deportation vs. legalization in florida

7/31/2019 Deportation vs. Legalization in Florida

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The Consequences of LegalizationVersus Mass Deportation in FloridaFindings and Methodology

Dr. Ral Hinojosa-Ojeda August 2012

WWW.AMERICANPROGRESS.ORG


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The Consequences of Legalization Versus MassDeportation in FloridaFindings and Methodology

Dr. Ral Hinojosa-Ojeda August 2012


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1 Introduction

3 Economic contribution of immigrants in Florida

5 The economic consequences of mass deportation

7 The benefits of legalizing undocumented immigrantsin Florida

9 Appendix: Methodology

13 About the Author

14 Endnotes

Contents


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The effects of mass deportation versus legalization in FloridaWhat would happen to Floridas economy were it to drive out all of its undocumented immigrants? Conversely, what wouldthe impact be if all of Floridas undocumented immigrants acquired legal status? Our analysis nds that Florida would standto see signicant gains if legalization occurs, and signicant losses if mass deportation became a reality.

These results have been calculated using the IMPLAN system. For the complete Florida ndings and methodology,visit our website at: http://www.americanprogress.org/issues/immigration/report/2012/08/29/35242//

Total undocumented in 2010(4.5% of total population)

825,000

18,512,000 Total population in 2010

Florida fast facts Current contributions of undocumented workers

543,000 Total undocumentedworkers

$5.67 billionGross state product of undocumented workers

$31.22 billion Tax revenue fromundocumented workers

Mass deportation versus legalization in Florida

$31.22 billionDecrease in grossstate product if 100%deportation occurs

97,000Jobs created if 100%legalization occurs

Total wages

$3.8 billionincrease if 100%legalization occurs

$15.45 billiondecrease if 100%

deportation occurs

$1.13 billionincrease if 100%legalization occurs

$5.67 billiondecrease if 100%

deportation occurs

Tax revenue

What could Florida do with an extra $1.13 million in tax revenue?

Give136 days of freeschool lunch to everyK-12 student in the state.

Fund the salariesof close to 17,000 Registered Nurses.

Cover the fees for students to take13 million Advanced Placement Exams.

Increase the Bright Futures ScholarshipProgram for high achieving students tocover the cost of a year of college for an

additional 350,000 to 450,000 students.

Fund over 200,000 Pell Grants at themaximum level.

Completely close thestates projected 2013budget decit, with

$125 Million left over.

5.6%Of total workers areundocumented

By Ral Hinojosa-Ojeda, Director of the North American Integration and Development Center, UCLA


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1 Center or American Progress | The Consequences o Legalizat ion Versus Mass Depor tation in Florida

Introduction

Deba es abou he economic and scal bene s and drawbacks o immigran s ypi-cally oversimpli y he role ha immigran s play in our economy. When one looksmore closely, hey will nd ha he impac immigran s (or any group or ha ma -

er) have on he economy is mul i ace ed and complex.

Immigran s are no jus workers; hey are also consumers and axpayers. Tee ec s o heir labor and consump ion on economic grow h and scal heal h

mus be ac ored in as we consider how o address he si ua ion o having a largeundocumen ed work orce.1

In his repor we describe he direc impac s o ei her depor ing or legalizingundocumen ed workers. In reali y, he e ec s would be much larger. Mass depor-

a ion, or example, would resul in an indirec nega ive impac on local businesses because here would be less money circula ing in he local economy, which wouldlead o ur her job losses.2 Te es ima es repor ed here should hus be consideredconserva ive ra her han exhaus ive.3

We es ima e he economic con ribu ions o immigran s, bo h documen edand undocumen ed, or seven s a es: Arizona, Colorado, Florida, Nevada, New Mexico, exas, and Virginia. Tese seven s a es have some o he larges popula-

ions o unau horized immigran s, and have played and will con inue o play a piv-o al role in elec ions as swing s a es. We hen repor he nega ive scal impac o

our di eren depor a ion scenariosnamely wha would happen i 15, 30, 50, or100 percen o undocumen ed immigran s were removed rom he s a e. Finally, we explore he posi ive economic ou comes ha would resul rom legalizingundocumen ed immigran s in each o he seven s a es. (For a de ailed explana ion

o he me hodology used, please see he appendix on page 9.)


