A UCLA study published Monday found that the exclusion of undocumented residents and their families from the $1,200 given to taxpayers as a result of the COVID-19 pandemic resulted in an estimated loss of $10 billion in potential economic output.
The study, Essential Undocumented Workers But Disposable Mixed-Status Families: Modeling COVID-19 Economic Impacts and Government Relief Policies by Race and Immigration Status in Los Angeles County and the United States, focuses on the impacts of excluding undocumented immigrants from COVID-19 economic relief packages.
It found that the economic benefits outweigh the costs and undocumented workers are essential to the U.S. and California economies.
Research showed that undocumented workers and their families contributed more than $1.6 trillion to the nation’s gross domestic product in 2018 through their shopping and workforce activities, and “their reduced purchasing power amid a looming recession is both a public health and economic crisis,” according to the report by lead author Raul Hinojosa.
“Our undocumented neighbors buy groceries, pay taxes and support local businesses in economic activity that generates $190 billion in government revenue nationwide,” explained Hinojosa, who is a UCLA professor of Chicano studies and the executive director of the North American Integration and Development Center. “It is cruel to deny undocumented residents financial assistance as unemployment rates skyrocket, but it’s also counterproductive fiscal policy that has negative consequences for all Americans who benefit from their economic contributions.”
Besides the loss of $10 billion in potential economic output from not including undocumented workers in the stimulus payouts, Hinojosa and his colleagues estimated that the action cost roughly 82,000 jobs nationally and 17,000 jobs in California. The national unemployment rate for undocumented workers reached 29% in May.
“Undocumented workers have suffered disproportionate health and economic impacts during this global health crisis that we are just beginning to understand yet they are being excluded from critical policy relief discussions and we need to address this through a comprehensive approach to economic recovery,” said Abel Valenzuela, director of the Institute for Research on Labor and Employment and a member of the study’s research team.
The economic activity generated by undocumented immigrants spending the tax credits they would receive under the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, currently being debated in Congress, would support 112,000 jobs nationally and produce $14 billion in economic output. These benefits exceed the $9.5 billion price tag them in recovery efforts.
The study found that:
— Undocumented workers contribute $1 trillion to the country’s gross domestic product and more than $263 billion to California’s GDP. Mixed-status families — households with at least one undocumented immigrant and U.S. citizens — produce $1.67 trillion in national GDP and $425 billion to the state’s GDP. They are deeply embedded in the US economy.
— Undocumented workers generate economic activity that supports almost 20 million jobs in the country and 3.2 million jobs in California.
— They generate $190 billion in government revenue nationally and $63 billion in California, and their unemployment rates and total wages have been particularly impacted by the economic effects of the pandemic.
— The unemployment rate for undocumented workers reached over 29% in the United States and more than 27% in California, the highest of any demographic group.
— The total wage bill for undocumented workers fell by almost 25% across the country and by more than 18% in California. Including undocumented workers and their families in relief and stimulus bills would lessen the economic damage, support recovery, and benefit all Americans.
— Extending the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, to undocumented taxpayers and their families would have added over $10 billion to the U.S. economy creating enough economic activity to support over 82,000 jobs nationally and 17,000 in California.
— Providing undocumented workers with tax credits under the HEROES Act would add almost $14 billion to the economy and would support over 112,000 jobs nationally.
— And the economic benefits of providing relief to undocumented workers would outweigh the costs and would generate more government revenue than the total cost of the tax credits.
The study was a collaboration among the UCLA Latino Policy and Politics Initiative, the UCLA North American Integration and Development Center and the UCLA Institute for Research on Labor and Employment.