Financial Benefits of Legalizing Undocumented Immigrants Outweigh Costs

The benefits of legalizing many of the 11 million undocumented immigrants under business-backed reforms being considered by Congress outweigh the costs.

That is according to a new study by the Levy Economics Institute at Bard College in New York.

A white paper by Selcuk Eren contends legalized unauthorized immigrants would leave under-the-table jobs and start paying Social Security and other taxes, get better paying jobs and may save and spend more on their lives here in the U.S. rather than sending that money back to family in Mexico and other home countries.

“Legalization should be expected to increase the level of capitalization in the U.S. economy,” Eren said.

Immigrants send as much as $25 billion a year back to home countries, according to the Center for Immigration Studies.

In many cases, undocumented immigrants also live on cash without credit cards or even bank accounts.

Business and economic advocates of legalization argue the reform bill in Congress will bring those workers out of the shadows and into the mainstream economy.

Eren acknowledges legalizing undocumented immigrants could add some strains on social services and welfare programs, but concludes the economic benefits outweigh those costs.

A study earlier this year by Arizona State University’s Morrison Institute expects legalization to increase immigrants’ wages by as much as $3,100 each per year. The ASU report said immigrants with legal status can get better jobs and earn higher wages than those being paid under the table or working with fake identification. Currently, unauthorized immigrants in Arizona make $27,100 a year on average.

A Congressional Budget Office report also expects reforms — if passed by Congress — to hike immigrants wages by 12 percent. But the same report said American worker wages would remain flat or decline slightly over the next two decades if reforms pass.

National and Arizona business interests are pushing hard for reforms to pass Congress. Agriculture and construction companies as well as chambers of commerce in Arizona back reforms as do high-tech CEOs such as Facebook’s Mark Zuckerberg, Google’s Eric Schmimdt and Yahoo’s Marissa Meyer. The reform bill increases the number of foreign worker visas, including for engineers and high-tech workers.