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Overall we nd ha each o he seven s a es would gain signi can ly rom legal-izing heir unau horized immigran s, bo h in erms o raised wages or all workersin he s a e, new jobs crea ed, and addi ional ax revenue genera ed. Conversely,depor ing even a por ion o he unau horized immigran s would lead o signi -can losses in gross s a e produc , worker wages, and ax revenues. Te bene s o

immigra ion are clear, and s a es s and o prosper hrough posi ive immigra ionpolicies, or lose ou wi h harsh and res ric ive ones.


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Florida has a o al popula ion o 18.5 million people, o which 3.6 million, or 19.2percen , are oreign born. Te s a e has 825,000 undocumen ed immigran s, com-prising 4.5 percen o he o al popula ion.4 (see able 1)

TABLE 1

Foreign-born residents

Thousands

State of Florida Share of total population

Total population 18,512 100%

Legal foreign-born residents 2,725 14.7%

Undocumented immigrants 825 4.5%

Total foreign-born residents 3,550 19.2%

Immigran workers as a whole added $137 billion o Floridas gross s a e prod-uc he o al value added by workers o he s a ein 2010, he la es year suchda a was available. Te undocumen ed work orce by i sel accoun ed or $31.2 billion o his GSP.5 Immigran workers produce even more by way o goods andservices crea ed, wi h a o al s a e ou pu o $270.6 billion, including $68.6 billion

rom undocumen ed immigran s alone. (see able 2)

Economic contribution of immigrants in Florida


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TABLE 2

The economic importance of immigrants in the labor force

Employment(thousands)

Percent of totalemployment

Gross state product*(in millions)

Output**(in millions)

Employeecompensation***

(in millions)

Total 9,774 100% $713,839 $1,154,329 $391,634

Legal foreign-born residents 1,475 15.1% $105,619 $202,092 $61,955

Undocumented immigrants 543 5.6% $31,215 $68,563 $15,451

Total foreign-born residents 2,018 20.7% $136,834 $270,655 $77,407

*Gross state product or value added includes employee compensation, proprietary income, other property income, and indirect businesstax.**Output represents the value o the total production o goods and services by industry in the regional economywhether such output isconsumed or not. Output could also be thought as the total value o sales plus or minus inventory.*** Income received by workers, including benefts and be ore taxes.

Immigran workers also pay billions o dollars o axes o he s a e reasury. Juslike he na ive born, immigran s pay personal axes, such as income ax andproper y ax, business axes (among hem corpora e pro s axes, dividends, and

proper y axes), and sales axes. Our analysis es ima es ha immigran s on he whole paid $22 billion in axes o Florida in 2010 wi h undocumen ed immigran scon ribu ing approxima ely $5.7 billion. (see able 3)

TABLE 3

The tax revenues immigrants pay

Local and state taxes

Personal taxes(in millions)*

Business taxes(in millions)**

Sales taxes(in millions)

Total taxes(in millions)

Total $3,445 $71,459 $22,163 $97,067

Legal foreign-born residents $562 $12,045 $3,739 $16,345

Undocumented immigrants $163 $4,198 $1,306 $5,668

Total foreign-born residents $725 $16,243 $5,045 $22,013

*Personal taxes include income tax, motor vehicle license ees, property tax, and other nontax fnes and ees.**Business taxes include corporate profts tax, dividends, motor vehicle license ees, property tax, severance tax, and other taxes.


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So wha would happen i all he undocumen ed immigran s were driven romhe s a e?

Removing all o he undocumen ed immigran s rom Florida would have subs an-ial, indeed devas a ing, consequences or everyone remaining in he s a e. Driving

undocumen ed immigran s ou o Florida would lead o subs an ially diminishedearnings, decreased gross s a e produc , and los ax revenue or he s a e govern-

men , which is already reeling rom he recession and high unemploymen 8.9percen in 2010 ( he base year or calcula ions) and 8.6 percen as o June 2012.

Our analysis shows ha he con rac ion rom rapidly removing undocumen edimmigran workers would have severe rami ca ions or he s a e. I all undocu-men ed workers were expelled, Florida would lose more han $15.5 billion inemployee compensa ion, de ned as pre ax salary and wage earnings. While i islikely ha some o hese posi ions would be lled by o her workers, i even 15 per-cen o unau horized immigran jobs go un lled, he s a e s ands o lose $2.3 bil-lion in employee compensa ion.6 (see able 4) As ha worker income decreases,

he earnings ha would o herwise be spen in he s a es economy, or example, ongroceries, clo hes, and housing, are los .

