The Economic Benefits of Administrative Relief


We’ve already looked at the economic gains that Long Island will enjoy as a result of President Barack Obama’s administrative relief program. An analysis by the President’s Council of Economic Advisers (CEA) estimates that, for the U.S. at large, the program will boost economic output between 0.4 to 0.9 percent over 10 years. This will add $90 billion to $210 billion to our GDP by 2024.

Here are some of the reasons for this growth:

Administrative relief will increase the productivity of all American workers. The program allows undocumented workers to find jobs that better match their skills and potential. This shift of workers across occupations will also allow more native workers to specialize in the tasks best suited to their abilities. These effects are likely to lead to wage increases for all workers—immigrants and natives alike. In addition, by encouraging high-skilled immigration, these actions will boost the rate of innovation and patenting in the American economy, further increasing the productivity of the American workforce.

It will increase the size of the American workforce. CEA estimates that the economy will also grow thanks to an expansion of the American labor force by nearly 150,000 people over 10 years as a result of the President’s program.

Average wages for all workers, both U.S.-born and immigrant, will increase. This boost in productivity and innovation will translate into higher wages for all types of workers. CEA estimates that by 2024 annual wages for native workers will rise 0.3 percent, or approximately $170 in today’s dollars. CEA also estimates that the President’s actions would neither increase nor decrease the likelihood of employment for native workers.

The national deficit will shrink. As the economy grows so do tax revenues, requiring the government to borrow less to finance government operations. This reduced borrowing translates into reduced spending on interest payments by the government, thus reducing overall government spending—and shrinking the deficit. CEA’s estimate of the higher economic growth associated with executive action on immigration would translate into reductions in the Federal deficit by $25 billion in 2024.

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