Cost to U.S. of Ending DACA: Not So Much; Cost to Affected Workers: Enormous

Steve Miller, chair of the Pinal County Board of Supervisors, said he hopes Congress finds a way to allow DACA recipients to become U.S. citizens.
Steve Miller, chair of the Pinal County Board of Supervisors, said he hopes Congress finds a way to allow DACA recipients to become U.S. citizens. Pinal County
How much will ending the Deferred Action for Childhood Arrivals program cost the United States, assuming Congress doesn't act to renew it in the next six months?

Possibly $60-$100 billion over 10 years — a significant figure in some respects, but it's a large economy.

To put it in perspective, the California wine industry alone has an estimated annual economic impact of $114 billion.

Yet, the economic activity of DACA beneficiaries isn't the only factor in the debate over the controversial program.

The arguably cruel nature of Trump's decision to end the program could also be considered: Young people who were brought to the United States — at an average age of 6 — could be deported to what is, to them, a foreign country.

Even if they aren't sent back to their "home" countries, the end of DACA means severe economic disruption and lost opportunity for tens of thousands of them. Potentially, Arizona and the United States could see a negative effect, experts says.

Several other variables cloud the analysis of DACA's economic-impact question.

For instance, some pundits conflate the idea of DACA ending with DACA recipients being deported.

"If Donald Trump does indeed remove Texas' 120,000 DACA recipients from the workforce, the Texas economy would lose $6.1 billion annually," wrote U.S. Congressman Marc Veasey, D-Texas, in a January op-ed for the Dallas Morning News. "And the overnight loss of services provided by 100,000 workers would create serious problems here."

Perhaps such a thing could still happen under Trump's immigration master plan, but there are currently no mass-deportation schemes in the works for undocumented residents, including DACA recipients.

click to enlarge
Nolan Pope, economics professor at the University of Maryland, studied DACA's economic impact while a doctoral student at the University of Chicago.
University of Chicago
Veasey took his statistics from the Center for American Progress, a liberal advocacy group chaired by former U.S. Senator Tom Daschle, D-South Dakota, and, a pro-DACA group started by Facebook CEO Mark Zuckerberg and other technology leaders.

"Unless we act now to preserve the DACA program, all 780,000 hardworking young people will lose their ability to work legally in this country, and every one of them will be at immediate risk of deportation. Our economy would lose $460.3 billion from the national GDP and $24.6 billion in Social Security and Medicare tax contributions," the group claimed in a letter to Trump last week that was re-published by Arizona State University's Cronkite News.

The $460 billion figure is taken over 10 years, and speculatively assumes the deportation of the DACA recipients.

In fact, according to a 2016 study done by Nolan Pope, now an economics professor at the University of Maryland, DACA increased employment in the United States by about 50,000 to 75,000 jobs. Most of the DACA-eligible young people had jobs before DACA.

Many, if not most, would likely find illegal employment after DACA. But those people would earn 10-20 percent less in wages than they did as legal DACA workers, according to Alex Nowrasteh of the Cato Institute. That brings the estimated fiscal impact down to $60-$100 billion over 10 years.

DACA increased the likelihood of work for DACA-eligible people by 11 percent, Pope tells New Times.

"It's probably not going to have some giant effect on the U.S. economy as a whole," Pope said of Tuesday's DACA announcement, assuming no Congressional action.

However, the impact was indeed giant for the young beneficiaries, Pope said: "Even for those who already had a job, they saw an increase in wages and income for the year."

In bringing people "out of the shadows," DACA has had a "substantial impact," Pope went on. It got more people working, got them higher wages, and increased the population of undocumented workers who had high-school diplomas or GEDs, which is a requirement to enter the program, he said.

"Probably, if it was taken away, it will undo a lot of what was done here," he said.

Garrick Taylor, senior vice president of government relations and communications for the Arizona Chamber of Commerce, acknowledged the difficulty in trying to "tease out" precise numbers of how ending DACA could affect Arizona. But in theory, he said, the state could face more of a negative impact than other states.

Arizona has a workforce that's about 25 percent immigrants, compared to the national figure of 17 percent, Taylor said. Beyond that, more people of working age who live in Arizona are foreign-born, about 70 percent, compared to 47 percent of Arizonans of working age who were born in the United States, he said.