Tere is ample reason o suspec ha a leas a por ion o hese jobs would no be readily aken by o her workers. Immigran s end o live clus ered in cer aincommuni ies, where here may no be a ready supply o o her workers o ll heopenings hey would leave behind.7 Addi ionally, undocumen ed workers end ohave skill se s ha are speci c o he indus ries hey work in ( or example, con-s ruc ion, home heal h services, e c.) ha ofen do no ma ch hose o he na ive-

born unemployed.8

The economic consequencesof mass deportation


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TABLE 4

Mass deportation, mass income losses

Employee compensation in millions

Total employeecompensation

Direct employeecompensation*

State of Florida $391,634

15 percent deportation -$2,318




* Change in employee compensation as a result o the direct removal o undocumented individuals romthe regional economy.

Tis cycle o diminished earnings, consump ion, and demand would shrink Floridas economy. Our analysis indica es ha Floridas gross s a e produc would be reduced by more han $31.2 billion i he en ire undocumen ed popula ion

were driven rom he s a e. And even i a propor ion o hese unau horized jobs goun lledsay 15 percen ha would decrease GSP by $4.7 billion. (see able 5)

TABLE 5

Devastating Floridas economy

The effects of deporting undocumented immigrant workers on state domestic product

Gross state product, or GSP, in millions

Total GSP Direct GSP impact*

State of Florida $713,839





* Change in employee compensation as a result o the direct removal o undocumented individuals romthe regional economy.

Finally, mass depor a ion would also signi can ly decrease he s a es ax revenue,s alling he s a es economic recovery and orcing pain ul choices be ween cuting back services or implemen ing new ax increases. Al oge her, Florida would lose

$5.7 billion were mass depor a ion o become a reali y. (see able 3)

Te nex sec ion de ails why doing jus he opposi erequiring undocumen edimmigran s o regis er and work legallywould have precisely he opposi e e ec .


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Our analysis shows ha bringing all undocumen ed workers legally in o heFlorida work orce would be unques ionably bene cial o he s a e economy andall i s residen s. Ul ima ely, only he ederal governmen can resolve he s a us o

he undocumen ed. Bu or he purposes o our analysis we examine in his sec-ion o he paper wha would happen i Floridas work orce were legalized.

Undocumen ed immigran workers earn abou 18 percen less in wages han legal workers.9 A program ha required all undocumen ed immigran s o earn legals a us would increase employmen compensa ion and employmen in he s a e by closing he wage gap be ween documen ed and undocumen ed workers. We es i-ma e ha legalizing he undocumen ed workers in Florida would increase laborincome in he s a e by more han $3.7 billion. (see able 6)

TABLE 6

Legalization: Raising Florida

The effects of legalizing undocumented workers on employment compensation

and employment in FloridaEmployment compensation

increase (in millions)Direct employmentgain (in thousands)*

Florida** $391,634

Legalization $3,770 97

*Direct employment gain is the increase in employment caused by the legalization o all undocumented immigrants in the regionaleconomy.**IMPLAN base data. This case represents the economy without any changes in employment or other values.Note: Totals may not sum due to rounding error.

As he legalized workers and heir amilies spend he increased earnings on new

clo hes, a down paymen on a car, or a new apar men , he e ec reverbera eshroughou he economy. Clo hing s ores, car dealers, and ren al agencies boosheir sales and hire more s a . In o her words, he increase in economic ou pu and

consumer spending would precipi a e a spike in demand or goods and services.

