by Marshall Kirby, Public Policy Analyst

It may be down right now, but it is anything but out.  Given our belief in its eventual revival, we thought it might be pertinent to take a closer look at the economic implications of the Dream Act.

The DREAM Act (Development, Relief, and Education for Alien Minors) has been a contentious piece of legislation from its very beginning.  Legislators and the American public seem to be more polarized than ever on virtually everything, especially the complicated legal, economic, and moral implications regarding immigration issues.  One only needs to look back several years to recall the firestorm of activism which Comprehensive Immigration Reform created.  The DREAM Act has not proven to be any different as activists on both sides seem keen to repeat slogans to key up their base.  On the right you are likely to hear calls of “amnesty” and on the left you will hear calls of this being a civil rights issue.

The specifics of the DREAM Act varied with each version drafted by legislators.  The over-arching goal is to provide undocumented young people who have lived in the United States a path to citizenship to allow them to reach their full potential.  In order to be eligible, an individual must be 16 years old, born outside of the US, and be brought to the United States by others (i.e. their family).  Furthermore, the individual must volunteer their service in the military or graduate college with at least an Associate’s degree.  This certainly is a noble goal, and one which is relevant to the situation of immigration.  However, like all federal legislation – it never is really that simple and the bill is so complex with good and bad policy interventions mixed in.

The DREAM Act recently failed passage in the United States Senate after it had passed the House of Representatives.  The only thing that remains clear is that our immigration system is clearly broken and in dire need of repair.  As Americans, we tend to forget that we are citizens of a country which millions of individuals across the world are willing to go to great lengths to come to whether legally or illegally.  They come for a multitude of individual reasons, but collectively they all fall into three general categories – political and individual freedom, safety and security, and a chance for economic prosperity.

Polling done by Gallup has shown that a majority of Americans support the bill by a narrow margin.  The poll done on the week ending 12/10/2010 showed that 54% support the bill with 42% opposed, and 4% undecided/no opinion (Poll Shows).  Looking at party lines – an overwhelming majority of Democrats support the bill, similarly an overwhelming number of Republicans do not (Poll Shows).  Independents, a key voting block have shown positive support for the bill with 57% favoring the bill and 38% opposing (Poll Shows).  A further breakdown has shown a significant split through racial lines.  Whites are opposed to the bill with a tight ratios – 49% oppose and 47% support.  Non-whites support the bill by a 69% to 26% margin (Poll Shows).

The legislative debate has brought in key figures and prominent and influential groups in the policy community.  The United States Conference of Catholic Bishops has demonstrated their overwhelming support for the DREAM Act.  Archbishop Jose Gomez from Los Angeles and Chairman of the Conference of Catholic Bishops Committee on Migration has gone on the record stating:

The DREAM Act would provide thousands of deserving young persons who desire to become Americans a fair opportunity to do so.  This would not only benefit them, but our country as well. It is the right thing to do, for them and for our nation (US Bishops).

Representative Charles Rangel (NY – D) has also written strong pleas for passage.  Representative Rangel uses an economic growth argument in addition to his plea on the basis for moral obligations and civil rights (Rangel, Charles).  It is true that currently there is plenty of idle potential amongst young undocumented aliens, as they are unable to secure lawful employment or obtain higher education.  However, Mr. Rangel’s argument about the need for scientists, researchers, educators, and entrepreneurs is not a strong one.  There are no proposed provisions in the bill requiring that those who would take advantage of the educational aspects of the bill would have to take a specifically geared course load designed to fill America’s workforce needs.

The Center for American Progress has made similar claims for the economic significance passage of this bill would create.  They estimate [via The National Immigration Law Center] that 800,000 students would benefit from this legislation (Idea of the Day).  They also cite statistics in which 31.5% of Latinos receiving a college degree are in technical and desirable fields of employment (Idea of the Day).  Extrapolating that percentage, of the 800,000 students who this bill benefits – 252,000 previously undocumented aliens would receive desirable degrees in science and engineering which will help advance American innovation (Idea of the Day).

Edward Schumacher-Matos wrote an impassioned Op-Ed piece in the Washington Post describing the DREAM Act as an essential civil rights legislation important for the future of Latinos.  While mostly based from a political and rights-based perspective, his argument also includes the issue of global competitiveness and the issue of national security (Schumacher-Matos).  In his analysis, the DREAM Act would boost education [which in turns gives rise to economic growth and strengthening the workforce], and also would help fill needed military roles during a time when the military is worn thin.

