Citizenship and bank access for immigrants would add ‘enormous amount of money’ to US economy

The United States is losing an “enormous amount of money” by denying citizenship and use of banks to immigrants living in the country illegally, according to new research.

These immigrants have been an “unrecognized driver of the economy for decades,” writes Jose Ivan Rodriguez-Sanchez, research scholar in the Center for the United States and Mexico at Rice’s Baker Institute for Public Policy. By limiting immigrants’ economic options, the U.S. is missing out on additional growth in its own economy — especially with an aging American population, he argues.

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“These residents are fully engaged in economic activities that produce wealth and contribute to the well-being of American society. They play an especially vital role in the construction and agriculture sectors of the U.S. economy, as well as the entertainment, arts, recreation, accommodation and food service industries,” he writes. “Undocumented immigrants are also frequently business owners, and nearly all are taxpayers, paying income and sales taxes to the local, state and federal governments.”

Much of the immigration debate centers on the costs of providing public services to these individuals and ignores the benefits they generate, Rodriguez-Sanchez argues. Several studies have already shown that the economic benefits they produce are greater than their cost at large — and that deporting them would have a negative impact on the U.S. economy.

“For example, a major ceiling on the economic potential of undocumented immigrants is their lack of access to the banking system to obtain credit and mortgages,” he writes. “Having access to credit would provide them with financial stability to further their own wealth as well as that of the country, since they could make financial plans to buy homes and vehicles or pay for their children’s higher education. Tapping into these resources would result in a further expansion of the U.S. economy and boost economic growth in the mid- and long-terms.”

The study found that if immigrants simultaneously gained citizenship and access to U.S. banking, home ownership and health care in 2019, the economy would have gained around $246 billion (representing 1.15% of U.S. GDP), and the additional federal, state and local tax revenue collected would have totaled $26 billion (representing 0.77% of government revenue), according to the paper.

“There is a double urgency to calculating these impacts,” Rodriguez-Sanchez argues. “First, there is a crucial need for a more informed political debate over the fate of the 10.7 million undocumented immigrants living in the United States. Second, given that the United States is faced with an increasingly older workforce and stagnating population growth, the country will need immigrants to stay and work in the U.S. and may even need to increase immigration in the future.”

“Deporting undocumented workers — who tend to be young, economically active taxpayers with the potential to create new jobs and businesses and to generate new products and technology — could be counterproductive,” he writes.