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Samantha Iellimo

Research in the Disciplines- College

December 13, 2013

Professor Goeller

The Economic Benefits of the DREAM Act

Abstract

                            This analytical research paper explores the controversial political topic of immigration reform and it’s relation to higher education.  It discusses the DREAM Act, which is a piece of Federal legislature that aims to make higher education more accessible for America’s illegal youth and develops a path for those youth to obtain legal citizenship. This piece focuses in on the economic benefits of the DREAM Act and how enabling America’s alien minors to attend college will create jobs while driving up wages, bring in federal tax revenue and be a catalyst for more economic growth in the long term. Ultimately, the DREAM Act is a law that supports the belief in higher education for a greater good, rather than for individual benefit, challenging the principles of privatization.

                            Imagine you are sitting at your high school graduation all over again. You look around and observe your classmates, some of which you have attended school with since kindergarten. When you reach for your diploma, a result of thirteen years of hard work, what do you feel? Pride, happiness, and excitement for your future are emotions that probably come to mind. Now imagine that after all of your hard work and dedication, high school would be the end of the scholastic road for you. By not possessing a nine-digit number, you lack the key to unlock a future worth of ambitions. Although you have completed and excelled in the same education system as your peers, you will be unable to pursue a higher degree and improve your economic standing due to a choice made by your parents when you were too young to control your own life. This is exactly what the 2.1 million undocumented immigrant youth residing in America will experience because they are unable to neither afford a college education nor legally obtain a job without a social security number.  

                            To solve this problem, Congress has presented the Development, Relief, and Education of Alien Minors Act, known as the  “DREAM” Act, which aims to provide a path to legal citizenship for illegal immigrants through higher education. The DREAM Act allows those that have entered this country prior to the age of fifteen, to apply for American Citizenship after completing two years of college level education or two years of military service. The DREAM Act would also allow illegal youth to be eligible for Federal and State financial aid and in-state tuition in the states they reside in, thereby increasing financial ability to attend college. Though the DREAM Act was introduced in 2001, it still has not been instated twelve years later due to its many opponents who cite reasons for its dismissal. Opponents believe that it rewards those who have entered the United States illegally and encourages future illegal immigration, is a huge cost burden to taxpayers, and will result in a decrease in job availability to American college graduates.  However, the truth could not be further from this. The DREAM Act is in fact a piece of legislation that will ultimately be an economic benefit to the United States by providing increased revenue to the Federal government, increasing job demand, and driving up wages for all Americans.

            According to American Progress, “For the nation as a whole, passage of the DREAM Act would add a total of $329 billion to the economy by 2030, support the creation of 1.4 million new jobs, and generate at least $10.2 billion in revenue for the federal government” (Garcia 1).  This long-term benefit will be achieved by granting undocumented students the ability to complete a higher education degree at America’s universities. By offering undocumented students an opportunity to receive financial aid through grants or loans, or a tuition reduction through allowing in-state tuition, it will be an incentive for more illegal high school graduates to attend college. Then, according to Hiroshi Motomura, “A noncitizen meeting these requirements would be eligible to be a conditional permanent resident. If she is under thirty-five at the time the act passed, and attends college or serves in the U.S. military for two years, she would become a lawful permanent resident" (1130). Becoming a lawful permanent resident will result in the immigrant obtaining a social security number, which means that he or she will be able to legally obtain work in the United States. By legitimately obtaining a job, it enables the immigrant to be protected under employment laws and requires employers to administer a fair wage. When a worker is not protected under employment laws, wages for all Americans are actually driven down as illegal immigrants are forced to take jobs that receive exceptionally below average pay. Employers will then choose to employ illegal immigrants over legal residents because it will cost their company less money out of their revenue for entry-level position wages. This consequently drives down the wages of more qualified workers in higher up positions in the company. By encouraging more illegal immigrants to take the route of higher education and citizenship, the United States Department of Labor can ensure that immigrants’ employers are giving them a fair hourly wage or salary. Essentially, increasing the wages of illegal immigrants can be completed by granting them legal citizenship and will have upward rising effect on all workers’ wages.

