Immigration Legislation and Unemployment

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At least some of the backers of the Senate’s Gang of Eight amnesty and mass immigration bill seem to have bought the line that the legislation would be an economic stimulus. The Congressional Budget Office (CBO) analysis of the bill projected that enactment would generate additional tax revenues resulting in a $197 billion reduction in the federal deficit during the first decade. This finding was touted by the White House and Senate leadership as a seal of approval on the legislation.

But, that rosy forecast disappears when the details are examined. Most of the increased revenue in the CBO analysis results from increased flows to the Social Security Trust fund. Under amnesty, illegal aliens would be issued valid Social Security numbers. Both they and their employers would begin paying into the system. In addition, a large influx of new workers who enter would enter our labor force under the bill, either as immigrants or as guest workers would contribute to a temporary boon to the trust fund. That is funding that is not considered available for general budget programs.

However, whether the newly legalized workers and new immigrants would benefit the economy would depend on whether they can find productive jobs. That issue is questionable in light of the CBO’s estimate that one of the effects of the legislation would be to increase unemployment and lower wages. The CBO’s report on “The Economic Impact of S.744…” states on p.4, “…temporary imbalances in the skills and occupations demanded and supplied in the labor market, as well as other factors, would cause the unemployment rate to be slightly higher for several years than projected under current law.”

But, the current situation is already dismal. Neil Irwin, writing in the Washington Post on the current state of the economy, provides statistical analysis that shows unemployment is still much higher than it was in 2008 before the recession. There are more than three unemployed job-seekers for every available job. And the share of the workforce that is employed remains much lower that it was in 2008. Irwin’s data are the following:

  • Unemployment – The number of unemployed job-seekers per job opening was less than 2:1 from 2005 to 2008 when it began to zoom – reaching a level of 6.7 job-seekers per available jobs in July 2008. The level has since fallen, but it remains above 3:1 (3.1 in April 2013).
  • Employment – The employment-to-population ratio (aged 16 and older) was just below 63% until 2008. Then it rapidly fell to below 59% by mid-2009. It has not recovered and stood at 58.6% in May 2013.

Friday’s report from the Labor Department reveals that unemployment was back up to 7.6 percent in June.

With current labor market conditions remaining seriously depressed, it would be the height of irresponsibility for Congress to ignore the warning of the CBO. Adopting the proposed amnesty and increased immigration provisions of S.744 would further harm job prospects for already suffering Americans.

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About Author

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Jack, who joined FAIR’s National Board of Advisors in 2017, is a retired U.S. diplomat with consular experience. He has testified before the U.S. Congress, U.S. Civil Rights Commission, and U.S. Commission on Immigration Reform and has authored studies of immigration issues. His national and international print, TV, and talk radio experience is extensive (including in Spanish).

9 Comments

  1. Pingback: FAIR Alert: House GOP to Determine Immigration Plan Today

  2. avatar
    Mass Immigration Is Unsustainable on

    “Most of the increased revenue in the CBO analysis results from increased flows to the Social Security Trust fund.”

    That will eventually be paid back–and then some in the case of lower earners. So if CBO is really counting FICA tax as increased revenue, it would seem to create a huge net loss once the entitlement is received.

    • avatar

      Robbing Social Security from Baby Boomers is ORGANISED CRIME by our Government

      The Boomers paid more in than they’ll ever draw out in their lifespans.

  3. avatar

    Technology and outsourcing have reduced the numbers of workers needed. It’s not just the fact of so many short term and long term unemployed, and the fact they are not working. It’s a double whammy because they are not paying any taxes, which they would be if they had a job, but many are receiving government benefits like unemployment and food stamps.

    Now the administration is attempting to hide the costs of Obamacare by delaying the start date a full year. From January 2014 to January 2015. Clearly an attempt to postpone bad news until after the 2014 elections.

    • avatar

      Obamacare for the Overpopulation the President Pushes Means One Thing

      Higher costs and taxes added for Cadillac insurance plans [i.e., Blue Cross] to subsidize more IA Emergency Room patients, RE: the added recent immigration overpopulation will make Medicaid basically completely useless [no doctors will see that many patients paying like 25 cents on the dollar].

  4. avatar
    Concerned Citizen on

    This blog post is loaded with facts and sound reasoning.

    If you look at the high rate of unemployment among African-American males, for example, before looking at the impact of S.744, it quickly becomes clear that this legislation carries with an unacceptable human cost. My personal job isn’t at stake here because I no longer report to any individual except myself, but as a business owner, I do emphasize the importance of having a stable, vibrant middle class and a legal system that protects rule of law. As soon as you place pressure and personal politics over sound public policy, you introduce many of the problems from which American immigrants have fled for over 100 years.

    • avatar

      Yes Concerned Citizen

      Overpopulation decreasing wages impacts the lion’s share of the CEOs in America, as I’m sure more than a few billionares are very concerned about overpopulation destryoying their economic base too.

    • avatar
      John Winthrop on

      SWE…they already have jobs we have invited them for years to have……………………………..so if you were to find out some illegal used your SS and you will benefit from this when you get old….how patriotic would you be to be honest and failfthful to this land to go back to the SS office and tell them you did not make that extra income?