The benefits of legalizingundocumented immigrants

in Florida


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Ins ead o he downward spiral produced by ex rac ing hese workers rom he s a eseconomy, requiring hem o earn legal s a us would s ar a vir uous cycle o grow h in jobs and revenue in o mo ion. Our modeling shows ha legalizing hese workersand hus increasing heir spending power, which would lead o grea er economicdemand or goods and serviceswould add 97,000 jobs o Floridas economy (see

able 6) and increase he s a es ax revenues by $1.13 billion.10

(see able 7)TABLE 7

Legalization: Boosting tax revenues by the millions

The effects of legalizing undocumented workers on tax state revenue in Florida,direct effects

Taxes in millions

Personal taxes* Business taxes** Sales taxes Total taxes Total tax gain Percentage change

Florida*** $3,445 $71,459 $22,163 $97,067

Legalization $36 $831 $258 $1,125 $1,125 1.2%

*Personal taxes include income tax, motor vehicle license ees, property tax, and other non-tax fnes and ees.**Business taxes include corporate profts tax, dividends, motor vehicle license ees, property tax, severance tax, and other taxes.***IMPLAN base data. This case represents the economy without deportation changes.


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Tis s udy uses he erm undocumen ed immigran s o describe hose individu-als who are no U.S. ci izens or legal residen s. Overall and oreign-born popula-

ion es ima es are derived rom he American Communi y Surveys ve-year da aor 2006-2010, as well as he Pew Hispanic Cen er on he number o unau horized

immigran s in a given s a e. o calcula e he number o undocumen ed workers ineach s a e, we discoun ed he o al number o undocumen ed workers in he labor

orce rom Pew da a by he unemploymen ra e or oreign-born workers in he

s a e a he ime he da a were collec ed.11

About IMPLAN

Tis s udy uses he IMPLAN inpu -ou pu models o each s a es economy, whichallow researchers o calcula e he impac s resul ing rom changes in policy andeconomic ac ivi y. Te s udy es ima es he impac s on economic ou pu andemploymen in each indus ry, and he resul ing impac on ax con ribu ions, givena range o assumed changes o migra ion-rela ed policies. Te model allows iden i-

ca ion o direc economic e ec s in a ec ed indus ries, indirec e ec s in rela edindus ries, and induced e ec s ha cascade hrough he economy. Only direceconomic e ec s are u ilized in his s udy.

Te IMPLAN inpu -modeling approachIMPLAN s ands or IMpac analy-sis or PLANningis mos use ul and appropria e in analyzing he shor - ermshock o a s a e economy ha would be immedia ely el rom a signi can policy changeei her a mass depor a ion or a mass legaliza ion. Te IMPLAN model-ing approach is hus well sui ed o analyze he immedia e and regionally speci c

impac s resul ing rom abrup policy shifs.12

Appendix: Methodology


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IMPLAN data

Te da ase used is a 2010 da a le by s a e con aining 509 indus ries. For hiss udy, he 2010 IMPLAN da a les were aggrega ed down o 36 indus ries. A bridge was crea ed be ween he 509 indus ries in he IMPLAN les and he

13 indus ries in he U.S. Census Bureaus indus ry ables o crea e compa ibil-i y be ween he U.S. Census da a and he IMPLAN da ase s. I is impor an ono e ha in his s udy we are using cons an 2010 dollar gures provided by heIMPLAN da abase.

Undocumented worker estimates

Te number o undocumen ed workers was es ima ed using Pew Cen er es ima esor each s a e, adjus ed o accoun or he unemploymen ra e among oreign-born

workers. We hen applied he number o undocumen ed workers o each indus ry using oreign-born worker percen age es ima es or he economies o each region(see nex sec ion), since speci c es ima es o unau horized immigran s by sec or areno available. For ins ance, i here were an es ima ed 100 undocumen ed workers ina given region and es ima es or oreign-born workers in he cons ruc ion indus ry in ha region were 23 percen , hen 23 undocumen ed workers were added o hecons ruc ion indus ry and he res were dis ribu ed using he same me hod.

Undocumented workers by industry

In Te Charac eris ics o Unau horized Immigran s in Cali ornia, Los AngelesCoun y and he Uni ed S a es, he au hors provide es ima es o he percen age o undocumen ed workers in 13 aggrega ed indus ries.13 Because no similar break-down exis s or Florida, we used he Cali ornia dis ribu ions o es ima e Floridasshare o undocumen ed workers by indus ry.


