DACA: An Economic Imperative

The clock is ticking on a two-million-job issue: finding a permanent solution to replace Deferred Action for Childhood Arrivals (DACA). The DACA program allows individuals who entered the United States as children to remain here for school or work. Nearly 800,000 persons across the country are enrolled in the program, and approximately 124,300 of these individuals live in Texas. If no action is taken, these young people will be subject to deportation when work visas in place on March 5, 2018 expire (some are already expiring). The issue has become highly politicized, thus at times masking the critical underlying socioeconomics.

Given underlying changes in the US workforce, immigrants, both documented and undocumented, will become a more crucial source of labor over time. Even if all currently unemployed persons in Texas filled jobs now held by undocumented workers (which is impossible for myriad reasons), the state would be left with a glaring gap of hundreds of thousands of workers if the undocumented workforce were no longer available. Certain industries are particularly in need of workers and rely on undocumented individuals, and events such as Hurricane Harvey exacerbate the shortage. As fears of deportation rise, it becomes increasingly difficult to access this critical resource. Many of the DACA recipients are highly educated and possess skills that are in high demand.

Apart from the obvious social and human issues associated with removing the DACA recipients, there are very real economic losses that would occur if DACA is allowed to expire. The Perryman Group recently quantified the direct economic benefits of these young people, often called “Dreamers” in reference to proposed legislation, known as the “DREAM Act (Development, Relief, and Education for Alien Minors Act), which has yet to be enacted; the firm’s impact assessment system was then used to estimate the total gains in business activity including multiplier effects.

For the United States, direct benefits of Dreamers each year include an estimated $84.3 billion in output (gross product), $52.8 billion in personal income and almost 685,200 jobs. When multiplier effects are considered, the total benefits rise to $188.6 billion in output and $117.3 billion in income per year as well as nearly 2.1 million jobs.

For Texas, the direct gains in business activity associated with the Dreamers include an estimated $11.5 billion in output (gross product) and $7.2 billion in income each year in addition to more than 108,100 jobs. When multiplier effects are included, the total rises to $25.8 billion in annual output, $16.0 billion in income per year, and 324,000 jobs.

Although the issues related to immigration are complex, economic benefits of this magnitude should not be ignored in the conversation regarding immigration reform. The immigrant workforce is critical to long-term prosperity in the United States and in Texas, particularly given the aging of the population and slowing of workforce growth. Millions of jobs are at stake, and Congress and the Administration need to work together proactively to replace DACA with a permanent solution.