Obama: Immigration reform could lead to growth

President Barack Obama

U.S. President Barack Obama (L) speaks about immigration while as U.S. Vice President Joseph Biden listens in the Rose Garden of the White House June 30, 2014 in Washington, DC.

In his interview with Kai, President Obama said that the economy could see $1.4 trillion in additional growth if the government passed immigration reform.

Believe it or not, there are two $1.4 trillion figures the White House has mentioned when it comes to immigration reform and they mean two completely different things: One comes from the Congressional Budget Office. And one comes from the Center for American Progress.

At the heart of both is the idea that citizenship brings higher wages. That's something multiple researchers have studied, including Madeleine Sumption with the Migration Policy Institute.

"We found that citizens earn between 50 percent and two thirds more than non-citizens," she says. "Most of that is explained by the fact that citizens are more educated and they speak better English and they've been in the country for longer."

But, she says, once you control for those factors, citizens still get a 5 percent wage boost or more.

More wages means more spending and more tax revenue. The Center for American Progress added up the ripple effect of that and got … $1.4 trillion in GDP growth over ten years.

"The $1.4 trillion in our report was more of a hypothetical thing," says Patrick Oakford, who co-wrote that report. "What if they got legal status and citizenship status right away."

That report also looked at different timelines for naturalization with different economic outcomes. Big picture: the timing of citizenship matters for economic growth.

But of course in the immigration debate, there is no overnight path to citizenship. The Congressional Budget Office scored the Senate's actual bill, with its decade-plus path, and came up with … about $1.4 trillion in growth over twenty years.

Manual Pastor directs the Center for the Study of Immigrant Integration at the University of Southern California.

"The numbers, the $1.4 trillion, look very much the same," he says. "But the difference is one is scoring the actual legislation and the other is a thought exercise."

The CBO looked at comprehensive immigration reform which is about more than just the path to citizenship.

About the author

Kate Davidson is a regular contributor to Marketplace.

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