Summer Chat: How Will Immigration Reform Impact the U.S. Economy?

My friends and I were talking the other day about immigration reform and how it might affect the economy. While we have varying perspectives on how to go about it, we all seem to agree that reform is a good thing. Looking at what’s trending in news and social media networks on the topic, our views are pretty much on par with what most other Americans are saying.

When the House reconvenes in September, it will take up immigration reform passed by the Senate earlier this summer.¹ Discussions will cover reform’s impact on families and patriotism, but mainly the focus will be on the economy. At the heart of the debate is the bill’s provision on the path to citizenship for 11 million undocumented immigrants here today. Most Republican voters polled support citizenship, but with tougher border-security measures than the current bill contains.² So maybe the two camps aren’t too far apart for agreement by early next year at least.

Other measures in the bill include doubling the number of skilled immigrants eligible for temporary H-1B visas, significantly increasing border security, expanding the fence along the Mexican border, doubling the number of patrol agents, and creating a more-robust employment verification system.³

A multitude of American companies are pushing for reform. In a unified letter to Speaker John Boehner and Minority Leader Nancy Pelosi on July 31, hundreds of them urge Congress to enact reform – and “not let this momentum slip and progress vanish.”

“Done right, reform will serve to protect and complement our U.S. workforce, generating greater productivity and economic activity that will lead to new innovations, products, businesses, and jobs in communities across the U.S.,” says the letter, signed by hundreds of American corporations.

Names like the American Farm Bureau, California Cotton Growers, Maryland Nursery and Landscape Association, and the New England Apple Council appear in the signature block – but so do those of Adobe, AT&T, Caterpillar, Facebook, Dow Chemical Company, eBay, General Electric, IBM Corporation, Ingersoll Rand, Microsoft, NASDAQ QMX, and Yahoo!

Then there’s Wall Street to consider. In an article published last month in Barron’s titled Winners and Losers of Immigration Reform, Leslie Norton did a nice job outlining more specifically how companies might benefit – and might not. For example, consider if millions more individuals must file taxes. It’s likely many of them would seek assistance from H&R Block and other preparers that may cater to low-income employees.

Payroll processors, such as Automatic Data Processing (ADP) and Paychex (PAYX) will see an uptick in business. Companies involved with border control, identity control, and surveillance may also likely benefit. Organizations that serve the Hispanic community, like Telemundo, which is owned by Comcast (CMCSA), and banks that lean toward serving people with English as a second language may also benefit. Companies that manage outsourcing may not fare so well as more American corporations may be strongly encouraged to look inward for workers instead.⁴

Since the bill cuts paperwork for annual country caps on workers and increases visas, many software developers are hoping for its passage. A large number of their engineers are from places like India. The Obama Administration says the bill will support travel and tourism by easing the visa process for low-risk visitors, while strengthening law enforcement for high-risk applicants.⁵

While under the current proposal, government spending would increase by almost $300 billion, that figure would be more than covered by the additional tax revenue of an estimated 9,000 more employees working on the record.

It will be interesting to see what happens in the legislature this fall.

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