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Undocumented worker value-added contribution by industry

In order o es ima e he undocumen ed worker con ribu ions o gross s a e prod-uc in each indus ry, we applied he ollowing calcula ion:

VA*Uj = ( VA / E)*Uj

Where:

UUndocumen ed workers in indus ry j JAny given indus ry VA o al value added E o al employmen

Deportation scenarios

In his s udy, we calcula e he impac s resul ing rom he depor a ion o 15 per-cen , 30 percen , 50 percen , and 100 percen o undocumen ed workers. Tesecalcula ions were per ormed by es ima ing he number o undocumen ed work-ers by indus ry and running he IMPLAN model o calcula e he exac impac o

hese workers (all else equal).

Te model provides a good es ima e o changes in economic ac ivi y impor ano his s udy. Te main economic impac s analyzed are: employmen impac s;

ou pu impac s; value-added impac s; labor-income impac s; and ax impac s.

Wage differences between legal and undocumented workers

Tis s udy assumes undocumen ed workers wages are 18 percen lower hanhose o legal workers. o assure ha our gures are he mos conserva ive

es ima es possible, we have placed a cap or wages o undocumen ed workersin high-wage indus ries. Tese indus ries are: u ili ies, re ned energy, ranspor

equipmen , and elec ronic equipmen . Te cap consis s o wo imes he median worker income o unau horized immigran s ($36,000 x 2 = $72,000), and inindus ries where he median wage was higher han he cap, undocumen ed workers wages were reduced by 50 percen ins ead o 18 percen .14 Based on

his assump ion, we es ima ed legal and undocumen ed workers wages using


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IMPLAN base employee compensa ion. Nex , we legalized hose workers,increasing heir wages o he prevailing marke wage.

When all workers across he s a e economy earn he same wages, he labor wage bill increases, as does ou pu based on he increases in wage-based demand. Based

on previous experiences o legaliza ion (such as he impac o he Immigra ionRe orm and Con rol Ac o 1986), we assume labor produc ivi y grows in com-mensura e propor ion o wage increases due o legaliza ion and a cons an wageelas ici y o labor demand, hus resul ing in a s able employmen ra e.

Fiscal analysis

ax impac s or his s udy are calcula ed in wo par s. Te rs par is calcula ed by ex rac ing o al popula ion ax con ribu ions or he base year (IMPLAN base

year da a). Te second par is calcula ed by ex rac ing he di eren percen ages o undocumen ed workers rom he economy and hen comparing he resul s o heoriginal IMPLAN da a. Te di erence in ax revenue is he undocumen ed workercon ribu ion.


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About the Author

Professor Ral Hinojosa-Ojeda is he ounding direc or o he Nor h AmericanIn egra ion and Developmen Cen er and associa e pro essor in he Division o Social Sciences and he Csar E. Chvez Depar men o Chicana and ChicanoS udies a he Universi y o Cali ornia, Los Angeles. Born in Mexico and raised inChicago, he received a B.A. in economics, an M.A. in an hropology, and a Ph.D.in poli ical science a he Universi y o Chicago. Pro essor Hinojosa-Ojeda hasheld various academic and policy research posi ions in a varie y o universi ies

and public ins i u ions, including he World Bank, In erAmerican DevelopmenBank, he Whi e House Council o Economic Advisers, he Uni ed S a es radeRepresen a ive, S an ord Universi y, and he Universi y o Cali ornia, Berkeley.Pro essor Hinojosa-Ojeda ounded he Nor h American In egra ion andDevelopmen Cen er a UCLA in 1995, dedica ed o developing innova ive researchagendas and policy pilo projec s concerning globaliza ion and developmen .


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1 In order to have the most accurate data, we use theAmerican Community Survey ve-year estimates ortotal state population (2006-2010), which pools thedata collected over multiple years and is less proneto sampling error. See When to use 1-year, 3-year, or5-year estimates, available at http://www.census.gov/acs/www/guidance_ or_data_users/estimates/.

2 For example, with ewer people around to spend theirwages, local businesses will lose customers and pro ts,and will likely be unable to sustain as many jobs, lead-ing to urther economic troubles.

3 Previous reports released by the Center or AmericanProgress in conjunction with the Immigration PolicyCenter have included direct, indirect, and inducede ects o legalization or deportation o undocu-

mented workers. For more in ormation, please see RaulHinojosa-Ojeda and Marshall Fitz, A Rising Tide or aShrinking Pie: The Economic Impact o LegalizationVersus Deportation in Arizona (Washington: Center

or American Progress, 2011) available at http://www.americanprogress.org/issues/2011/03/pd /rising_tide.pd , and Revitalizing the Golden State: What Legaliza-tion Over Deportation Could Mean to Cali ornia andLos Angeles County (Washington: Center or AmericanProgress, 2011), available at http://www.american-progress.org/issues/2011/04/pd /ca_immigration.pd .

