants are not taking native-born workers jobs. The Economic Policy Institute found that immigrants are not substitutes for native-born workers in the U.S. labor markets. They do not compete for the same jobs, in part, due to limited English proficiency. Studies show immigrants are competing for jobs occupied by immigrants, and that immigrants are pushing U.S.-born workers up in the labor market.

Another source, the Current Population Survey, Annual Social and Economic Supplement, also found that immigrants tend to complement American-born workers than replacing them.

In some areas like agriculture, immigrants fill a much-needed gap in the workforce. Studies show that native-born workers do not want to work as crop pickers. Native-born workers in this field have a high turnover rate and most eventually quit after a short period. What we have in this industry is immigrant workers filling a need.  Agriculture field workers are mostly immigrants, or temporary immigrants on visas contracted by Americans farms, or undocumented immigrants. They are the backbone of this industry.

According to the Pew Research Center, 26% of agriculture workers are undocumented immigrants. But in some areas of the country, that number is higher. Robert Guenther, senior vice president for public policy for the United Fresh Produce Association, estimates “undocumented farm workers in some regions are at 50 to 70%.” The Department of Labor is less conservative than Pew and puts the number of undocumented agriculture workers at 46%

Fact: Immigrants are not making wages cheaper. The Bureau of Labor Statistics Standard found that higher labor supply caused by immigrants only initially depress wages, but over time, companies increase investment to restore the amount of capital per worker, which then restores wages.

The National Academies of Sciences, Engineering, and Medicine studies the wage impact of immigrants over periods of ten years or more and found immigration has only a small effect on wages of native-born workers. Those who are likely to have their wages negatively affected are prior immigrants or native-born workers without a high school degree.

A study from Penn Wharton, University of Pennsylvania’s school of business, made a similar conclusion. The Penn Wharton study says immigrants have had little effect on Americans’ wages in the long run since the 1970s.

David Kallick, the director of Immigration Research Initiative at the Fiscal Policy Institute, said “"It may seem surprising, but study after study has shown that immigration actually improves wages to U.S.-born workers and provides more job opportunities for U.S.-born workers. The fact is that immigrants often push U.S.-born workers up in the labor market rather than out of it."

Fact: Immigrants are leaders in innovation that boosts economic progress. They make up a disproportionately high share of patent filings, science and technology graduates, and senior positions at top venture capital-funded firms. 76% of patents from top 10 U.S. patent-producing universities had at least one foreign-born author. There is a historical link that innovation grows the GDP.

Professor Abinales mentioned Diosdado Banatao among the Silicon Valley movers-and-shakers. Born in Iguig, Cagayan, Philippines, Banatao moved to Silicon Valley to become a venture capitalist and technology innovator. Back in the Philippines, and here in the U.S., he is known as the “Pinoy Bill Gates.

Fact: Immigrants contribute to the economy as entrepreneurs and small business owners. Immigrants are more likely to own businesses than native-born Americans. An analysis from the Small Business Administration found that 10.5 percent of U.S. immigrants own a business, compared with 9.3 percent of native-born Americans.

In Hawaii, nearly 20,000 immigrant business owners accounted for nearly a quarter of all self-employed Hawaii residents in 2015, generating $384.7 million in business revenue.

Fact: Immigrants play a major role in corporate America. About one-third of companies that go public had at least one immigrant founder. Of the 87 privately held companies currently valued at over $1 billion, 51 percent had immigrant founders, according to the Bureau of Labor Statistics.

A report from the Partnership for a New American Economy shows that immigrant entrepreneurs are overrepresented on the list of founders of Fortune 500 companies. More than 40 percent of Fortune 500 companies were founded by immigrants or their children.

The Net Positive Effect

When analyzing data scholars look at all the interrelated parts and come up with a net-positive or net-negative effect. Where much of the misinformation for political ends takes place occurs when only select data are used to present a false picture. Analyzing multiple positive and negative data then making a conclusion renders greater accuracy. Immigrants’ positive tax contributions to consum er spending to workforce roles in addition to the negative losses of welfare assistance, public education, and temporary depression of wage must all be considered to determine a net-positive or net-negative effect.

A study from Penn Wharton, University of Pennsylvania’s school of business says overall immigration (documented and undocumented) has a net-positive effect on combined federal, state, and local budgets. But the study recognizes there are regional differences by state and counties with large populations of less educated, lower-income immigrants showing net-negative costs due to heavier use of public services, especially public education.

In just tax contributions alone, the National Academy of Sciences says the average immigrant contributes over the span of a lifetime at least $92,000 more in taxes compared to the benefits that he or she claims from the government.

While much of the national debate over immigration is focused on political and cultural issues, the economic effects immigrants have must also be considered. The problem is that when they are mentioned, select data is used to fuel myths without consideration of overall contributions. The bulk of scholarly research shows that immigration is beneficial to the U.S. economy when weighing in all their contributions and losses. The long-term impact to the economy from immigrants is broadly positive -- this is what Americans should know of today’s immigration.

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