"This is an administration that's doing its best to put the squeeze on those individuals who are most essential to the state's economic health," Taylor fumed. "This injects a new level of uncertainty into the economy, for sure."

Steve Miller, chair of the Pinal County Board of Supervisors, said he hopes Congress finds a way to allow DACA recipients to become U.S. citizens.
Pinal County
On the other side of the equation are immigration hardliners who claim that getting rid of DACA, and possibly DACA recipients, too, might actually be good for the economy.

U.S. Treasury Secretary Steven Mnuchin told Fox News Sunday over the weekend that ending DACA means putting more Americans back to work.

The Federation for American Immigration Reform, a national group that supports limiting immigration, put out a news release on Tuesday saying the group "applauds the decision" by Trump that was announced by Attorney General Jeff Sessions.

Cassie Williams, spokeswoman for FAIR, said that the group's research team has studied the issue and concluded the end of DACA would be a "great opportunity" for legal U.S. workers.

"It's a total myth that this is ever going to hurt or harm the U.S. economy," Williams said. "There are over 5 million Americans of working age, 16-34, who are unemployed."

Stephen Miller, chairman of the Pinal County Board of Supervisors, doesn't buy it.

Miller is a Republican and fiscal conservative who helps run one of the poorest counties in the country. He said he doesn't believe Americans are waiting in the wings for jobs vacated by DACA recipients.

"We have so many holes in our workforce, it's unbelievable," Miller said. "I was a general contractor for 40 years, and in the last 10 years, it's hard to fill a position."

Miller said he thinks ending DACA is "unjust."

"It's no fault to them," he said of the DACA recipients. "I think we should afford them some type of an opportunity to become a citizen."

Nationally, unemployment stands at about 4.4 percent. The figure is slightly higher in Arizona overall, at 5 percent, but lower in Phoenix, at 4 percent.

Taylor, of the Chamber of Commerce, agreed with Miller that ending DACA wasn't a good way to put non-working Americans to work.

Garrick Taylor
Arizona Chamber of Commerce
"We're dealing with a very tight labor market," he said. "It's not an issue."

James Scimecca, of the pro-immigrant group New American Economy, also doubted that stopping DACA would help created opportunities for others.

"While it's true that some natives will take jobs left vacant by deported DACA recipients, it is likely that most will go unfilled, since research has found that immigrants and natives are not perfect substitutes," he said.

Scimecca's group estimated that Arizona's DACA recipients pay about $40 million yearly in local and state taxes.

Lee McPheters is a research professor at ASU's W. P. Carey School of Business and director of the school's JPMorgan Chase Economic Outlook Center.  He said he's not sure of the precise number of DACA-eligible Arizonans who are currently employed in the state, so he can't be sure of the effect on Arizona. But he estimates more of a negative effect than positive.

"Historically, Arizona’s economic development is tied to population and labor force growth," McPheters said. "Any political changes that reduced or slowed that population and labor force growth (such as deportations), particularly for younger workers, would create headwinds for the economy."

History also show that if large numbers of undocumented immigrants were deported from Arizona, the state's growth rate could offset the economic declines.

From 2007 to 2012, the state lost an estimated 40 percent of its undocumented residents because of the recession, and possibly because of the anti-immigrant policies led by former Maricopa County Sheriff Joe Arpaio and former Governor Jan Brewer, both Republicans

Overall, Arizona's gross domestic product has risen steadily every year since 2009.

But that's not the whole picture, either.

The state experienced economic "carnage" from the passage of SB 1070, the anti-illegal-immigrant law signed by Brewer in 2010, and by employer sanctions signed by former Democratic Governor Janet Napolitano, according to a 2012 article by the Cato Institute's Alex Nowrasteh.

In other words, even if Arizona continues to have long-term gains, the multiplier effects of denying DACA recipients legal jobs or removing them from the country could cause the state to lose money.

The bottom line is that the failure of Congress to help DACA recipients stay in the country could hurt Arizona's economy — but it will definitely hurt DACA recipients.
KEEP PHOENIX NEW TIMES FREE... Since we started Phoenix New Times, it has been defined as the free, independent voice of Phoenix, and we'd like to keep it that way. With local media under siege, it's more important than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.
Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.