A bad dream: The damage Trump’s DACA order could inflict on the economy

President Donald Trump’s order to rescind the Deferred Action for Childhood Arrivals program (DACA) has provoked a thunderous national response from Americans across the political spectrum who are rightfully outraged at the potential human carnage that could result from pushing more than 800,000 young people back into the shadows. As Vanita Gupta of the Leadership Conference on Civil and Human Rights observed in a statement yesterday:

President Trump’s decision to end DACA in six months is inhumane, cruel and shameful. There is no legal, ethical, or moral justification for ending DACA, which is a lawful program. President Trump manufactured this unnecessary crisis….Ending DACA will devastate the lives of young men and women who have essentially known no home other than America. This is the latest in a series of mean-spirited, politically-motivated actions by President Trump that further corrodes his morally bankrupt administration and furthers an agenda supported by White supremacists and bigots.”

Even, however, if one sets aside the potentially disastrous impact of Trump’s order on the young people directly affected, there is also a raft of compelling evidence that ending DACA will produce a hugely negative impact on the U.S. and North Carolina economies. As veteran researcher and advocate Daniel Costa of the Economic Policy Institute wrote yesterday in a post entitled “Ending DACA lowers wages and tax revenue, and degrades labor standards,” the decision bodes ill for millions of non-immigrant American workers:

To call this decision tragic is an understatement. Not only is it inhumane—after President Trump promised to treat DACA recipients with “heart”—but the evidence is clear that DACA has positively benefited the U.S. labor market. The vast majority of DACA recipients are employed, 87 percent, and on average DACA recipients saw their wages increase by 42 percent after receiving an EAD. Those gains—and the higher tax revenue to the federal and state and local governments that have accompanied it and benefited public coffers—are now in jeopardy.

President Trump has also repeatedly voiced his desire to help improve working conditions for American workers, but by ending DACA he is harming the U.S. citizens and lawful permanent residents who are employed alongside DACA recipients. Once DACA recipients lose their work authorization, they will effectively be unable to complain when they are paid below the minimum wage, aren’t paid for overtime hours, or when their employer subjects them to unsafe conditions at the workplace. All immigrant workers who are unauthorized are often too afraid to speak out when employers take advantage of them, because they know their bosses can threaten them with deportation and use their immigration status to retaliate against them. The impact of this is not theoretical: research has shown that unauthorized immigrants suffer much higher rates of wage theft than U.S. citizens. The reasonable fear unauthorized workers feel keeps them docile and quiet, which in turn diminishes the bargaining power of Americans who work alongside unauthorized workers. Ending DACA and forcing these young workers out of the formal, regulated labor market, thus making them easily exploitable, will not help American workers, it will do the opposite.

Ending DACA will destroy the educational and employment prospects of 800,000 young immigrants who did nothing wrong, while at the same time hurting the wages and labor standards of American workers. If President Trump were serious about improving labor standards for working people, he would reconsider and reverse his decision.”

Costa’s analysis at the national level echoes some of the findings highlighted in a recent report from the North Carolina Budget and Tax Center on DACA’s impact in North Carolina. As researcher Victoria Crouse wrote, “DACA has been an effective strategy for boosting beneficiaries’ wages, employment opportunities, and education, while helping NC’s economy.” This is from her report:

Ending DACA and introducing a mass deportation policy would not only be inhumane, it would also translate into significant economic losses for our state. If the program was eliminated and participants were removed from our labor market, North Carolina would experience a $1.1 billion annual GDP loss. Over 10 years, our nation would lose $433.4 billion in GDP if DACA were terminated. A loss in productivity at the state and national level impacts our ability to sustain a post-recession recovery.

The end of the DACA program would hurt our labor market. Research points to the central role that immigrants and children of immigrants will play in growing our labor force in the years to come. In fact, immigrants and their children are projected to be the primary drivers of growth in the working-age population through the year 2035. The number of working age immigrants in the United States is projected to rise from 33.9 million in 2015 to 38.5 million by 2035. Moreover, children of U.S.-born parents are projected to decline by 8.2 million between 2015 and 2035, thereby shrinking the working-age population. Given these projections, it is imperative that policymakers work toward integrating DACA beneficiaries into our communities to ensure that our skilled and educated labor force remains solvent for years to come.

North Carolina would not only lose a generation of thinkers, creators and doers, it would also lose opportunities to invest in all North Carolinians.  Every year, DACA beneficiaries and their families join millions of Americans in filing their tax returns. Losing DACA beneficiaries as taxpayers would mean an annual loss of $63 million in state and local tax revenue in North Carolina. Our state is already missing out on an opportunity to raise $14 million in additional tax revenue each year because DACA does not provide a pathway to citizenship. Citizenship would enable beneficiaries to achieve better job and educational opportunities and higher earnings. Removing DACA beneficiaries who are also taxpayers would prevent our state from being financially able to make important investments in our schools, our hospitals, and our communities.”

Going forward

Trump’s regrettable action now places the onus squarely on Republican leaders in congress to swiftly approve legislation to rescue the DACA young people. Happily, there appears to be at least some hope in this regard. This morning, in defending a bipartisan bill that would provide a path to citizenship for the DACA kids, South Carolina Republican senator Lindsay Graham voiced optimism, and derided the notion advanced by Attorney General Jeff Sessions that DACA harms the U.S. economy. This is from a Politico story:

‘Jeff Sessions is wrong. These kids are not taking jobs from American citizens, they’re part of our country,’ Graham (R-S.C.) told NBC’s ‘Today’ show, rebutting Sessions’ assertion from the previous day. “They’re fully employed for the most part, they’re in school, they will add great value.’

Let’s hope Graham’s message (and the hard data it reflects) carry the day in congress in the coming weeks and, in time, at the North Carolina General Assembly as well.