            Furthermore, this overall increase in wages trickles into other economic aspects, such as spending and ultimately job growth. As Marshall Fitz of the New York Times reports, “this boost in wages translates into big returns. Those workers invest that earnings surplus back into the economy by purchasing things like homes, cars and computers, and pay a significant amount in new tax revenue. That consumption creates more demand for goods and services, which leads to economic growth and job creation” (Fitz 1). Since these undocumented immigrants are now documented and able to earn more in wages, they will be able to spend more of that money in the United States economy through the purchasing of goods and services. When more goods and services are being purchased, it also results in more goods and services being needed. This is a simple concept of supply and demand, and Fitz notes, “a recent study by my colleagues found that legalization would increase the earnings of all Americans by $470 billion and generate on average 121,000 jobs annually, over 10 years. On top of those benefits and the additional $832 billion in cumulative gross domestic product, legalization would generate $109 billion in federal, state and local tax revenues” (1).  The positive increase in immigrants’ personal incomes will overall have a positive increase in the incomes of all Americans because they will have more money to spend in the economy.

Furthermore, providing undocumented students more accessibility to a college education also means that when they graduate with a higher degree they will be eligible for jobs that require more qualifications.  Jobs that require more qualifications and a higher degree will yield a higher salary, and therefore also result in increased spending ability in our economy. In his article, “Illegal Immigration: A Positive Economic Contribution to the United States”, Ramanujan presents that, “90 per cent of the wages that the undocumented population earns are currently spent inside the US. As a result, he told that the total consumptive capacity of illegal immigrants remaining in the US is around $450 billion (Cater et al. 2005)” (1046). If ninety percent of their wages are spent inside of the United States, this further supports that if more money is earned then a greater amount of money is spent, thereby positively boosting the United States economy.  Opponents of the DREAM Act believe that if more illegal immigrants become educated in college, then Americans will experience more job competitiveness and will increase the American unemployment rate. On the contrary, if more educated workers are available for work, then more efficient work will be completed, thereby producing more revenue for companies, which will trickle down. Additionally, in her 2006 analysis, “The Economic Impact of Illegal Aliens” Susan Ladika asserts a noteworthy point. She writes, “America’s population is becoming better educated, so many turn their backs on low paid, low skilled jobs. Illegal Immigrants typically compete for jobs against Americans who lack a high school diploma. Griswold says half of US workers in the 1960s had no diploma, while today it’s at 10 percent” (58). Ladika’s research supports the mission of the DREAM Act by confirming that providing undocumented students a path to qualify for higher skilled jobs will increase job opportunity for lower educated and skilled Americans. If more academically qualified, now legal, immigrants are able to pursue a college degree and accept lawful job offers, then Americans without those scholastic credentials will be able to fill the lower skilled jobs that do not require degrees. As a result, America’s unemployment rate will decrease as those jobs become filled, proving yet another benefit to our economy.

The final route that the DREAM Act will take to benefit our economy is the one through the Federal government’s revenue.  According to Susan Ladika,  “Michele Waslin, director of immigration policy research at the National Council of La Raza, a Latino advocacy group in Washington, DC, says illegal immigrants also pay sales taxes and possibly property taxes. And she predicts that legalizing their status would have a huge impact on the economy. Once people are able to come out from ‘the shadows,’ she says, they could spend more money on houses, cars, and education” (58). When income is higher and more money is spent on taxed goods, then the federal government ultimately collects more money from those taxes. Currently, illegal immigrants without a social security number must perform jobs that pay “under the table”, which goes unreported to the government. Therefore, the worker does not pay income taxes to the government, creating a strain on American taxpayers. By enabling illegal immigrants to emerge from the “shadows”, they will have to contribute toward both federal and state income taxes automatically when a paycheck is received. This tax revenue is utilized to fund a plethora of government programs, including the higher education system. Opponents of the DREAM Act have stated that by allowing undocumented students into our colleges it will be a burden on American taxpayers’ contributions toward state universities. However, by giving illegal immigrants the opportunity to pay taxes means that they will be able to contribute their share toward the education system they are using. Fundamentally, the DREAM Act will financially balance itself by simultaneous increasing college attendance and tax revenue.