4 Demographic data rom American Community Survey5 year data, 2006-2010; Passel and Cohn, Unauthor-ized Immigrant Population.

5 The number o employed undocumented workers wascalculated by discounting the Pew Hispanic Centernumbers or the size o the undocumented work orce

(which includes employed and unemployed people,)by the state unemployment rate or oreign-bornnoncitizens, 9.5 percent in 2010, the base year orcalculations. See American Community Survey 5-yearestimates, 2006-2010; Passel and Cohn, UnauthorizedImmigrant Population.

6 A 100 percent deportation scenario, where all jobsdisappear and no native workers replace the undocu-mented is clearly the worst-case scenario. We haveincluded multiple deportation scenarios (15 percent,30 percent, 50 percent, and 100 percent,) to illustratewhat would happen i even a portion o these jobsevaporate. And economic research backs the claimthat, as the Immigration Policy Center puts it, There isno direct correlation between the presence o recentimmigrants and unemployment levels at the regional,state, or county levels. In general native-born workersand recent immigrant workers compliment, rather than

confict with one another, and are not easily substitut-able, generally having di erent work and skill histories,and living in di erent locations. See: Immigration PolicyCenter, The Economic Blame Game; and ImmigrationPolicy Center, Not in Competition. Immigrant workersalso sustain workers in other sectors, with the U.S.Department o Agriculture estimating that each arm job sustains three other jobs in upstream occupations,such as transportation or manu acturing. See Holt, Testimony be ore the Committee on Agriculture.

7 For example, a ter the passage o Georgias immigrationlaw H.B. 87 which drove many undocumented workersout o the state, a survey by the Georgia RestaurantAssociation ound that hal (49 percent) o respondentsexperienced labor shortages, and a whopping 88percent were concerned with experiencing uture laborshortages. See Georgia Restaurant Association, Geor-gia Immigration Re orm: Restaurant Impact Study.

8 Hagan, Lowe, and Quingla, Skills on the Move; Lowe,Hagan, and Iskander, Revealing talent.

9 Bureau o International Labor A airs, E ects o theImmigration Re orm and Control Act.

10 Tax e ects in IMPLAN are derived rom wage increasesresulting rom the legalization o undocumented work-

ers. This tax analysis represents the estimated increasein tax revenue generated by a change in nal demand,refecting only the direct impacts o increasing wagesto undocumented workers.

11 American Community Survey 5 year data, 2006-2010;Passel and Cohn, Unauthorized Immigrant Population.

12 For more in ormation on the IMPLAN system, see: MIG,inc.s IMPLAN website, available at http://implan.com/V4/Index.php. For other immigration and economicmodeling uses o IMPLAN, see, or example: RandyCapps, Kristen McCabe, and Michael Fix, Pro le o Immigrants in Napa County (Washington: MigrationPolicy Institute, 2012), available at http://www.migra-tionpolicy.org/pubs/Napa-Pro le.pd .

13 Karina Fortuny, Randy Capps, and Je rey S. Passel,The Characteristics o Unauthorized Immigrants in

Cali ornia, Los Angeles County, and the United States(Washington: The Urban Institute, 2007), available athttp://www.urban.org/uploadedpd /411425_charac-teristics_immigrants.pd .

14 Note: For the Florida State gures, the wages o undocumented workers in the industry category o Re ned Energy still crossed the $72,000 thresholdeven a ter discounting the wages by 50 percent; or thiscategory alone we discounted the overall wages by 60percent to ensure the most conservative results.

Endnotes


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The Center for American Progress is a nonpartisan research and educational institute

dedicated to promoting a strong, just, and free America that ensures opportunity

for all. We believe that Americans are bound together by a common commitment to

these values and we aspire to ensure that our national policies reflect these values.

We work to find progressive and pragmatic solutions to significant domestic and

international problems and develop policy proposals that foster a government that

is of the people, by the people, and for the people.

deportation vs. legalization in florida

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