Analysis of Claims of an Economic Benefit from Amnesty

April 2014

Center for American Progress (CAP) claimed benefit of amnesty: CAP claims that amnesty “…will bring about significant economic gains in terms of growth, earnings, tax revenues and jobs…”¹

FAIR response: The fallacy with the CAP claim is that it is based on a misunderstanding or misrepresentation of the findings of a survey of recipients of amnesty in 1986. The authors assume that increased earnings for amnesty recipients was across the board — which it was not — and that average wage gains provided relatively greater economic benefit to the legalized population than to others who already were legal workers — which it did not. The average wage increase of 15 percent over the five-year period for illegal aliens gaining legal status (1987-1992) was the same as the increase for all non-supervisory workers, and it coincided with a rise of 26.9 percent in the federal minimum wage. ² (For details see False Assumptions in CAP Study Yield False Results)

Center for American Progress (CAP) claim: Amnesty would be a boost to the U.S. economy.³

FAIR response: The studies that CAP relied on to claim that amnesty would be a benefit misunderstand or misrepresent the results of survey data obtained from beneficiaries of the 1986 amnesty.⁴ The survey data clearly establish that five years after gaining legal status, economic progress had been achieved by only a minority of the amnesty beneficiaries — those who were visa overstayers — and the majority of beneficiaries had lost ground economically compared to other workers. (For details see: Flawed Claims of Improved Earnings of Amnestied Aliens)

Center for American Progress (CAP) claim: The DREAM act would add $329 billion to the U.S. economy by 2030.⁵

FAIR response: If adopted, the DREAM act would add to the burden on the U.S. taxpayer of additional subsidized education for these former illegal aliens, add to the social assistance burden, create additional competition with U.S. workers for U.S. jobs, and eventually extend the amnesty benefit to the illegal alien parents who brought them illegally into the country. The CAP claim deliberately ignores the potential costs of the proposal. (For details see: Would the Dreamer Amnesty Benefit the Economy?)

Center for American Progress (CAP) claim: Citing the Immigration Policy Center, CAP claims that amnesty is justified because illegal aliens pay $11.2 billion annually in taxes and would pay more if given amnesty.⁶

FAIR response: The CAP claim, and the underlying data, fail to recognize that illegal aliens pay little in taxes because of their low earnings and that if they gained legal status they would be able to claim the Earned Income Tax Credit — causing a major drain on the U.S. Treasury. Few of the 1986 amnesty beneficiaries gained significantly more than average legal workers as a result of the amnesty and the majority lost ground economically. (For details see Illegal Aliens Who Pay Taxes May Claim Tax Credits)