Here’s why immigration may be good for the feds and bad for states — for now

TNS

Republican presidential candidate Donald Trump delivers his immigration speech at a rally in Phoenix, Ariz., on Wednesday, Aug. 31, 2016. (Marcus Yam/Los Angeles Times/TNS)

A new 500-page report from the National Academies of Sciences, Engineering and Medicine that analyzes roughly 20 years’ worth of data found that, overall, immigration gives the economy an important boost in the long term.

However, results were more mixed in the shorter term.

Pia Orrenius, a senior economist with the Federal Reserve Bank of Dallas and a member of the panel that compiled the report, said she was struck by the gap between short term economic impacts of immigration and the long term benefits.

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“It argues for having a really good immigration policy,” she said, because it would help employers be certain about their labor force before they invest more in their businesses.

Without that certainty, though, “in the short run, there are people that are going to be negatively impacted and positively impacted,” Orrenius said. Ultimately, though, the report found that, “in the long run, everybody’s going to benefit.”

“So how do we get to the long run faster?” she asked.

The report, which updates a comprehensive document completed in 1997, comes as Republican presidential candidate Donald Trump continues to make a hard anti-immigration stance a focal point of his campaign.

Texas’ status as a large border state has for decades meant that it’s attracted a large share of new immigrants, which means the report’s findings are especially relevant for Texans.

And Orrenius said Texas’ economy generally responds quickly to change, which puts it in a better position to benefit.

Here are four key takeaways from the report

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1. New immigrants don’t take native-born Americans’ jobs.

This may not surprise North Texans, who live in a job market with more demand for high-skilled workers than there are qualified residents to fill them. The report’s panel of authors found that “there is little evidence that immigration significantly affects the overall employment levels of native-born workers.”

Although teens who are looking to snag a summer job may not work as many hours, according to the analysis, they’re not employed less.

Some stats did find that newer, less educated immigrants are joining competition for jobs with similarly less educated immigrants who are already living in the U.S.

2. New immigrants are more dispersed around the country — but Texas is still a top gateway.

The report showed how the percentage of new immigrants who arrive in the “Big Five” gateway states (California, New York, Texas, Florida and Illinois) has decreased over the years. From 1975 to 1980, 63.8 percent of new immigrants arrived in one of those states.

From 2010 to 2014, that number was down to 44 percent.

But Texas’ percentage held relatively steady over the nearly four decades and from 2010 to 2014, the Lone Star State passed New York, with 9.3 percent of new immigrants arriving here compared with 8.4 in New York.

3. More high-skilled immigrants help drive up wages for everyone.

The report analyzed the effects of highly educated, skilled immigrants on wages for everyone, as more and more new arrivals in the U.S. tend to fit that demographic, rather than less educated workers coming to the U.S. for lower wage jobs requiring less specialized skills.

According to the report, “several studies have found a positive impact of skilled immigration on the wages and employment of both college- and non-college-educated” native born workers.

4. Over the next 75 years, immigration will be good for the federal government — less so for state and local governments.

Because new immigrants tend to be younger, they’re often working and paying taxes. But many of those dollars, like federal income tax dollars, benefit older native-born residents, so they’re essentially paying into services like Social Security that they may not use.

On the other hand, first-generation immigrants and their kids tend to use more local service dollars, like through education. Those services are typically funded at the local level, through property taxes and sales taxes.

Orrenius said the twist for Texas is that because the state spends less money per person, those effects are blunted here.

But she said it’d be “short-sighted” to use that finding as a justification to spend less money on schools. They make for a better educated workforce later on, which is a key component for future economic growth.

“Because we haven’t produced enough high skilled workers in Texas, we’re trying to attract them from other states and abroad,” she said.

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