ND Study: Undocumented workers an asset to local economy

(The following article appeared April 8, 2008 in the South Bend Tribune)

by Pablo Ros

Deporting a single undocumented worker from South Bend would on average cost the local economy a net loss of about $3,000 a month, according to a new study from the University of Notre Dame’s Economics and Econometrics Department.

The report, which can be read online, may be the first cost-benefit analysis of undocumented immigration to South Bend.

Based largely on surveys of Hispanic immigrants who live in South Bend, it provides a breakdown in dollar amounts of their assets and liabilities.

The researchers conclude that contrary to the belief that undocumented immigrants are a drain on the local economy, they are “an essential part of the economy and important for maintaining stability. Immigrants pay taxes, do not use as many government benefits as citizens and often take lower wages for unskilled labor.”

Kasey Buckles, one of two Notre Dame professors who directed the study, said its ultimate purpose is to assist policymakers in making informed decisions.She said its scope is limited to the economic impact of undocumented immigration, which has generated a debate that is political and ethical, among other things.

Abigail Wozniak, who co-directed the research, said the results of the study would be meaningful to cities similar to South Bend that have not traditionally been immigrant destinations.

The overall impact of the 12 million undocumented immigrants on the country’s economy has been the subject of much debate in recent years.

While immigrant advocates have underscored the attributes of the labor, taxes and purchasing power of undocumented workers, others have pointed to a drain in social services and loss of jobs as detriments.Based on an estimate of South Bend’s undocumented population that puts it at or near 3,400, the report concluded that this often neglected and shunned segment of our community on average contributes as much as $10 million per month to the local economy.

Researchers subtracted the total cost of liabilities — the greatest of which was public education — from the added value of assets — which included income from labor, taxes and expenditures.There are a few disclaimers to that figure, however. Researchers found data on investments made by undocumented immigrants in the stock market and other options unreliable, possibly the result of respondents misinterpreting a survey question.

Also, researchers were unable to calculate the costs of medical services used by undocumented immigrants.

But even in a worst-case scenario, the report points out, the overall impact of undocumented immigration on South Bend remains positive, meaning that the dollar value of immigrants’ contributions outweighs the total costs they generate.

Although the study doesn’t express such gains in terms of the total size of the local economy, Buckles said the loss of millions of dollars in monthly capital would inevitably cause it to shrink.

Researchers were not able to quantify other liabilities, such as crime and the loss of jobs. While undocumented immigrants generally take jobs others don’t want, the study points out, “there are still individuals who will suffer a loss of their job from less expensive competition.”The results of the study are based on two anonymous surveys administered in 2007 to about 120 congregants of St. Adalbert Parish in South Bend who were undocumented.

The survey sample is likely representative of the local Hispanic undocumented community, the study says.

Buckles told me she was surprised by a finding that the amounts of money immigrants send to families back home are not as high as she expected, averaging about $54 per month.

That seems to support the finding that only 46 percent of those surveyed said they would seriously consider someday returning to their country of origin permanently, she said.

Wozniak told me she was surprised by the study’s finding that a majority of undocumented workers pay taxes. The average total taxes paid by those surveyed is nearly $300 per month.The study was funded through the University of Notre Dame’s Center for Social Concerns.

Buckles said it was published in the undergraduate journal “Beyond Politics: An Undergraduate Review of Politics of the University of Notre Dame.”


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