The US could take a heavy fiscal hit if DACA isn't resolved, economists say

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Much has been said about the emotional toll of rescinding the Deferred Action for Childhood Arrivals (DACA) program on young people. But labor analysts say the economy could also take a hit if lawmakers don’t come up with a resolution quickly.

Back in September, the Trump administration decided to roll back DACA, citing concerns about how it was initially introduced.

President Obama issued DACA in 2012, temporarily shielding thousands of undocumented immigrants (also known as “Dreamers”), who were brought into the country as children, and later found themselves undocumented. The program allowed some 800,000 DACA recipients to live and work in the United States without fear of deportation.

When Obama first introduced the program, he did so via an executive action, rather than going through Congress – a move that ruffled some Republican lawmakers.

While Trump says that in working on a deal for DACA, “a lot has to do with the amount of security” at the border, he adds that pulling the plug on DACA will allow Congress to figure out a path for DACA recipients. The move is also in keeping with his campaign promises. In addition, President Trump says he empathizes with DACA recipients. Speaking in a press conference on Sept. 5, the day he scrapped the program, Trump said:

“I have a great heart for the folks we’re talking about. …and hopefully, now Congress will be able to help them and do it properly. And I can tell you in speaking to members of Congress they want to be able to do something and do it right. And really we have no choice.”

The Trump administration charged Congress with finding an alternative solution by March 2018.

As things stand, Democratic lawmakers want to pass some sort of resolution within the budget bill before the end of the year. Many Republicans have said they want to wait to pass a standalone measure in the new year, but as recently as last month, some GOP lawmakers like Sen. Lindsey Graham (R-SC) expressed wanting to work out a deal as part of other legislation. There are currently at least four possible DACA replacement bills floating around Congress, including a bipartisan bill, the Dream Act, Graham introduced in July.

In an interview with CNN’s State of the Union, Sen. Graham said, alluding to the list of legislation Congress is trying to get through before the holidays, he thinks it would be “sad” to miss out on addressing DACA now.

But while lawmakers attempt to hammer out a plan forward, an estimated 10,000 DACA recipients have lost their protections, according to data from the Department of Homeland Security compiled by FWD.us, an immigration advocacy group launched and led by leaders in tech, including Facebook’s Mark Zuckerberg, Microsoft’s Bill Gates and Dropbox’s Drew Houston. Every day, 122 more will fall out of status. In March, that number will surge to 1,700 each work day.

“We really want to contribute to the communities that we’re a part of, and we want to do it the right way,” Nancy*, a DACA recipient affiliated with the KIPP Foundation, told Circa. “And we don’t want a handout; we just want a pathway.”

Another DACA recipient, Leezia*, who works with FWD.us, put it simply: “We’re already working and we just want to continue to do that without disruption.”

In the days and weeks following the announcement, hundreds of business leaders and entrepreneurs put out statements expressing concern with the decision to repeal DACA. High-profile executives from billionaire Warren Buffett, Disney’s Bob Iger and Mozilla’s Jascha Kaykas-Wolff to small business owners and schools like the KIPP Academy urged Congress to act swiftly lest they throw the economy into a frenzy.

FWD.us has published two open letters now, urging action on a Dream Act from Congress. Over 800 men and women in business have signed the FWD.us letters. “Dreamers are vital to the future of our companies and our economy. With them, we grow and create jobs. They are part of why we will continue to have a global competitive advantage,” the most recent letter reads.

“There would be disruptions, as there would be any time there’s significant change in the composition of the labor force. This would be a significant change,” Barry Chiswick, a professor of economics and international affairs at George Washington University, who has studied U.S. immigration history closely, told Circa.

The issue is complex and delicate, and quantifying its reach isn’t clear-cut. But if there’s anything the business community fears, it’s uncertainty.

Disruptive business

Economists tend to agree immigration has a generally positive impact on the U.S. economy. They also say the decision to wind back the program stands to take a heavy toll on American businesses.

Immigration, broadly speaking, can lead to more innovation, higher productivity, workers with better matched skills for the jobs they’re working, and an overall better educated workforce, research out of The Wharton School has found. Their research has also shown immigration to have a positive effect on federal, state and local budgets. Although, for taxpayers living in areas with a larger population of low-income or less-educated immigrants, it can mean more of a cost-burden in the short-term because of immigrants’ use of public services like schooling.

When you zoom into the DACA-eligible population, 81.4 percent have completed high school, and another 17 percent have graduated from college. Currently, 90 percent of DACA recipients hold jobs in a variety of industries with just over four percent actually running their own companies. With DACA up in the air, it’s possible that 300,000 workers will be wiped out from the American workforce by the end of 2018 if their status is revoked. FWD.us estimates that at the national level, the economy could lose $460 billion from the GDP and about $24 billion in Social Security and Medicare tax contributions.

Labor analysts say the sudden loss of jobs would rattle the economy in a way that could leave a lasting dent. Business leaders, meanwhile, have been left to worry about the fate of some of their employees.

“When we think about the people that make up the community of Mozilla, we care about a very diverse view and who they are and how they’re able to contribute into the work that we do,” Mozilla Chief Marketing Officer Jascha Kaykas-Wolff told Circa. “It certainly weighs on my mind that there’s the potential for us to lose out on some of the best candidates in our organization that could support our mission in a meaningful way.”

