KY Policy Blog

Pathway to Citizenship for Immigrants Would Be Good for Kentucky’s Economy

By Anna Baumann
May 29, 2013

Last week, the Senate Judiciary Committee approved a comprehensive immigration reform bill that would increase border security, regulate future immigration flows, and formally extend the American dream to the 11 million immigrants living in the U.S. without legal status, about 80,000 of whom live in Kentucky.

Immigrants who do not have legal status make up roughly 1.8 percent of Kentucky’s population, and because they are more likely than native born Kentuckians to be working age adults, about 2.6 percent of our labor force. Conferring legal status and a pathway to citizenship is good for Kentucky’s economy. Here’s why:

Higher wages and lower poverty. Immigrants who become naturalized citizens have higher wages and lower poverty rates than immigrants without legal status, as the Economic Policy Institute shows. In Kentucky in 2011, according to the Migration Policy Institute, 28.9 percent of non-citizen immigrants lived in poverty, compared with 13.8 percent of citizen immigrants. Legal status allows workers greater economic mobility through decreased vulnerability in the workplace, access to a diverse range of jobs and physical mobility through drivers’ licenses.

Increased demand for goods and services. As a result of their economic gains as legal residents and then citizens, immigrants would grow Kentucky’s economy by increasing demand for goods and services like cars, food, health care and vacations. That demand creates jobs.

More tax revenue. Even without legal status, immigrants pay property and sales tax in Kentucky, and many also pay Social Security and Medicare taxes that they won’t benefit from. However, legal status would allow the state and federal government to collect all income and other taxes owed by immigrants. This means more needed money for schools, public safety and roads.

Self-investment. Immigrants with legal status are more likely to invest in their own education and skills because of the greater returns on those investments. That’s an especially important consideration for the estimated 2,000-10,000 DREAMers living in Kentucky–immigrants who were brought to the U.S. as young children, know no other home, and aspire to go to college. Better skills and education will only further improve their wages and contributions to the economy.

Level playing field for businesses and native-born workers. Employers who play by the rules will no longer have to compete with unscrupulous employers who have been hiring and underpaying immigrants without legal status. The Senate immigration bill would mandate the use of the E-Verify system for all employers to ensure they hire workers with legal status. Likewise, native-born workers will no longer have to compete with immigrant workers that employers can underpay.

In the next few weeks, the immigration reform bill will go before the full Senate. Its future in the House is uncertain. The road to passage will be bumpy, but given the benefit of immigration reform to native and non-native Kentuckians, it’s worth the fight.

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