            Finally, the government program illegal immigrants most impact is the Federal Social Security Administration, which according to Susan Ladika, “. . . illegal workers pay between 7 billion and 10 billion annually into social security—money they never collect” (58). Often, illegal immigrants are able to obtain fake social security numbers that they present to their employers prior to employment. These employers then distribute the undocumented worker’s paycheck with social security portion withheld and paid toward the government.  In Eduardo Porter’s New York Times article, entitled “Illegal Immigrants are Bolstering Social Security with Billions” he follows the experience of illegal resident Angel Martinez.  Porter reports, “Last year, Mr. Martinez paid about $2,000 toward Social Security and $450 for Medicare through payroll taxes withheld from his wages. Yet unlike most Americans, who will receive some form of a public pension in retirement and will be eligible for Medicare as soon as they turn 65, Mr. Martinez is not entitled to benefits” (Porter 1). This creates an imbalance in our Social Security system because illegal immigrants are never able to collect their retirement benefits that they are paying into, which means that money is never put back into the economy when it is received.  It is kept within the federal government and is unable to be a catalyst for more economic growth. This is a large sum of money that is essentially stuck, as it is “estimated that 3.8 million households headed by illegal immigrants generated $6.4 billion in Social Security taxes is 2002” (1), and this reported number fails to account for inflation that has occurred in the past decade. The DREAM Act therefore solves this with its path to citizenship for illegal residents, giving them the retirement benefits of American citizens.

            The DREAM Act is clearly a piece of legislation with a multitude of outlets for economic stimulation, proving its existence and eventual instatement as a true benefit to our nation. The ideals of the DREAM Act are ones of overall advantage to all Americans, especially those who are native born. However, in order to truly visualize its’ benefit in more than a tangible numeric value, opponents must move beyond the principles of higher education privatization. Privatization asserts that a college education is generally a personal benefit, rewarding individuals for achieving a degree in a competitive scholastic environment and therefore improving one’s economic standing. The DREAM Act contrarily asserts that by encouraging higher education for the “DREAMers,” a population that would otherwise be unable to improve its economic stature, overall economic improvement can be achieved for our entire nation. By viewing education as a catalyst that allows everyone to rise to the top, the DREAM Act challenges privatization and broadly impacts our society’s forward movement. Motomura asserts, “ This broadening is part of the integration of immigrants into American society. Children in immigrant families are typically much more likely than their parents to become integrated linguistically, socially, and in other dimensions. This is true regardless of a child’s legal status, but is even more true for children who have lawful immigration status or citizenship, which allows them to serve more effectively as cultural brokers between their parents and mainstream society outside immigrant enclaves" (Motomura 1136).  America’s undocumented youth have the power and drive to make a dramatic impact on America. The DREAM Act, through education, gives those who were unable to control their own fate as children the nine-digit code to drive our economy and society into the future. Many of these youth have known no other country, language or culture other than America and deserve the same opportunity and hope for their futures given to American youth.

            With the induction of the DREAM Act, as America’s DREAMer’s reach for their high school diplomas, they too will have the same excitement and zest for their futures as you did. With the potential economic benefits through job and wage growth and tax revenue, the DREAM Act proves higher education yields more than just a degree for one.

Works Cited

Conlan, Mark Gabrish. "The Effects of Illegal Immigration: An Overview." Print. Rpt. In

            Illegal Immigration. Ed. William Barbour. San Diego: Greenhaven, 1994. 67-71. Print.

Fitz, Marshall. "Legalized Workers Earn More and Spend More." The New York Times

                            . N.p., 13 Apr. 2013. Web. 12 Dec. 2013.

Garcia, Ann. "Passing the DREAM Act for Our Economy." Name. N.p., 01 Oct. 2012.

                            Web. 12 Dec. 2013.

Ladika, Susan. 2006. "The Economic Impact of Illegal Aliens." HR Magazine 51, no. 10:

 58-59. Business Abstracts with Full Text (H.W. Wilson), EBSCOhost (accessed     October 29, 2013).

Levine, Linda. "Immigration: The Effects on Native-Born Workers." Print. Rpt. In

            Politics of Immigration. Ed. A.M.      Babkina. New York: Nova Science. Print.

Motomura, Hiroshi, Making Legal: The Dream Act, Birthright Citizenship, and Broad-

Scale Legalization (January 15, 2013). 16 Lewis & Clark Law Review 1127-48 (2012); UCLA School of Law Research Paper No. 13-01.

Porter, Eduardo. "Illegal Immigrants Are Bolstering Social Security With Billion." New

            York Times. N.p., 5 Apr. 2005. Web. 12 Dec. 2013

Ramanujan, Nadadur (2009): Illegal Immigration: A Positive Economic Contribution to

            the United States, Journal of Ethnic and Migration Studies, 35:6, 1037-1052

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