Key Components of Immigration Reform: Federal, State and Regional Lens

Economic Impacts of Immigrants in Boston Monday, April 28, 2014

Key Components of Immigration Reform: Federal, State and Regional Lens

Rod Motamedi, Senior Economic Associate Chris Judson, Associate Economist

what does REMI say? sm

Timeline


� Nov 2012 – POTUS mentions Immigration Reform in his election victory speech

� Jan 2013 – POTUS highlights Immigration Reform in his SOTU address

� Jan 2013 – Bipartisan group of Senators release plan to address Immigration Reform

� Jun 2013 – Senate Bill passes, considered dead on arrival in House

� Oct 2013 to Present – On and off Policy Agenda

Policy Question

What is the effect of immigration reform

on the broader economy, both at the national and

state levels?

What does this mean for Boston?


Key Components of Immigration Reform

� Creating a Pathway to Legal Status � Effects of incorporating the more than 11 million

undocumented immigrants into the formal economy � Expanding High-Skilled Visas � Increasing cap on H-1B Visa issuance

� In national report but not included today � Reforming Lesser-Skilled Visas � H-2A (temporary or seasonal agricultural work) � H-2B (nonagricultural seasonal, intermittent or peak load work)

� W-1 (lesser-skilled, nonagricultural work)


Approach to Modeling

� Goal was to understand the effect on the greater national and state economies.

� This study is unique in showing comprehensive macroeconomic impacts for all states and across all industry sectors on an annual basis.

� Applied MA immigration totals with PI+ BRA model baseline data to understand regional effects based on employment shares


Key Finding

All states see significant growth in major indicators such as GDP and total jobs for each component of immigration reform examined.


Pathway to Legal Status


Approach to Analyze Pathway

�No increase in workforce or population

� Increase in labor productivity �Indirectly modeled

� Increase in wages �Accounted for labor costs to businesses


Summary Pathway Findings

� Increased jobs and income � Increased job opportunities for existing U.S.

workers � Increased real income per capita for Americans � Increases in construction for housing- and

consumption-related industries in particular � All states see increases due to economic linkages

between the states


National Results Pathway to Legal Status � In 2014, providing a pathway to legal status will

produce a total of 123 thousand jobs as well as add approximately $10 billion to GDP.

� By 2020, it is estimated that the result of the expansion will be 551 thousand jobs and the increase in GDP will total $45 billion.


Change in Employment from Baseline 2020

Key Industries Pathway to Legal Status � Job gains are across diverse industry sectors. The

industries listed below, organized by total job gains, represent over 50% of the total job gains for the nation as a result of this change in policy. � Retail Trade 15% � Construction 15% � Ambulatory Health Care Services 12% � Administrative and Support Services 6% � Professional, Scientific, and Technical Services 5%


Boston – Pathway


0

1,000

2,000

3,000

4,000

5,000

6,000

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Jobs

Employment Impact

Suffolk County

Four County Region

Rest of MA

Boston – Pathway


Suffolk County Top Employment by Industry 2020 Hospitals 318 Securities, commodity contracts, investments 168 Ambulatory health care services 160 Professional, scientific, and technical services 153 Educational services 128 Retail trade 103 Administrative and support services 91 Food services and drinking places 80 Construction 73 Personal and laundry services 51

Boston – Pathway


Gross Regional Product (Millions of Fixed 2014 $) 2020 � Suffolk County GRP $205 Million � 22 percent of total MA GSP impact 2030

� Suffolk County GRP $168 Million � 21 percent of total MA GSP impact

� Negligible, slightly negative population effects

Boston – Pathway


$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Mill

ions

of F

ixed

201

4 $

Personal Income Impact

Suffolk County

Four County Region

Rest of MA

Visa Expansion & Reform


Approach to Analyze Visas

� Increase in jobs and international migrants

� Provides workers for U.S. industry expansion

� Economic expansion driven by increased business competitiveness


Summary of Visa Reforms

� Increased jobs and income � Increased job opportunities in income per capita

for existing U.S. workers � Increase in jobs through firm expansion and

increased production � All states see increases due to economic linkages � Expanding economic pie benefits existing U.S

workers


High-Skilled Visas


National Results High-Skilled Visa Expansion � In 2014, expansion of high-skilled visas will

produce a total of 227 thousand jobs as well as add approximately $22 billion to GDP.

� By 2020, the expansion creates approximately 408 thousand jobs and increases GDP by $41 billion.


Change in Employment from Baseline 2020

Key Industries High-Skilled Visa Expansion � Job gains are not only concentrated in industries

with high H-1B issuance. The industries listed below, organized by total job gains, represent over 50% of the total job gains for the Nation as a result of this change in policy. � Professional, Scientific, and Technical Services 18% � Construction 8% � Retail Trade 7% � Food Services and Drinking Places 7% � Administrative and Support Services 7% � Educational Services 4%


Key Findings High-Skilled Visa Expansion

� The economic benefits are not restricted to states that receive large shares of H-1B Visa issuance.

� For every visa issued, it creates anywhere from 2 to more than 8 new jobs depending on the state.

� High-Skilled Visas have a high impact on economy.


Boston – H-1B


0

2,000

4,000

6,000

8,000

10,000

12,000

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Jobs

Employment Impact

Suffolk County

Four County Region

Rest of MA

Boston – H-1B


Suffolk County Top Employment by Industry 2020 Professional, scientific, and technical services 556 Educational services 242 Hospitals 224 Food services and drinking places 176 Administrative and support services 123 Securities, commodity contracts, investments 103 Retail trade 90 Real estate 68 Construction 62 Membership associations and organizations 57

Boston – H-1B


Gross Regional Product (Millions of Fixed 2014 $) 2020 � Suffolk County GRP $348 Million � 22 percent of total MA GSP impact 2030

� Suffolk County GRP $556 Million � 21 percent of total MA GSP impact

Boston – H-1B


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Indi

vidu

als

Population Impact

Suffolk County

Four County Region

Rest of MA

Boston – H-1B


$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Mill

ions

of F

ixed

201

4 $

Personal Income Impact

Suffolk County

Four County Region

Rest of MA

Concluding Remarks

� The immigration policies we evaluated promote economic growth.

� The economic growth is broad based across states and industries.

� Existing American workers have increased employment opportunities and incomes.

� Immigration reform in Boston, benefits surrounding counties rest of state- counterfactual approach


Thank You

http://www.remi.com/immigration-report

@REMIeconomics

www.remi.com


Business

Key Components of Immigration Reform: Federal, State and Regional Lens