Texas Border Business
By M. Ray Perryman, The EconomistÂ
A Two-Million-Job Issue
The clock is ticking on a two-million-job issue: finding a permanent solution to replace Deferred Action for Childhood Arrivals (DACA). The DACA program allows individuals who entered the United States as children to remain here for school or work. Nearly 800,000 persons across the country are enrolled in the program, and approximately 124,300 of these individuals (often called “Dreamers”) live in Texas.
DACA was never intended to be a permanent solution, and it is time for Congress to step up and deal with the situation in a sustainable manner. The Trump Administration’s decision to end the current version of DACA allowed six months for Congressional action to provide a replacement. If no action is taken, the Dreamers will be subject to deportation when work visas in place on March 5, 2018 expire. The problem is that DACA is the result of a 2012 Presidential memorandum, was never intended to be a long-term solution, and was facing significant challenges on legal and other fronts. The economy needs the Dreamers, who are either already working or preparing to do so by attending school.
Given underlying changes in the US workforce, immigrants, both documented and undocumented, will become a more crucial source of labor over time. Even if all currently unemployed persons in Texas filled jobs now held by undocumented workers (which is impossible for myriad reasons), the state would be left with a glaring gap of hundreds of thousands of workers if the undocumented workforce were no longer available. Certain industries are particularly in need of workers and rely on undocumented individuals, and events such as Hurricane Harvey exacerbate the shortage. As fears of deportation rise, it becomes increasingly difficult to access this critical resource.
Apart from the obvious social and human issues associated with removing the DACA recipients, there are very real economic losses that would occur if DACA is allowed to expire. I recently looked at the numbers, quantifying the direct economic benefits of the Dreamers. I also used our impact assessment system to estimate the total gains in business activity they generate including multiplier effects.
For the United States, direct benefits of Dreamers each year include an estimated $84.3 billion in output (gross product), $52.8 billion in personal income and almost 685,200 jobs. When multiplier effects are considered, the total benefits rise to $188.6 billion in output and $117.3 billion in income per year as well as nearly 2.1 million jobs.
For Texas, the direct gains in business activity associated with the Dreamers include an estimated $11.5 billion in output (gross product) and $7.2 billion in income each year in addition to more than 108,100 jobs. When multiplier effects are included, the total rises to $25.8 billion in annual output, $16.0 billion in income per year, and 324,000 jobs.
The economic consequences go beyond these numbers. Uncertainty related to DACA causes notable other problems, both for the individuals involved and for those interacting with them (such as potential employers). Furthermore, there are also people who are undocumented entirely, with even more challenges such as being unable to start a business, buy an airplane ticket, or obtain a checking account. Although the issues related to immigration are complex, economic benefits of this magnitude should not be ignored in the conversation regarding immigration reform.
Recently, some members of Congress have announced that they are tying their votes on the appropriations bill needed to fund the federal government past December 31 to the inclusion of a DACA fix. While a solution is imperative, so too is avoiding a government shutdown. The deadline for DACA is in March, and this may not be the time to play politics on passing the appropriations bill. No good can come out of a failure to act to fund the government (but that’s a topic for another day).
Rational immigration reform is clearly needed, and solving the problem facing Dreamers can be an important first step. The immigrant workforce is critical to long-term prosperity in the United States and in Texas, particularly given the aging of the population and slowing of workforce growth. In addition, immigrants (including undocumented immigrants) generate substantial business activity through consumer spending and other activity. Millions of jobs are at stake, and Congress needs to work together to replace DACA with a permanent solution.
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Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.
