The fiscal fallout from flawed executive orders on immigration

By Alexandra Forter Sirota - NC Justice Center

Public outcry and legal challenges to President Trump’s Executive Orders on immigration were immediate. The costs to our country and economy will mount in the coming weeks, months, and could play out over generations if these Executive Orders stand.

They will be felt not just in the immigrant community but among the broader public through various mechanisms. Here are just FOUR ways in which the Executive Orders on immigration will cost our country and undermine efforts to strengthen our economy.

1. Detention, litigation and deportation costs are likely to rise. The executive orders adopt a policy of removing prioritization in the detention and deportation of undocumented immigrants which has the likely effect of increasing the number of people detained and deported across the country. At the same time, this policy shifts the responsibilities and cost for policing and detaining immigrants from the federal government to local law enforcement. It is unclear whether the time in detention could also increase as well given that the number of immigration judges will remain constant and thus likely be overloaded with cases as the number of immigrants in the system is increased.

The average cost of detention per day in North Carolina is approximately $90. Current detention numbers in North Carolina mean that we are already spending an estimated $1.2 million a year. The potential increase in detentions could grow that state and local cost figure to a conservative cost of $63 million for holding immigrants detained in North Carolina.

The costs of deportation are estimated to be on average $10,000 per person. Estimates of the cost of deporting all undocumented immigrants in the United States are $4.7 trillion over 10 years. Already, federal spending on interior enforcement has grown by 85 percent since the inception of the US Immigration and Customs Enforcement agency to $6.1 billion.

2. Building a wall is a cost that will have to be paid for somehow. Thus far, there is no serious and viable plan that would keep Americans from paying to build the wall.

The estimated costs of building the wall is estimated between $15 and $25 billion. The maintenance of the wall has been estimated to be $750 million annually. The cost of building the wall is equivalent to a third of the country’s investment in medical care for veterans; would cover the entire federal investment to provide high-quality education for all students and work to close the achievement gap; and could provide affordable housing to 2.2 million Americans. Instead of investing in a wall, with that money the federal government could hire 40,000 teachers for ten years or build 230,000 new homes and cut the number of individuals experiencing homelessness in the country by almost half.

3. Restricting labor flows will impact industry and usher in a new post-free-trade paradigm. As countries retaliate for closing the flow of labor across borders, there will be challenges for investors who seek to place their capital in business operations and investments abroad, barriers to the research and development that has seeded new technologies and ventures here in the U.S. and difficulties for industries that seek a labor force with specialized skills and experience. A whole host of cascading effects on the cost of doing business could also ensue as inputs into our supply chains and markets for our products are reduced driving the cost up of what is available.

The restriction on the mobility of labor will likely make worse the already significant economic loss from failing to realize the skills of immigrants in our labor markets which the Migration Policy Institute estimates in earnings alone is $39.4 billion annually. In the extreme, North Carolina industries under mass deportation would experience a $10.6 billion net loss in productivity.

The literature on the economic harm of restricting immigration flows has reached overall consensus: the benefits of immigrants to the size of the labor force, earnings levels of all workers in the long-term and consumption in the broader economy is positive.

4. Our labor markets and social security systems, to name just two, depend on immigrants to remain vibrant and solvent. The United States is on the pathway to a major demographic shift with the aging of our population. Immigrants to North Carolina are likely to be younger and also have a higher labor force participation rate playing a critical role in our communities as workers, entrepreneurs, taxpayers and consumers. Estimates suggest that the United States will need to add 25 million workers by 2030 to maintain economic growth and immigrants are important to achieving that target.

Despite the rhetoric, it is important to note that undocumented immigrants also pay taxes including social security taxes even though they cannot access those benefits. This means that their payments are in part keeping the Social Security system solvent right now.

Undocumented immigrants in North Carolina also pay approximately $278 million in state and local taxes. In the United States, undocumented immigrants pay approximately $11.64 billion in state and local taxes contributing to the infrastructure in communities across the country supported by state and local government services.

There are many reasons to oppose the recent Executive Actions on immigration but its costs and drain on our economy should be prominent among the problems listed with these ill-crafted orders.

Alexandra Sirota is the Director of the N.C. Budget and Tax Center.

By Alexandra Forter Sirota

NC Justice Center

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