On the other side of the political spectrum, conservative columnists, radio, and television hosts have argued that this bill essentially amounts to amnesty for undocumented aliens, and affords them special benefits.  Additionally, in economic terms they raise issue about the costs associated with the bill and also the precedent it sets for future generations of undocumented immigrants.  They argue that by allowing individuals who are here illegally to become citizens, it creates a moral hazard and encourages more people to come here illegally and attempt to reap the same benefits as the current benefactors of the DREAM Act.

Immigration can have both positive and negative effects for an economy.  Immigrants can help voids created in the workforce and are often willing to work very hard in America to achieve individual goals and goals for their families.  They bring a strong entrepreneurial attitude and eventually go on to create small businesses which support their communities and can raise prosperity for all.  Some even bring desired skills and knowledge into the workforce.  On the other side, immigration can bring up the administrative costs and burdens of the federal, state, and local governments due to increased demand for services and enforcement of regulation.

By allowing previously undocumented individuals a path to citizenship, it will allow them to gain lawful employment and have access [gradual in some circumstances] to government programs.  Here is the main conundrum of the bill.  Supporters of the bill claim that this will raise government revenues by $1.7 billion over a ten year period.  The discussion of revenue is the most disputed portion of the legislation considering the way it was scored by the CBO.  In the scoring, the CBO has assumed that all affected by this bill would [1] gain immediate employment [given the currently high unemployment levels this is unlikely], [2] there would be no unemployment, disability, or entitlement claims by DREAMers, [3] there would be no claims for public healthcare programs, and [4] applications for student loans amongst those affected would be at 15% – currently one fifth of the rate for the population [and that none would default on their loans over a 10 year window] (Lies About the DREAM Act).  Outside of the 10 year scoring window, estimates have shown that this bill is not even deficit neutral considering that there will be an increase of government services and program which those affected would be receiving and entitled to (Lies About the DREAM Act).

It seems what has been missing in this discussion is what the DREAM Act means for Latinos who are already citizens or resident aliens of the United States.  Without the data and resources available to do in-depth economic analysis, economic principles must suffice.  The major negative issue associated for Latinos currently here is simply the monetary cost of this bill.  As mentioned before, the bill is not deficit neutral in the long run and will increase the cost of government entitlements for years to come.  In order to offset the costs, eventually taxes will need to be raised – on individuals and businesses.

Outside of the negative implications of the bill – the real issue at hand for Latinos is still the overarching immigration debate.  Citizens and resident aliens of Hispanic and Latino origin have a strong interest in keeping America’s borders safe, while at the same time allowing hard working and deserving individuals from all over the world the opportunity to achieve the American dream.  As mentioned earlier, immigration is an essential component of innovation, economic growth, and a strong and sustainable workforce.

Immigration is one of the many reasons this country has been able to become the nation that it is today.  For centuries, America has become a new home to countless people from everyone across the world seeking a better life.  Immigration reform is something in which all Americans are stakeholders, and Hispanics and Latinos in particular need to remind lawmakers of their presence and concern over the issue.  As a growing voting bloc, they can have a strong policy influence regarding upcoming issues of immigration and economic growth.

Mr. Kirby joins The National Puerto Rican Chamber of Commerce with an experienced background in Public Policy Analysis.  He has worked for Americans for Informed Democracy, the Center for US Global Engagement, and for local governments in Virginia on issues ranging from international finance, national security, and other areas of foreign and domestic policy.  He holds a Master of International Development Degree from the University of Pittsburgh.

Marshall can be reached at 866-576-5222 x 8, or MarshallK@NPRChamber.org.

Works Cited

“Idea of the Day: Passing the DREAM Act Will Strengthen U.S. Workforce.”  The Center for

American Progress.  December 14th, 2010.  http://www.americanprogress.org/issues/ideas/2010/12/121410.html

Medina, Frank.  “Lies About the DREAM Act and the Congressmen Who Told Them.” Des

Plaines Patch.  December 13th, 2010.  http://desplaines.patch.com/articles/lies-about-the-dream-act-and-the-congressmen-who-told-them

“Poll Shows Slim Majority of Americans Would Vote for the DREAM Act.” RTT News.

December 10th, 2010.  http://www.rttnews.com/ArticleView.aspx?Id=1503807

Rangel, Charles. “Why the DREAM Act is so Important.”  The Huffington Post.  December 13th,

2010.  http://www.huffingtonpost.com/rep-charles-rangel/why-the-dream-act-is-so-i_b_796154.html

Schumacher-Matos, Edward.  “The DREAM Act Affects More than Latinos.”  The Washington

Post.  December 12th, 2010.  http://voices.washingtonpost.com/postpartisan/2010/12/dream_act_republican_senate_vo.html

“US Bishops Praise House Passage of DREAM Act.” Catholic Culture.  December 13th, 2010.

http://www.catholicculture.org/news/headlines/index.cfm?storyid=8542

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