Hundreds of companies, including Mozilla, have come out in support of finding a permanent solution for DACA recipients. “From a purely human perspective, I think it’s our responsibility culturally and societally to make sure that we find ways to protect groups of people oftentimes that aren’t represented well,” Kaykas-Wolff said.

What happens to working DACA recipients?

Eighty-six percent of Americans answered a Washington Post/ABC News poll from September saying they supported letting DACA-eligible people stay in the country.

Many of these people came to the U.S. as toddlers and have never known another home. They were educated here and trained for jobs in the U.S. So when people talk about falling out of status, that means not only do they lose their right to work, but it also makes them a priority for deportation to countries they may not even remember. Or, as both Nancy and Leezia pointed out, to regions where they may not be able to secure work for reasons like not being able to speak the language or use the skills they’ve polished here.

Nancy is from Ghana. She came to the U.S. when she was just five years old. Her passion is the saxophone. She plays it when she wants to escape.

Learning she’d been granted DACA protections was surreal for her – it meant she could lead a fully public life.

“A lot of people take that for granted because it’s second nature here, if you’re a citizen. But for me, I was able to contribute, to pay my taxes, to work…” she said, thinking back on the day she picked up her paperwork. “I remember crying when I went into the line, because I finally had a line to go into to get my papers. And growing up, I didn’t have a line.”

Born in Canada, Leezia arrived in Texas at the age of six. She was a Girl Scout, played basketball and wrote for her school paper.

She has a degree in journalism, which she’s been putting to use working in communications for the past few years. But all of that won’t matter if she loses her DACA status.

“At this point I think all we want to do is be able to use all of our talents that we’ve developed in school and use that in our careers here in the U.S., in the place where we grew up,” Leezia said.

It’s a globalized world

There are 185 different types of visas applicants can fill out to come to the U.S. There are non-migrant visas and immigrant visas, none of which really apply to the DACA-eligible population, which is something advocates hope is addressed in new legislation.

GWU’s Chiswick explained that the primary reason immigrants come to the U.S. is jobs. The issue, however, he says, is that the United States has a somewhat “schizophrenic” immigration policy. While countries like Canada, Australia and New Zealand place emphasis on skills and talent in their immigration policies, the United States has largely focused on the person’s family ties.

“Their question is, ‘What can you contribute to our economy?'” Chiswick said, adding, “Our primary focus in immigration policy is, ‘To whom are you related?'” This, he said, has led to “chain migration,” where one person gets a visa, then sponsors a family member, such as a spouse or child.

Sen. Graham, said in the same interview with CNN in November, he believes “we need to go from chain migration, family-based immigration to merit-based immigration.”

What’s more, experts say, is that the rest of the world is aware that immigration can drive growth. “Increasingly you see countries starting visas for entrepreneurs as they go after high-skilled talent. You have Chile offering $40,000 and a visa for people who want to start their companies,” Jeremy Robbins, executive director at New American Economy, told Circa. In the U.S., a scant 7 percent of visas go to fill employment needs, he said, adding that is “just about the lowest as a percentage of any developing nation around the world.”

The New American Economy (NEA) is an immigration advocacy group founded by former New York Mayor Michael Bloomberg. They crunched numbers and uncovered that right now there are 6 million people in America who work at a company owned by an immigrant. Per FWD.us estimates, DACA recipients are employed at more than two-thirds of the top 25 Fortune 500 companies. The DACA-eligible population earns $20 billion per year, $3 billion of which they pay back in taxes. They hold $16.8 billion in spending power.

Economists and business leaders say immigrants could help the U.S. compete in a more globalized economy.

Diversity of skill-sets, backgrounds, educations, work ethics and ideas, Robbins said, is what helps fill gaps in the economy, and gives businesses a dynamic edge. “One of the great fallacies of the economy,” Robbins said, “is the idea that the labor market is a zero-sum game, that there will never be a job for an American or for an immigrant.”

Reed Hastings, founder and CEO of Netflix, speaking at a hearing on Capitol Hill put together by KIPP in early December, echoed that thought, saying the American economy has doubled in the last half century. “If you have a mindset of a fixed economy, a fixed number of jobs, then you naturally see the competition,” Hastings said.

According to Hastings and Robbins, more flexible immigration policies that attract workers and make them want to stick around are crucial for companies – and the country – to succeed.

“We need to be smarter about using our immigration system to get the talent we need to compete,” Robbins said.

And Mozilla’s Kaykas-Wolff added, “It kind of brings it all full circle. If we take care of people well, there’s the promise that we can start to create products, especially in technology, that have a global impact, positive global impact.”

Working on staying present

Both Nancy and Leezia’s parents brought them to the U.S. in hopes of providing them with a better education. Both have college degrees and both work full-time jobs.

For Nancy, her dreams of making a name for herself in marketing and opening up her own shop are currently on hold. Her focus right now is on advocating for herself and others like her.

“After going through this process of getting DACA, I realized that I couldn’t stay silent because if I stay silent, then who will be out there to speak for people like me?” she asked.

As for Leezia, she tries to focus on the present moment.

“I try not to think about May 4, when my DACA expires. It’s hard to think about having an expiration date stamped on your back when you know that your shelf life is much longer,” she said. “I’ve been in this country for 21 years. I feel like at this point I deserve certainty.”

*Last names were omitted out of privacy concerns for the DACA recipients.